Opioid makers and distributors are fighting a New York law that aims to collect hundreds of millions of dollars from the industry to help defray costs of the opioid crisis. Some companies are re-engineering their supply chain to avoid the new tax, reports the Wall Street Journal. Companies and trade groups have argued in three legal challenges that the law, which seeks $600 million over six years, is unconstitutional. They cite a lawsuit New York’s attorney general has filed against major opioid industry players to recoup money for the state, and say the tax is an improper end-run around resolution of that case.
New York’s health department sent bills last week to 75 companies and their subsidiaries detailing how much they owe under the new Opioid Stewardship Act. The state said the charges are based on the volume and potency of drugs each company sold or distributed in New York. Companies say they recognize the seriousness of the crisis, which has led to widespread addiction and public-health costs. They say taxing companies for legal drug distribution isn’t the solution. The health department disclosed the names of affected companies but not the amounts each owe, citing trade secrets. The list includes well-known names like CVS Health , Endo International PLC, Purdue Pharma LP and Teva Pharmaceutical Industries Ltd., alongside dozens of small companies based around the U.S. Some companies are arguing the amount they owe makes it prohibitively expensive to operate in New York.