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 The justices declined to hear an appeal by two trade groups
representing drug distributors and generic drug makers and a unit of
British-based pharmaceutical company Mallinckrodt Plc of a lower
court's decision upholding the surcharge.
The law's challengers included the Association for Accessible
Medicines, whose members include drugmakers Teva Pharmaceutical
Industries Plc and Mallinckrodt, and the Healthcare Distribution
Alliance, which represents wholesale distributors.
The alliance's members include the three largest opioid distributors
in the United States, McKesson Corp, AmerisourceBergen Corp and
Cardinal Health. They proposed in July paying $21 billion to resolve
lawsuits accusing them of fueling the epidemic.
Mallinckrodt filed for bankruptcy protection in 2020 and has been
seeking to finalize a similar, $1.7 billion settlement.
The payments to New York were owed under the Opioid Stewardship Act,
which Democratic former Governor Andrew Cuomo signed into law in
2018 to address the costs the epidemic imposed on the state.
The law marked the first time a state had sought to impose a tax or
fee related to the epidemic on opioid manufacturers and
distributors. Delaware, Minnesota and Rhode Island have since
adopted their own taxes.
The Association for Accessible Medicines and the Healthcare
Distribution Alliance in separate statements expressed
disappointment in the Supreme Court's action. The alliance said it
is evaluating its options and next steps.
[to top of second column] |
 Opioids have resulted in the
overdose deaths of nearly 500,000 people from
1999 to 2019 in the United States, according to
the U.S. Centers for Disease Control and
Prevention, part of an ongoing public health
crisis.
The New York law envisioned collecting $100
million annually from prescription painkiller
manufacturers and distributors based on their
market shares from 2019 to 2024, or $600 million
in total.
A federal judge in 2018 ruled that a provision
barring the companies from passing on the costs
of making the payments to consumers was
unconstitutional and could not be severed from
the rest of the law.
The state appealed, but following that ruling
New York enacted a new tax law that did not
include the pass-through prohibition, limiting
the case to $200 million in payments owed based
on 2017 and 2018 market shares.
The New York-based 2nd U.S. Circuit Court of
Appeals in 2020 handed a victory https://www.reuters.com/article/us-new-york-opioids/u-s-appeals-court-revives-new-york-tax-on-opioid-companies-idUSKBN26536E
to the state, ruling that the judge lacked
authority to strike down the law. The
challengers then appealed to the Supreme Court.
The justices acted on the case on the first day
of their new nine-month term.
(Reporting by Lawrence Hurley and Nate Raymond;
Editing by Will Dunham)
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