McDermott Wins $600 Million Victory in New York Federal Court
McDermott Will & Emery’s Litigation and SALT teams have successfully challenged New York’s Opioid Stewardship Act and saved the pharmaceutical industry $600 million.
On Wednesday, December 19, 2018, Judge Katherine Polk Failla of the Southern District of New York ruled in favor of McDermott’s client, the Healthcare Distribution Alliance, the national trade association for pharmaceutical distributors. Judge Failla granted summary judgment and enjoined enforcement of the New York law, which imposed a $600 million surcharge on manufacturers and distributors of opioid products and barred them from passing the surcharge to purchasers. The first $100 million installment was due on January 1, 2019.
Judge Failla agreed with McDermott’s arguments that the Tax Injunction Act did not bar federal jurisdiction over any part of the suit and that the Act’s cost-pass-through prohibition violated the dormant Commerce Clause. She further agreed with McDermott that the cost-pass-through prohibition was not severable from the rest of the Act, including the $600 million surcharge.
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