Pharmaceutical company SpecGx alleges New York's Opioid Stewardship Act is unconstitutional

By Bree Gonzales | Nov 6, 2018

NEW YORK (Legal Newsline) – A Missouri pharmaceutical company has filed suit in a New York federal court over allegations the state's Opioid Stewardship Act (OSA) is unconstitutional.

SpecGx LLC filed a complaint on Oct. 24 in the U.S. District Court for the Southern District of New York against New York Attorney General Barbara Underwood and New York Commissioner of Health Howard A. Zucker seeking declaratory and injunctive relief.

According to the complaint, the plaintiff sells and distributes generic opioid medications in New York and that the medications have been approved by the U.S. Food and Drug Administration.

"The OSA imposes on manufacturers and distributors of FDA-approved opioid medications a class-wide penalty totaling $100 million. In doing so, the OSA violates critical constitutional limits. The OSA penalizes manufacturers and distributors for entirely lawful conduct - selling FDA-approved opioid medications for physician-prescribed purposes, in amounts determined by the U.S. Drug Enforcement Administration to be necessary for legitimate uses," the complaint states.

"As became clear from SpecGx’s OSA assessment for 2017, which SpecGx received on Oct. 18, the OSA penalty associated with the sale of SpecGx’s highest volume generic opioids exceeds or is just  below the revenue (not even accounting for costs) that SpecGx generates from selling those high volume generic opioid medications into New York. Because the OSA forbids manufacturers and distributors from collecting the OSA penalty from New York purchasers, unless the OSA is enjoined, SpecGx’s continued sale of generic opioids in New York will result in financial loss to SpecGx," the suit states.

The plaintiff seeks a declaration that OSA is in violation of the Supremacy Clause, and the Commerce Clause, and a permanent injunction prohibiting defendants from implementing or enforcing the OSA against it. The plaintiff also seeks for costs and attorneys' fees and other relief the court deems just and proper. 

It is represented by Christopher P. Conniff of Ropes & Gray LLP in New York; Douglas H. Hallward-Driemeier of Ropes & Gray LLP in Washington, D.C.; and Brien O’Connor, Erin R. Macgowan and Andrew J. O’Connor of Ropes & Gray LLP in Boston, Massachusetts.

U.S. District Court for the Southern District of New York case number 1:18-cv-09830-UA

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Ropes & Gray LLP U.S. District Court for the Southern District of New York New York Division

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