New York State’s $100 Million Opioid . . . Tax

OK, they call it a fee, but it looks like a tax to me.  New York is collecting $100 million from opioid sellers -- with a few exemptions, like for Hospice use.

Here's the law:  http://nyassembly.gov/leg/?default_fld=&leg_video=&bn=S07507&term=2017&Summary=Y&Actions=Y&Text=Y, mentioned to me by Katherine "KT" Kramer of ASTHO.




Section  1. Article 33 of the public health law is amended by adding a
    22  new title 2-A to read as follows:
    23                                  TITLE 2-A
    24                           OPIOID STEWARDSHIP ACT
    25  Section 3323. Opioid stewardship fund.
    26    § 3323. Opioid stewardship fund. 1. Definitions:
    27    (a) "Opioid stewardship payment" shall mean the  total  amount  to  be
    28  paid  into the opioid stewardship fund for each state fiscal year as set
    29  forth in subdivision two of this section.
    30    (b) "Ratable share" shall mean the individual portion  of  the  opioid
    31  stewardship  payment  to  be  paid  by each manufacturer and distributor
    32  licensed under this article that sells or  distributes  opioids  in  the
    33  state of New York.
    34    (c) Notwithstanding any inconsistent provision of law to the contrary,
    35  "distribute"  shall mean to deliver a controlled substance other than by
    36  administering or dispensing to the ultimate user, including intra-compa-
    37  ny transfers between any  division,  affiliate,  subsidiary,  parent  or
    38  other  entity under complete common ownership and control.  For purposes
    39  of this section, "distribute" shall not  include  controlled  substances
    40  surrendered to reverse distributors, or donated to recipient entities or
    41  third-party  intermediaries  pursuant  to  the  unused prescription drug
    42  donation and redispensing program of section  two  hundred  eighty-b  of
    43  this chapter.
    44    2.  Opioid  stewardship payment imposed on manufacturers and distribu-
    45  tors.  All manufacturers and distributors licensed  under  this  article
    46  (hereinafter  referred  to  as  "licensees"),  that  sell  or distribute
    47  opioids in the state of New York shall be  required  to  pay  an  opioid
    48  stewardship  payment. On an annual basis, the commissioner shall certify
    49  to the state comptroller the  amount  of  all  revenues  collected  from
    50  opioid  stewardship  payments  and  any penalties imposed. The amount of
    51  revenues so certified shall  be  deposited  quarterly  into  the  opioid
    52  stewardship  fund  established pursuant to section ninety-seven-aaaaa of
    53  the state finance law. No licensee shall pass the cost of their  ratable
    54  share  amount to a purchaser, including the ultimate user of the opioid,

        S. 7507--C                         92                         A. 9507--C
 
     1  or such licensee shall be subject to penalties pursuant  to  subdivision
     2  ten of this section.
     3    3.  Determination  of  opioid  stewardship  payment.  The total opioid
     4  stewardship payment amount shall be one hundred million dollars  annual-
     5  ly, subject to downward adjustments pursuant to subdivision nine of this
     6  section.
     7    4.  Reports  and  records.  Each manufacturer and distributor licensed
     8  under this article that sells or distributes opioids in the state of New
     9  York shall provide to the commissioner a report  detailing  all  opioids
    10  sold  or distributed by such manufacturer or distributor in the state of
    11  New York. Such report shall include:
    12    (a) the manufacturer's or distributor's name, address,  phone  number,
    13  federal Drug Enforcement Agency (DEA) registration number and controlled
    14  substance license number issued by the department;
    15    (b)  the  name,  address  and DEA registration number of the entity to
    16  whom the opioid was sold or distributed;
    17    (c) the date of the sale or distribution of the opioid;
    18    (d) the gross receipt total,  in  dollars,  of  all  opioids  sold  or
    19  distributed;
    20    (e)  the  name  and  National  Drug  Code  (NDC) of the opioid sold or
    21  distributed;
    22    (f) the number of containers and the strength and metric  quantity  of
    23  controlled  substance  in  each container of the opioid sold or distrib-
    24  uted;
    25    (g) the total number of morphine milligram equivalents (MMEs) sold  or
    26  distributed; and
    27    (h) any other elements as deemed necessary by the commissioner.
    28    4-a.  Initial  and  future  reports.  (a)  Such  information  shall be
    29  reported annually to the department in  such  form  as  defined  by  the
    30  commissioner, provided however that the initial report provided pursuant
    31  to  subdivision four shall consist of all opioids sold or distributed in
    32  the state of New York for the two thousand seventeen calendar year,  and
    33  must  be submitted by August 1, 2018. Subsequent annual reports shall be
    34  submitted on April first of each year based on the actual  opioid  sales
    35  and distributions of the prior calendar year.
    36    (b) For the purpose of such annual reporting, MMEs shall be determined
    37  pursuant  to a formulation to be issued by the department and updated as
    38  the department deems appropriate.
    39    5. Determination of ratable share. Each manufacturer  and  distributor
    40  licensed  under  this  article  that sells or distributes opioids in the
    41  state of New York shall pay a portion of the  total  opioid  stewardship
    42  payment amount. The ratable share shall be calculated as follows:
    43    (a)  The  total amount of MMEs sold or distributed in the state of New
    44  York by the licensee for the preceding calendar year, as reported by the
    45  licensee pursuant to subdivision four of this section, shall be  divided
    46  by  the  total amount of MME sold in the state of New York by all licen-
    47  sees pursuant to this article to determine the licensee payment percent-
    48  age.  The licensee payment percentage shall be multiplied by  the  total
    49  opioid  stewardship  payment.   The product of such calculation shall be
    50  the licensee's ratable share.  The department shall have  the  authority
    51  to  adjust  the  total  number  of  a licensee's MMEs to account for the
    52  nature and use of the product, as well as the type of entity  purchasing
    53  the product from the licensee, when making such determination and adjust
    54  the ratable share accordingly.
    55    (b) The licensee's total amount of MME sold or distributed, as well as
    56  the  total amount of MME sold or distributed by all licensees under this
        S. 7507--C                         93                         A. 9507--C
 
     1  article, used in the calculation of the ratable share shall not  include
     2  the  MME of those opioids which are: (i) manufactured in New York state,
     3  but whose final point of delivery or sale is outside of New York  state;
     4  (ii)  sold  or  distributed to entities certified to operate pursuant to
     5  article thirty-two of the mental hygiene law, or article  forty  of  the
     6  public  health  law;  or  (iii)  the MMEs attributable to buprenorphine,
     7  methadone or morphine.
     8    (c) The department shall provide to the licensee, in  writing,  on  or
     9  before  October fifteenth, two thousand eighteen, the licensee's ratable
    10  share for the two thousand seventeen calendar  year.    Thereafter,  the
    11  department  shall  notify  the licensee in writing annually on or before
    12  October fifteenth of each year based on the opioids sold or  distributed
    13  for the prior calendar year.
    14    6. Payment of ratable share. The licensee shall make payments quarter-
    15  ly  to  the  department  with  the  first  payment of the ratable share,
    16  provided that the amount due on January  first,  two  thousand  nineteen
    17  shall  be  for  the  full amount of the first annual payment, with addi-
    18  tional payments to be due and owing on the first day  of  every  quarter
    19  thereafter.
    20    7.  Rebate  of  ratable  share. In any year for which the commissioner
    21  determines that a licensee failed  to  report  required  information  as
    22  required  by  this  section, those licensees complying with this section
    23  shall receive a reduced assessment of their ratable share in the follow-
    24  ing year equal to the amount in excess of any overpayment in  the  prior
    25  payment period.
    26    8.  Licensee  opportunity  to  appeal. A licensee shall be afforded an
    27  opportunity to submit information to the department to justify  why  the
    28  ratable  share  provided  to  the licensee, pursuant to paragraph (c) of
    29  subdivision five of this section, or  amounts  paid  thereunder  are  in
    30  error or otherwise not warranted. If the department determines thereaft-
    31  er  that  all  or  a portion of such ratable share, as determined by the
    32  commissioner pursuant to  subdivision  five  of  this  section,  is  not
    33  warranted,  the department may: (a) adjust the ratable share; (b) adjust
    34  the assessment of the ratable share in the following year equal  to  the
    35  amount  in excess of any overpayment in the prior payment period; or (c)
    36  refund amounts paid in error.
    37    9. Department annual review. The department shall annually review  the
    38  amount  of  state  operating funds spent in the office of alcoholism and
    39  substance abuse services (OASAS) budget for opioid prevention, treatment
    40  and recovery. The commissioner of OASAS shall certify to the  department
    41  the  amount  of  annual  spending for such services, utilizing available
    42  information on patient demographics and  the  actual  cost  of  services
    43  delivered  by the state and by state-funded providers. The certification
    44  of such spending shall begin in state fiscal  year  two  thousand  eigh-
    45  teen-nineteen,  and  continue  annually  thereafter. The total amount of
    46  such spending shall be provided to the department by the commissioner of
    47  OASAS no later than June thirtieth of  each  year.  There  shall  be  no
    48  stewardship  fund  payments  beginning  on July first in the event state
    49  operating funds spent in the OASAS budget for opioid prevention,  treat-
    50  ment and recovery in the most recently reported year is equal to or less
    51  than  state operating funds spent for such purposes in state fiscal year
    52  two thousand nine-ten.
    53    10. Penalties. (a) The department may assess a  civil  penalty  in  an
    54  amount  not  to exceed one thousand dollars per day against any licensee
    55  that fails to comply with subdivisions four and four-a of this section.
        S. 7507--C                         94                         A. 9507--C
 
     1    (b) In addition to any other civil or  criminal  penalty  provided  by
     2  law,  where a licensee has failed to pay its ratable share in accordance
     3  with subdivision six of this section, the department may also  assess  a
     4  penalty  of  no  less than ten percent and no greater than three hundred
     5  percent of the ratable share due from such licensee.
     6    (c)  Where  the ratable share, or any portion thereof, has been passed
     7  on to a purchaser by a licensee, the commissioner may impose  a  penalty
     8  not to exceed one million dollars per incident.
     9    § 2. Subdivision 1 of section 3316 of the public health law is amended
    10  by adding a new paragraph (c) to read as follows:
    11    (c)  is  unlikely  during the period of his or her license to complete
    12  the reports or to pay the ratable share required by title two-A of  this
    13  article on or before the required date. Prior evidence of non-compliance
    14  shall constitute substantial evidence of such.
    15    § 3. The state finance law is amended by adding a new section 97-aaaaa
    16  to read as follows:
    17    §  97-aaaaa.  Opioid stewardship fund.  1. There is hereby established
    18  in the joint custody of the state comptroller and  the  commissioner  of
    19  taxation  and  finance  an  account of the miscellaneous special revenue
    20  account to be known as the "opioid stewardship fund".
    21    2. Moneys in opioid stewardship fund shall be kept separate and  shall
    22  not  be  commingled  with  any  other moneys in the custody of the state
    23  comptroller and the commissioner of taxation and finance.
    24    3. The opioid stewardship fund shall consist  of  moneys  appropriated
    25  for  the  purpose  of  such  account, moneys transferred to such account
    26  pursuant to law, contributions consisting of promises or grants  of  any
    27  money  or  property  of  any kind or value, or any other thing of value,
    28  including grants or  other  financial  assistance  from  any  agency  of
    29  government  and moneys required by the provisions of this section or any
    30  other law to be paid into or credited to this account.
    31    4. Moneys of the opioid stewardship fund,  when  allocated,  shall  be
    32  available,  subject  to  the  approval of the director of the budget, to
    33  support programs operated by the New York state office of alcoholism and
    34  substance abuse services or agencies certified, authorized, approved  or
    35  otherwise  funded  by  the  New  York  state  office  of  alcoholism and
    36  substance abuse services  to  provide  opioid  treatment,  recovery  and
    37  prevention  and  education  services;  and  to  provide  support for the
    38  prescription monitoring program  registry  as  established  pursuant  to
    39  section thirty-three hundred forty-three-a of the public health law.
    40    5.  At the request of the budget director, the state comptroller shall
    41  transfer moneys to support the  costs  of  opioid  treatment,  recovery,
    42  prevention,  education  services,  and  other related programs, from the
    43  opioid stewardship fund to any other fund of the state to  support  this
    44  purpose.
    45    6.  (i)  Notwithstanding the provisions of any general or special law,
    46  no moneys shall be available from the opioid stewardship  fund  until  a
    47  certificate  of  allocation  and  a  schedule of amounts to be available
    48  therefor shall have been issued by the director of the budget, upon  the
    49  recommendation  of  the  commissioner  of  the  office of alcoholism and
    50  substance abuse services, and a copy of such certificate filed with  the
    51  comptroller, the chairman of the senate finance committee and the chair-
    52  man of the assembly ways and means committee.
    53    (ii) Such certificate may be amended from time to time by the director
    54  of the budget, upon the recommendation of the commissioner of the office
    55  of alcoholism and substance abuse services, and a copy of such amendment
        S. 7507--C                         95                         A. 9507--C
 
     1  shall  be filed with the comptroller, the chairman of the senate finance
     2  committee and the chairman of the assembly ways and means committee.
     3    7.  The  moneys,  when  allocated,  shall  be  paid  out of the opioid
     4  stewardship fund, pursuant to subdivision  four  of  this  section,  and
     5  subject  to the approval of the director of the budget, on the audit and
     6  warrant of the comptroller on vouchers certified or approved by (i)  the
     7  commissioner of the office of alcoholism and substance abuse services or
     8  his  or  her  designee;  or  (ii)  the commissioner of the department of
     9  health or his or her designee.
    10    § 4. Severability. If any clause, sentence, paragraph, subdivision, or
    11  section of this act shall be adjudged by any court of  competent  juris-
    12  diction to be invalid, such judgment shall not affect, impair, or inval-
    13  idate  the  remainder thereof, but shall be confined in its operation to
    14  the  clause,  sentence,  paragraph,  subdivision,  or  section  directly
    15  involved  in  the  controversy  in  which  such judgment shall have been
    16  rendered. It is hereby declared to be the intent of the legislature that
    17  this act would have been enacted even if such invalid provisions had not
    18  been included herein.
    19    § 5. This act shall take effect July 1, 2018 and shall expire  and  be
    20  deemed  to  be repealed on June 30, 2024, provided that, effective imme-
    21  diately, the addition, amendment and/or repeal of any rule or regulation
    22  necessary for the implementation of this act on its effective  date  are
    23  authorized to be made and completed on or before such effective date.
    24    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    25  sion,  section  or  part  of  this act shall be adjudged by any court of
    26  competent jurisdiction to be invalid, such judgment  shall  not  affect,
    27  impair,  or  invalidate  the remainder thereof, but shall be confined in
    28  its operation to the clause, sentence, paragraph,  subdivision,  section
    29  or part thereof directly involved in the controversy in which such judg-
    30  ment  shall  have been rendered. It has hereby declared to be the intent
    31  of the legislature that this act would have been enacted  even  if  such
    32  invalid provisions had not been included herein.
    33    §  3.  This  act shall take effect immediately provided, however, that
    34  the applicable effective date of Parts A through NN of this act shall be
    35  as specifically set forth in the last section of such Parts.
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