8. Commitments, Contingent Liabilities and Litigation
future minimum rental payments for operating leases having initial or
remaining non-cancelable lease terms in excess of one year at June 30, 2019 for fiscal 2020 through 2024 and thereafter are as follows: $126 million, $100 million, $76 million, $54 million, $33 million and $94 million. Rental expense relating to operating leases was $153 million, $172 million and $159 million in fiscal 2019, 2018 and 2017, respectively. Sublease rental income was immaterial for all periods presented.
Generic Sourcing Venture with CVS Health Corporation ("CVS Health")
Oak Sourcing, LLC ("Red Oak Sourcing") is a U.S.-based generic
pharmaceutical sourcing venture with CVS Health for an initial term
through June 2024. Red Oak Sourcing negotiates generic pharmaceutical
supply contracts on behalf of its participants. Due to the achievement
of predetermined milestones, we are required to make quarterly payments
of $45.6 million to CVS Health for the initial term.
New York Opioid Stewardship Act
April 2018, the State of New York passed a budget which included the
Opioid Stewardship Act (the "OSA"). The OSA created an aggregate $100
million annual assessment on all manufacturers and distributors licensed
to sell or distribute opioids in New York. Under the OSA, each licensed
manufacturer and distributor would be required to pay a portion of the
assessment based on its ratable share, as determined by the state, of
the total morphine milligram equivalents sold or distributed in New York
during the applicable calendar year, beginning in 2017.
October 2018, we received notices from the New York Department of
Health of our estimated payment amount for calendar year 2017. In
December 2018, the U.S. District Court for the Southern District of New
York ruled that the OSA is unconstitutional and enjoined its enforcement
(the "Ruling"). In January 2019, the State filed notice of its intent
to appeal the Ruling. In April 2019, the State, among other things,
amended the OSA so that the assessment would only cover opioid sales in
2017 and 2018, subject to the State's pending appeal of the Ruling.
accrue contingencies if it is probable that a liability has been
incurred and the amount can be estimated. At June 30, 2019, we have no
amounts accrued for the OSA because we do not believe it is probable
that a liability has been incurred.
We become involved from time to time in disputes, litigation and regulatory matters.
We may be named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act