Pharma and Life Sciences Tax News, Vol.12, No. 11 - August 9, 2013

August 2013
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Pharma and Life Sciences Tax News, Vol. 12, No. 11 - August 9, 2013

At a glance

The IRS has released guidance (Notice 2013-51) on the procedural requirements related to the branded prescription drug fee (“the fee”) for the 2014 calendar year. This annual fee, which applies to companies that manufacture or import branded prescription drugs, was enacted as part of health care legislation in 2010 and applies to each calendar year beginning after 2010. For 2014, the aggregate amount of the fee that is to be allocated proportionally to covered entities is $3.0 billion.

Background

Section 9008 of the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148 ), as amended by Sec. 1404 of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152 ), provides that a covered entity (i.e. any manufacturer or importer with gross receipts from branded prescription drug sales) with aggregate branded prescription drug sales of over $5 million to any specified government program, or pursuant to coverage under any such program, must pay an annual fee for calendar years beginning after Dec. 31, 2010.