New Annual IRS Fee On Branded Prescription Drugs Now In Effect

Health reform legislation included a new industry-wide fee on branded prescription drugs, based on a manufacturer’s share of the government drug sales market, defined as Medicaid, Medicare Parts B and D, Veterans Administration (VA), Department of Defense (DOD) and TRICARE retail pharmacy purchases. This annual fee, administered by the Internal Revenue Service, will be imposed starting September 1, 2012.

The fee amount is fixed each year by statute, $2.5 billion for 2011, and will be allocated by the IRS among branded prescription drug manufacturers and importers based on each manufacturer’s share of the government market, from data supplied by the Centers for Medicare and Medicaid Services (CMS), VA and DOD. More information on the fee: http://www.irs.gov/irb/2010-50_IRB/ar11.html