The Annual Branded Prescription Drug Fee imposes an annual fee on each covered entity engaged in the business of manufacturing or importing branded prescription drugs. Manufacturers and Importers are required to pay such fee on each covered entity with aggregated branded prescription drug sales of over $5 million to specific programs. The IRS distributes to covered entities a preliminary calculation of the fee by March 1 of each fee year. The final fee notice (Letter 4658)1 is sent to covered entities with the final fee calculation for the year by August 31 and payment is due by September 30.
The Centers for Medicare and Medicaid Services (CMS) Medicaid Branded Prescription Drug (BPD) team sent out a communication to all technical and invoice contacts on March 2, 2017 as a reminder to verify utilization in the Medicaid Drug Rebate system for all quarters in 2016.2 Manufacturers and importers of covered branded drugs are responsible for the accuracy of sales data, as well as resolving utilization discrepancies with state technical contacts.
Please refer to our previous blog post dated March 10, 2015 on the subject for more information. More information on the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 Annual Branded Prescription Drug Fee may be accessed here.
1 Final Fee Notice – Letter 4658, https://www.irs.gov/businesses/corporations/annual-fee-on-branded-prescription-drug-manufacturers-and-importers
2 CMS MedicaidBPD, “Manufacturer TC/Invoice Contacts: 2016 State Utilization Data for Branded Prescription Drug Fees”, March 2, 2017