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Statutory Text

SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION
PHARMACEUTICAL MANUFACTURERS AND IMPORTERS.
(a) IMPOSITION OF FEE.—
(1) IN GENERAL.—Each covered entity engaged in the business
of manufacturing or importing branded prescription drugs
shall pay to the Secretary of the Treasury not later than the
annual payment date of each calendar year beginning after
2010 a fee in an amount determined under subsection (b). øAs
revised by section 1404(a)(1) of HCERA¿
(2) ANNUAL PAYMENT DATE.—For purposes of this section,
the term ‘‘annual payment date’’ means with respect to any
calendar year the date determined by the Secretary, but in no
event later than September 30 of such calendar year.
(b) DETERMINATION OF FEE AMOUNT.—
(1) IN GENERAL.—With respect to each covered entity, the
fee under this section for any calendar year shall be equal to
an amount that bears the same ratio to the applicable amount
as—øAs revised by section 1404(a)(2)(A) of HCERA¿
(A) the covered entity’s branded prescription drug
sales taken into account during the preceding calendar
year, bear to
(B) the aggregate branded prescription drug sales of
all covered entities taken into account during such preceding
calendar year.
(2) SALES TAKEN INTO ACCOUNT.—For purposes of paragraph
(1), the branded prescription drug sales taken into account
during any calendar year with respect to any covered entity
shall be determined in accordance with the following table:
With respect to a covered entity’s aggregate branded prescription
drug sales during the calendar year that are:
The percentage of such
sales taken into account
is:
Not more than $5,000,000 …………………………………… 0 percent
More than $5,000,000 but not more than
$125,000,000.
10 percent
More than $125,000,000 but not more than
$225,000,000.
40 percent
More than $225,000,000 but not more than
$400,000,000.
75 percent
More than $400,000,000 ……………………………………… 100 percent.
(3) SECRETARIAL DETERMINATION.—The Secretary of the
Treasury shall calculate the amount of each covered entity’s
fee for any calendar year under paragraph (1). In calculating
such covered entity’s branded prescription drug sales on the
basis of reports submitted under subsection (g) and through
the use of any other source of information available to the Secretary
of the Treasury.
(4) APPLICABLE AMOUNT.—øAs added by section
1404(a)(2)(B) of HCERA¿ For purposes of paragraph (1), the
applicable amount shall be determined in accordance with the
following table:
Calendar year Applicable amount
2011 ……………………………………………………………………………………….. $2,500,000,000
2012 ……………………………………………………………………………………….. $2,800,000,000
2013 ……………………………………………………………………………………….. $2,800,000,000
2014 ……………………………………………………………………………………….. $3,000,000,000
2015 ……………………………………………………………………………………….. $3,000,000,000
2016 ……………………………………………………………………………………….. $3,000,000,000
2017 ……………………………………………………………………………………….. $4,000,000,000
2018 ……………………………………………………………………………………….. $4,100,000,000
2019 and thereafter ………………………………………………………………….. $2,800,000,000.
(c) TRANSFER OF FEES TO MEDICARE PART B TRUST FUND.—
There is hereby appropriated to the Federal Supplementary Medical
Insurance Trust Fund established under section 1841 of the
Social Security Act an amount equal to the fees received by the
Secretary of the Treasury under subsection (a).
(d) COVERED ENTITY.—
(1) IN GENERAL.—For purposes of this section, the term
‘‘covered entity’’ means any manufacturer or importer with
gross receipts from branded prescription drug sales.
(2) CONTROLLED GROUPS.—
(A) IN GENERAL.—For purposes of this subsection, all
persons treated as a single employer under subsection (a)
or (b) of section 52 of the Internal Revenue Code of 1986
or subsection (m) or (o) of section 414 of such Code shall
be treated as a single covered entity.
(B) INCLUSION OF FOREIGN CORPORATIONS.—For purposes
of subparagraph (A), in applying subsections (a) and
(b) of section 52 of such Code to this section, section 1563
of such Code shall be applied without regard to subsection
(b)(2)(C) thereof.
(3) JOINT AND SEVERAL LIABILITY.—If more than one person
is liable for payment of the fee under subsection (a) with
respect to a single covered entity by reason of the application
of paragraph (2), all such persons shall be jointly and severally
liable for payment of such fee. øAs added by section 1404(a)(3)
of HCERA¿
(e) BRANDED PRESCRIPTION DRUG SALES.—For purposes of this
section—
(1) IN GENERAL.—The term ‘‘branded prescription drug
sales’’ means sales of branded prescription drugs to any specified
government program or pursuant to coverage under any
such program.
(2) BRANDED PRESCRIPTION DRUGS.—
(A) IN GENERAL.—The term ‘‘branded prescription
drug’’ means—
(i) any prescription drug the application for which
was submitted under section 505(b) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)), or
(ii) any biological product the license for which
was submitted under section 351(a) of the Public
Health Service Act (42 U.S.C. 262(a)).
(B) PRESCRIPTION DRUG.—For purposes of subparagraph
(A)(i), the term ‘‘prescription drug’’ means any drug
which is subject to section 503(b) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 353(b)).
(3) EXCLUSION OF ORPHAN DRUG SALES.—The term ‘‘branded
prescription drug sales’’ shall not include sales of any drug
or biological product with respect to which a credit was allowed
for any taxable year under section 45C of the Internal Revenue
Code of 1986. The preceding sentence shall not apply with respect
to any such drug or biological product after the date on
which such drug or biological product is approved by the Food
and Drug Administration for marketing for any indication
other than the treatment of the rare disease or condition with
respect to which such credit was allowed.
(4) SPECIFIED GOVERNMENT PROGRAM.—The term ‘‘specified
government program’’ means—
(A) the Medicare Part D program under part D of title
XVIII of the Social Security Act,
(B) the Medicare Part B program under part B of title
XVIII of the Social Security Act,
(C) the Medicaid program under title XIX of the Social
Security Act,
(D) any program under which branded prescription
drugs are procured by the Department of Veterans Affairs,
(E) any program under which branded prescription
drugs are procured by the Department of Defense, or
(F) the TRICARE retail pharmacy program under section
1074g of title 10, United States Code.
(f) TAX TREATMENT OF FEES.—The fees imposed by this section—
(1) for purposes of subtitle F of the Internal Revenue Code
of 1986, shall be treated as excise taxes with respect to which
only civil actions for refund under procedures of such subtitle
shall apply, and
(2) for purposes of section 275 of such Code, shall be considered
to be a tax described in section 275(a)(6).
(g) REPORTING REQUIREMENT.—Not later than the date determined
by the Secretary of the Treasury following the end of any
calendar year, the Secretary of Health and Human Services, the
Secretary of Veterans Affairs, and the Secretary of Defense shall
report to the Secretary of the Treasury, in such manner as the Secretary
of the Treasury prescribes, the total branded prescription
drug sales for each covered entity with respect to each specified
government program under such Secretary’s jurisdiction using the
following methodology:
(1) MEDICARE PART D PROGRAM.—The Secretary of Health
and Human Services shall report, for each covered entity and
for each branded prescription drug of the covered entity covered
by the Medicare Part D program, the product of—
(A) the per-unit ingredient cost, as reported to the Secretary
of Health and Human Services by prescription drug
plans and Medicare Advantage prescription drug plans,
minus any per-unit rebate, discount, or other price concession
provided by the covered entity, as reported to the Secretary
of Health and Human Services by the prescription
drug plans and Medicare Advantage prescription drug
plans, and
(B) the number of units of the branded prescription
drug paid for under the Medicare Part D program.
(2) MEDICARE PART B PROGRAM.—The Secretary of Health
and Human Services shall report, for each covered entity and
for each branded prescription drug of the covered entity covered
by the Medicare Part B program under section 1862(a) of
the Social Security Act, the product of—
(A) the per-unit average sales price (as defined in section
1847A(c) of the Social Security Act) or the per-unit
Part B payment rate for a separately paid branded prescription
drug without a reported average sales price, and
(B) the number of units of the branded prescription
drug paid for under the Medicare Part B program.
The Centers for Medicare and Medicaid Services shall establish
a process for determining the units and the allocated price
for purposes of this section for those branded prescription
drugs that are not separately payable or for which National
Drug Codes are not reported.
(3) MEDICAID PROGRAM.—The Secretary of Health and
Human Services shall report, for each covered entity and for
each branded prescription drug of the covered entity covered
under the Medicaid program, the product of—
(A) the per-unit ingredient cost paid to pharmacies by
States for the branded prescription drug dispensed to Medicaid
beneficiaries, minus any per-unit rebate paid by the
covered entity under section 1927 of the Social Security
Act and any State supplemental rebate, and
(B) the number of units of the branded prescription
drug paid for under the Medicaid program.
(4) DEPARTMENT OF VETERANS AFFAIRS PROGRAMS.—The
Secretary of Veterans Affairs shall report, for each covered entity
and for each branded prescription drug of the covered entity
the total amount paid for each such branded prescription
drug procured by the Department of Veterans Affairs for its
beneficiaries.
(5) DEPARTMENT OF DEFENSE PROGRAMS AND TRICARE.—
The Secretary of Defense shall report, for each covered entity
and for each branded prescription drug of the covered entity,
the sum of—
(A) the total amount paid for each such branded prescription
drug procured by the Department of Defense for
its beneficiaries, and
(B) for each such branded prescription drug dispensed
under the TRICARE retail pharmacy program, the product
of—
(i) the per-unit ingredient cost, minus any perunit
rebate paid by the covered entity, and
(ii) the number of units of the branded prescription
drug dispensed under such program.
(h) SECRETARY.—For purposes of this section, the term ‘‘Secretary’’
includes the Secretary’s delegate.
(i) GUIDANCE.—The Secretary of the Treasury shall publish
guidance necessary to carry out the purposes of this section.
(j) EFFECTIVE DATE.—øReplaced by section 1404(a)(4) of
HCERA¿ This section shall apply to calendar years beginning after
December 31, 2010.
(k) CONFORMING AMENDMENT.—Section 1841(a) of the Social
Security Act is amended by inserting ‘‘or section 9008(c) of the Patient
Protection and Affordable Care Act of 2009’’ after ‘‘this part’’.