Health reform has new drug sales fee

Share this article:
Washington attorneys Thomas Barker and Barrett Thornhill (Foley Hoag) say in an on-line report that the new healthcare reform law imposes an annual fee on brand-name prescription drug manufacturers and importers, effective on a date chosen by the HHS secretary to be no later than September 30, 2011. The fee is structured to raise $2.5 billion in 2011 and rise to $4.1 billion in 2018 before falling to $2.8 billion in 2019 and years thereafter. The proceeds are to be credited to the Supplementary Medical Insurance Fund.

Barker and Thornhill say the aggregate fee is apportioned among covered entities each year based on each entity's relative market share of “branded prescription drug sales” taken into account in the preceding calendar year. Sale or importation of generic drugs is not subject to the fee, nor are orphan drugs.

To be counted, the sales must be to a specified government program or pursuant to coverage under such a program. Cited in the law are Medicare Parts B and D, Medicaid, Veterans Affairs programs, Department of Defense programs or the TRICARE retail pharmacy program. Thus, the attorneys say, sales in the private marketplace are excluded in determining the fee amount. A graduated structure determines the proportion of a covered entity's drug sales taken into account in determining the fee.
Share this article:
You must be a registered member of MMM to post a comment.

Reimagining healthcare? We want to hear about it.
Submit nominations here for MM&M's first-ever list of the Top 40 Healthcare Transformers

Email Newsletters


More in Features

Is your marketing strategy stuck in 2005?

Is your marketing strategy stuck in 2005?

It is not enough to just have a killer black book or Rolodex. The market needs agile, swift marketing

Is guidance stifling social media?

Recent FDA draft guidance was meant to help companies create FDA-compliant tweets and handle third-party misinformation on the web. What other obstacles lie in the path of effective social media use?

Upward Move: Jose Rivera

Upward Move: Jose Rivera

Jose Rivera. EVP, account director, Concentric