n-12-74.pdf

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Part III – Administrative, Procedural, and Miscellaneous

Branded Prescription Drugs

Notice 2012-74
Branded Prescription Drug Fee; Guidance for the 2013 Fee Year

Purpose

This notice provides guidance on the branded prescription drug fee for the 2013
fee year related to (1) the submission of Form 8947, “Report of Branded Prescription
Drug Information,” (2) the time and manner for notifying covered entities of their
preliminary fee calculation, (3) the time and manner for submitting error reports for the
dispute resolution process, and (4) the time for notifying covered entities of their final fee
calculation.
Background

An annual fee on covered entities engaged in the business of manufacturing or
importing branded prescription drugs is imposed by section 9008 of the Patient
Protection and Affordable Care Act, Public Law 111-148 (124 Stat. 119 (2010)), as
amended by section 1404 of the Health Care and Education Reconciliation Act of 2010,
Public Law 111-152 (124 Stat. 1029 (2010)).
The Branded Prescription Drug Fee Regulations in 26 C.F.R. Part 51, which
were published on August 18, 2011 (76 FR 51245), provide the method by which each
covered entity’s annual fee is calculated. These regulations also define terms for the
administration of the fee. As relevant for this notice, § 51.2T(g) defines fee year
as the
calendar year in which the fee for a particular sales year must be paid and § 51.2T(m)
defines sales year
as the second calendar year preceding the fee year.
Section 51.3T provides that annually, each covered entity may submit a
completed Form 8947, “Report of Branded Prescription Drug Information,” in
accordance with the instructions for the form. Generally, the form solicits information
from covered entities on National Drug Codes, orphan drugs, designated entities,

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rebates, and other information specified by the form or its instructions. The form is to be
filed by the date prescribed in guidance published in the Internal Revenue Bulletin.
Section 51.6T provides that for each sales year the IRS will make a preliminary
fee calculation for each covered entity and will notify each covered entity of this
calculation by the date prescribed in guidance published in the Internal Revenue
Bulletin. This notification will also include additional prescribed information. As used in
this notice, “notice of preliminary fee calculation” includes the additional prescribed
information.
Section 51.7T provides that upon receipt of its preliminary fee calculation, each
covered entity will have an opportunity to dispute this calculation by submitting to the
IRS an error report with prescribed information. Sections 51.7T(b) and (c) set out the
information that a covered entity must submit to support each asserted error. Section
51.7T(d) provides that each covered entity must submit its error report(s) in the form
and manner that is prescribed in guidance published in the Internal Revenue Bulletin.
This guidance will also prescribe the date by which each covered entity must submit its
report(s).
Section 51.8T provides that the IRS will send each covered entity its final fee
calculation no later than August 31
st
of each fee year and also provides that covered
entities must pay their fee by September 30
th
of the fee year.
Submission of Form 8947
For the 2013 fee year, a covered entity that chooses to submit Form 8947 must
file the form by December 17, 2012.
Time and manner for notifying covered entities of their preliminary fee calculation

For the 2013 fee year, the IRS will mail each covered entity a paper notice of its
preliminary fee calculation by April 1, 2013. This mailing will include a National Drug
Code (NDC) attachment (NDC attachment) that lists the covered entity’s NDCs and the
sales data reported to the IRS by each government program pursuant to § 51.4T.
A covered entity may request that the IRS send a CD-ROM with the NDC
attachment in Microsoft Excel format. The covered entity must make this request by
March 15, 2013. This request must be made either by telephone to Ingrid Taylor at
(908) 301-2118 or Mi Lim at (312) 292-3775 (not toll-free calls) or by email to
it.bpd.fee@irs.gov. If a covered entity makes this request timely, the IRS will mail the
covered entity its notice of preliminary fee calculation on paper and the NDC attachment
on paper and CD-ROM by April 1, 2013.
Time and manner for submitting error reports for the dispute resolution process

For the 2013 fee year, a covered entity that chooses to submit an error report
regarding its preliminary fee calculation must mail the error report by May 16, 2013.
When the IRS mails each covered entity a notice of its preliminary fee calculation
by April 1, 2013, the IRS will also send each covered entity a template on a CD-ROM
that the covered entity must use to prepare its error report. All completed templates and
the supporting documentation must be submitted on a CD-ROM and sent by mail to:
Department of the Treasury
Internal Revenue Service – Branded Prescription Drug Fee

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1973 N. Rulon White Boulevard, Mail Stop 4916
Ogden, UT 84404
Notification of Final Fee Calculation

In accordance with § 51.8T(a), the IRS will notify each covered entity of its final
fee calculation for 2013 by August 31, 2013. In accordance with § 51.8T(c), each
covered entity must pay this fee by September 30, 2013.
Effect on Other Documents

Notice 2011-92, 2011-48 I.R.B. 809, which provides guidance for the 2012 fee
year, is obsoleted.
Drafting Information

The principal author of this notice is Celia Gabrysh of the Office of Associate
Chief Counsel (Passthroughs & Special Industries). For further information regarding
this notice contact Celia Gabrysh at (202) 622-3130 (not a toll-free call).