Part III. Administrative, Procedural, and Miscellaneous

Branded Prescription Drug Sales

Notice 2011–9

Purpose

This notice modifies, restates, and supersedes Notice 2010–71, 2010–50 I.R.B. 822, which provides guidance on the annual fee imposed by section 9008 of the Affordable Care Act on certain manufacturers and importers (covered entities) of branded prescription drugs. The modifications reflected in this notice affect Part I — Information Requested from Covered Entities, Part II - Preliminary Fee Calculation for 2011, and Part III - Request for Comments. All other sections of Notice 2010–71 are restated in this notice without change.

Modifications Made to Notice 2010–71

Notice 2010–71, Part I - Information Requested from Covered Entities, asks covered entities to submit five general items of information on Form 8947, Report of Branded Prescription Drug In- formation . The Treasury Department and the IRS received a number of comments on the information requested on Form 8947. In response to these comments, this notice makes the following changes to the section on Information Requested from Covered Entities:

tions to Form 8947 provided that each designated entity should list information on “all” members of its controlled group. This item is modified to clarify that information is requested for only those members of the controlled group that are manufacturers and importers with gross receipts from the sale of a branded prescription drug(s) to a specified government program(s).

2010–71 provided for reporting of each orphan drug for which a covered entity was allowed a section 45C credit. In response to comments, this item is modified to provide that for purposes of section 9003(e)(3), the credit is considered “allowed” for any particular drug if any person claimed

the credit. Thus, the section 45C credit is considered to be allowed if any entity claimed the credit even if that entity was not part of the covered entity at the time the credit was claimed.

tice 2010–71 provided for reporting of rebates for drug sales as taken into account on a covered entity’s tax return. Commentators indicated that pharmaceutical manufacturers generally compile rebate information at an aggregate entity level for tax purposes, rather than at the drug product level. In response to these comments, this item is revised to provide that rebates should be reported for drugs dispensed in the 2009 sales year if the rebates are paid before Form 8947 is filed.

is also revised in response to the comments about the difficulty of reporting rebates as taken into account on the covered entity’s tax return. This item is revised to require reporting of rebates invoiced by states for drugs reimbursed by states in the 2009 sales year and paid before Form 8947 is filed.

notice provides that rebate information will be taken into account in calculating a covered entity’s annual fee for 2011 only if it is reported on a timely filed Form 8947.

Notice 2010–71, Part II — Preliminary Fee Calculation for 2011, provides the due date for filing Form 8947 and a time schedule for notification of the preliminary fee calculation for 2011. Commentators requested additional time to file Form 8947. In response to these comments, the due date for filing Form 8947 is deferred to February 11, 2011, and the remaining time schedule for preparing the preliminary fee calculation has been revised accordingly.

Notice 2010–71, Part III — Request for Comments, is revised to defer the deadline for submitting comments to June 15, 2011.

Restatement of Notice 2010–71, as modified by this notice

This notice provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing

or importing branded prescription drugs by section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111–148 (124 Stat. 119 (2010)), as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111–152 (124 Stat. 1029 (2010)). All references in this notice to section 9008 are references to section 9008 of the ACA, as amended by section 1404 of HCERA.

Part I of this notice describes a proposed methodology for calculating the section 9008 fee. Part II of this notice describes how the Internal Revenue Service (IRS) will use this proposed methodology to provide each covered entity with a preliminary 2011 fee calculation. The IRS and Treasury Department intend that a covered entity’s preliminary fee calculation for 2011 will serve as a basis for comments by the covered entity on the proposed methodology. Part III of this notice solicits public comments on all aspects of the notice.