Under the price negotiation provisions of the Inflation Reduction Act (IRA), Medicare is now able to negotiate prices for certain drugs. Manufacturers of these brand-name drugs selected for negotiation who do not participate are penalized. One such penalty is paying an excise tax on the sales of the selected drug to Medicare.
In comments provided to the Internal Revenue Service (IRS), Arnold Ventures addressed the following aspects of the implementation of the excise tax:
1. Enhancing data quality and timely reporting of the tax
The process for manufacturers to meet reporting requirements, estimate excise taxes, and pay in a timely manner should not be burdensome or difficult.
2. Enforcement mechanisms
If the excise tax is not properly estimated, reported, and paid there are civil penalties that can be imposed by the IRS.
Read the full letter and recommendations here.