Biotech Values

[DewDiligence]

Re: ObamaCare fee refunds

Tinker et al: I’m referring not to insurance, but rather to the pharma-industry fee that went into effect on 1/1/11. From #msg-49486773:

There is in the legislation an annual dollar amount that must be assessed across large companies in our industry [i.e. pharma]. This amount is apportioned to each individual company based upon the calculation of that entity’s share of total public-plan sales. This item is one of the largest on the list, and additionally is not tax deductible. It has an effective date of January 1, 2011…

Thus, there are two questions for investors to think about: i) will these fees be accrued on the P&L statements of pharma companies?; and ii) will the fees actually be paid to the government when all is said and done?

Because these fees are not tax-deductible, they are more consequential to EPS than many investors realize.