S. 974 would create a private right of action that allows developers of generic drugs or biosimilar products to bring civil lawsuits against manufacturers of brand-name drugs if sufficient quantities of reference samples of a branded product are not made available for premarket testing. (To obtain marketing approval of their products from the Food and Drug Administration (FDA), developers of generic or biosimilar drugs currently must purchase reference samples to conduct the testing required to demonstrate that their drugs meet the FDA’s approval criteria.)
The bill also would remove a statutory requirement that manufacturers of generic or biosimilar versions of certain drugs that carry a significant risk of serious side effects use the same risk management system as the brand-name reference drug to ensure safe use of the product. Instead, it would provide the FDA with more discretion to allow those manufacturers to use comparable safety systems on a case-by-case basis. CBO expects that the bill’s provisions would allow generic drugs (including biosimilar versions of biologics) to enter the market earlier, on average, than they would under current law. Because of the earlier entry of lower-priced generic drugs, CBO estimates, enacting the legislation would reduce federal spending on prescription drugs.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that implementing S. 974 would:
Reduce direct spending by $3.3 billion over the 2019-2028 period;
Increase revenues by $0.6 billion over the 2019-2028 period;
Reduce unified budget deficits by $3.9 billion over the 2019-2028 period; and
Reduce spending subject to appropriation, on net, by $87 million over the 2019-2023 period, assuming appropriation actions consistent with those estimated reductions in costs.
Because enacting S. 974 would affect direct spending and revenues, pay-as-you-go procedures apply.
CBO estimates that enacting S. 974 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
S. 974 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
