H.R. 1499 would prohibit certain agreements that are used to settle claims of patent infringement between sponsors of brand-name, generic, or biosimilar drugs relating to the sale of a drug or biological product. The bill also would create civil penalties for parties to settlement agreements that violate the bill’s requirements.
CBO expects that the bill would accelerate the availability of lower-priced generic or biosimilar drugs that would have been affected by agreements prohibited under the bill and reduce the average price of drugs paid by federal health programs that purchase drugs or provide health insurance that covers drugs. In total, CBO estimates that enacting H.R. 1499 would decrease the deficit by $613 million over the 2019-2029 period. That amount includes a $520 million reduction in direct spending and a $93 million increase in revenues.
CBO also estimates that implementing H.R. 1499 would decrease spending subject to appropriation by $24 million over the 2019-2024 period, assuming appropriation actions consistent with the bill. That decrease would result primarily because lower estimated drug prices would reduce costs for discretionary health programs.
By prohibiting certain agreements between sponsors of brand-name, generic, or biosimilar drugs, H.R. 1499 would impose a private-sector mandate as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates the cost of the mandate, in the form of lost revenues to patent holders, would exceed the threshold for private-sector mandates established in UMRA ($164 million in 2019, adjusted annually for inflation) in at least two of the first five years the mandate is in effect.