Section 601 would authorize the Food and Drug Administration (FDA) to disclose qualitative and quantitative information on the inactive ingredients of a reference brand drug in response to a request in a controlled correspondence for a generic drug. Section 602 would allow the FDA to approve the marketing application for a generic drug whose label differs from that of the reference brand product when the reference product’s label changes within 90 days of the date on which the generic application would otherwise have been eligible for approval. The sponsor of the generic drug would be required to update that drug’s label within 60 days of approval. Based on conversations with stakeholders, CBO expects that both provisions would accelerate the availability of lower-priced generic drugs that manufacturers would choose to market earlier than current law allows. Therefore, CBO anticipates, the provisions would reduce the average prices for those drugs that are paid by federal health programs that purchase or provide health insurance that covers drugs.
Section 711 of the bill would reauthorize through 2027 a provision that allows sponsors of drugs developed from a particular type of molecule called an enantiomer to elect five-year data exclusivity under certain circumstances; that period is two years longer than allowed under current law. (Five-year data exclusivity begins when a drug is approved by the FDA; during that time, the agency does not accept applications for marketing approval for generic versions of the drug). Based on historical data, CBO expects that extending market exclusivity for prescription drugs would, in some cases, delay the entry of lower-priced generic versions of those drugs.
Section 902 of the bill would appropriate $450 million for the Medicaid Improvement Fund in fiscal year 2025. Other provisions in H.R. 7667 would have insignificant effects on direct spending and revenues. The areas of significant uncertainty for this table include CBO’s estimates of sales, market effects, and timing of introductions of new pharmaceutical products.
H.R. 7667 would impose private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). The bill would impose fees on drug, biological product, and device developers and manufacturers, amend the application and approval process for certain products, expand notification duties, and ban electrical stimulation devices, among other mandates. Those mandates are included in Sections 103, 203, 303, 403, 721, 801, 803, 804, 808, and 811. CBO estimates the cost of the mandates would exceed the private-sector threshold established in UMRA ($184 million in 2022, adjusted annually for inflation). The bill would not impose any intergovernmental mandates.