Congressional Budget Office releases cost estimate for FDA Reauthorization Act of 2017

The Congressional Budget Office released its cost estimate for the FDA Reauthorization Act of 2017, noting the bill would increase net discretionary spending by about $740 million during the 2017 to 2022 period if appropriation actions are consistent with the bill.

Although the implementation would require increased funding for a variety of FDA activities, the CBO reported most of the increase in FDA spending would be offset by additional fees collected under the bill and used to reduce the need for discretionary appropriations.

According to the report, the FDA Reauthorization Act of 2017 (S. 934) would apply pay-as-you-go procedures due to an increase in direct spending by $13 million and a decrease in revenue by $2 million during the 2017 to 2027 period. This would increase budget deficits by $15 million during the 2017 to 2027 period, the CBO noted. Net direct spending or on-budget deficits would not be increased by more than $5 billion in any of the four consecutive 10-year periods starting in 2028.

The FDA Reauthorization Act of 2017 would also allow FDA programs through which fees are collected to cover the costs related to approving and marketing branded prescription drugs, medical devices, generic drugs and biosimilar biological products through 2022. In aggregate, the FDA would assess about $9 billion in fees — $8 billion for prescription drugs and $1 billion for medical devices — during the 2018 to 2022 period based on the fee levels and the inflation adjustments specified in the bill. The bill would also require modification of certain agency procedures related to oversight and review of generic drugs, drugs for pediatric populations and medical devices, as well as reauthorize certain research grant programs and require the Government Accountability Office (GAO) to prepare several reports, all of which would cost about $1.2 billion during the 2018 to 2022 period.

According to the report, the FDA Reauthorization Act of 2017 would allow the FDA to collect and spend fees to cover the cost of carrying out certain activities to expedite the approval process for marketing prescription drugs and medical devices, as well as regulate drugs after entrance into the market. The bill would also do the following:

- reauthorize specific programs and grants administered by FDA and the NIH;

- mandate the GAO to report on FDA and NIH activities; and

- allow drug sponsors to request 5-year data exclusivity that would restrict competition from generic drugs developed from an enantiomer.

The Congressional Budget Office released its cost estimate for the FDA Reauthorization Act of 2017, noting the bill would increase net discretionary spending by about $740 million during the 2017 to 2022 period if appropriation actions are consistent with the bill.

Although the implementation would require increased funding for a variety of FDA activities, the CBO reported most of the increase in FDA spending would be offset by additional fees collected under the bill and used to reduce the need for discretionary appropriations.

According to the report, the FDA Reauthorization Act of 2017 (S. 934) would apply pay-as-you-go procedures due to an increase in direct spending by $13 million and a decrease in revenue by $2 million during the 2017 to 2027 period. This would increase budget deficits by $15 million during the 2017 to 2027 period, the CBO noted. Net direct spending or on-budget deficits would not be increased by more than $5 billion in any of the four consecutive 10-year periods starting in 2028.

The FDA Reauthorization Act of 2017 would also allow FDA programs through which fees are collected to cover the costs related to approving and marketing branded prescription drugs, medical devices, generic drugs and biosimilar biological products through 2022. In aggregate, the FDA would assess about $9 billion in fees — $8 billion for prescription drugs and $1 billion for medical devices — during the 2018 to 2022 period based on the fee levels and the inflation adjustments specified in the bill. The bill would also require modification of certain agency procedures related to oversight and review of generic drugs, drugs for pediatric populations and medical devices, as well as reauthorize certain research grant programs and require the Government Accountability Office (GAO) to prepare several reports, all of which would cost about $1.2 billion during the 2018 to 2022 period.

According to the report, the FDA Reauthorization Act of 2017 would allow the FDA to collect and spend fees to cover the cost of carrying out certain activities to expedite the approval process for marketing prescription drugs and medical devices, as well as regulate drugs after entrance into the market. The bill would also do the following:

- reauthorize specific programs and grants administered by FDA and the NIH;

- mandate the GAO to report on FDA and NIH activities; and

- allow drug sponsors to request 5-year data exclusivity that would restrict competition from generic drugs developed from an enantiomer.

PAGE BREAK

Reference:

www.cbo.gov/publication/52826

    See more from Healio Special Report: Health Care and Politics