H.R. 1919, Safeguarding America’s Pharmaceuticals Act of 2013

Cost Estimate
May 31, 2013

As ordered reported by the House Committee on Energy and Commerce on May 15, 2013

H.R. 1919 would require the Food and Drug Administration (FDA) to establish national standards for monitoring the movement of prescription drugs through the drug distribution system. The “drug distribution system” encompasses the network of companies that produce, handle, distribute, and dispense drug products. The legislation would impose new regulatory requirements on such companies relating to the handling of drug products and recordkeeping of transactions, and would create notification rules concerning drugs that are potentially unsuitable for distribution.

The bill also would require the FDA to establish a licensing program for certain third parties that provide logistic services to support pharmaceutical manufacturers, wholesalers, and dispensers. The bill would authorize FDA to collect and spend fees to cover the costs of the licensing program.

CBO estimates that enacting H.R. 1919 would increase federal revenues by $19 million over the 2015-2018 period and by $24 million over the 2015-2023 period. Pay-as-you-go procedures apply because enacting the legislation would affect revenues.

CBO estimates that implementing H.R. 1919 would have a discretionary cost of $39 million over the 2014-2018 period, assuming annual appropriation actions consistent with the bill.

H.R. 1919 would impose both intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) by requiring public and private-sector entities to comply with standards for monitoring the movement of prescription drugs through the distribution system. Because few public entities manufacture, distribute, or dispense prescription drugs, CBO estimates that the costs to public entities to comply with the mandates in the bill would be small and below the intergovernmental threshold established in UMRA ($75 million in 2013, adjusted annually for inflation). CBO estimates that the costs to private entities would exceed the threshold established in UMRA ($150 million in 2013, adjusted annually for inflation).