As reported by the Senate Committee on the Judiciary on July 22, 2011
S. 27 would impose significant restrictions on certain agreements, relating to the sale of a drug product, used to settle a claim of patent infringement between manufacturers of brand-name and generic drugs. CBO anticipates that enacting S. 27 would accelerate, on average, the availability of lower-priced generic drugs affected by such agreements and generate savings to public and private purchasers of prescription drugs.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that implementing S. 27 would:
Reduce direct spending by $1.1 billion over the 2012-2016 period and by $4.0 billion over the 2012-2021 period.
Increase federal revenues by $0.2 billion over the 2012-2016 period and by $0.8 billion over the 2012-2021 period. (Social Security payroll taxes, which are off-budget, would account for almost 25 percent of those totals.)
Reduce spending subject to appropriation by $0.1 billion over the 2012-2016 period and by $0.4 billion over the 2012-2021 period, assuming that appropriation actions reflect the estimated reductions in costs.
Considering both the direct spending and revenue effects, we estimate that enacting S. 27 would reduce unified budget deficits by approximately $1.4 billion over the 2012-2016 period and by nearly $4.8 billion over the 2012-2021 period.
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
S. 27 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).
S. 27 would impose a private-sector mandate by limiting agreements between brand-name and generic drug manufacturers to settle a claim of patent infringement. CBO estimates that the aggregate direct cost of complying with this mandate would exceed the threshold established by UMRA for private-sector mandates ($141 million in 2011, adjusted annually for inflation) in each year, beginning with 2012.
