OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS

Report No: 568
Date: 01/25/2002

1. LAW NUMBER: P.L.107-109 (S. 1789)
2. BILL TITLE: Best Pharmaceuticals for Children Act
3. BILL PURPOSE: Extends through October 1, 2007, a provision of law that gives drug companies an extra six months of exclusive marketing rights for certain drugs that are tested for use on children.

 

4. OMB ESTIMATE: P.L. 107-109 expands the authority of the National Institutes of Health's National Foundation for Biomedical Research to collect funds to support pediatric pharmacologic research and studies on certain drugs. OMB estimates that any funds collected would be spent on research grants in the same year.

	(Fiscal years; in millions of dollars)
	2001	2002	2003	2004	2005	2006
Net costs. . . . . . . . . . . . . . . . . . . .	0	0	0	0	0	0

 

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	2001	2002	2003	2004	2005	2006
Net costs. . . . . . . . . . . . . . . . . . . .	0	-8	-5	-4	-7	-15

 

In addition to scoring the provision scored by OMB, CBO scores the effects of the Act on direct spending and receipts from potential changes in drug prices resulting from the extension in exclusivity of marketing rights.

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

The difference between OMB and CBO estimates of net costs is primarily for provisions related to the extension of market exclusivity. CBO scores the impact of changes in drug prices resulting from the changes in market exclusivity; OMB considers these changes in drug prices to be an indirect effect of the Act and thus not scorable for pay-as-you-go purposes.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:

	(Fiscal years; in millions of dollars)
	2001	2002	2003	2004	2005	2006
Outlay effect..............	5,503	18,465	23,825	23,533	22,822	8,218
Receipt effect............	-69,768	-34,950	-84,840	-104,135	-105,311	-123,752
Net costs....................	75,271	53,415	108,665	127,668	128,133	131,970