HR1396-119

Introduced

To amend the Internal Revenue Code of 1986 to establish the generic drugs and biosimilars production credit, and for other purposes.

119th Congress Introduced Feb 14, 2025

Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.

Summary

What This Bill Does

The PILLS Act creates two new tax credits to encourage American companies to manufacture generic drugs and biosimilars domestically. It addresses U.S. dependence on foreign pharmaceutical supply chains by making it more profitable to produce these medicines in the United States.

Who Benefits and How

Domestic pharmaceutical manufacturers and generic drug producers receive a 30-35% production tax credit on value added for each eligible drug component made in the U.S. Companies building new manufacturing facilities get a 25% investment tax credit on construction and equipment costs. Additional 20% bonus credits reward using domestically-sourced materials.

Who Bears the Burden and How

Foreign pharmaceutical companies and entities designated as foreign entities of concern are explicitly excluded from receiving these credits, putting them at a competitive disadvantage. Taxpayers bear the cost of reduced federal revenue from these tax expenditures. Companies must maintain documentation for domestic content claims.

Key Provisions

  • 30% production credit (35% for finished drugs) on value added for generic drugs and biosimilars made in the U.S.
  • 25% investment credit for building or expanding domestic pharmaceutical manufacturing facilities
  • Up to 20% bonus credit for using domestically-produced materials and components
  • Credits phase out between 2031-2033 (production credit) and terminate for construction starting after 2028 (investment credit)

Evidence Chain:

This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.

At a Glance

What This Bill Does

Creates two new tax credits to incentivize domestic manufacturing of generic drugs and biosimilars in the United States, addressing pharmaceutical supply chain vulnerabilities.

Key Policy Areas

Taxation, Healthcare, Manufacturing, Supply Chain Security

Primary Purpose

Creates two new tax credits to incentivize domestic manufacturing of generic drugs and biosimilars in the United States, addressing pharmaceutical supply chain vulnerabilities.

Policy Domains

Taxation Healthcare Manufacturing Supply Chain Security

Section 2 - Generic Drugs and Biosimilars Production Credit (45BB)

Identified Gains
  • Domestic generic drug manufacturers
  • Domestic biosimilar producers
  • Pharmaceutical supply chain companies
  • U.S. chemical manufacturers
Model: N/A | Version: bill_summary_v2 | Source: ih
U.S. chemical manufacturers:
Domestic biosimilar producers:
Domestic generic drug manufacturers:
Pharmaceutical supply chain companies:
Identified Costs
  • Foreign pharmaceutical manufacturers
  • Foreign entities of concern
  • Federal treasury (reduced revenue)
Model: N/A | Version: bill_summary_v2 | Source: ih
Foreign entities of concern:
Federal treasury (reduced revenue):
Foreign pharmaceutical manufacturers:

Section 3 - Generic Drugs and Biosimilars Investment Credit (48F)

Identified Gains
  • Pharmaceutical manufacturers building new facilities
  • Construction industry
  • Equipment manufacturers
Model: N/A | Version: bill_summary_v2 | Source: ih
Construction industry:
Equipment manufacturers:
Pharmaceutical manufacturers building new facilities:
Identified Costs
  • Foreign entities of concern
  • Federal treasury (reduced revenue)
Model: N/A | Version: bill_summary_v2 | Source: ih
Foreign entities of concern:
Federal treasury (reduced revenue):

Legislative Progress

Introduced
Introduced Committee Passed
Feb 14, 2025

Ms. Tenney introduced the following bill; which was referred to …

Stakeholder Effects

cui bono?

How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.

Manufacturing
16 mentions across 4 clauses
+11 positive -5 negative

Biosimilar facility developers, Companies building new pharmaceutical manufacturing facilities, Companies with domestic supply chain sourcing

Positive-direction: Biosimilar facility developers, Companies building new pharmaceutical manufacturing facilities, Companies with domestic supply chain sourcing, Domestic biosimilar producers, Domestic generic drug manufacturers, Domestic generic drug manufacturers producing finished drugs, Domestic pharmaceutical supply chain companies (API, excipients, packaging), Pharmaceutical equipment manufacturers, Pharmaceutical ingredient suppliers in the United States, Pharmaceutical manufacturers investing in U.S. production capacity, U.S. territory-based pharmaceutical manufacturers

Negative-direction: Facilities with FDA warning letters, Foreign entities of concern, Foreign entities of concern (China, Russia, etc.), Foreign entities of concern seeking U.S. market access, Foreign pharmaceutical manufacturers

Construction
1 mention across 1 clause
+1 positive

Commercial construction contractors for pharmaceutical facilities

4/5
sections analyzed
Full impact breakdown

Bill Structure & Actor Mappings

Who is "The Secretary" in each section?

Domains
Taxation Healthcare Manufacturing
Actor Mappings
"the_secretary"
→ Secretary of the Treasury
Domains
Taxation Manufacturing
Actor Mappings
"the_secretary"
→ Secretary of the Treasury

Key Definitions

Terms defined in this bill

8 terms
"foreign entity of concern" §45BB/48F

As defined in section 9901(8) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (15 U.S.C. 4651).

"qualified facility" §48F(b)(3)

A facility owned by the taxpayer, located in the U.S. or its territories, whose primary purpose is production of eligible components.

"eligible taxpayer" §48F(c)(1)

Any taxpayer which is not a foreign entity of concern.

"eligible component" §45BB(c)(1)

An approved generic drug, licensed biosimilar, or any drug substance, intermediate raw material, starting material, reagent, component, in-process material, inactive ingredient, container closure system, packaging, quality testing, or other material or service used in production of an approved generic drug or licensed biosimilar.

"approved generic drug" §45BB(c)(2)

A drug for which an approval under section 505(j) of the Federal Food, Drug, and Cosmetic Act is in effect, or an authorized generic drug.

"licensed biosimilar" §45BB(c)(3)

A biological product for which a biologics license has been issued under section 351(k) of the Public Health Service Act.

"produced in the United States" §45BB(c)(5)

All production of the material or component takes place in the United States, regardless of the origin of the subcomponents.

"production" §45BB(c)(6)

All steps in manufacture, propagation, and preparation of an eligible component, including synthesis, mixing, granulating, milling, molding, lyophilizing, tableting, encapsulating, coating, sterilizing, testing, filling, labeling, packaging, and storage prior to release.

We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.

Learn more about our methodology