PlainBillCongress, translated.Legislation. Context. Public interest.Congressional Research Service
No official summary is available in the imported record yet.
People & committees
Rep. Tenney, Claudia [R-NY-24] · R–NY
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
Source last updated: Dec 5, 2025. Consult Congress.gov for the current record.
AI Conversation Starters
Choose a perspective, copy a prompt, and paste it into your preferred AI. Each prompt includes the bill version and available official source links, and asks for counterarguments as well as supporting evidence.
Analyze H.R.1396 as objectively as possible. Explain its main provisions, who would be affected, possible benefits and harms, implementation, exceptions, and uncertainties. Present the strongest arguments for and against it, and identify evidence needed to assess its public impact.
Examine H.R.1396 through a progressive lens, focusing on fairness, access, economic inequality, and effects on vulnerable communities. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and distinguish stated goals from demonstrated outcomes.
Examine H.R.1396 through a conservative lens, focusing on fiscal responsibility, institutional stability, federalism, and the scope of government. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and any provisions that challenge this perspective.
Examine H.R.1396 through a civil-liberties and limited-government lens. Consider individual rights, privacy, voluntary choice, accountability, and government power. Explain tradeoffs, possible safeguards, and the strongest counterarguments without assuming the proposal is beneficial or harmful.
PlainBill explanation
Based on the full Introduced in House · 2025-02-14 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The bill proposes two tax credits for producers of generic drugs, licensed biosimilars, and related production inputs and services. One would reward qualifying U.S. production and sales, with higher rates for final production of certain drug substances and products and for domestic content. The other would cover 25% of qualifying investment in production facilities. Eligibility restrictions and deadlines would apply, including exclusion of foreign entities of concern, a production-credit phaseout, and an investment-credit construction deadline.
the term eligible component means— (i) an approved generic drug, (ii) a licensed biosimilar, and (iii) 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, or sold with intention for use, in the production of an approved generic drug or a licensed biosimilar.
each eligible component which is— (A) produced by the taxpayer in the United States, and (B) sold by such taxpayer to an unrelated person (as determined by the Secretary) during the taxable year.
Except as provided in subparagraphs (B) and (C), the base credit percentage is 30 percent. (B) Increased base credit percentage for certain eligible components The base credit percentage is 35 percent in the case of the final production of— (i) a drug substance, (ii) a drug product, or (iii) a biological product.
In the case of an eligible component which contains domestic content, the base credit percentage determined under this paragraph (determined without regard to this subparagraph) shall be increased by an amount equal to— (I) the domestic content percentage, multiplied by (II) 0.20.
the generic drugs and biosimilars investment credit for any taxable year is an amount equal to 25 percent of the qualified investment for such taxable year with respect to any qualified facility of an eligible taxpayer.
The credit under this subsection shall not be allowed to any taxpayer which, at any time during the taxable year, was a foreign entity of concern (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)).
The term eligible taxpayer means any taxpayer which is not a foreign entity of concern (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)).
the phase out percentage is— (i) in the case of an eligible component sold during calendar year 2031, 75 percent, (ii) in the case of an eligible component sold during calendar year 2032, 50 percent, (iii) in the case of an eligible component sold during calendar year 2033, 25 percent, and (iv) in the case of an eligible component sold after December 31, 2033, 0 percent.
The credit allowed under this section shall not apply to property the construction of which begins after December 31, 2028.
Section 1 would name the legislation the PILLS Act, short for the Producing Incentives for Long-term production of Lifesaving Supply of medicine Act.
This Act may be cited as the Producing Incentives for Long-term production of Lifesaving Supply of medicine Act or the PILLS Act.
The production credit would require the taxpayer to produce the eligible component in the United States and sell it to an unrelated person during the tax year. Under its trade-or-business requirement, the bill would apply rules similar to section 45X(a)(2); the supplied text does not reproduce those rules.
each eligible component which is— (A) produced by the taxpayer in the United States, and (B) sold by such taxpayer to an unrelated person (as determined by the Secretary) during the taxable year. (2) Production and sale must be in trade or business Rules similar to the rules of section 45X(a)(2) shall apply.
Eligible components would include approved generic drugs, licensed biosimilars, and materials or services used—or sold with the intention of use—in their production. The definitions include authorized generics and biological products licensed under the specified federal licensing provision. The bill also incorporates external definitions of biological product, drug substance, and drug product without reproducing them.
the term eligible component means— (i) an approved generic drug, (ii) a licensed biosimilar, and (iii) 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, or sold with intention for use, in the production of an approved generic drug or a licensed biosimilar.
The term approved generic drug means— (A) a drug for which an approval of an application filed under section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)) is in effect, or (B) an authorized generic drug (as defined in section 314.3 of title 21, Code of Federal Regulations (or any successor regulation)).
The term licensed biosimilar means a biological product for which a biologics license has been issued under section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)).
(B) Biological product The term biological product has the meaning given such term in section 351(i)(1) of the Public Health Service Act (42 U.S.C. 262(i)(1)). (4) Other terms The terms drug substance and drug product have the respective meanings given such terms in section 314.3 of title 21, Code of Federal Regulations (or any successor regulation).
A taxpayer classified as a foreign entity of concern at any time during the tax year would be barred from the production credit. The bill relies on an external statutory definition of that classification, which is not reproduced in the supplied source.
The credit under this subsection shall not be allowed to any taxpayer which, at any time during the taxable year, was a foreign entity of concern (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)).
Before the domestic-content bonus and phaseout, the production credit would generally equal 30% of value added, rising to 35% for final production of a drug substance, drug product, or biological product. Value added means gross sales receipts minus the cost of eligible components purchased from unrelated persons in connection with that production.
Subject to paragraph (4), the amount determined under this subsection with respect to any eligible component is an amount equal to the base credit percentage of the value added to such component by the taxpayer.
The value added to a component by a taxpayer is an amount equal to— (A) the gross receipts received by the taxpayer from the sale of the eligible component, minus (B) the cost of eligible components purchased from an unrelated person in connection with the production of the component by the taxpayer.
Except as provided in subparagraphs (B) and (C), the base credit percentage is 30 percent. (B) Increased base credit percentage for certain eligible components The base credit percentage is 35 percent in the case of the final production of— (i) a drug substance, (ii) a drug product, or (iii) a biological product.
A domestic-content bonus would increase the production credit rate by the domestic-content percentage multiplied by 0.20. That percentage measures the share of eligible input costs attributable to U.S.-produced materials and components; a 100% domestic share would therefore add 20 percentage points to the rate.
the base credit percentage determined under this paragraph (determined without regard to this subparagraph) shall be increased by an amount equal to— (I) the domestic content percentage, multiplied by (II) 0.20.
the term domestic content percentage means the percentage of the total cost of the eligible components taken into account for purposes of paragraph (2) which is attributable to materials and components that were produced in the United States.
Taxpayers would have to document domestic content to receive the bonus. For materials or components supplied by unrelated parties, the Secretary would have to accept those parties’ certifications of U.S. production, in the prescribed form and manner.
No domestic content bonus credit shall be determined under this subparagraph unless the taxpayer provides documentation supporting the domestic content percentage (in such form and manner as the Secretary shall prescribe).
In the case of materials or components provided to the taxpayer by an unrelated party, the Secretary shall accept certification (in such form and manner as the Secretary shall prescribe) by such unrelated party that the materials or components were produced in the United States.
U.S. production would require all production of the material or component to occur in the United States, regardless of where its subcomponents originated. Production would encompass manufacturing and preparation steps, including testing, labeling, packaging, and storage before manufacturer release.
The term produced in the United States means that all the production of the material or component takes place in the United States, regardless of the origin of the subcomponents of such material or component.
The term production means all steps in the 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 by the manufacturer.
A component would be excluded if any part of its production occurred at a facility with a Food and Drug Administration warning letter issued on or after September 1, 2009, for which the agency has not issued a close-out letter.
The term eligible component shall not include a component any portion of the production of which occurred at a facility which is the subject of a warning letter— (i) which was issued by the Food and Drug Administration on or after September 1, 2009, and (ii) with respect to which the Food and Drug Administration has not issued a close-out letter.
The production credit’s eligible-component definition would exclude property produced at a facility if the basis of any property in that facility is taken into account for the proposed section 48F investment credit after enactment.
The term eligible component shall not include any property which is produced at a facility if the basis of any property which is part of such facility is taken into account for purposes of the credit allowed under section 48F after the date of the enactment of this section.
The otherwise calculated production credit, including the domestic-content bonus, would be multiplied by 75% for components sold in 2031, 50% in 2032, and 25% in 2033. Components sold after December 31, 2033, would receive no production credit.
In the case of any eligible component sold after December 31, 2030, the amount determined under this subsection with respect to such component shall be equal to the product of— (i) the amount determined under paragraph (1) with respect to such component (determined without regard to this paragraph and after the application of paragraphs (2) and (3)), and (ii) the phase out percentage.
the phase out percentage is— (i) in the case of an eligible component sold during calendar year 2031, 75 percent, (ii) in the case of an eligible component sold during calendar year 2032, 50 percent, (iii) in the case of an eligible component sold during calendar year 2033, 25 percent, and (iv) in the case of an eligible component sold after December 31, 2033, 0 percent.
The bill would add the production credit to section 6417(b) under elective payment and section 6418(f)(1)(A) under transfer of credits. A taxpayer outside the existing section 6417(d)(1)(A) category could elect to be treated as an applicable entity for this credit for a tax year in which it produced eligible components after December 31, 2024. The election also incorporates existing rules that are not supplied; the full payment and transfer conditions cannot be determined from this text alone.
(b) Elective payment (1) In general Section 6417(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (13) The generic drugs and biosimilars production credit determined under section 45BB.
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2024, produced eligible components (as defined in section 45BB(c)(1)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(13). (ii) Other rules The rules of clauses (ii) and (iii) of subparagraph (D) shall apply for purposes of this subparagraph.
(c) Transfer of credits Section 6418(f)(1)(A) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause: (xii) The generic drugs and biosimilars production credit determined under section 45BB.
Section 2’s effective-date clause would apply its amendments to generic drugs and biologics produced after enactment. Its separate election language referring to production after December 31, 2024, does not by itself establish credit eligibility for production before enactment. The effective-date clause does not expressly explain its application to the inputs and services included in the broader eligible-component definition.
The amendments made by this section shall apply to generic drugs and biologics produced after the date of enactment of this Act.
with respect to any taxable year in which such taxpayer has, after December 31, 2024, produced eligible components
the term eligible component means— (i) an approved generic drug, (ii) a licensed biosimilar, and (iii) 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, or sold with intention for use, in the production of an approved generic drug or a licensed biosimilar.
The investment credit would equal 25% of qualified investment. That investment would be measured by the basis of qualifying property placed in service by the taxpayer during the tax year as part of a qualifying facility.
the generic drugs and biosimilars investment credit for any taxable year is an amount equal to 25 percent of the qualified investment for such taxable year with respect to any qualified facility of an eligible taxpayer.
The qualified investment for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified facility.
Qualifying investment property would have to be tangible property for which depreciation or amortization in lieu of depreciation is allowable, and used as an integral part of the facility to produce eligible components. It would have to be constructed, reconstructed, or erected by the taxpayer, or acquired with its original use beginning with that taxpayer.
The term qualified property means property— (i) which is tangible property, (ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (iii) which is— (I) constructed, reconstructed, or erected by the taxpayer, or (II) acquired by the taxpayer if the original use of such property commences with the taxpayer, and (iv) which is used as an integral part of the qualified facility to produce eligible components.
Buildings and structural components meeting the other property requirements could qualify for the investment credit. Buildings or portions used for offices, administrative services, or other functions unrelated to eligible production would be excluded from that inclusion.
The term qualified property includes any building or its structural components which otherwise satisfies the requirements of subparagraph (A). (ii) Exception Clause (i) shall not apply with respect to a building or portion of a building used for offices, administrative services, or other functions unrelated to the production of eligible components.
A qualifying facility would have to be wholly or partly owned by the taxpayer, located in the United States or a U.S. territory, and have production of eligible components as its primary purpose.
The term qualified facility means a facility— (A) which is owned (in whole or in part) by the taxpayer, (B) which is located in the United States or any territory of the United States, and (C) the primary purpose of which is the production of eligible components.
The investment credit would exclude taxpayers classified as foreign entities of concern and use the production-credit definitions of eligible components and production. The incorporated eligible-component definition includes both the FDA warning-letter exclusion and the facility-level exclusion tied to use of the same section 48F investment credit. The text establishes those cross-references but does not resolve their full operation within the investment credit.
The term eligible taxpayer means any taxpayer which is not a foreign entity of concern (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)).
The term eligible component has the meaning given such term in section 45BB(c)(1). (3) Production The term production has the meaning given such term in section 45BB(c)(6).
The term eligible component shall not include a component any portion of the production of which occurred at a facility which is the subject of a warning letter— (i) which was issued by the Food and Drug Administration on or after September 1, 2009, and (ii) with respect to which the Food and Drug Administration has not issued a close-out letter.
The term eligible component shall not include any property which is produced at a facility if the basis of any property which is part of such facility is taken into account for purposes of the credit allowed under section 48F after the date of the enactment of this section.
Qualified investment would exclude the portion of property basis attributable to qualified rehabilitation expenditures as defined in section 47(c)(2). Under its progress-expenditure provision, the bill would also apply rules similar to specified portions of section 46 as they existed before the Revenue Reconciliation Act of 1990. Those referenced provisions are not reproduced, so their full requirements cannot be determined from the supplied text.
The qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).
Certain progress expenditure rules made applicable Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply.
The investment-credit amendments would apply to property placed in service after December 31, 2026. Property whose construction begins after December 31, 2028, would be ineligible; the latter deadline concerns the start of construction.
The amendments made by this section shall apply to property placed in service after December 31, 2026.
The credit allowed under this section shall not apply to property the construction of which begins after December 31, 2028.
The bill would add the investment credit to section 6417(b) under elective payment and section 6418(f)(1)(A) under transfer of credits. A taxpayer outside the existing section 6417(d)(1)(A) category could elect to be treated as an applicable entity for this credit for a tax year in which it placed a qualifying facility in service. The surrounding payment and transfer provisions are not supplied, so their full conditions cannot be determined here.
(b) Elective payment (1) In general Section 6417(b) of the Internal Revenue Code of 1986, as amended by section 2(b) of this Act, is further amended by adding at the end the following new paragraph: (14) The generic drugs and biosimilars investment credit determined under section 48F.
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has placed in service a qualified facility (as defined in section 48F(b)(3)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(14).
(c) Transfer of credits Section 6418(f)(1)(A) of the Internal Revenue Code of 1986, as amended by this Act, is further amended by adding at the end the following new clause: (xiii) The generic drugs and biosimilars investment credit determined under section 48F.
For both credits, the Secretary would be required to issue appropriate or necessary regulations and guidance. The production credit would also apply rules similar to specified special rules in section 45X(d), whose contents are not reproduced.
(d) Special rules Rules similar to the rules of paragraphs (1), (3), and (4) of section 45X(d) shall apply. (e) Regulatory authority The Secretary shall prescribe such regulations and other guidance as are appropriate or necessary to carry out the purposes of this section.
(e) Regulatory authority The Secretary shall prescribe such regulations and other guidance as are appropriate or necessary to carry out the purposes of this section.
The investment-credit section would add the basis of qualifying facility property to Internal Revenue Code section 49(a)(1)(C). The supplied text shows that addition but does not reproduce the surrounding rules needed to explain its full effect.
Section 49(a)(1)(C) of such Code is amended— (A) by striking and at the end of clause (vii), (B) by striking the period at the end of clause (viii) and inserting , and, and (C) by adding at the end the following new clause: (ix) the basis of any qualified property which is part of a qualified facility under section 48F.
Conforming amendments would add the production credit to section 38(b), the investment credit to section 46, and entries for the two new credit sections to the relevant tables of sections. The surrounding provisions of sections 38 and 46 are not reproduced.
Section 38(b) of the Internal Revenue Code of 1986 is amended— (A) by striking plus at the end of paragraph (40), (B) by striking the period at the end of paragraph (41) and inserting , plus, and (C) by adding at the end the following new paragraph: (42) the generic drugs and biosimilars production credit determined under section 45BB(a).
Section 46 of the Internal Revenue Code of 1986 is amended— (A) by striking and at the end of paragraph (6), (B) by striking the period at the end of paragraph (7) and inserting , and, and (C) by adding at the end the following new paragraph: (8) the generic drugs and biosimilars investment credit.
The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 45BB. Generic drugs and biosimilars production credit.
The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 48E the following new item: 48F. Generic drugs and biosimilars investment credit.
The supplied official-actions snapshot, updated December 5, 2025, records introduction in the House and referral to the House Committee on Ways and Means on February 14, 2025. This snapshot does not establish subsequent action or enactment.
Source snapshot updated 2025-12-05T22:47:33Z. 2025-02-14: Referred to the House Committee on Ways and Means. 2025-02-14: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-14. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified after reviewing the complete supplied introduced text. This conclusion is limited to that version and does not establish attachment history or the absence of riders in other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified after reviewing the complete supplied introduced text. This conclusion is limited to that version; it does not establish absence in other versions or accompanying materials, and the source set cannot establish formal earmark status elsewhere.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
None identified in the reviewed text
No materially narrow carve-out, special exemption, or preferential exception beyond the credits’ intended beneficiaries and generally defined eligibility rules was identified after reviewing the complete supplied introduced text. This conclusion is limited to that version and does not establish absence in other versions or accompanying materials.
Full text preserved for this analysis. Legislative record snapshot: Dec 5, 2025. How PlainBill uses AI