WASHINGTON — The Coalition for a Prosperous America (CPA) today strongly supported Senator Tom Cotton’s (R-AR) introduction of the ‘Producing Incentives for Long-term production of Lifesaving Supply of medicine (PILLS) Act,’ legislation that would incentivize domestic manufacturing of lifesaving medicines.
A smart policy like the ‘PILLS Act’ would prioritize domestic production of essential generics. It’s precisely the market signal needed to attract serious investment and rebuild the industry at home. Earlier this year, Representative Claudia Tenney (R-NY-24) had introduced the companion bill on the House side of the Capitol.
“The PILLS Act is a critical step toward reshoring America’s generic drug production and reducing our dangerous dependence on foreign suppliers, as America faces a growing health crisis due to chronic shortages of essential, lifesaving generic drugs,” said Zach Mottl, Chairman of CPA. “This crisis is directly tied to our reliance on China and India – since 2002, imports from India have increased 35 times, while imports from China have surged 165 times over that same period. This is increasingly dangerous to American patients at a time when generic drugs now make up more than 90% of all prescriptions dispensed in the U.S.” Mottl continued, “Thanks to Senator Cotton – and also to Rep. Tenney – CPA believes that the PILLS Act is a necessary first step to reverse this trend, restore American pharmaceutical production, create high-quality jobs, and protect national security by ensuring a safe, reliable domestic supply of high-quality generic medicines, antibiotics, and other essential drugs.”
This week, CPA warned of our dangerous overreliance on foreign generic drugs, which poses a clear threat to U.S. national security – in its release of comments on the Department of Commerce Section 232 investigation of pharmaceutical imports.
CPA has long advocated for strong industrial policy measures to support reshoring critical generic drug manufacturing capacity. The ‘PILLS Act’ would smartly incentivize the strategic reshoring of U.S. domestic production of generic medicines with a domestic production-based tax credit, domestic content bonus credit, and an investment tax credit. CPA’s research has consistently exposed the national security vulnerabilities posed by dependence on foreign pharmaceutical production. As imports from China and India have surged, U.S. consumers have suffered serious shortages and quality issues, placing a significant strain on the American healthcare system.
“The national security and public health implications require a priority on stable and safe pharmaceutical supply. A smart policy like the PILLS Act would prioritize domestic production of essential generics by incentivizing the strategic reshoring of U.S. production of generic medicines, to cover all materials, testing, and packaging involved at every step of the manufacturing process,” said Jon Toomey, President of CPA. “This includes upstream inputs such as API, and downstream materials and services such as packaging and quality testing. CPA thanks Senator Cotton and Rep. Tenney for their continued leadership in this critical area, and urges the DOC’s Section 232 investigation into pharmaceutical imports to recommend strong measures to rebuild America’s pharmaceutical manufacturing capacity and end the dangerous overreliance on foreign sources that threaten our health and national security.”
The ‘PILLS Act’ would establish the following:
A production-based tax credit (PBTC) of 35% for final manufacturers of APIs and finished drug products and 30% for all other components.
A proportional domestic content bonus tax credit of up to 20% for 100% domestic content in the drug’s constituent materials.
Optional election of an investment tax credit equal to 25% of the qualified investment to offset costs of creating new production capacity (in lieu of PBTC).
Disallowance of tax credits to any entity which, at any time during the taxable year, was a foreign entity of concern.
It’s time to recognize and reward high quality American manufacturing in federal programs and boost more manufacturing with the PILLS Act. This legislation will create more American jobs, reduce our nation’s overreliance on foreign production, and improve patient access to essential medicines. Thank you to Senator Cotton – and again to Rep. Tenney for her previous action in the House – for his leadership on the PILLS Act, by strategically reshoring essential medicines including generic drugs, biologics, and biosimilars through tax credits proposed in the legislation.
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