PILLS Act

The PILLS Act creates tax credits to incentivize domestic production of generic drugs and biosimilars in the United States. It offers a production credit of 30% (35% for final drug products) of the value added to eligible components, with an additional domestic content bonus of up to 20% for components made with US-sourced materials. Companies can also claim a 25% investment credit for qualified facilities producing these drugs, phasing out for facilities beginning construction after 2028. The bill excludes foreign entities of concern from these benefits and requires documentation for domestic content claims. These provisions apply to FDA-approved generic drugs and biosimilars to increase domestic supply of essential medications.