Sponsors
The bill aims to reduce reliance on PRC pharmaceutical inputs and boost U.S. production (and transparency) through procurement limits and temporary tax incentives, but it raises near‑term risks of drug shortages, higher costs for federal programs, fiscal impacts, and administrative and distributional burdens.
Patients covered by federal programs (Medicare, Medicaid, VA) and other federal beneficiaries will face reduced exposure to drugs whose active pharmaceutical ingredients (APIs) are made in the People’s Republic of China because federal purchases are phased to non‑PRC sources (60% by 2028, 100% by 2030).
U.S. manufacturers, workers, and communities stand to gain more domestic and allied pharmaceutical and device production (and associated jobs) because the bill couples procurement restrictions with tax incentives to encourage onshore capacity.
Manufacturers that invest in U.S. plants or equipment for drugs and medical devices can immediately expense qualifying investments during 2025–2030, improving cash flow and lowering upfront project costs and financing risk.
Patients who rely on certain medicines (including chronic-condition patients and veterans) risk drug shortages or interrupted access if many APIs currently sourced from China cannot be replaced quickly from non‑PRC suppliers.
Federal programs (and therefore taxpayers and beneficiaries) could face higher drug costs if replacement APIs from non‑PRC sources are more expensive than current supplies.
Immediate 100% expensing for qualifying property reduces near‑term federal tax receipts, potentially increasing the deficit or crowding out other federal spending priorities.
Based on analysis of 3 sections of legislative text.
Introduced April 10, 2025 by Thomas Bryant Cotton · Last progress April 10, 2025
Requires federal health programs to phase out purchases of drugs whose active pharmaceutical ingredients (APIs) are made in the People’s Republic of China, with a 60% non-China API threshold by January 1, 2028 and a 100% non-China API requirement by January 1, 2030, and allows a limited waiver authority through 2030. Adds a drug-labeling requirement to disclose the country of origin for each active ingredient. Creates a temporary 100% bonus depreciation (expensing) tax incentive for tangible property used in U.S. pharmaceutical and medical device manufacturing for property placed in service from 2025 through 2030. The bill affects federal procurement rules, manufacturing supply chains, drug labeling requirements, and federal tax treatment for U.S. pharma/device capital investment. Agencies will need to verify API origin, may seek waivers if unable to comply, and manufacturers may benefit from enhanced tax write-offs for domestic facility construction or expansion during the incentive window.