Sponsor
Thomas Bryant Cotton
Senator · R-AR
Senator · R-AR
The bill trades clearer supply-chain transparency and tax incentives to spur domestic pharmaceutical/device production and resilience against risks of higher short-term drug costs, possible drug access disruptions, concentrated suppliers, and reduced federal revenue.
Federal purchasers, hospitals, and patients get clearer supply-chain information and procurement will shift away from China, improving resilience of federally procured medicines and reducing reliance on a single country.
Manufacturers of drugs and medical devices can immediately expense qualifying equipment bought and placed in service (2025–2030), increasing after-tax cash flow and lowering first-year taxable income.
The tax incentive encourages faster construction and expansion of U.S. pharmaceutical and device manufacturing facilities, supporting domestic production and potential job growth in affected communities.
Hospitals, Medicare beneficiaries, and taxpayers may face higher drug costs if federal procurement restricts sourcing or shifts supply chains, increasing prices for federally funded programs and patients.
Patients with chronic conditions and veterans risk interrupted access to some drugs if equivalent API supplies outside China are not available, threatening treatment continuity.
Limiting supplier countries could reduce competition and concentrate API supply in a smaller set of foreign producers, raising long-term risks to price and availability.
Based on analysis of 3 sections of legislative text.
Phases federal purchases away from APIs made in China (60% non‑PRC by 2028, 100% by 2030), adds API origin labeling, and provides 100% bonus depreciation for U.S. pharma/device manufacturing 2025–2030.
Official title: Ban the use of Federal funds for the purchase of drugs manufactured in the People's Republic of China, and for other purposes.
Introduced April 10, 2025 by Thomas Bryant Cotton · Last progress April 10, 2025
Requires most federal health programs to phase out purchases of drugs whose active ingredients are made in the People’s Republic of China and to buy drugs whose APIs are majority (by 2028) then fully (by 2030) manufactured outside China while allowing limited waivers through 2030; mandates drug labels to list the country of origin of each active ingredient when not already shown. Temporarily creates a tax incentive — 100% bonus depreciation — for qualifying pharmaceutical and medical device manufacturing property placed in service in the U.S. from 2025 through 2030 to encourage domestic production. The bill affects federal purchasing rules, drug labeling, domestic pharmaceutical and device manufacturing investment, and provides a temporary tax benefit to speed onshore production capacity. Waivers are available before 2031 but are prohibited thereafter for federal purchases covered by the rule.