PILLS Act

Creates two new tax incentives to spur U.S. production of approved generic drugs and licensed biosimilars and to encourage investment in domestic manufacturing facilities. One credit rewards a share of the value added by producing qualifying generics and biosimilars in the United States (with higher rates for certain final products and domestic content and a phaseout after 2030). The other is a 25% investment tax credit for qualified facility property placed in service after 2026 (with limits tied to construction start dates).

Both credits include definitions, rules for elective payment or transfer of credits, taxpayer eligibility rules, and regulatory authority for Treasury. The production credit excludes producers that are designated as “foreign entities of concern.” These changes amend the Internal Revenue Code and apply only to production or property placed in service after the dates in the bill.