I 

116TH CONGRESS 

2D SESSION H. R. 8987 

To amend the Public Health Service Act to incentivize the manufacture 

of certain medicines in the United States and to enhance the security 

of the United States pharmaceutical supply chain, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 16, 2020 

Mr. JOYCE of Pennsylvania introduced the following bill; which was referred 

to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To amend the Public Health Service Act to incentivize the 

manufacture of certain medicines in the United States 

and to enhance the security of the United States pharmaceutical supply chain, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Enhancing the Secu5 rity of the U.S. Pharmaceutical Supply Chain Act of 

6 2020’’. 


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1 SEC. 2. TABLE OF CONTENTS. 

2 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Identification, development, and procurement of priority medicines. 

Sec. 4. Priority medicine production credit. 

Sec. 5. Improving regulatory efficiencies for transfer of drugs. 

3 SEC. 3. IDENTIFICATION, DEVELOPMENT, AND PROCURE4 MENT OF PRIORITY MEDICINES. 

5 (a) PRIORITY MEDICINES.—Title XXVIII of the Pub6 lic Health Service Act (42 U.S.C. 300hh et seq.) is amend7 ed by adding at the end the following: 

8 ‘‘SEC. 2804. IDENTIFICATION OF PRIORITY MEDICINES. 

9 ‘‘(a) PRIORITY MEDICINES.—The Secretary shall 

10 designate as a priority medicine each covered product 

11 that— 

12 ‘‘(1)(A) is necessary for use in a public health 

13 emergency declared under section 319; or 

14 ‘‘(B) is at high risk of becoming in short sup15 ply; and 

16 ‘‘(2) has a vulnerable global supply chain. 

17 ‘‘(b) GLOBAL SUPPLY CHAIN VULNERABILITY.—In 

18 determining whether a covered product has a vulnerable 

19 global supply chain under subsection (a)(2), the Secretary 

20 shall consider— 

21 ‘‘(1) the findings of the National Academies of 

22 Sciences, Engineering, and Medicine in the report 


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1 published pursuant to section 4111 of the CARES 

2 Act (Public Law 116–136); 

3 ‘‘(2) the number of manufacturers of each cov4 ered product; 

5 ‘‘(3) the manufacturing locations, and amount 

6 produced, of each covered product; 

7 ‘‘(4) the history of the importation of each pri8 ority medicine; and 

9 ‘‘(5) the probability of the imposition of duties 

10 on the importation of each covered product. 

11 ‘‘(c) CONSULTATION.—In carrying out subsection 

12 (a), the Secretary shall consult with the Public Health 

13 Emergency Medical Countermeasures Enterprise estab14 lished under section 2811–1. 

15 ‘‘(d) PUBLICATION OF LIST.—The Secretary shall— 

16 ‘‘(1) not later than 180 days after the date of 

17 enactment of this section, publish a preliminary list 

18 of priority medicines; 

19 ‘‘(2) provide an opportunity for public comment 

20 on such preliminary list; 

21 ‘‘(3) not later than 1 year after such date of en22 actment, publish a final list of priority medicines; 

23 and 

24 ‘‘(4) on an annual basis, review and, as appro25 priate, update such list. 


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1 ‘‘(e) DEFINITIONS.—In this section: 

2 ‘‘(1) ACTIVE PHARMACEUTICAL INGREDIENT.— 

3 The term ‘active pharmaceutical ingredient’— 

4 ‘‘(A) means any component that is in5 tended to furnish pharmacological activity or 

6 other direct effect in the diagnosis, cure, miti7 gation, treatment, or prevention of a disease, or 

8 to affect the structure or any function of the 

9 body of a human or animal; and 

10 ‘‘(B) does not include— 

11 ‘‘(i) intermediates used in the syn12 thesis of a drug product; or 

13 ‘‘(ii) components that may undergo 

14 chemical change in the manufacture of a 

15 drug product and be present in a drug 

16 product in a modified form that is in17 tended to furnish such activity or effect. 

18 ‘‘(2) COVERED PRODUCT.—The term ‘covered 

19 product’ means a drug (including a biological prod20 uct) or an active pharmaceutical ingredient. 

21 ‘‘(3) PRIORITY MEDICINE.—The term ‘priority 

22 medicine’ means a priority medicine for which a des23 ignation is in effect under subsection (a).’’. 

24 (b) NATIONAL STRATEGIC HEALTH STRATEGY.— 

25 Section 2802(b) of the Public Health Service Act (42 


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1 U.S.C. 300hh–1(b)) is amended by adding at the end the 

2 following: 

3 ‘‘(11) PRIORITY MEDICINES.—Supporting the 

4 identification, production, and procurement of pri5 ority medicines designated under section 2804.’’. 

6 (c) PUBLIC HEALTH EMERGENCY MEDICAL COUN7 TERMEASURES ENTERPRISE RECOMMENDATIONS.—Sec8 tion 2811–1(c)(1) of the Public Health Service Act (42 

9 U.S.C. 300hh–10a(c)) is amended by adding at the end 

10 the following: 

11 ‘‘(E) Provide recommendations to the Sec12 retary with respect to the priority medicines 

13 designated under section 2804.’’. 

14 (d) STRATEGIC PLAN FOR COUNTERMEASURE RE15 SEARCH, DEVELOPMENT, AND PROCUREMENT.—Section 

16 319L(b) of the Public Health Service Act (42 U.S.C. 

17 247d–7e(b)) is amended— 

18 (1) in paragraph (2)— 

19 (A) in subparagraph (B), by striking 

20 ‘‘and’’ at the end; 

21 (B) in subparagraph (C), by striking the 

22 period at the end and inserting ‘‘; and’’; and 

23 (C) by adding at the end the following: 


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1 ‘‘(D) the development and procurement of 

2 priority medicines designated under section 

3 2804.’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(3) PRIORITY MEDICINES.—With respect to 

6 the development and procurement of priority medi7 cines, the Secretary shall promote a diverse and sus8 tainable supply chain, including through grants and 

9 purchases.’’. 

10 (e) CRITICAL DRUG CONSIDERATION.—Section 3101 

11 of the CARES Act (Public Law 116–136) is amended— 

12 (1) by redesignating subsection (d) as sub13 section (e); and 

14 (2) after executing the redesignation in para15 graph (1), by inserting after subsection (c) the fol16 lowing: 

17 ‘‘(d) CONSIDERATION.—With respect to any analysis 

18 of a critical drug under subsection (b)(1), the Secretary 

19 shall consider the vulnerability of such drug with respect 

20 to the global supply chain, including an analysis of— 

21 ‘‘(1) the number of manufacturers of such 

22 drug; 

23 ‘‘(2) the manufacturing locations, and amounts 

24 produced, of such drug; 


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1 ‘‘(3) the history of the importation of such 

2 drug; and 

3 ‘‘(4) the probability of the imposition of duties 

4 on the importation of such drug.’’. 

5 SEC. 4. PRIORITY MEDICINE PRODUCTION CREDIT. 

6 (a) IN GENERAL.—Subpart D of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 

8 1986 is amended by adding at the end the following new 

9 section: 

10 ‘‘SEC. 45U. PRIORITY MEDICINE PRODUCTION CREDIT. 

11 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

12 the priority medicine production credit determined under 

13 this section for the taxable year is an amount equal to 

14 50 percent of the qualified priority medicine expenses for 

15 the taxable year. 

16 ‘‘(b) QUALIFIED PRIORITY MEDICINE EXPENSES.— 

17 ‘‘(1) QUALIFIED PRIORITY MEDICINE EX18 PENSES.—The term ‘qualified priority medicine ex19 penses’ means direct and indirect costs paid or in20 curred by the taxpayer during the taxable year for 

21 the production of priority medicines. 

22 ‘‘(2) PRIORITY MEDICINES.—For purposes of 

23 this section, a ‘priority medicine’ is a medicine that 

24 was included, within the 5 calendar years imme25 diately preceding the taxable year, on the list develVerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8987.IH H8987

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1 oped and published by the Secretary of Health and 

2 Human Services pursuant to section 2804(d) of the 

3 Public Health Service Act. 

4 ‘‘(3) COORDINATION WITH SECTION 263A.— 

5 ‘‘(A) COORDINATION WITH SECTION

6 263A.—In applying section 263A, indirect costs 

7 shall be allocated between the production of pri8 ority medicines and the production of other 

9 medicines based on the ratio in which the num10 ber of doses of the priority medicines produced 

11 in the taxable year bears to the total number of 

12 doses of all medicines produced by the taxpayer 

13 in that taxable year to which the expense is at14 tributable. 

15 ‘‘(B) REGULATIONS AND GUIDANCE.—The 

16 Secretary shall by regulation or other guidance 

17 prescribe rules for the proper allocation of indi18 rect costs described in subparagraph (A).’’. 

19 (b) CREDIT ALLOWED AS BUSINESS CREDIT.—Sec20 tion 38(b) of the Internal Revenue Code of 1986 (relating 

21 to current year business credit) is amended by striking 

22 ‘‘plus’’ at the end of paragraph (32), by striking the period 

23 at the end of paragraph (33) and inserting ‘‘, plus’’, and 

24 adding at the end the following new paragraph: 


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1 ‘‘(34) the priority medicine production credit 

2 determined under section 45U.’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) COORDINATION WITH SECTION 59.— 

5 (A) Section 59A(b)(1)(B)(ii) is amended— 

6 (i) in subclause (I), by striking 

7 ‘‘plus,’’ at the end; 

8 (ii) in subclause (II), by striking the 

9 period at the end, and inserting ‘‘, plus’’; 

10 and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(III) the credit allowed under 

14 section 38 for the taxable year which 

15 is properly allocable to the priority 

16 medicine production credit determined 

17 under section 45U.’’. 

18 (B) Section 59A(b)(2)(B) is amended to 

19 read as follows: 

20 ‘‘(B) by reducing (but not below zero) the 

21 regular tax liability (as defined in section 

22 26(b)) for purposes of subparagraph (B) there23 of by the excess (if any) of the aggregate 

24 amount of the credits allowed under this chap25 ter against such regular tax liability over the 


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1 credit allowed under section 38 for the taxable 

2 year which is properly allocable to the priority 

3 medicine production credit determined under 

4 section 45U, rather than the excess described in 

5 such paragraph.’’. 

6 (2) COORDINATION WITH RESEARCH CREDIT.— 

7 Section 41(c)(4)(A) is amended by striking ‘‘14’’ 

8 and inserting ‘‘20’’. 

9 (d) CLERICAL AMENDMENT.—The table of sections 

10 for subpart D of part IV of subchapter A of part IV of 

11 subchapter A of chapter 1 of the Internal Revenue Code 

12 of 1986 is amended by inserting after the item relating 

13 to section 45T the following new item: 

‘‘Sec. 45U. Priority medicine production credit.’’ 

14 (e) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to qualified priority medicine ex16 penses paid or incurred after December 31, 2020. 

17 SEC. 5. IMPROVING REGULATORY EFFICIENCIES FOR 

18 TRANSFER OF DRUGS. 

19 The Federal Food, Drug, and Cosmetic Act (21 

20 U.S.C. 301 et seq.) is amended by inserting after section 

21 505–1 of such Act (21 U.S.C. 355–1) the following: 

22 ‘‘SEC. 505–2. TRANSFER OF DRUGS TO DOMESTIC ESTAB23 LISHMENTS. 

24 ‘‘(a) IN GENERAL.—Beginning not later than 90 

25 days after the date of the enactment of this section, the 


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1 Secretary shall expedite the review and approval of a sup2 plemental application to an abbreviated new drug applica3 tion approved under section 505(j) or a new drug applica4 tion approved under section 505(c) that seeks to transfer 

5 manufacturing of one or more finished dosage forms of 

6 a drug or one or more active pharmaceutical ingredients 

7 therein from one or more foreign establishments to one 

8 or more new or existing domestic establishments. 

9 ‘‘(b) BEFORE SUPPLEMENTAL APPLICATION SUB10 MISSION.— 

11 ‘‘(1) DEVELOPMENT AND PRE-SUBMISSION.— 

12 After an applicant submits a meeting request with 

13 respect to expedited review and approval of a supple14 mental application pursuant to subsection (a), the 

15 Secretary shall— 

16 ‘‘(A) not later than 30 days after receiving 

17 such request, conduct a meeting with the appli18 cant to— 

19 ‘‘(i) discuss the information necessary 

20 to approve the supplemental application; 

21 and 

22 ‘‘(ii) if applicable, schedule a pre-ap23 proval inspection; and 


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1 ‘‘(B) not later than 60 days after receiving 

2 such request, conduct a meeting with the appli3 cant to— 

4 ‘‘(i) provide advice to the applicant 

5 with respect to the supplemental applica6 tion; and 

7 ‘‘(ii) if applicable, select a first drug 

8 to be identified in accordance with sub9 section (c). 

10 ‘‘(2) REVIEW AND APPROVAL.—In carrying out 

11 subsection (a), the Secretary shall— 

12 ‘‘(A) review and take action with respect to 

13 a supplemental application not later than 6 

14 months after the date of submission or resub15 mission of such application; and 

16 ‘‘(B) where the Secretary recommends a 

17 change to a domestic establishment following an 

18 inspection of such establishment, reinspect the 

19 establishment not later than 90 days after re20 ceiving a request from the applicant for rein21 spection. 

22 ‘‘(3) RELATION TO FEE PERFORMANCE

23 GOALS.—The deadlines specified in paragraph (1) 

24 supersede any conflicting performance goals identi25 fied in any statute reauthorizing the fee programs in 


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1 parts 2 and 7 of subchapter C of title VII of the 

2 Federal Food, Drug, and Cosmetic Act. 

3 ‘‘(c) CONTENTS.—With respect to a supplemental ap4 plication under subsection (a) for a transfer of the site 

5 of manufacture of multiple drugs that share a similar 

6 manufacturing process, the Secretary shall— 

7 ‘‘(1) request a list of the drugs; 

8 ‘‘(2) from the list under paragraph (1), identify 

9 a first drug to be transferred; 

10 ‘‘(3) determine the criteria necessary to receive 

11 approval of the supplemental application; and 

12 ‘‘(4) require the applicant to demonstrate, as 

13 part of such criteria, that each foreign establishment 

14 from which the drugs are to be transferred has a 

15 satisfactory inspection history with respect to the 

16 drugs. 

17 ‘‘(d) SUBSEQUENT TRANSFER OF DRUGS THAT

18 SHARE A SIMILAR MANUFACTURING PROCESS.—After the 

19 approval of a supplemental application under subsection 

20 (a) for the transfer of the manufacturing of a first drug 

21 identified by the Secretary pursuant to subsection (c)(2) 

22 from one or more foreign establishments to one or more 

23 new or existing domestic establishments, the Secretary 

24 may allow the applicant to so transfer drugs that share 

25 a similar manufacturing process with such first drug purVerDate Sep 11 2014 04:16 Jan 08, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H8987.IH H8987

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1 suant to submission of a report under section 506A(d)(2) 

2 rather than by requiring submission of a supplemental ap3 plication. 

4 ‘‘(e) WORKING GROUP.— 

5 ‘‘(1) ESTABLISHMENT.—Not later than 90 days 

6 after the date of enactment of this section, the Sec7 retary shall establish an intra-agency working group 

8 to be known as the Facility Transfer Working 

9 Group. 

10 ‘‘(2) MEMBERSHIP.—The Secretary shall ap11 point members of the Facility Transfer Working 

12 Group from among officials and employees of the 

13 Department of Health and Human Services who— 

14 ‘‘(A) represent a cross-section of the De15 partment of Health and Human Services; and 

16 ‘‘(B) have expertise on establishments used 

17 to manufacture drugs. 

18 ‘‘(3) DUTIES.—The Facility Transfer Working 

19 Group shall— 

20 ‘‘(A) assist the Secretary in carrying out 

21 this section; 

22 ‘‘(B) upon request by an applicant, con23 duct an informational site visit during the de24 velopmental phase to discuss requirements with 


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1 the applicant with respect to facility design, site 

2 status, and validation; 

3 ‘‘(C) not later than 30 days after con4 ducting an informational site visit under sub5 paragraph (B), provide advice and feedback to 

6 the applicant with respect to facility issues that 

7 may prevent approval of the supplemental ap8 plication under subsection (a), including any 

9 issues with the facility transfer plans; and 

10 ‘‘(D) participate in any pre-approval in11 spection required by the Secretary for an estab12 lishment or provide feedback to the Secretary 

13 with respect to a supplemental application de14 scribed in subsection (a). 

15 ‘‘(f) ADDITIONAL INFORMATIONAL VISITS.—Upon 

16 request by the applicant, the Secretary may conduct infor17 mational site visits in addition to an informational site 

18 visit conducted by the Facility Transfer Working Group 

19 under subsection (e). 

20 ‘‘(g) GUIDANCE.— 

21 ‘‘(1) ISSUANCE.—Not later than 1 year after 

22 the date of enactment of this section, the Secretary 

23 shall issue guidance with respect to this section. 

24 ‘‘(2) CONTENT.—The guidance issued under 

25 this paragraph shall include— 


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1 ‘‘(A) the process by which an applicant 

2 may seek expedited review and approval of a 

3 supplemental application under subsection (a); 

4 and 

5 ‘‘(B) a description of the actions the Sec6 retary may take to expedite the submission and 

7 review of such supplemental application. 

8 ‘‘(h) DEFINITIONS.—In this section: 

9 ‘‘(1) SATISFACTORY INSPECTION HISTORY.— 

10 The term ‘satisfactory inspection history’ means, 

11 with respect to a drug, a history consisting of one 

12 or more inspections in which the most recent manu13 facturing inspection was a satisfactory manufac14 turing inspection during which— 

15 ‘‘(A) no objectionable conditions or prac16 tices were found; or 

17 ‘‘(B) objectionable conditions were found 

18 and voluntary corrective action was left to the 

19 manufacturer. 

20 ‘‘(2) SIMILAR MANUFACTURING PROCESS.—The 

21 term ‘similar manufacturing process’ means proc22 esses used to manufacture drugs that share at least 

23 one unit operation having the same design prin24 ciple.’’. 

Æ 


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