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 pur-
poses. 
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 Com-
mittee 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 phar-
maceutical supply chain, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Enhancing the Secu-
rity of the U.S. Pharmaceutical Supply Chain Act of 
2020’’. 
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SEC. 2. TABLE OF CONTENTS. 
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. 
SEC. 3. IDENTIFICATION, DEVELOPMENT, AND PROCURE-
MENT OF PRIORITY MEDICINES. 
(a) PRIORITY MEDICINES.—Title XXVIII of the Pub-
lic Health Service Act (42 U.S.C. 300hh et seq.) is amend-
ed by adding at the end the following: 
‘‘SEC. 2804. IDENTIFICATION OF PRIORITY MEDICINES. 
‘‘(a) PRIORITY MEDICINES.—The Secretary shall 
designate as a priority medicine each covered product 
that— 
‘‘(1)(A) is necessary for use in a public health 
emergency declared under section 319; or 
‘‘(B) is at high risk of becoming in short sup-
ply; and 
‘‘(2) has a vulnerable global supply chain. 
‘‘(b) GLOBAL SUPPLY CHAIN VULNERABILITY.—In 
determining whether a covered product has a vulnerable 
global supply chain under subsection (a)(2), the Secretary 
shall consider— 
‘‘(1) the findings of the National Academies of 
Sciences, Engineering, and Medicine in the report 
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published pursuant to section 4111 of the CARES 
Act (Public Law 116–136); 
‘‘(2) the number of manufacturers of each cov-
ered product; 
‘‘(3) the manufacturing locations, and amount 
produced, of each covered product; 
‘‘(4) the history of the importation of each pri-
ority medicine; and 
‘‘(5) the probability of the imposition of duties 
on the importation of each covered product. 
‘‘(c) CONSULTATION.—In carrying out subsection 
(a), the Secretary shall consult with the Public Health 
Emergency Medical Countermeasures Enterprise estab-
lished under section 2811–1. 
‘‘(d) PUBLICATION OF LIST.—The Secretary shall— 
‘‘(1) not later than 180 days after the date of 
enactment of this section, publish a preliminary list 
of priority medicines; 
‘‘(2) provide an opportunity for public comment 
on such preliminary list; 
‘‘(3) not later than 1 year after such date of en-
actment, publish a final list of priority medicines; 
and 
‘‘(4) on an annual basis, review and, as appro-
priate, update such list. 
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‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) ACTIVE PHARMACEUTICAL INGREDIENT.— 
The term ‘active pharmaceutical ingredient’— 
‘‘(A) means any component that is in-
tended to furnish pharmacological activity or 
other direct effect in the diagnosis, cure, miti-
gation, treatment, or prevention of a disease, or 
to affect the structure or any function of the 
body of a human or animal; and 
‘‘(B) does not include— 
‘‘(i) intermediates used in the syn-
thesis of a drug product; or 
‘‘(ii) components that may undergo 
chemical change in the manufacture of a 
drug product and be present in a drug 
product in a modified form that is in-
tended to furnish such activity or effect. 
‘‘(2) COVERED PRODUCT.—The term ‘covered 
product’ means a drug (including a biological prod-
uct) or an active pharmaceutical ingredient. 
‘‘(3) PRIORITY MEDICINE.—The term ‘priority 
medicine’ means a priority medicine for which a des-
ignation is in effect under subsection (a).’’. 
(b) NATIONAL STRATEGIC HEALTH STRATEGY.— 
Section 2802(b) of the Public Health Service Act (42 
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U.S.C. 300hh–1(b)) is amended by adding at the end the 
following: 
‘‘(11) PRIORITY
MEDICINES.—Supporting the 
identification, production, and procurement of pri-
ority medicines designated under section 2804.’’. 
(c) PUBLIC HEALTH EMERGENCY MEDICAL COUN-
TERMEASURES ENTERPRISE RECOMMENDATIONS.—Sec-
tion 2811–1(c)(1) of the Public Health Service Act (42 
U.S.C. 300hh–10a(c)) is amended by adding at the end 
the following: 
‘‘(E) Provide recommendations to the Sec-
retary with respect to the priority medicines 
designated under section 2804.’’. 
(d) STRATEGIC PLAN FOR COUNTERMEASURE RE-
SEARCH, DEVELOPMENT, AND PROCUREMENT.—Section 
319L(b) of the Public Health Service Act (42 U.S.C. 
247d–7e(b)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (B), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
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‘‘(D) the development and procurement of 
priority medicines designated under section 
2804.’’; and 
(2) by adding at the end the following: 
‘‘(3) PRIORITY
MEDICINES.—With respect to 
the development and procurement of priority medi-
cines, the Secretary shall promote a diverse and sus-
tainable supply chain, including through grants and 
purchases.’’. 
(e) CRITICAL DRUG CONSIDERATION.—Section 3101 
of the CARES Act (Public Law 116–136) is amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) after executing the redesignation in para-
graph (1), by inserting after subsection (c) the fol-
lowing: 
‘‘(d) CONSIDERATION.—With respect to any analysis 
of a critical drug under subsection (b)(1), the Secretary 
shall consider the vulnerability of such drug with respect 
to the global supply chain, including an analysis of— 
‘‘(1) the number of manufacturers of such 
drug; 
‘‘(2) the manufacturing locations, and amounts 
produced, of such drug; 
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‘‘(3) the history of the importation of such 
drug; and 
‘‘(4) the probability of the imposition of duties 
on the importation of such drug.’’. 
SEC. 4. PRIORITY MEDICINE PRODUCTION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45U. PRIORITY MEDICINE PRODUCTION CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the priority medicine production credit determined under 
this section for the taxable year is an amount equal to 
50 percent of the qualified priority medicine expenses for 
the taxable year. 
‘‘(b) QUALIFIED PRIORITY MEDICINE EXPENSES.— 
‘‘(1) QUALIFIED
PRIORITY
MEDICINE
EX-
PENSES.—The term ‘qualified priority medicine ex-
penses’ means direct and indirect costs paid or in-
curred by the taxpayer during the taxable year for 
the production of priority medicines. 
‘‘(2) PRIORITY
MEDICINES.—For purposes of 
this section, a ‘priority medicine’ is a medicine that 
was included, within the 5 calendar years imme-
diately preceding the taxable year, on the list devel-
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oped and published by the Secretary of Health and 
Human Services pursuant to section 2804(d) of the 
Public Health Service Act. 
‘‘(3) COORDINATION WITH SECTION 263A.— 
‘‘(A) 
COORDINATION
WITH
SECTION 
263A.—In applying section 263A, indirect costs 
shall be allocated between the production of pri-
ority medicines and the production of other 
medicines based on the ratio in which the num-
ber of doses of the priority medicines produced 
in the taxable year bears to the total number of 
doses of all medicines produced by the taxpayer 
in that taxable year to which the expense is at-
tributable. 
‘‘(B) REGULATIONS AND GUIDANCE.—The 
Secretary shall by regulation or other guidance 
prescribe rules for the proper allocation of indi-
rect costs described in subparagraph (A).’’. 
(b) CREDIT ALLOWED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 (relating 
to current year business credit) is amended by striking 
‘‘plus’’ at the end of paragraph (32), by striking the period 
at the end of paragraph (33) and inserting ‘‘, plus’’, and 
adding at the end the following new paragraph: 
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‘‘(34) the priority medicine production credit 
determined under section 45U.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) COORDINATION WITH SECTION 59.— 
(A) Section 59A(b)(1)(B)(ii) is amended— 
(i) in subclause (I), by striking 
‘‘plus,’’ at the end; 
(ii) in subclause (II), by striking the 
period at the end, and inserting ‘‘, plus’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(III) the credit allowed under 
section 38 for the taxable year which 
is properly allocable to the priority 
medicine production credit determined 
under section 45U.’’. 
(B) Section 59A(b)(2)(B) is amended to 
read as follows: 
‘‘(B) by reducing (but not below zero) the 
regular tax liability (as defined in section 
26(b)) for purposes of subparagraph (B) there-
of by the excess (if any) of the aggregate 
amount of the credits allowed under this chap-
ter against such regular tax liability over the 
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credit allowed under section 38 for the taxable 
year which is properly allocable to the priority 
medicine production credit determined under 
section 45U, rather than the excess described in 
such paragraph.’’. 
(2) COORDINATION WITH RESEARCH CREDIT.— 
Section 41(c)(4)(A) is amended by striking ‘‘14’’ 
and inserting ‘‘20’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of part IV of 
subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after the item relating 
to section 45T the following new item: 
‘‘Sec. 45U. Priority medicine production credit.’’ 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to qualified priority medicine ex-
penses paid or incurred after December 31, 2020. 
SEC. 5. IMPROVING REGULATORY EFFICIENCIES FOR 
TRANSFER OF DRUGS. 
The Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 301 et seq.) is amended by inserting after section 
505–1 of such Act (21 U.S.C. 355–1) the following: 
‘‘SEC. 505–2. TRANSFER OF DRUGS TO DOMESTIC ESTAB-
LISHMENTS. 
‘‘(a) IN GENERAL.—Beginning not later than 90 
days after the date of the enactment of this section, the 
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Secretary shall expedite the review and approval of a sup-
plemental application to an abbreviated new drug applica-
tion approved under section 505(j) or a new drug applica-
tion approved under section 505(c) that seeks to transfer 
manufacturing of one or more finished dosage forms of 
a drug or one or more active pharmaceutical ingredients 
therein from one or more foreign establishments to one 
or more new or existing domestic establishments. 
‘‘(b) BEFORE SUPPLEMENTAL APPLICATION SUB-
MISSION.— 
‘‘(1) DEVELOPMENT
AND
PRE-SUBMISSION.— 
After an applicant submits a meeting request with 
respect to expedited review and approval of a supple-
mental application pursuant to subsection (a), the 
Secretary shall— 
‘‘(A) not later than 30 days after receiving 
such request, conduct a meeting with the appli-
cant to— 
‘‘(i) discuss the information necessary 
to approve the supplemental application; 
and 
‘‘(ii) if applicable, schedule a pre-ap-
proval inspection; and 
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‘‘(B) not later than 60 days after receiving 
such request, conduct a meeting with the appli-
cant to— 
‘‘(i) provide advice to the applicant 
with respect to the supplemental applica-
tion; and 
‘‘(ii) if applicable, select a first drug 
to be identified in accordance with sub-
section (c). 
‘‘(2) REVIEW AND APPROVAL.—In carrying out 
subsection (a), the Secretary shall— 
‘‘(A) review and take action with respect to 
a supplemental application not later than 6 
months after the date of submission or resub-
mission of such application; and 
‘‘(B) where the Secretary recommends a 
change to a domestic establishment following an 
inspection of such establishment, reinspect the 
establishment not later than 90 days after re-
ceiving a request from the applicant for rein-
spection. 
‘‘(3) 
RELATION
TO
FEE
PERFORMANCE 
GOALS.—The deadlines specified in paragraph (1) 
supersede any conflicting performance goals identi-
fied in any statute reauthorizing the fee programs in 
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parts 2 and 7 of subchapter C of title VII of the 
Federal Food, Drug, and Cosmetic Act. 
‘‘(c) CONTENTS.—With respect to a supplemental ap-
plication under subsection (a) for a transfer of the site 
of manufacture of multiple drugs that share a similar 
manufacturing process, the Secretary shall— 
‘‘(1) request a list of the drugs; 
‘‘(2) from the list under paragraph (1), identify 
a first drug to be transferred; 
‘‘(3) determine the criteria necessary to receive 
approval of the supplemental application; and 
‘‘(4) require the applicant to demonstrate, as 
part of such criteria, that each foreign establishment 
from which the drugs are to be transferred has a 
satisfactory inspection history with respect to the 
drugs. 
‘‘(d) SUBSEQUENT TRANSFER
OF DRUGS THAT 
SHARE A SIMILAR MANUFACTURING PROCESS.—After the 
approval of a supplemental application under subsection 
(a) for the transfer of the manufacturing of a first drug 
identified by the Secretary pursuant to subsection (c)(2) 
from one or more foreign establishments to one or more 
new or existing domestic establishments, the Secretary 
may allow the applicant to so transfer drugs that share 
a similar manufacturing process with such first drug pur-
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suant to submission of a report under section 506A(d)(2) 
rather than by requiring submission of a supplemental ap-
plication. 
‘‘(e) WORKING GROUP.— 
‘‘(1) ESTABLISHMENT.—Not later than 90 days 
after the date of enactment of this section, the Sec-
retary shall establish an intra-agency working group 
to be known as the Facility Transfer Working 
Group. 
‘‘(2) MEMBERSHIP.—The Secretary shall ap-
point members of the Facility Transfer Working 
Group from among officials and employees of the 
Department of Health and Human Services who— 
‘‘(A) represent a cross-section of the De-
partment of Health and Human Services; and 
‘‘(B) have expertise on establishments used 
to manufacture drugs. 
‘‘(3) DUTIES.—The Facility Transfer Working 
Group shall— 
‘‘(A) assist the Secretary in carrying out 
this section; 
‘‘(B) upon request by an applicant, con-
duct an informational site visit during the de-
velopmental phase to discuss requirements with 
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the applicant with respect to facility design, site 
status, and validation; 
‘‘(C) not later than 30 days after con-
ducting an informational site visit under sub-
paragraph (B), provide advice and feedback to 
the applicant with respect to facility issues that 
may prevent approval of the supplemental ap-
plication under subsection (a), including any 
issues with the facility transfer plans; and 
‘‘(D) participate in any pre-approval in-
spection required by the Secretary for an estab-
lishment or provide feedback to the Secretary 
with respect to a supplemental application de-
scribed in subsection (a). 
‘‘(f) ADDITIONAL INFORMATIONAL VISITS.—Upon 
request by the applicant, the Secretary may conduct infor-
mational site visits in addition to an informational site 
visit conducted by the Facility Transfer Working Group 
under subsection (e). 
‘‘(g) GUIDANCE.— 
‘‘(1) ISSUANCE.—Not later than 1 year after 
the date of enactment of this section, the Secretary 
shall issue guidance with respect to this section. 
‘‘(2) CONTENT.—The guidance issued under 
this paragraph shall include— 
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‘‘(A) the process by which an applicant 
may seek expedited review and approval of a 
supplemental application under subsection (a); 
and 
‘‘(B) a description of the actions the Sec-
retary may take to expedite the submission and 
review of such supplemental application. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) SATISFACTORY
INSPECTION
HISTORY.— 
The term ‘satisfactory inspection history’ means, 
with respect to a drug, a history consisting of one 
or more inspections in which the most recent manu-
facturing inspection was a satisfactory manufac-
turing inspection during which— 
‘‘(A) no objectionable conditions or prac-
tices were found; or 
‘‘(B) objectionable conditions were found 
and voluntary corrective action was left to the 
manufacturer. 
‘‘(2) SIMILAR MANUFACTURING PROCESS.—The 
term ‘similar manufacturing process’ means proc-
esses used to manufacture drugs that share at least 
one unit operation having the same design prin-
ciple.’’. 
Æ 
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