term in section 351(i)(1) of the Public Health 
Service Act (42 U.S.C. 262(i)(1)). 
‘‘(4) OTHER
TERMS.—The terms ‘drug sub-
stance’ and ‘drug product’ have the respective mean-
ings given such terms in section 314.3 of title 21, 
Code of Federal Regulations (or any successor regu-
lation). 
‘‘(5) PRODUCED IN THE UNITED STATES.—The 
term ‘produced in the United States’ means that all 
the production of the material or component takes 
place in the United States, regardless of the origin 
of the subcomponents of such material or compo-
nent. 
‘‘(6) PRODUCTION.—The term ‘production’ 
means all steps in the manufacture, propagation, 
and preparation of an eligible component, including 
synthesis, mixing, granulating, milling, molding, 
lyophilizing, tableting, encapsulating, coating, steri-
lizing, testing, filling, labeling, packaging, and stor-
age prior to release by the manufacturer. 
‘‘(d) SPECIAL RULES.—Rules similar to the rules of 
paragraphs (1), (3), and (4) of section 45X(d) shall apply. 
‘‘(e) REGULATORY AUTHORITY.—The Secretary shall 
prescribe such regulations and other guidance as are ap-
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propriate or necessary to carry out the purposes of this 
section.’’. 
(b) ELECTIVE PAYMENT.— 
(1) IN GENERAL.—Section 6417(b) of the In-
ternal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(13) The generic drugs and biosimilars pro-
duction credit determined under section 45BB.’’. 
(2) ELECTION WITH RESPECT TO OTHER ENTI-
TIES.—Paragraph (1) of section 6417(d) is amend-
ed— 
(A) by redesignating subparagraph (E) as 
subparagraph (F), 
(B) by striking ‘‘or (D)’’ each place it ap-
pears in subparagraph (F), as so redesignated, 
and inserting ‘‘(D), or (E)’’, and 
(C) by inserting after subparagraph (D) 
the following new subparagraph: 
‘‘(E) ELECTION
WITH
RESPECT
TO
GE-
NERIC DRUGS AND BIOSIMILARS PRODUCTION 
CREDIT.— 
‘‘(i) IN
GENERAL.—If a taxpayer 
other than an entity described in subpara-
graph (A) makes an election under this 
subparagraph with respect to any taxable 
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year in which such taxpayer has, after De-
cember 31, 2024, produced eligible compo-
nents (as defined in section 45BB(c)(1)), 
such taxpayer shall be treated as an appli-
cable entity for purposes of this section for 
such taxable year, but only with respect to 
the credit described in subsection (b)(13). 
‘‘(ii) OTHER
RULES.—The rules of 
clauses (ii) and (iii) of subparagraph (D) 
shall apply for purposes of this subpara-
graph.’’. 
(c) TRANSFER OF CREDITS.—Section 6418(f)(1)(A) 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new clause: 
‘‘(xii) 
The 
generic 
drugs 
and 
biosimilars production credit determined 
under section 45BB.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of the Internal Revenue Code 
of 1986 is amended— 
(A) by striking ‘‘plus’’ at the end of para-
graph (40), 
(B) by striking the period at the end of 
paragraph (41) and inserting ‘‘, plus’’, and 
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(C) by adding at the end the following new 
paragraph: 
‘‘(42) the generic drugs and biosimilars produc-
tion credit determined under section 45BB(a).’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by adding at the end 
the following new item: 
‘‘Sec. 45BB. Generic drugs and biosimilars production credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to generic drugs and biologics pro-
duced after the date of enactment of this Act. 
SEC. 3. GENERIC DRUGS AND BIOSIMILARS INVESTMENT 
CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 48E the fol-
lowing new section: 
‘‘SEC. 48F. GENERIC DRUGS AND BIOSIMILARS INVEST-
MENT CREDIT. 
‘‘(a) ESTABLISHMENT OF CREDIT.—For purposes of 
section 46, the generic drugs and biosimilars investment 
credit for any taxable year is an amount equal to 25 per-
cent of the qualified investment for such taxable year with 
respect to any qualified facility of an eligible taxpayer. 
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‘‘(b) QUALIFIED INVESTMENT.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The qualified investment 
for any taxable year is the basis of any qualified 
property placed in service by the taxpayer during 
such taxable year which is part of a qualified facil-
ity. 
‘‘(2) QUALIFIED PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
property’ means property— 
‘‘(i) which is tangible property, 
‘‘(ii) with respect to which deprecia-
tion (or amortization in lieu of deprecia-
tion) is allowable, 
‘‘(iii) which is— 
‘‘(I) constructed, reconstructed, 
or erected by the taxpayer, or 
‘‘(II) acquired by the taxpayer if 
the original use of such property com-
mences with the taxpayer, and 
‘‘(iv) which is used as an integral part 
of the qualified facility to produce eligible 
components. 
‘‘(B) BUILDINGS AND STRUCTURAL COM-
PONENTS.— 
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‘‘(i) IN GENERAL.—The term ‘quali-
fied property’ includes any building or its 
structural components which otherwise sat-
isfies the requirements of subparagraph 
(A). 
‘‘(ii) EXCEPTION.—Clause (i) shall 
not apply with respect to a building or por-
tion of a building used for offices, adminis-
trative services, or other functions unre-
lated to the production of eligible compo-
nents. 
‘‘(3) QUALIFIED FACILITY.—The term ‘quali-
fied facility’ means a facility— 
‘‘(A) which is owned (in whole or in part) 
by the taxpayer, 
‘‘(B) which is located in the United States 
or any territory of the United States, and 
‘‘(C) the primary purpose of which is the 
production of eligible components. 
‘‘(4) COORDINATION
WITH
REHABILITATION 
CREDIT.—The qualified investment with respect to 
any qualified facility for any taxable year shall not 
include that portion of the basis of any property 
which is attributable to qualified rehabilitation ex-
penditures (as defined in section 47(c)(2)). 
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‘‘(5) CERTAIN PROGRESS EXPENDITURE RULES 
MADE APPLICABLE.—Rules similar to the rules of 
subsections (c)(4) and (d) of section 46 (as in effect 
on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990) shall apply. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 
taxpayer’ means any taxpayer which is not a foreign 
entity of concern (as defined in section 9901(8) of 
the William M. (Mac) Thornberry National Defense 
Authorization Act for Fiscal Year 2021 (15 U.S.C. 
4651)). 
‘‘(2) ELIGIBLE COMPONENT.—The term ‘eligi-
ble component’ has the meaning given such term in 
section 45BB(c)(1). 
‘‘(3) PRODUCTION.—The term ‘production’ has 
the meaning given such term in section 45BB(c)(6). 
‘‘(d) TERMINATION OF CREDIT.—The credit allowed 
under this section shall not apply to property the construc-
tion of which begins after December 31, 2028. 
‘‘(e) REGULATORY AUTHORITY.—The Secretary shall 
prescribe such regulations and other guidance as are ap-
propriate or necessary to carry out the purposes of this 
section.’’. 
(b) ELECTIVE PAYMENT.— 
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(1) IN GENERAL.—Section 6417(b) of the In-
ternal Revenue Code of 1986, as amended by section 
2(b) of this Act, is further amended by adding at 
the end the following new paragraph: 
‘‘(14) The generic drugs and biosimilars invest-
ment credit determined under section 48F.’’. 
(2) ELECTION WITH RESPECT TO OTHER ENTI-
TIES.—Paragraph (1) of section 6417(d) of such 
Code, as amended by this Act, is further amended— 
(A) by redesignating subparagraph (F) as 
subparagraph (G), 
(B) by striking ‘‘or (E)’’ each place it ap-
pears in subparagraph (G), as so redesignated, 
and inserting ‘‘(E), or (F)’’, and 
(C) by inserting after subparagraph (E) 
the following new subparagraph: 
‘‘(F) ELECTION
WITH
RESPECT
TO
GE-
NERIC DRUGS AND BIOSIMILARS INVESTMENT 
CREDIT.—If a taxpayer other than an entity de-
scribed in subparagraph (A) makes an election 
under this subparagraph with respect to any 
taxable year in which such taxpayer has placed 
in service a qualified facility (as defined in sec-
tion 48F(b)(3)), such taxpayer shall be treated 
as an applicable entity for purposes of this sec-
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tion for such taxable year, but only with respect 
to the credit described in subsection (b)(14).’’. 
(c) TRANSFER OF CREDITS.—Section 6418(f)(1)(A) 
of the Internal Revenue Code of 1986, as amended by this 
Act, is further amended by adding at the end the following 
new clause: 
‘‘(xiii) 
The 
generic 
drugs 
and 
biosimilars investment credit determined 
under section 48F.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 46 of the Internal Revenue Code of 
1986 is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (6), 
(B) by striking the period at the end of 
paragraph (7) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
paragraph: 
‘‘(8) the generic drugs and biosimilars invest-
ment credit.’’. 
(2) Section 49(a)(1)(C) of such Code is amend-
ed— 
(A) by striking ‘‘and’’ at the end of clause 
(vii), 
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(B) by striking the period at the end of 
clause (viii) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
clause: 
‘‘(ix) the basis of any qualified prop-
erty which is part of a qualified facility 
under section 48F.’’. 
(3) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48E the fol-
lowing new item: 
‘‘48F. Generic drugs and biosimilars investment credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2026. 
Æ 
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