,,ii #aagth ,,congress #ast ,session ,s4 #bjhb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #af1 #bjba,mr4 ,scott of ,south ,carolina 7for himself and ,ms4 ,rosen7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to mitigate drug shortages and provide incentives for maintaining1 expanding1 and relocating the manufacturing of active pharmaceutical ingredients1 excipients1 medical diagnostic devices1 pharmaceuticals1 and personal protective equipment in the ,united ,states1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,manufacturing ,,api1 ,drugs1 and ,excipients in ,america ,act or the ,,made in ,america ,act4 #b4 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title4,sec4 #b4 ,table of contents4,,title ,i--,health provisions,sec4 #aja4 ,report to ,congress on barriers to domestic manufacturing of medical products4,sec4 #ajb4 ,enhance intra-agency coordination and public health assessment with regard to compliance activities4,sec4 #ajc4 ,reporting of mutual recognition agreements for inspections and review activities4,sec4 #ajd4 ,enhancing transparency of drug facility inspection timelines4,sec4 #aje4 ,advanced manufacturing technologies program4,,title ,,ii--,tax incentives to increase domestic pharmaceutical and medical device production,sec4 #bja4 ,credit for pharmaceutical and medical device production activities in distressed zones4 ,i ,health provisions #aja4 ,report to ,congress on barriers to domestic manufacturing of medical products 7a7 ,report ,not later than #f months after the date of enactment of this ,act1 the ,secretary of ,health and ,human ,services1 the ,secretary of the ,treasury1 the ,secretary of ,commerce1 and the ,united ,states ,trade ,representative 7collectively referred to in this section as the ,secretaries7 shall submit to the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate and the ,committee on ,energy and ,commerce of the ,house of ,representatives a report on barriers to domestic manufacturing of active pharmaceutical ingredients1 finished drug products1 and devices that are imported from outside of the ,united ,states4 7b7 ,contents ,such report shall-- 7#a7 identify factors that limit or otherwise discourage the domestic manufacturing of active pharmaceutical ingredients1 drugs1 and devices that are currently imported from outside of the ,united ,states1 including any ,federal1 ,state1 local1 or ,tribal laws that hinder domestic manufacturing opportunities2 and 7#b7 recommend specific strategies to overcome the challenges identified under paragraph 7#a71 including strategies-- 7,a7 to develop effective incentives for domestic manufacturing2 and 7,b7 to make changes to laws or regulations that hinder domestic manufacturing opportunities4 7c7 ,consultation ,in preparing the report under subsection 7a71 the ,secretaries shall consult with-- 7#a7 the ,food and ,drug ,administration1 the ,centers for ,medicare ,medicaid ,services1 the ,department of ,defense1 the ,department of ,state1 the ,department of ,veterans ,affairs1 the ,department of ,justice1 and any other ,federal agencies as appropriate2 and 7#b7 relevant stakeholders1 including drug1 device1 and active pharmaceutical ingredient manufacturers1 and other entities1 as appropriate4 7d7 ,definition ,in this section1 the term active pharmaceutical ingredient has the meaning given to such term in section #bjg4a of title #ba1 ,code of ,federal ,regulations 7or any successor regulations74 7e7 ,publication ,the ,secretary shall make the report under subsection 7a7 available on the public website of the ,department of ,health and ,human ,services4 #ajb4 ,enhance intra-agency coordination and public health assessment with regard to compliance activities 7a7 ,coordination ,section #ejf;,d of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cef;d7 is amended by adding at the end the following3 7g7 ,coordination ,the ,secretary shall ensure timely and effective internal coordination and alignment among the field investigators of the ,food and ,drug ,administration and the staff of the ,center for ,drug ,evaluation and ,research's ,office of ,compliance and ,drug ,shortage ,program regarding the reviews of reports shared pursuant to section #gjd7;b77#b71 and any feedback or corrective or preventive actions in response to such reports4 4 7b7 ,reporting ,section #ejf;,c-#a7;a77#b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cef;c-#a7;a77#b77 is amended to read as follows3 7#b7 7,a7 describes the communication between the field investigators of the ,food and ,drug ,administration and the staff of the ,center for ,drug ,evaluation and ,research's ,office of ,compliance and ,drug ,shortage ,program1 including the ,food and ,drug ,administration's procedures for enabling and ensuring such communication2 7,b7 provides the number of reports described in section #gjd7;b77#b7 that were required to be sent to the appropriate offices of the ,food and ,drug ,administration with expertise regarding drug shortage and the number of such reports that were sent2 and 7,c7 describes the adoption and utilization of the approach described in section #ejf;,d7g72 4 7c7 ,applicability 7#a7 ,subsection 7a7 ,the amendment made by subsection 7a7 shall apply beginning on the date of enactment of this ,act4 7#b7 ,subsection 7b7 ,the amendment made by subsection 7b7 shall apply beginning on the date that is #a year after the date of enactment of this ,act4 #ajc4 ,reporting of mutual recognition agreements for inspections and review activities 7a7 ,in general ,not later than the end of calendar year #bjbj1 and annually thereafter1 the ,secretary of ,health and ,human ,services 7referred to in this section as the ,secretary7 shall publish a report on the public website of the ,food and ,drug ,administration on the utilization of agreements entered into pursuant to section #hji of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #chd;e7 or otherwise entered into by the ,secretary to recognize inspections between drug regulatory authorities across countries and international regions with analogous review criteria to the ,food and ,drug ,administration1 such as the ,pharmaceutical ,inspection ,co-,operation ,scheme1 the ,mutual ,recognition ,agreement with the ,european ,union1 and the ,australia-,canada-,singapore-,switzerla nd ,consortium1 in the previous fiscal year4 7b7 ,content ,the report under subsection 7a7 shall include each of the following3 7#a7 ,the total number of establishments that are registered under section #eaj7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj7;i771 and of such establishments1 the number in each region of interest4 7#b7 ,the total number of inspections conducted as described in subparagraphs 7,a7 and 7,b7 of paragraph 7#e7 at establishments described in paragraph 7#a74 7#c7 ,of the inspections described in paragraph 7#b71 the total number of inspections in each of region of interest4 7#d7 ,of the inspections in each region of interest reported pursuant to paragraph 7#c71 the number of inspections in each ,,fda inspection category4 7#e7 ,of the number of inspections reported under each of paragraphs 7#c7 and 7#d7-- 7,a7 the number of inspections which have been conducted pursuant to an agreement or other recognition described in subsection 7a72 and 7,b7 the number of inspections which have been conducted by employees or contractors of the ,food and ,drug ,administration4 7c7 ,definitions ,in this subsection3 7#a7 ,,fda inspection category ,the term ,,fda inspection category means the following inspection categories3 7,a7 ,inspections to support approvals of changes to the manufacturing process of drugs approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb74 7,b7 ,good manufacturing practice surveillance inspections4 7,c7 ,for-cause inspections4 7#b7 ,region of interest ,the term region of interest means ,china1 ,india1 the ,european ,union1 and any other geographic region as the ,secretary determines appropriate4 #ajd4 ,enhancing transparency of drug facility inspection timelines ,section #ijb of the ,,fda ,reauthorization ,act of #bjag 7#ba ,u4,s4,c4 #cee note7 is amended to read as follows3 #ijb4 ,annual report on inspections ,not later than ,march #a of each year1 the ,secretary of ,health and ,human ,services shall post on the public website of the ,food and ,drug ,administration information related to inspections of facilities1 including inspections that are necessary for approval of a drug under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee71 approval of a device under section #eae of such ,act 7#ba ,u4,s4,c4 #cfj;e71 or clearance of a device under section #eaj7k7 of such ,act 7#ba ,u4,s4,c4 #cfj7k77 that were conducted during the previous calendar year4 ,such information shall include the following3 7#a7 ,the median time following a request from staff of the ,food and ,drug ,administration reviewing an application or report to the beginning of the inspection1 including-- 7,a7 the median time for drugs described in section #eje7;j77#aa77;,a77i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77#aa77;,a77i772 7,b7 the median time for drugs described in section #ejf;,c7a7 of such ,act 7#ba ,u4,s4,c4 #cef;c7a77 only2 and 7,c7 the median time for drugs on the drug shortage list in effect under section #ejf;,e of such ,act 7#ba ,u4,s4,c4 #cef;f74 7#b7 ,the median time from the issuance of a report pursuant to section #gjd7;b7 of such ,act 7#ba ,u4,s4,c4 #cgd7;b77 to the sending of a warning letter1 issuance of an import alert1 or holding of a regulatory meeting for inspections for which the ,secretary concluded that regulatory or enforcement action was indicated1 including the median time for each category of drugs listed in subparagraphs 7,a7 through 7,c7 of paragraph 7#a74 7#c7 ,the median time from the sending of a warning letter1 issuance of an import alert1 or holding of a regulatory meeting to resolution of the actions indicated to address the conditions or practices observed during an inspection4 7#d7 ,the number of facilities that were unable to implement requested corrective or preventive actions following a report pursuant to such section #gjd7;b71 resulting in a withhold recommendation1 including the number of such times for each category of drugs listed in subparagraphs 7,a7 through 7,c7 of paragraph 7#a74 4 #aje4 ,advanced manufacturing technologies program ,subchapter ,a of chapter ,v of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cea et seq47 is amended by adding at the end the following3 #ebd;,b4 ,advanced manufacturing technologies program 7a7 ,in general ,not later than #a year after the date of enactment of the ,manufacturing ,,api1 ,drugs1 and ,excipients in ,america ,act1 the ,secretary shall continue in effect the programs to facilitate the development and review of an application under subsection 7b7 or 7j7 of section #eje of this ,act or subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act for a drug or biological product that is manufactured using one of more advanced manufacturing technologies that have been designated in accordance with subsection 7b74 7b7 ,designation ,the ,secretary shall designate a method of manufacturing or development of a drug or biological product as an advanced manufacturing technology under this section if it incorporates a novel technology or uses an established technique or technology in a novel way that-- 7#a7 enhances drug quality2 or 7#b7 improves the flexibility1 robustness1 or efficiency of the manufacturing process to-- 7,a7 prevent or resolve a drug shortage2 7,b7 reduce premarket development time2 or 7,c7 increase the supply of drugs described in paragraph 7#a7 or 7#b7 of section #ejf;,c7a7 for national emergencies4 7c7 ,consultation ,if the ,secretary designates a method of manufacturing as an advanced manufacturing technology under this section1 the ,secretary shall take actions to expedite the development and implementation of such method of manufacture for purposes of approval of an application under subsection 7c7 or 7j7 of section #eje of this ,act or subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act1 which may include1 as appropriate1 holding meetings between the sponsor of the application and appropriate ,food and ,drug ,administration staff throughout the development of the drug of biological product using such advanced manufacturing technology4 7d7 ,evaluation of an advanced manufacturing technology 7#a7 ,package ,a person who seeks designation of an advanced manufacturing technology under this section shall submit to the ,secretary a package of scientific evidence supporting the implementation of the advanced manufacturing technology in a particular context-of-use4 ,the ,secretary shall assist with the development of such package by-- 7,a7 providing timely advice to1 and interactive communication with1 the sponsor regarding the development of the technology2 and 7,b7 involving senior managers and experienced staff of the ,food and ,drug ,administration1 as appropriate1 in a collaborative1 cross-disciplinary review of the method of manufacturing4 7#b7 ,evaluation ,within #ij days of receiving a package under paragraph 7#a71 the ,secretary shall determine whether a designated advanced manufacturing technology is validated for the proposed context of use based on the scientific merit the supporting evidence provided by the sponsor4 7#c7 ,effect of designation ,upon designation of an advanced manufacturing technology1 the holder of the advanced manufacturing technology designation1 or a person the advanced manufacturing technology designation holder authorizes1 may rely upon the advanced manufacturing technology for use across multiple manufacturing or product lines within the same context-of-use without having to re-submit data to the ,secretary validating the underlying technology4 7e7 ,implementation and reporting 7#a7 ,public meeting ,the ,secretary shall publish in the ,federal ,register a notice of a public meeting1 to be held not later than #a year after the date of enactment of the ,manufacturing ,,api1 ,drugs1 and ,excipients in ,america ,act1 to discuss and obtain input and recommendations from stakeholders regarding the goals and scope of1 and a suitable framework and procedures and requirements for1 the program under this section4 7#b7 ,program guidance ,the ,secretary shall-- 7,a7 not later than #a year after the date of enactment of the ,manufacturing ,,api1 ,drugs1 and ,excipients in ,america ,act1 issue draft guidance regarding the goals and implementation of the program under this section2 and 7,b7 not later than #b years after the date of enactment of the ,manufacturing ,,api1 ,drugs1 and ,excipients in ,america ,act1 issue final guidance with respect to the implementation of such program4 7#c7 ,report ,the ,secretary shall make available on the public website of the ,food and ,drug ,administration an annual report on the progress of the programs under this section4 4 ,,ii ,tax incentives to increase domestic pharmaceutical and medical device production #bja4 ,credit for pharmaceutical and medical device production activities in distressed zones 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,u4 ,distressed zone pharmaceutical and medical device production credit 7a7 ,in general ,for purposes of section #ch1 the distressed zone pharmaceutical and medical device production credit for the taxable year shall be an amount equal to the applicable percentage of the qualified production activity expenditures of the taxpayer for the taxable year4 7b7 ,applicable percentage ,for purposes of this section-- 7#a7 ,in general ,except as provided in paragraph 7#b71 the term applicable percentage means #be percent4 7#b7 ,increased amount where employees reside in distressed zone ,in the case of any qualified pharmaceutical or medical device production business a substantial portion of the employees of which reside in a distressed zone1 the applicable percentage shall be #cj percent4 7c7 ,qualified production activity expenditures ,for purposes of this section-- 7#a7 ,in general ,the term qualified production activity expenditures means-- 7,a7 wages paid or incurred to an employee of the taxpayer for services performed by such employee in the conduct of a qualified pharmaceutical or diagnostic medical device production business in a distressed zone 7but only if the employee's principal place of employment is in a distressed zone71 and 7,b7 qualified pharmaceutical or medical device production expenditures4 7#b7 ,qualified pharmaceutical or medical device production business 7,a7 ,in general ,the term qualified pharmaceutical or medical device production business means the trade or business of producing qualified pharmaceuticals in commercial quantities4 7,b7 ,qualified pharmaceuticals 7i7 ,in general ,the term qualified pharmaceuticals means pharmaceuticals1 active pharmaceutical ingredients1 excipients1 medical diagnostic devices1 or personal protective equipment4 7ii7 ,pharmaceutical ,the term pharmaceuticals-- 7,i7 means any drug 7as defined in section #bja of the ,federal ,food1 ,drug1 and ,cosmetic ,act72 and 7,,ii7 includes a biological product 7as defined in section #cea of the ,public ,health ,service ,act74 7iii7 ,active pharmaceutical ingredient ,the term active pharmaceutical ingredients has the meaning given to such term in section #bjg4a of title #ba1 ,code of ,federal ,regulations 7or any successor regulations74 7iv7 ,excipient ,the term excipient-- 7,i7 means any inactive ingredient that is intentionally added to a pharmaceutical that is not intended to exert therapeutic effects at the intended dosage1 other than by acting to improve product delivery2 and 7,,ii7 includes any such filler1 extenders1 diluent1 wetting agent1 solvent1 emulsifier1 preservative1 flavor1 absorption enhancer1 sustained release matrix1 and coloring agent4 7v7 ,medical diagnostic device ,the term medical diagnostic device means any device 7as defined in section #bja7;h7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act7 intended for use in the diagnosis of disease or other conditions4 7vi7 ,personal protective equipment ,the term personal protective equipment means-- 7,i7 any device 7as defined in section #bja7;h7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act7 that is a face mask1 filtering facepiece respirator1 face shield1 surgical mask1 gown1 other apparel1 or glove that is intended for a medical purpose2 and 7,,ii7 any particulate filtering air purifying respiratory protective device that is approved by the ,national ,institute for ,occupational ,safety and ,health under part #hd of title #db1 ,code of ,federal ,regulations 7or successor regulations74 7#c7 ,certain health plan expenses treated as wages 7,a7 ,in general ,the term wages shall include so much of the eligible employer's qualified health plan expenses as are properly allocable to such wages4 7,b7 ,qualified health plan expenses ,for purposes of this paragraph1 the term qualified health plan expenses means amounts paid or incurred by the eligible employer to provide and maintain a group health plan 7as defined in section #ejjj7;b77#a771 but only to the extent that such amounts are excluded from the gross income of employees by reason of section #ajf7;a7 of such ,code4 7,c7 ,allocation rules ,for purposes of this paragraph1 qualified health plan expenses shall be allocated to qualified wages in such manner as the ,secretary may prescribe4 ,except as otherwise provided by the ,secretary1 such allocation shall be treated as properly made if made on the basis of being pro rata among employees and pro rata on the basis of periods of coverage 7relative to the periods to which such wages relate74 7#d7 ,qualified pharmaceutical or medical device production expenditures 7,a7 ,definition ,the term qualified pharmaceutical or medical device production expenditures means amount paid or incurred 7whether or not chargeable to capital account7 for qualified property used in the conduct of a qualified pharmaceutical or medical device production business in a distressed zone 7but only if the primary use of such property is in a distressed zone74 7,b7 ,qualified property 7i7 ,in general ,the term qualified property means any tangible personal property 7other than a building or its structural components7 used in the conduct of a qualified pharmaceutical or medical device production business in a distressed zone 7but only if the primary use of such property is in a distressed zone74 7ii7 ,exception ,such term shall not include any property described in section #ej7;b7 7determined as if the ,united ,states included ,puerto ,rico74 7d7 ,distressed zone ,for purposes of this section1 the term distressed zone means a population census tract-- 7#a7 which has been designated as a qualified opportunity zone under section #adjj,z-#a1 and 7#b7 which has a poverty rate in excess of #cj percent for the calendar year prior to the calendar year that includes the date of enactment of this section4 7e7 ,special rules 7#a7 ,application to ,united ,states shareholders of controlled foreign corporations 7,a7 ,in general ,in the case of a domestic corporation that is a ,united ,states shareholder of a qualified controlled foreign corporation1 the credit under subsection 7a7 7determined without regard to this paragraph7 shall be increased by an amount equal to #cj percent of the corporation's pro rata share 7determined under rules similar to the rules of section #iea7;a77#b77 of qualified production activity expenditures of such controlled foreign corporation for the taxable year of the qualified controlled foreign corporation ending with or within the taxable year of the domestic corporation4 7,b7 ,qualified corporation ,for purposes of subparagraph 7,a71 the term qualified controlled foreign corporation means1 for any taxable year1 a controlled foreign corporation which does not have gross income that is effectively connected with the conduct of a trade or business within the ,united ,states for such taxable year 4 7#b7 ,reduction in basis ,if a credit is determined under this section with respect to any property by reason of any qualified production activity expenditures described in subsection 7b77#a77;,b71 the basis of such property shall be reduced by the amount of the credit so determined4 7#c7 ,coordination with other credits ,any qualified production activity expenditures taken into account in determining the amount of the credit under subsection 7a7 shall not be taken into account in determining a credit under any other provision of this chapter4 7f7 ,recapture 7#a7 ,in general ,if1 during any taxable year1 property take into account under subsection 7c77#a77;,b7 is disposed of1 or otherwise ceases to be used by the taxpayer in the active trade or business of producing qualified pharmaceuticals in commercial quantities1 before the close of the recapture period1 then the tax under this chapter for such taxable year shall be increased by the recapture percentage of the aggregate decrease in the credits allowed under section #ch for all prior taxable years which would have resulted solely from reducing to zero any credit determined under this section with respect to such property4 7#b7 ,recapture percentage ,for purposes of subparagraph 7,a71 the recapture percentage shall be determined in the same manner as under section #ej7;a77#a77;,b74 7#c7 ,application to ,united ,states shareholders ,in the case of any taxpayer to whom a credit is allowed by reason of subsection 7e77#a71 paragraph 7#a7 shall be applied by substituting the controlled foreign corporation with respect to which the taxpayer is a ,united ,states shareholder for the taxpayer4 7#d7 ,application of other rules ,for purposes of this paragraph1 rules similar to the rules of paragraphs 7#c71 7#d71 and 7#e7 7other than subparagraph 7,a7 thereof7 of section #ej7;a77#a7 shall apply4 4 7b7 ,credit allowed against alternative minimum tax ,section #ch7;c77#d77;,b7 of such ,code is amended by redesignating clauses 7x71 7xi71 and 7xii7 as clauses 7xi71 7xii71 and 7xiii71 respectively1 and by inserting after clause 7ix7 the following new clause3 7x7 the credit determined under section #de,u1 4 7c7 ,credit allowed against base erosion anti-,abuse tax ,section #ei;,a7b77#a77;,b77ii7 of such ,code is amended by striking plus at the end of subclause 7,i71 by redesignating subclause 7,,ii7 as subclause 7,,iii71 and by inserting after subclause 7,i7 7as so amended7 the following new subclause3 7,,ii7 the credit allowed under section #ch for the taxable year which is properly allocable to the distressed zone pharmaceutical and medical device production credit determined under section #de,u7a71 plus 4 7d7 ,denial of deduction ,section #bhj;,c of such ,code is amended by adding at the end the following new subsection3 7i7 ,distressed zone pharmaceutical and medical device production credit ,no deduction shall be allowed for that portion of the qualified production activity expenditures 7as defined in section #de,u7b77 otherwise allowable as a deduction for the taxable year which is equal to the amount of the distressed zone pharmaceutical and medical device production credit determined for such taxable year under section #de,u7a74 4 7e7 ,part of general business credit ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#cb71 by striking the period at the end of paragraph 7#cc7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cd7 the distressed zone pharmaceutical and medical device production credit determined under section #de,u7a74 4 7f7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a is amended by adding at the end the following new item3 ,sec4 #de,u4 ,distressed zone pharmaceutical and medical device production credit4 4 7g7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this ,act4