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The PILLS Act establishes two federal tax credits to incentivize domestic production of generic drugs and biosimilars. The first credit provides a 30–35 percent tax credit on the value added by manufacturers producing generic drugs and biosimilars in the United States, with an additional bonus for domestic content in materials. The second credit provides a 25 percent investment tax credit for capital expenditures at facilities dedicated to generic drug and biosimilar production. Both credits phase out after 2029 and exclude manufacturers that are foreign entities of concern or subject to unresolved FDA warning letters.
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