The bill introduces the Generic Drugs and Biosimilars Production Credit (Section 45BB) to encourage the domestic manufacturing of essential medicines. This credit is available to taxpayers who produce eligible components, such as approved generic drugs, licensed biosimilars, and their raw materials, within the United States and sell them to unrelated parties. The base credit is 30% of the value added by the taxpayer, increasing to 35% for the final production of drug substances, drug products, or biological products. An additional domestic content bonus credit is provided, calculated based on the percentage of U.S.-produced materials and components used. To qualify, production and sale must be part of a trade or business, and the credit is disallowed for foreign entities of concern. The credit specifically excludes components from facilities with unaddressed Food and Drug Administration (FDA) warning letters or those already claiming the investment credit. This production credit is subject to a phase-out schedule , reducing to 75% in 2031, 50% in 2032, 25% in 2033, and expiring after December 31, 2033. Additionally, the bill establishes the Generic Drugs and Biosimilars Investment Credit (Section 48F), offering a 25% tax credit for qualified investments in facilities dedicated to producing eligible components. This credit applies to tangible, depreciable property, including buildings and structural components (excluding offices), that are integral to the production process. To be eligible, facilities must be owned by the taxpayer, located in the United States or its territories, and primarily focused on manufacturing these components. The investment credit is available for property placed in service after December 31, 2026, but terminates for construction beginning after December 31, 2028. Both the production and investment credits allow for elective payment , enabling certain entities to receive direct payments instead of tax credits, and are also transferable . These provisions aim to strengthen the domestic supply chain for generic drugs and biosimilars, reducing reliance on foreign sources and enhancing national preparedness.