MMEDS Act of 2025

Bill Number

H.R. 3042

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-04-28: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.

Last Updated

2025-06-25T08:05:59Z

AI-Generated Summary

Purpose

The Medical Manufacturing, Economic Development, and Sustainability Act of 2025 (MMEDS Act) aims to encourage the growth of medical manufacturing in economically distressed areas of the United States and its territories. It provides tax incentives to boost domestic production of medical products, strengthen the national supply chain, create jobs, and support the development of health products that protect vulnerable populations during epidemics or pandemics.

Key Provisions

• Tax Credits for Medical Manufacturing in Distressed Zones (Internal Revenue Code Subchapter AA):
• Offers a 40% tax credit on qualified wages, employee fringe benefits (e.g., pensions, health insurance), and depreciation costs for facilities producing medical products (such as prescription drugs, biological products, or medical devices) or their essential components (e.g., active ingredients) in designated economically distressed zones.
• Wages are capped (based on Social Security limits) and must relate to full-time employees working primarily in these facilities; part-time or temporary workers receive prorated benefits.
• Prevents "double-dipping" by disallowing these expenses in other tax credits (e.g., research credits under section 41).
• Defines "economically distressed zones" as U.S. census tracts with high poverty (at least 25-30% over five years), unemployment, or prolonged economic decline, designated by the Treasury Secretary and Commerce Secretary upon application from state or local governments. These include strategic plans for community involvement, resource commitments, and measurable goals. Automatic designations apply to tracts with 30%+ poverty; others require applications. Designations last 15 years, starting from enactment (for automatic ones) or designation date.
• Applies to taxable years after December 31, 2024; covers U.S. states, D.C., and territories.

• Credit for Purchasing from Distressed Zones:
• Eligible U.S. medical manufacturers get a 30% tax credit (or 5% if from related parties) on costs for products or services (e.g., components or packaging) sourced from distressed zones that support their production.

• Enhanced Incentives for Specific Facilities:
• Boosts credits to 60% for wages/benefits/depreciation and 50% for purchases for "qualified repatriated" facilities (moved from foreign countries posing supply chain risks due to political/social issues) or "qualified population health product" facilities (producing drugs/devices addressing non-communicable diseases like diabetes or heart disease that worsen pandemic outcomes for vulnerable groups).
• Allows an election to fully expense (deduct 100%) facility property costs immediately instead of using depreciation credits, treating it as "qualified property" under existing tax rules.

• Amendments to Public Health Service Act (Section 3):
• Expands "qualified countermeasures" (government-supported drugs, biologics, or devices for public health emergencies) to include products diagnosing, preventing, or treating non-communicable diseases (e.g., chronic conditions) that amplify risks from pandemics or infectious diseases, especially for vulnerable groups (children, pregnant women, older adults, minorities, veterans).
• Defines "population health products" as widely available drugs/devices for these non-communicable threats in epidemic contexts.
• Prioritizes research, development, manufacturing, and stockpiling of such products; emphasizes multi-use technologies (e.g., vaccine platforms).
• Requires federal agencies (e.g., HHS, CMS, FDA, Defense, VA) to collaborate on rapid distribution of these products to at-risk populations.
• Mandates a HHS report to Congress within 90 days of enactment assessing disproportionate pandemic harms to vulnerable groups, needs for new products, and recommendations for incentives similar to those for infectious disease products.

Significant Changes to Existing Law

• Internal Revenue Code: Introduces a new Subchapter AA with targeted tax credits for medical manufacturing, similar to empowerment zone incentives but focused on medical sectors and distressed areas. No prior specific credits existed for repatriating medical production or population health products.
• Public Health Service Act: Broadens countermeasure definitions beyond traditional threats (e.g., bioterrorism, infectious diseases) to include interactions with chronic conditions. Adds priorities for vulnerable populations, strategic initiatives for ongoing threats like influenza combined with non-communicable diseases, and inter-agency coordination for distribution. Introduces "population health products" and requires a congressional report on incentives, potentially aligning with FDA priority review pathways (e.g., under section 505E for rare diseases).

Potential Impacts

• Government Agencies: Increases workload for IRS (administering credits, preventing abuse), Treasury/Commerce (designating zones), and HHS (identifying priorities, reporting, coordinating distribution). Could enhance HHS's role in supply chain security and pandemic preparedness.
• Citizens: Creates jobs and economic growth in high-poverty areas, potentially reducing unemployment and empowering low-income communities through required strategic plans. Improves access to essential medical products, especially for vulnerable groups, by incentivizing domestic production and rapid distribution during crises.
• International Relations: Encourages reshoring (repatriation) from risky foreign suppliers, reducing dependence on geopolitically unstable regions and bolstering U.S. supply chain resilience, which may strain trade ties but align with national security goals.
• Broader Economy: Stimulates medical manufacturing investment, potentially lowering costs for U.S.-made drugs/devices over time, while fostering public-private partnerships (e.g., with universities, medical centers).

Main Stakeholders Affected

• Medical Manufacturers: Primary beneficiaries through tax credits and expense options, especially those expanding in distressed zones or repatriating operations.
• Workers and Communities in Distressed Areas: Gain from job creation, wage supports, and community development plans; includes low-income, minority, and rural populations.
• Vulnerable Populations: Older adults, children, pregnant women, minorities, veterans, and those with chronic diseases benefit from targeted health products and distribution priorities.
• State and Local Governments: Responsible for zone applications and strategic planning, gaining federal support for economic revitalization.
• Federal Agencies: HHS (health priorities, reporting), IRS/Treasury (tax administration), Commerce (designations), and others (e.g., FDA for approvals, CMS for distribution).

Notable Legal, Constitutional, or Political Implications

• Legal: Introduces eligibility rules and anti-abuse measures (e.g., no credits for relocations causing job losses elsewhere), likely requiring IRS regulations for compliance and audits. Expands HHS authorities without new funding, relying on existing programs.
• Constitutional: Aligns with Congress's commerce power (Article I, Section 8) to regulate interstate trade and promote economic welfare, including tax incentives for targeted industries. Designations based on poverty metrics raise no equal protection issues, as they aim to address disparities.
• Political: Bipartisan sponsorship (Democrats and Republicans) emphasizes economic equity, supply chain security, and health equity post-COVID, potentially appealing across aisles. Could spark debates on tax expenditures (lost revenue from credits) versus benefits for underserved areas, and on prioritizing chronic diseases in emergency funding.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Malliotakis, Nicole [R-NY-11]

Cosponsors (10)

Rep. Torres, Ritchie [D-NY-15], Rep. Salazar, Maria Elvira [R-FL-27], Rep. Soto, Darren [D-FL-9], Rep. Hurd, Jeff [R-CO-3], Rep. Gimenez, Carlos A. [R-FL-28], Rep. Quigley, Mike [D-IL-5], Rescom. Hernández, Pablo Jose [D-PR-At Large], Rep. Buchanan, Vern [R-FL-16], Rep. Tenney, Claudia [R-NY-24], Rep. Gooden, Lance [R-TX-5]

Recent Actions

• 2025-04-28: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
• 2025-04-28: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
• 2025-04-28: Introduced in House
• 2025-04-28: Introduced in House

Bill Versions

• Medical Manufacturing, Economic Development, and Sustainability Act of 2025 — issued 2025-04-28 — PDF (21 pages)