ABC Safe Drug Act

Bill Number

S. 1407

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-04-10: Read twice and referred to the Committee on Finance.

Last Updated

2026-02-23T21:55:31Z

AI-Generated Summary

Summary of S. 1407: Anyone But China Safe Drug Act (ABC Safe Drug Act)

Purpose

This bill aims to restrict the use of federal funds for purchasing drugs manufactured in the People's Republic of China (PRC) by requiring active pharmaceutical ingredients (APIs, the key chemical components that make drugs effective) to come from other countries. It seeks to enhance national security and drug safety by promoting manufacturing in the United States or allied nations that meet U.S. Food and Drug Administration (FDA) standards. Additionally, it provides tax incentives to encourage domestic production of pharmaceuticals and medical devices.

Key Provisions

• Phased Restrictions on Federal Drug Purchases (Section 2(a)):
• Starting January 1, 2028, federal health programs (including those run by the Department of Health and Human Services, Department of Veterans Affairs, Department of Defense, and others defined under the Social Security Act) can only buy drugs where at least 60% of APIs are made in countries other than the PRC that comply with FDA health and safety standards.
• By January 1, 2030, this increases to 100% of APIs from non-PRC countries meeting FDA standards.
• The Secretary of Health and Human Services can grant temporary waivers for agencies unable to comply, but no waivers are allowed for purchases after January 1, 2031.
• Drug Labeling Requirement (Section 2(b)):
• Amends the Federal Food, Drug, and Cosmetic Act to require drug labels to specify the country of origin for each API. Drugs without this information would be considered misbranded.
• Tax Incentives for Manufacturing (Section 3):
• Allows 100% immediate tax deduction (expensing) for the cost of qualified property used in manufacturing pharmaceuticals or medical devices in the United States.
• Applies to property placed in service between January 1, 2025, and December 31, 2030.
• "Qualified property" includes new or expanded facilities for producing drugs (as defined by FDA law) or medical devices (tools like pacemakers or syringes).

Significant Changes to Existing Law

• Federal Purchasing Rules: Introduces new limits on federal drug procurement, overriding other laws to prioritize non-PRC sources, with no prior such nationwide phased ban tied specifically to China.
• Labeling Standards: Adds a new subsection to the Federal Food, Drug, and Cosmetic Act requiring API origin disclosure, which previously did not mandate country-specific details for ingredients.
• Tax Code Amendments: Modifies Section 168(k) of the Internal Revenue Code to extend and enhance bonus depreciation specifically for pharmaceutical and medical device manufacturing, treating it as "qualified property" for full expensing, which was not previously available at this level for these sectors.

Potential Impacts

• On Government Agencies: Federal health programs may face higher costs or supply disruptions during the transition, requiring shifts to alternative suppliers. Waivers provide short-term flexibility, but long-term compliance could strain budgets and procurement processes.
• On Citizens: Could improve drug safety by reducing reliance on PRC manufacturing, potentially lowering risks from quality issues or supply chain vulnerabilities. However, it might lead to temporary shortages or price increases for medications if domestic production ramps up slowly.
• On International Relations: May heighten tensions with the PRC by targeting its pharmaceutical industry, signaling U.S. efforts to decouple economically from China. It could strengthen ties with other countries (e.g., allies like Canada or India) that meet FDA standards and expand their role in global drug supply.

Main Stakeholders Affected

• Federal Agencies: Departments of Health and Human Services, Veterans Affairs, and Defense, which manage large-scale drug purchases for public health, military, and veterans' care.
• Pharmaceutical and Medical Device Companies: U.S.-based manufacturers benefit from tax incentives to build or expand facilities; companies reliant on PRC APIs may need to relocate production, facing compliance costs.
• Healthcare Providers and Patients: Hospitals, clinics, and individuals in federal programs (e.g., Medicare, VA beneficiaries) could see changes in drug availability and pricing.
• Taxpayers and Economy: Broader U.S. workforce and economy gain from incentivized domestic manufacturing jobs, but initial implementation might increase federal spending on alternative sourcing.

Notable Legal, Constitutional, or Political Implications

• Legal: Reinforces FDA oversight by tying purchases to its safety standards and introduces enforceable labeling rules, potentially leading to more litigation over misbranding or waiver denials. The bill uses Congress's spending power to condition federal funds, which is a standard legislative tool.
• Constitutional: No clear challenges anticipated, as it aligns with Congress's authority over federal appropriations and commerce regulation; it does not infringe on free speech or equal protection by focusing on safety and security rationales.
• Political: Reflects growing bipartisan concerns over U.S. dependence on PRC for critical goods, positioning the bill as a national security measure amid trade tensions. If enacted, it could set precedents for similar restrictions on other imports, influencing future foreign policy debates.

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

Sponsor

Sen. Cotton, Tom [R-AR]

Recent Actions

• 2025-04-10: Read twice and referred to the Committee on Finance.
• 2025-04-10: Introduced in Senate

Bill Versions

• Anyone But China Safe Drug Act — issued 2025-04-10 — PDF (4 pages)