H.R. 3042 — MMEDS Act of 2025

This section adds new subchapter AA to IRC chapter 1, establishing tax incentives for medical manufacturing in economically distressed zones (designated under new IRC §1400AA-4), including (1) under new IRC §1400AA-1, a credit equal to 40% of the taxpayer's economically distressed zone wages (limited to the Social Security contribution and benefit base under SSA §230, prorated for part-time employees or partial-zone employment), allocable employee fringe benefit expenses (e.g., employer contributions to pensions, health plans, or life insurance), and depreciation/amortization allowances for qualified medical manufacturing facility property; and (2) credits under new IRC §§1400AA-2 and 1400AA-3 for acquiring economically distressed zone products/services and special rules to secure the national supply chain for population health products. Economically distressed zone wages and fringe benefits are for employees principally employed in a qualified medical manufacturing facility (i.e., one researching/developing or producing medical products—such as prescription drugs under FDCA §505, §351 of the PHS Act, or §802 or medical devices under FDCA §201(h)—or essential components thereof, such as active pharmaceutical or biological ingredients—and located in an economically distressed zone). Expenses used for the credit may not be used for the research credit under IRC §41 or substantially similar provisions.

This section amends the Public Health Service Act (PHS Act) to expand the Biomedical Advanced Research and Development Authority's (BARDA's) authorities—under sections 319F–1 and 319L (42 U.S.C. 247d–6a, 247d–7e)—to support research, development, manufacturing, stockpiling, and distribution of population health products, defined as widely available drugs to diagnose, mitigate, prevent, or treat harm from underlying non-communicable diseases that, when combined with pandemic influenza or emerging infectious diseases, threaten vulnerable American populations (i.e., children, pregnant women, older adults, minority populations, and other at-risk individuals). (As background, BARDA accelerates development of medical countermeasures against public health security threats.) Specifically, the section (1) revises the definition of qualified countermeasure under PHS Act section 319F–1(a)(2)(A) to include drugs (as defined in 21 U.S.C. 321(g)(1)), biological products, or devices prioritized by the HHS Secretary for harm from biological, chemical, radiological, or nuclear agents, or from such non-communicable diseases exacerbating epidemics or pandemics; (2) adds definitions of population health product and vulnerable American populations to PHS Act section 319L(a); (3) revises BARDA's strategic initiatives under section 319L(c)(4)(F)(ii) to address ongoing threats from pandemic influenza, emerging infectious diseases, and non-communicable diseases, including support for multiuse platform technologies; (4) revises section 319L(c)(6) to prioritize advanced research and development of qualified countermeasures, pandemic or epidemic products, and population health products for vulnerable populations; (5) requires the HHS Secretary, under new section 319L(c)(8), to collaborate with the Centers for Medicare & Medicaid Services, Department of Defense, Department of Veterans Affairs, FDA, and other agencies for prompt and continuous distribution of approved population health products; and (6) requires, under new section 319L(c)(9), a report to Congress within 90 days of enactment assessing disproportionate harms to vulnerable populations from COVID–19 and prior epidemics, needs for additional population health products, and recommendations for incentives comparable to those for covered infectious disease products under the Federal Food, Drug, and Cosmetic Act (e.g., under section 505E).