Discussion draft of ONSHORE Manufacturing Act proposes incentives for domestic battlefield medicine, device manufacturing

U.S. Rep. Brad Wenstrup (R-OH) released this week a discussion draft of a new bill known as the ONSHORE Manufacturing Act, which proposes incentives to encourage domestic manufacturing of critical battlefield medicines and devices.

ONSHORE, which stands for the Our Nation’s Supply chain for Healthcare has Over Reliance Elsewhere Act, specifically seeks to cut American reliance on name-brand and generic medications manufactured in China or similarly sourced.

“If you had told me when I was a surgeon serving in Iraq that the personal protective equipment I relied on to protect me, and the medications needed to serve our troops, had depended on China, I would have asked, ‘How did we allow ourselves to get here as a country, especially our military?'” Wenstrup said. “This draft legislation would incentivize the domestic manufacturing of vital medical items critical to our health security and adds to the urgent conversation about how best to reduce our reliance on China.”

The bill as drafted would take a few specific approaches to this. First, it would lower the tax rate on the income from domestic manufacturing and sales of essential drugs, biologics, medical devices, countermeasures and active pharmaceutical ingredients. Second, it would establish a tax credit for new investments in advanced manufacturing equipment or machinery used to domestically manufacture critical health products.

A credit would also be offered for equipment needed to comply with Environmental Protection Agency (EPA) requirements, to guarantee cost competitiveness without sacrificing environmental standards. Lastly, the draft set a standard that credits would only be available for investments in producing essential medicines or devices as defined by the Food and Drug Administration (FDA) and Department of Defense (DoD).