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Processing of Drug Products from Bulk Form to Measured Doses is Not Substantial Transformation, CBP Affirms

Friday, November 13, 2015
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain acyclovir tablets that may be offered to the U.S. government under an undesignated government procurement contract. This determination was issued Nov. 5 and any party-at-interest may seek judicial review of it by Dec. 14. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.

Acyclovir is an active pharmaceutical ingredient used as a synthetic nucleoside analogue active against herpes viruses and is manufactured in China and India. It is shipped to the U.S., where it undergoes five manufacturing steps that result in finished tablets packaged in high-density polyethylene plastic bottles put into cartons for distribution in the U.S.

In ruling HQ H267177, CBP states that, consistent with prior rulings, it has determined that the processing performed in the U.S. does not result in a substantial transformation. CBP explains that the acyclovir retains its chemical and physical properties and does not undergo a change in name, character or use; instead, it is merely put into a dosage form and packaged for sale. As a result, the country of origin of the acyclovir tablets is China and India.

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