HQ H250309
CLA–2 OT:RR:CTF:TCM H250309 LOR
Mr. Mark Huntebrinker
Forest Pharmaceuticals, Inc.
13600 Shoreline Drive
Earth City, MO 63045
RE: Revocation of New York Ruling Letter N233631; classification of Linzess® (Linaclotide) (CAS-851199-59-2); Guanylate Cyclase-C Agonist
Dear Mr. Huntebrinker,
This is in reference to New York Ruling Letter (NY) N233631, dated October 23, 2012, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) Linaclotide. In NY N233631, U.S. Customs and Border Protection (CBP) classified Linzess® (Linaclotide) under subheading 3004.90.9160, HTSUS (Annotated). We have reconsidered this ruling and have determined that product is provided for in heading 3002, HTSUS, and that it is excluded from classification in heading 3004, HTSUS. Therefore, this ruling revokes NY N233631.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625 (c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), ), a notice was published in the CUSTOMS BULLETIN, Vol. 49, No. 26, on July 1, 2015, proposing to revoke New York Ruling Letter (NY) N233631, dated October 23, 2012, and any treatment accorded to substantially identical transactions. No comments were received in response to this notice.
FACTS:
Linzess®, which has Linaclotide as its active ingredient, is a guanylate cyclase-c agonist product, which acts locally in the intestine to reduce intestinal pain and accelerate gastrointestinal transit. It is indicated for the treatment of irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC) in adults. The U.S. Food and Drug Administration has approved the use of Linzess® (Linaclotide). Linzess® (Linaclotide) is imported in 145 mcg and 290 mgc capsules.
The CBP Laboratory and Scientific and Services Division (LSSD) examined Linzess® (Linaclotide). In LSSD Report No. NY20131257, the report states the following, in pertinent part:
CAS No.: 851199-59-2; Listed in Pharmaceutical Appendix to the HTSUS
Uses: Treatment of irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC)
Linaclotide is a peptide consisting of 14 amino acids and three disulfide bonds. It is an analog of the naturally occurring E-Coli heat stable enterotoxin ST 1b, differing in a single amino acid (leucine to tyrosine at position four).
Functional Groups: amino acids, phenol, hetrocyclic compound containing both nitrogen and sulfur.
Linaclotide: C-C-E-Y- C-C-N-P-A-C-T-G-C-Y
Heat stable enterotoxin: C-C-E-L- C-C-N-P-A-C-G-G-C-Y
Linaclotide exerts its biological effect in a similar manner as E. coli heat-stable enterotoxin.
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NY N233631 classified Linaclotide under subheading 3004.90.91, HTSUS, which provides for: “Medicaments … consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale: Other: Other”.
ISSUE:
Whether Linzess®, which contains Linaclotide as its active ingredient, is properly classified in heading 3002, HTSUS, as a toxin; or in heading 3004, HTSUS, as a medicament (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale?
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied.
The HTSUS provisions at issue are as follows:
3002 Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products:
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3004 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale:
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Note 2 to Chapter 30, HTSUS, states, in pertinent part: “For the purposes of heading 3002, the expression “immunological products” applies to peptides and proteins (other than goods of heading 2937) which are directly involved in the regulation of immunological processes, such as … interleukins, interferons (IFN), chemokines and certain tumor necrosis factors (TNF), growth factors (GF), hematopoietins and colony stimulating factors (CSF).
The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to Heading 30.02 provides, in pertinent part:
This heading covers:
(D) Vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products. [Emphasis added]
These products include:
(2) Toxins (poisons), toxoids, crypto-toxins and anti-toxins.
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The products of this heading remain classified here whether or not in measured doses or put up for retail sale and whether in bulk or in small packings.
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Ruling N233631 classified the above-identified products under heading 3004, HTSUS. However, the heading specifically excludes goods which can be classified under heading 3002, HTSUS. Therefore, if the above-identified product can be properly classified under heading 3002 HTSUS, it is precluded from classification under heading 3004, HTSUS.
An enterotoxin is a protein toxin released by a microorganism in the intestine. Escherichia coli, also known as E. coli, is a bacterium that is commonly found in the gut of warm blooded animals. E. coli is a heat stable enterotoxin. Linaclotide is produced by genetically modifying E. coli bacteria by substituting two amino acids. Linaclotide maintains some of the effect of an enterotoxin and is an analog of naturally occurring E. coli. As toxoids are named as an example under the included products of heading 3002, HTSUS, the attenuated effects of Linaclotide is not precluded from classification under this heading. Accordingly, Linzess® (Linaclotide), which is imported in measured dosages, is properly classified under heading 3002, HTSUS. Therefore, Linzess® (Linaclotide) is not classifiable under heading 3004, HTSUS, or in Chapter 29, HTSUS. See heading 3004, HTSUS and Note 2 to Chapter 29, HTSUS.
We note that this ruling is in accord with the recent decision of the Harmonized System Committee to classify Linaclotide in heading 3002, HTSUS, (See, HSC Report NC1443B1b Ann. P/2, HSC/43) and with NY N243162, dated August 6, 2013.
HOLDING:
By application of GRI 1, the instant product Linzess® (Linaclotide) is properly classified under subheading 3002.90.51, HTSUS, which provides for “Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products: Other: Other. The rate of duty is free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
New York Ruling Letter N233631, dated October 23, 2012, is hereby REVOKED.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the CUSTOMS BULLETIN.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division