OT:RR:CTF:CPMM H310309 MMM
Craig A. Lewis, Esq.
Hogan Lovells US L.L.P
555 13th Street, N.W.
Washington, D.C. 20004-1109
Re: Classification of nicotine inhaler and nicotine nasal spray
Dear Mr. Lewis,
This is in reference to your letter, dated March 9, 2020, to the National Commodity Specialist Division (NCSD) of Customs and Border Protection (CBP), on behalf of your client, Pfizer Inc., requesting a binding ruling letter regarding the proper classification of prescription-only nicotine inhaler and nasal spray under the Harmonized Tariff Schedule of the United States (HTSUS). You claim that the inhaler and nasal spray are classified under subheading 3004.90.91, HTSUS, which provides for “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: Other: Other.” Your letter was forwarded to our office for reply.
FACTS:
The first product, the Inhaler, consists of an inhaler consisting of a mouthpiece and a plastic cartridge delivering nicotine from a porous plug. The cartridge is inserted into the mouthpiece prior to use. Nicotine is released when air is inhaled through the inhaler. The inhaler is sold by prescription-only and taken under physician’s guidance.
The second product, the Nasal Spray, is also indicated as an aid to smoking cessation for the relief of nicotine withdrawal symptoms. The product consists of an aqueous solution of nicotine, the active ingredient, as well as a nasal spray delivery system which administers a metered spray of the nicotine solution to the nasal mucosa. The Inhaler, like the Nasal Spray, is sold by prescription-only and taken under a physician’s guidance. The user receives gradually decreasing amounts of nicotine to overcome nicotine dependence and enable the user to quit smoking.
ISSUE:
Whether the inhaler and nasal spray are excluded from Note 1(b) of Chapter 30 and classified in heading 3004, HTSUS.
LAW AND ANALYSIS:
The 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 GRIs 2 through 6 may then be applied in order.
In this case, the 2020 HTSUS headings under consideration are as follows:
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:
3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
Section VI, Note 2 states:
“Subject to note 1 above, goods classifiable in heading 3004, 3005, 3006, 3212, 3303, 3304, 3305, 3306, 3307, 3506, 3707 or 3808 by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of the tariff schedule.”
Note 1(b) of Chapter 30 states:
This chapter does not cover:
(b) Preparations, such as tablets, chewing gum or patches (transdermal systems), intended to assist smokers to stop smoking (heading 2106 or 3824).
* * * *
Heading 3004, HTSUS, provides for “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.” However, Note 1(b) to Chapter 30 excludes “preparations, such as tablets, chewing gum or patches (transdermal systems), intended to assist smokers to stop smoking” from classification within Chapter 30. The scope of the phrase “preparations… intended to assist smokers to stop smoking” is not defined in the Nomenclature or in the Explanatory Notes to Chapter 30, but is followed by exemplars “such as tablets, chewing gum or patches (transdermal systems).”
CBP, in Headquarters Ruling Letter (“HQ”) H239874, dated August 14, 2013, analyzed the meaning of the terms “tablets, chewing gum or patches,” as used in Note 1(b) to Chapter 30, in relation to a prescription-only tablet that did not contain nicotine. CBP noted that smoking-cessation aids such as tablets, chewing gum, and patches are widely recognized to be effective in helping individuals quit smoking. The FDA has approved a variety of over-the-counter (“OTC”) nicotine gum, tablets, and patches for use in reducing withdrawal and craving symptoms associated with nicotine dependency. On its website, the FDA identifies such articles as “OTC nicotine replacements products” and individually describes “skin patches,” “chewing gum,” and “lozenges” that are:
[d]esigned to wean your body off cigarettes, they supply you with nicotine in controlled amounts while sparing you from other chemicals found in tobacco products.
As illustrated by the FDA description, the distinguishing characteristic of these products is that they each contain small doses of nicotine. Similarly, the U.S. Centers for Disease Control and Prevention (CDC) recommends that a “nicotine gum,” “nicotine lozenge,” or “nicotine patch” can help lessen cravings or feelings of withdrawal during smoking cessation, and neither the FDA nor the CDC describe smoking-cessation tablets, gums, or patches that do not contain nicotine. As such, we find that the repeated use of the term “nicotine” to identify and describe chewing gum, tablets, and patches that are used to assist a person to quit smoking is evidence that the common meaning of the term “preparations” includes merchandise such as the instant nicotine containing inhaler and nasal spray even though it is not in the form of the listed exemplars “tablets, chewing gum or patches,” in Note 1(b) to Chapter 30. This means that products which possess small doses of nicotine used to assist smokers to quit smoking are excluded from classification in heading 3004. There is no requirement that the preparation be one that is purchased without a prescription. In fact, in New York ruling letters (NY) N042937, dated November 12, 2008 and NY N073346, dated September 16, 2009, we classified a prescription dispensed prenatal vitamin as a dietary supplement rather than as a medicament of heading 3004.
In this instance, although the inhaler and nasal spray are administered by prescription only and under the supervision of a physician, they contain nicotine and are excluded from Chapter 30 by Note 1(b) to Chapter 30. They are thereby excluded from heading 3004, HTSUS, as medicaments put up in measured doses and are not governed by Section VI, note 2. Instead, they are correctly classified in heading 3824, HTSUS.
Statistical note 3 to Chapter 38 states, in pertinent part, the following:
For the purposes of statistical reporting numbers 3824.99.2840 and 3824.99.9280, mixtures for use in “personal electric or electronic vaporizing devices” means a formulated liquid containing nicotine, whether or not packaged for retail sale in cartridges or tanks adaptable to such devices. Personal electric or electronic vaporizing devices electrically heat or atomize liquids or other substances producing a vapor to be inhaled through the mouthpiece. These devices are commonly known as electronic cigarettes, “e-cigarettes”, “e-hookahs”, “e-pipes”, vaporizers or “vaping” systems.
Specifically, the merchandise is classified in subheading 3824.99.2890, HTSUS, as these preparations contain nicotine and are inhaled, however are not of the kind used in vaporizing devices.
HOLDING:
By application of GRI 1, the inhaler and nasal spray are classified under headings 3824, HTSUS, specifically subheading 3824.99.2890, HTSUS, which provides, in pertinent part, for: “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other.” The 2020 column one, general rate of duty for subheading 3824.99.2890 is 6.5% ad valorem.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by visiting their website at www.fda.gov.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3824.99.2890, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 3824.99.2890, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division