OT:RR:CTF:FTM H346255 MJD
Ms. Rachel Sher
Manatt, Phelps & Phillips, LLP
1050 Connecticut Ave. NW
Washington, D.C. 20036
RE: Affirmation of HQ H283420; Country of Origin Marking Requirements for Repackaged
Prescription Medication Sold at Retail Pharmacies
Dear Ms. Sher:
This is in response to your letter, dated March 25, 2025, on behalf of the National
Association of Chain Drug Stores (“NACDS”), the Retail Industry Leaders Association
(“RILA”), the National Community Pharmacists Association (“NCPA”), and the Healthcare
Distribution Alliance (“HAD”) (collectively, “Requesters”), requesting reconsideration of
Headquarters Ruling Letter (“HQ”) H283420 (hereinafter “HQ H283420” or “Internal Advice”),
dated June 14, 2024. In HQ H283420, U.S. Customs and Border Protection (“CBP”) determined
that the ultimate purchaser for imported prescription medication sold at retail pharmacies is the
customer at retail, and that importers of prescription medication have certain certification and
notice requirements. We have reviewed the request for reconsideration, and for the reasons set
forth below, we affirm our position as set forth in HQ H283420.
In HQ H283420, the subject merchandise was Omeprazole, a prescription medication
manufactured abroad and imported into the United States by Sandoz, 1 in an opaque white plastic
container that was marked with the country of origin as a “Product of India.” CVS Health
Pharmacy (“CVS”) repackaged the Omeprazole for sale to retail purchasers in an orange
translucent plastic container that did not contain any country of origin marking.
The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §
1304), provides that unless excepted, every article of foreign origin (or its container) imported
into the United States shall be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or its container) will permit, in such a manner as to
indicate to an ultimate purchaser in the United States the English name of the country of origin
of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate
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Sandoz is a division of the pharmaceutical company Novartis.
purchaser should be able to know by an inspection of the markings on the imported goods the
country of which the good is the product. The evident purpose is to mark the goods so that at the
time of purchase the ultimate purchaser may, by knowing where the goods were produced, be
able to buy or refuse to buy them, if such marking should influence his will.” United States v.
Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).
Part 134 of Title 19 of the Code of Federal Regulations (19 C.F.R. § 134) implements the
country of origin marking requirements of and exceptions to 19 U.S.C. § 1304. Pursuant to 19
C.F.R. § 134.41(b), the ultimate purchaser in the United States must be able to find the marking
easily and read it without strain. The degree of permanence of the marking should be at least
sufficient to ensure that in any reasonably foreseeable circumstance, the marking shall remain on
the article (or its container) until it reaches the ultimate purchaser, unless it is deliberately
removed. Section 134.1(d) defines the ultimate purchaser as “generally the last person in the
United States who will receive the article in the form in which it was imported.” Pursuant to 19
C.F.R. § 134.1(d)(3), if an imported article is to be sold at retail in its imported form, the
purchaser at retail is the ultimate purchaser.
In accordance with 19 C.F.R. § 134.1(b), the country of origin is defined as “the country
of manufacture, production, or growth of any article of foreign origin entering the United States.
Further work or material added to an article in another country must effect a substantial
transformation in order to render such other country the country of origin within the meaning of
[the marking laws and regulations].” A substantial transformation occurs when, as a result of a
manufacturing process, a new and different article emerges, having a distinct name, character or
use, which is different from that originally possessed by the article or material before being
subjected to the manufacturing process. See United States v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 69 C.C.P.A. 142, 681
F.2d 778 (1982). However, if the manufacturing or combining process is merely a minor one
that leaves the identity of the article intact, a substantial transformation has not occurred.
Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982) aff’d, 702 F.2d 1022
(Fed. Cir. 1983).
In HQ H283420, CBP affirmed its long-standing position with respect to repackaging and
held that because CVS repackages and sells the Omeprazole to customers at CVS’s retail
pharmacies, the repackaging of the medication into orange translucent plastic containers does not
constitute a substantial transformation for country of origin purposes. Consequently, in the
absence of a substantial transformation of the medication by CVS, the customer at the CVS retail
pharmacy is the last person to receive the Omeprazole in the form that it was imported and is
therefore the ultimate purchaser pursuant to 19 U.S.C. § 1304 and 19 C.F.R. § 134. As such,
prescription medication sold in retail pharmacies must include country of origin marking.
Furthermore, CBP found that importers of prescription medication that sell to retail pharmacies,
which repackage and sell the medication to the ultimate purchasers, must comply with the
certification and notice requirements of 19 C.F.R. § 134.25(a) and (d). Requesters disagree with
CBP’s holding in HQ H283420 for the following reasons.
First, Requesters argue that retail pharmacies, and not retail customers, are the ultimate
purchasers of prescription medication and as a result retail pharmacies do not need to provide the
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country of origin marking on prescription medication. Requesters explain that pharmacies are
healthcare destinations that provide a wide array of professional pharmacy services, and that
pharmacists do not simply repackage prescription drugs into retail packages, but that they
dispense medication pursuant to a prescription or order for an individual patient. Requesters
further explain that retail customers make their purchasing decisions based on the services that
pharmacies provide and that the primary focus of a retail pharmacy transaction with a patient is
the patient’s individual treatment or care. In our internal advice decision, CBP noted that
prescription medication repackaged by a pharmacist is analogous to the repackaging of raisins
imported in bulk and put into smaller retail packages. See New York Ruling Letter (“NY”)
N265425, dated June 17, 2015. Requesters argue that the two transactions cannot be compared
because pharmacy dispensing is regulated by the U.S Food and Drug Administration (“FDA”)
and state law and can only be performed by trained pharmacists with a certain degree and state
licensure, unlike the case of repackaging of raisins.
While we appreciate that retail pharmacies offer a variety of essential services to
customers and understand that licensed pharmacists are required to obtain a certain degree and
licensure to be a pharmacist, nevertheless, the services provided by pharmacists and the
education that pharmacists receive do not alter the medication in any way. The medication
dispensed to the retail customer at the pharmacy is the same exact medication that was imported
into the United States. Nothing has been altered or changed regarding the medication itself. The
only change that has taken place is the packaging. Prescription medication, which is typically
imported in bulk, is repackaged in a smaller container, such as a prescription bottle, when sold at
retail. That is why the comparison to the raisins in NY N265425 is appropriate for repackaged
prescription medication sold at retail pharmacies. Although raisins and prescription medication
are completely different products, they are both sold at retail in the same exact form in which
they were imported.
CBP has consistently held that repackaging does not result in a substantial
transformation. Absent a substantial transformation, the last person in the United States who will
receive the article in the form in which it was imported is the ultimate purchaser. Therefore, in
HQ H283420, the last person to receive the Omeprazole in the form that it was imported, i.e., the
ultimate purchaser, is the retail customer, and not the pharmacy. Moreover, 19 C.F.R. §
134.1(d)(3) provides that if an article is to be sold at retail in its imported form, the purchaser at
retail is the “ultimate purchaser.” Since the Omeprazole is sold in its imported form at retail, the
retail customer is the ultimate purchaser. Thus, the outermost container of prescription
medication must be marked with its country of origin.
In support of their argument, Requesters also provide that the dispensing of prescription
medication by retail pharmacies is akin to the facts in HQ 734232, dated November 20, 1991. In
that ruling, single dose vials of Carnitor, an intravenous medication to be mixed in parenteral
solutions of Sodium Chloride 0.9% or Lactated Ringer’s in concentrations ranging from 250
mg/500 mL (0.5 mg/mL) to 4200 mg/500 mL (0.8 mg/mL), packaged in cartons of five vials per
container, were marked as a product of Italy on the side panel of the carton. The drug was sold
to hospital pharmacies and administered intravenously to hospital patients by a doctor or nurse.
CBP held that the hospital pharmacy, and not the patients, was the ultimate purchaser of the
medication. In deciding that the ultimate purchaser was the hospital pharmacy, CBP relied on
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the definition of the “ultimate purchaser” in 19 C.F.R. § 134.1(d) and concluded that the hospital
pharmacy constituted the last person in the United States to receive the drug in the form in which
it is imported.
Requesters state that regardless of whether prescription drugs are dispensed by a hospital
pharmacy or by a retail pharmacy, the patient does not receive the drug in the same form in
which it was imported. We disagree. In HQ 734232, the patient received the medication from
one of the vials mixed with intravenous fluid as part of the service of delivering healthcare. The
medication the patient received in HQ 734232 is not the same medication that was imported,
whereas, in the instant case, the retail customer receives the medication in the same exact form in
which it was imported.
Requesters also provide that the facts in the internal advice are similar to the facts in HQ
H243931, dated December 5, 2013, where CBP held that the ultimate purchaser for imported
medications provided by physicians to patients as free samples in the course of providing
medical services was the physician and not the patient. CBP explained that in certain
circumstances, such as when the imported article is given to a recipient as part of a service, the
recipient of the article is not the ultimate purchaser. Rather, the ultimate purchaser of the
imported article is the party who distributes the article to the recipient. As a result, in HQ
H243931, the physicians were determined to be the ultimate purchasers of the medications
because the service is the primary focus of the transaction between the medical professional and
the patients, not the drugs themselves.
Requesters provide that, like the facts in HQ H243931, the primary focus of a retail
pharmacy transaction with a patient is based on the services the retail pharmacy provides and the
individual treatment or care of the retail customer. While retail pharmacies do provide services,
a survey of retail customers would indicate that the principal reason people go to a pharmacy is
not to receive a service, but to buy a product, prescription medication. Prescription medication is
sold at retail like many other products, such as non-prescription medication, cosmetics, food,
clothing, etc., to name a few, and all of these products must be marked with their country of
origin. See 19 C.F.R. § 134.1(d)(3). Accordingly, the ultimate purchaser of prescription
medication is the retail customer and prescription medication must be marked with its country of
origin pursuant to 19 U.S.C. § 1304 and 19 C.F.R. § 134.
Next Requesters argue that compliance with the holding in HQ H283420 will hinder
pharmacists’ ability to comply with state and federal laws and regulations. Requesters cite to the
Drug Supply Chain Security Act (“DSCSA”), in which retail pharmacies and drug repackagers
have separate roles, and provide that the FDA does not consider retail pharmacies to be
repackagers under the DSCSA. Requesters state that Congress did not include country of origin
information on the list of information that must be exchanged by trading partners in the
prescription drug supply chain. Requesters also explain that it would be impossible for
dispensers to derive package level country of origin details from the list of required information
under the DSCSA. Moreover, Requesters provide that adding the country of origin information
on prescription labels is not critical information, and that it would reduce the amount of white
space on prescription labels and potentially detract from other more important information. We
find these arguments to be unavailing.
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Requesters have not provided any evidence or a single example that shows how
adherence to HQ H283420 hinders the ability of retail pharmacies to comply with state or federal
law. Requesters have simply argued that the DSCSA does not require this information.
Although this may be true, CBP, not the FDA, is the agency that implements and enforces the
marking statute, 19 U.S.C. § 1304. Furthermore, CBP is not bound by the rules and regulations
of other agencies, and we found no conflict between FDA’s guidance and the holding in the
internal advice. In fact, requiring the country of origin on prescription medication sold at retail
furthers the objective of the DSCSA of protecting patient safety and preventing dangerous
counterfeit medications sold at retail.
Moreover, Requesters argue that since the country of origin is not on the list of
information required by the DSCSA, it would be impossible for dispensing pharmacies to derive
country of origin information. This statement conveys that the DSCSA is the only mechanism
by which trading partners can exchange information regarding the origin of prescription
medication. Yet, this claim is inaccurate because pharmacists, as Requesters explain, have the
ability to provide the country of origin of prescription medication to customers upon request.
Therefore, it is inconsistent to argue that the country of origin needs to be added as a requirement
under the DSCSA to accurately convey the country of origin of prescription medication, even
though dispensing pharmacies are able to (and do, upon request) provide the country of origin of
prescription medication to customers without this requirement. As a result, we find the claim,
that pharmacists are unable to provide the country of origin without the DSCSA explicitly
making it a requirement to do so, to be without merit, given that conveying this information to
customers upon request is possible.
Moreover, it should also be noted that, pursuant to 19 U.S.C. § 1304 and 19 C.F.R. § 134,
importers of prescription medication must mark the outermost container of prescription
medication, and those that sell to retail pharmacies, which repackage and sell the medication to
the ultimate purchasers, must comply with the certification and notice requirements of 19 C.F.R.
§ 134.25(a) and (d). Therefore, regardless of whether retail pharmacies receive prescription
medication directly from the importer or a subsequent purchaser or repacker, according to the
law, the prescription medication they receive must be marked with its country of origin. As
such, the country of origin of prescription medication is readily available to retail pharmacies
when they receive the medication. Thus, while the country of origin is not specifically listed as a
requirement of the DSCSA, which again is not in conflict with the holding of the internal advice
decision, we trust that the country of origin marking clearly stated on the packaging of the
prescription medications that retail pharmacies receive, will be adequate for pharmacies to
convey the country of origin of prescription medication to their customers.
We also disagree with the premise that adding the country of origin on prescription
medication is not critical information. In enacting 19 U.S.C. § 1304, Congress conveyed that it
is the right of ultimate purchasers in the United States to know the country of origin of imported
products so they can make informed decisions about purchasing (or not purchasing) imported
goods. With respect to prescription medication sold at retail, it is especially important for
consumers to know about the origin of their medications, as this is a product that is ingested or
applied to the body which directly affects personal health and safety. Awareness of the country
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of origin of medication protects public health, provides transparency regarding the source of
medication, and protects against counterfeit medication that can have harmful and long-lasting
effects. Thus, it is crucial for retail customers who are the ultimate purchasers of prescription
medication to know the country of origin of their prescription medication so that they can make
informed decisions about purchasing medications made in certain countries. As such, we find no
compelling reason why compliance with 19 U.S.C. § 1304 and 19 C.F.R. § 134 to mark
prescription medication sold at retail pharmacies, given the significant advantages to the health
and safety of the American people, would, as Requesters have stated, provide little to no benefit
and be contrary to legislative intent. Moreover, if every single product sold at retail in its
imported form is marked with its country of origin, in compliance with 19 C.F.R. § 134.1(d)(3),
we see no rationale as to why prescription medication should be exempted from complying with
the country of origin making laws and regulations under 19 U.S.C. § 1304 and 19 C.F.R. § 134.
Additionally, the country of origin does not necessarily have to be on the white space on the
prescription label but can be included as a separate sticker, so long as the country of origin
marking is conspicuous, legible and permanent, as required under 19 U.S.C. § 1304 and 19
C.F.R. § 134.
Lastly, Requesters argue that CBP’s holding in the internal advice would require
pharmacies to reconfigure their workflows and pharmacy technology systems at an unsustainable
cost. While we understand the cost and challenges that may be incurred for adding the country
of origin on prescription medication sold at retail, this is not an excuse to circumvent the law. As
mentioned above, CBP is the agency that implements and enforces the marking statute pursuant
to 19 U.S.C. § 1304 and 19 C.F.R. § 134, and as such, we have determined that the ultimate
purchaser of prescription medication sold at retail is the customer and not the retail pharmacy.
Therefore, pharmacies are legally required to mark the country of origin on prescription
medication regardless of the cost. Furthermore, given that Requesters have conceded that, if
interested, retail customers can ask pharmacists for the country of origin of their medication, we
fail to see how compliance with the internal advice decision will cause such an undue burden
when retail pharmacies have the country of origin readily available to them on the packaging of
the prescription medication they receive, and need only to take the additional step of providing
the country of origin on the outside packaging of prescription medication sold to ultimate
purchasers.
For the foregoing reason, pursuant to 19 U.S.C. § 1304 and 19 C.F.R. § 134, we reiterate
that the ultimate purchaser of prescription medication sold at retail pharmacies is the customer
who buys the medication at retail, and not the retail pharmacy. Furthermore, importers of
prescription medication that sell to retail pharmacies, which repackage and sell the medication to
the ultimate purchasers, must comply with the certification and notice requirements of 19 C.F.R.
§ 134.25(a) and (d). Therefore, HQ H283420 is hereby affirmed.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division
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