H346255

H346255 July 3, 2025 OT:RR:CTF:FTM H346255 MJD CATEGORY: Marking 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 1 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 2 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 repacka

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 2 

 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 pa