United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 2001 HQ Rulings > HQ 562039 - HQ 961103 > HQ 960995

Previous Ruling Next Ruling
HQ 960995

---

March 12, 2001

CLA-2 RR:CR:GC 960995 AM

CATEGORY: CLASSIFICATION

TARIFF NO.: 2934.90.30

Port Director
U.S. Customs Service
33 New Montgomery Street, #1501
San Francisco, CA 94105

RE: Protest 2809-97-101037; Ebtifibatide (Integrilin®)

Dear Port Director:

This is our decision on Protest 2809-97-101037, timely filed on July 17, 1997, against your decision in the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of Ebtifibatide (Integrilin®) identified in various entries made in 1996 and 1997, all of which were liquidated on June 6, 1997.

Protests against decisions of the appropriate Customs officers must be in conformity with applicable statutory and regulatory requirements. Under 19 U.S.C. 1514(c)(1), a protest of a decision under subsection (a) of section 1514 must set forth distinctly and specifically each decision as to which protest is made. United States v. Parksmith Corp., 514 F. 2d 1052, 62 CCPA 76 (1975); American Commerce Co. v. United States, 173 F. Supp. 812 (Cust. Ct.1959); United States v. E. H. Bailey & Co., 32 CCPA 89 C.A.D. 291 (1945). In addition the Customs Regulations require that a protest set forth the nature of, and justification for the objection distinctly and specifically with respect to each decision. 19 CFR 174.13(a)(6).

The scope of review of a protest filed under 19 U.S.C. 1514 is limited to the administrative record. Customs will consider all relevant allegations that are supported by competent evidence. In acting on a protest, however, Customs lacks the legal authority to assume facts and arguments that are not presented and, therefore, not in the official record. After receipt of a supplemental petition dated May 28, 1999, a member of my staff made several attempts to obtain additional information from the protestant. No further information was provided. The decision set forth below is based only on the official record.

FACTS:

Eptifibatide (Integrilin®) is a synthetic disulfide-linked cyclic heptapeptide containing nitrogen and sulfur hetero atoms, an indole ring, and side chains of carboxylic acid, and a nitrogen functional group and a carboxyamide. The chemical name is N6-(aminoiminomethyl)-N2-(3-mercapto-1-oxopropyl-L-lysylglycl-L--aspartyl-L-tryptophyl-L-prolyl-L-cysteinaminde, cyclic (16)-disulfide. The chemical formula for Eptifibatide is C35H49N11O9S2. Eptifibatide has been assigned CAS registry #157630-07-4. It is not listed in the Chemical Appendix to the HTSUS. At the time of entry, Eptifibatide was used in pharmacological research to determine its efficacy and safety in the treatment of patients with acute coronary syndromes. The Food and Drug Administration (FDA) approved “Eptifibatide Injection” for use in May of 1998.

Eptifibatide is imported as a lyophilized powder consisting of the active ingredient and 3-8% acetate ion. Manufacture of Eptifibatide occurs through "solution phase peptide synthesis". (Supplemental Submission, May 28, 1999, p.8). The "active pharmaceutical ingredient must be in some solution as it undergoes its manufacture and purification." Id. However, it is "theoretically possible for some steps to be performed in water or in some other liquid." Id. The solution, which is added during the manufacturing process, "functions in effect like a stabilizing agent." Id. The product is then "converted to a lyophilized powder for storage and shipping purposes after manufacture and before retail packaging" as a solution. Id. The acetate ion of the added solvent remains in the lyophilized powder. Id. This by-product has "no curative powers" itself. Id.

Eptifibatide was entered classified in subheading 2922.49.40, HTSUS, the residual provision for "[O]xygen function amino-compounds: amino-acids and their esters, other than those containing more than one kind of oxygen function; salts thereof: [O]ther: [O]ther: [O]ther." Customs changed the classification and liquidated the entries in subheading 2934.90.30, HTSUS, the provision for “ . . . other heterocyclic compounds: [O]ther: [A]romatic or modified aromatic: [O]ther: [D]rugs." Protestant seeks reclassification to subheading 3003.90.00, HTSUS, the residual provision for bulk "[M]edicaments . . consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses." In the alternative, Protestant requests that subheading 2933.90.05, HTSUS,the provision for "[H]eterocyclic compounds with nitrogen hetero-atom(s) only: Compounds containing an unfused pyrazole ring (whether or not hydrogenated) in the structure: [O]ther: Aromatic or modified aromatic: [A]cridine and indole," be considered for classificaiton of this merchandise instead of subheading 2922.49.40, HTSUS. ISSUE:

Whether Eptifibatide, imported in bulk for clinical testing, is classifiable as a medicament, a drug or according to its chemical structure.

LAW AND ANALYSIS:

Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs. In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).

The following HTSUS headings are under considration:

Heterocyclic compounds with nitrogen hetero-atom(s) only: Compounds containing an unfused pyrazole ring (whether or not hydrogenated) in the structure:

Nucleic acids and their salts; other heterocyclic compounds:

3003 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale:

In the May 24, 2000, CUSTOMS BULLETIN, Vol. 34, No. 21, Customs published a document entitled “Guidance Concerning the Tariff Classification of Pharmaceutical Products Imported for Clinical Research.” There, Customs announced its intentions thus:

Unmixed (pure) compounds, imported in bulk for use in Phase II or Phase III of clinical trials should be classified as “drugs” of Chapter 29, HTSUS. Mixtures of compounds, imported in bulk for use in any phase of clinical trials, should be classified as “medicaments” of heading 3003, HTSUS.

Hence, the dispositive factor for heading classification across chapters rests on whether Eptifabitide is an unmixed compound of Chapter 29, or a mixed compound of Chapter 30.

The Chapter Notes to Chapter 29 specifically state:

1. Except where the context otherwise requires, the headings of this Chapter apply only to:

(a) Separate chemically defined organic compounds, whether or not containing impurities; . . . .

(f) The products mentioned in (a), (b), (c), (d) or (e) above with an added stabiliser (including an anti-caking agent) necessary for their preservation or transport; . . . .

The Explanatory Notes to chapter 29 state, in pertinent part, the following:

(A) Chemically defined compounds
(Chapter Note 1)

. . . Separate chemically defined compounds containing other substances deliberately added during or after their manufacture (including purification) are excluded from this Chapter. Accordingly, a product consisting of saccharin mixed with lactose, for example, to render the product suitable for use as a sweetening agent is excluded (see Explanatory Note to heading 29.25).

The separate chemically defined compounds of this chapter may contain impurities (Note 1(a)). . . .

The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following:

(a) Unconverted starting materials.

(b) Impurities present in the starting materials.

(c) Reagents used in the manufacturing process (including purification).

(d) By-products.

It should be noted, however, that such substances are not in all cases regarded as “impurities” permitted under Note 1(a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities. For example, a product consisting of methyl acetate with methanol deliberately left in with a view to improving its suitability as a solvent is excluded (heading 38.14). . . .

First, "by-products" specifically constitute an impurity when such by-product is not deliberately left in to render the product particularly suitable for specific use. The protestant submitted no evidence that the acetate ion here renders the product particularly suitable for specific use, in fact, protestant states the opposite. (see Supplemental Submission, supra). Eptifibatide is used as a drug in the treatment of patients with coronary artery disease. The by-product of the solution phase peptide synthesis manufacturing process used here, which constitutes 3-8% of the lyophilized powder, does not assist the active ingredient in performing its function in the body, namely, inhibiting platelet aggregation.

For instance, the example above notes that methanol may be deliberately left in a formulation of methyl acetate in order to improve its suitability as a solvent. Methanol is a necessary ingredient in the production of methyl acetate and itself is a solvent. No such analogy to the acetate ion here exists. The by-product of the solution phase peptide synthesis manufacturing process present in Eptifibatide does not itself contain medicinal properties, nor is it a necessary ingredient in the formulation of Eptifibatide. The added solution is used in lyophilization, a process to increase the product's stability and shelf life. The result is a product that contains the active drug in a stabilized physical state. The powder is then merely reconstituted during subsequent processing and formulation. The composition of this lyophilized powder, then, remains in Chapter 29.

Second, the protestant describes the added chemical as a stabilizer. Impurities that constitute stabilizers, according to the chapter notes, do not exclude an otherwise unmixed chemical compound from classification in Chapter 29.

Lastly, the protestant argues that Headquarters ruling (HQ) 952478, dated October 8, 1992, and EN 30.02, which places "pharmaceutical substances together with an excipient" in heading 3003, support classification of Eptifibatide under heading 3003, HTSUS. HQ 952478 simply states that polymer emulsions constituting binders and adhesives, added to an already formulated drug, nitroglycerin, create a mixture appropriate for heading 3003, HTSUS, according to EN 30.02. Protestant submitted no evidence to support its claim that the acetate ion here is an excipient added to an already formulated drug. Hence, the analogy is specious and EN 30.02 has no bearing on this matter.

Hence, Eptifibatide is an unmixed compound. Although the compound is not 100% heptapeptide, the acetate ion in the final formulation of Eptifibatide is not an "excipient" or "inert ingredient" because it is not added to and mixed with an active ingredient. The inactive "ingredient" is in fact an unreacted byproduct present as a consequence of the reactions required to lyophilize and synthesize the heptapeptide. Eptfibatide remains an unmixed compound of Chapter 29 and is thus excluded from classification under heading 3003, HTSUS.

At GRI 6, the following subheadings of chapter 29 are at issue:

Heterocyclic compounds with nitrogen hetero-atom(s) only: Compounds containing an unfused pyrazole ring (whether or not hydrogenated) in the structure:

2933.90 Other: Aromatic or modified aromatic:

2933.90.05 Acridine and indole

2934 Nucleic acids and their salts; other heterocyclic compounds:

Other: Aromatic or modified aromatic:

2934.90.30 Drugs

Note 3, Chapter 29, HTSUS, provides that “[g]oods which could be included in two or more of the headings of this chapter are to be classified in that one of those headings which occurs last in numerical order.” Accordingly, if Eptifibatide is classifiable in heading 2934, HTSUS, it may not be classified in heading 2922 or 2933, HTSUS.

Eptifibatide contains two heterocyclic ring structures, one containing nitrogen and sulfur hetero-atoms and the other, an indole ring structure containing nitrogen hetero-atoms only as well as one carboxyamide functional group, one imine functional group and a carboxylic acid functional group. Within Chapter 29, the protestant argues that GRI 1 mandates classification under subheading 2933.90.05, HTSUS, due to the precision with which that subheading denotes an indole ring at the 8-digit level. The protestant is incorrect. GRI 1 mandates that the four-digit heading be determined first. To determine the subheading, we look to GRI 6 which notes that "only subheadings at the same level are comparable.”

Eptifibatide consists of more structures than just an indole ring. Compounds containing carboxyamide structures are typically classified in subheading 2924, HTSUS as "cyclic carboxyamide". Compounds containing indole ring structures are typically classified within heading 2933, HTSUS, as heterocyclic compounds with nitrogen hetero-atoms only. Lastly, heterocyclic compounds which contain nitrogen and sulfur heteroatoms typically fall within heading 2934, HTSUS, as other heterocyclic compounds. Thus Eptifibatide falls to heading 2934 as an “other heterocyclic compound” by operation of Note 3, Ch. 29 (which directs that compounds which could be included in either of two headings are to be classified in the latter heading).

Within heading 2934, HTSUS, Eptifibatide is a drug and should therefore be classified in subheading 2934.90.30, HTSUS. In the “Guidance Concerning the Tariff Classification of Pharmaceutical Products Imported for Clinical Research,” referred to above, Customs announced its intention to classify organic compounds, imported in bulk, for use in Phase II or Phase III of clinical trials described in 21 CFR 312.21 as “drugs” of Chapter 29, HTSUS. On June 6, 1997, the date the subject entries were liquidated, Eptifibatide was in the latter phases of the clinical trial process. It was administered to patients suffering from a specific ailment (coronary artery disease), so as to relieve such condition. Thus, it was used as a medicine and should be classified as a drug.

It is noted that Eptifibatide was added to Table 1 of the Pharmaceutical Appendix on July 1, 1999. Presidential Proclamation 7207, July 1, 1999, 64 Fed. Reg. 36549. General Note 13, HTSUS, provides that whenever a rate of duty of “Free” followed by the symbol “K” in parentheses appears in the “Special” subcolumn for a subheading, any product classifiable in such provision shall be entered free of duty, provided that such product is included in the Pharmaceutical Appendix to the tariff schedule. Thus, Eptifibatide, unmixed with other compounds, entered after July 1, 1999, may be entitled to duty-free entry.

HOLDING:

The protest should be Denied. Eptifibatide imported in bulk for Phase II or III FDA clinical trials is classified in subheading 2934.90.30, HTSUS, the provision for “other heterocyclic compounds . . . drugs.”

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John A. Durant, Director

Previous Ruling Next Ruling

See also:

• Tariff No.: 2922.49.40 - Nonaromatic amino-acids, other than those containing more than one kind of oxygen function, nesoi
• Tariff No.: 2933.90.05 - Acridine and indole
• Tariff No.: 2934.90.30 - Other heterocyclic compounds used as drugs
• Tariff No.: 3003.90.00 - Medicaments nesoi, not dosage form and not packed for retail