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HQ 963176




January 30, 2001

CLA-2 RR:CR:GC 963176 AM

CATEGORY: CLASSIFICATION

TARIFF NO.: 3004.90.90

Port Director of Customs
477 Michigan Ave.
Detroit, MI 48226

RE: Protest 3801-99-100280; Oxazolidinone 200 ml, Linezolid 2 mg/ml 100ml, and placebo for Linezolid 200 ml

Dear Port Director:

This is in regard to protest 3801-99-100280, concerning your classification of Oxazolidinone 200 ml, Linezolid 2 mg/ml 100ml, and placebo for Linezolid 200 ml, under the Harmonized Tariff Schedule of the United States (HTSUS). By letter dated December 27, 2000, the importer provided proof that the item, "Oxazolidinone 200 ml", was actually "Linezolid 200 ml." We will therefore refer to the "Oxazolidinone 200 ml" line item on the entry documents as "Linezolid 200 ml" throughout this ruling.

FACTS:

Linezolid, or Zyvox™, is imported in 100 ml and 200 ml intravenous (IV) solutions, for use in Food and Drug Administration (FDA) clinical trials. Linezolid is one substance in a class of new anti-infective agents called Oxazolidinones. Although Oxazolidinones are promising agents in killing bacteria, they are not similar to or derived from any known antibiotic. Linezolid is being investigated for use in the treatment of Meclezine Resistant Staph Aureus (MRSA) infection in individuals with compromised immune systems. Linezolid has the molecular formula C18H20FN3O4 and the chemical name ((S)-N-[[3-Fluoro-4-(4-morpholonil phenyl-2-oxo-5-oxazolidinal methyl acetimide]. The CAS registry number for Linezolid is 165800-03-3.

The IV placebo solution contains 5% dextrose and sterile water (D5W). The IV is designed to look exactly like the solution filled with the active ingredients. The placebo solution is imported packaged for disbursement in the clinical trial, separately from the Linezolid IV solution, but entered in the same shipment as the Linezolid IV solution.

The merchandise was entered on April 22 1998, and the entry was liquidated on March 5, 1999. Because it was marked "Oxazolidinone 200 ml", the Linezolid 200 mg. was liquidated under subheading 2934.90.47, HTSUS, the provision for "[N]ucleic acids and their salts; other heterocyclic [C]ompounds: [O]ther: [A]romatic or modified aromatic: [O]ther: [D]rugs". The Linezolid 2mg/ml 100ml, was liquidated under subheading 3004.20.00, HTSUS, the provision for "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [C]ontaining other antibiotics.

The classification for the placebo for linezolid 200 ml was changed on a Customs Form 7501 from subheading 3004.90.90, HTSUS, to subheading 2940.00.60, HTSUS, the provision for "[S]ugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers and sugar esters, and their salts, other than products of heading 2937, 2938 or 2939: [O]ther", but was not rate advanced to the appropriate amount of duty owed. Instead, the placebo liquidated on "bypass" as entered under subheading 3004.90.90, the provision for "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [O]ther: [O]ther." A protest was timely filed on June 3, 1999.

Protestant argues that Linezolid 200 ml IV solution should be classified under subheading 3004.20.00, HTSUS, as "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [C]ontaining other antibiotics." Protestant also argues that the placebo solution should be classified in subheading 3004.90.90, HTSUS, as "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [O]ther: [O]ther," because it is imported in measured doses to be used as a "substitute" for the active substance in clinical trials and is therefore itself used as a medicament.

ISSUE:

(1) Whether IV bags of Linezolid used in clinical trials for the treatment of MRSA are classified in subheading 3004.20.00, HTSUS, as an "antibiotic medicament" or in subheading 3004.90.90, HTSUS, as an "other medicament."

Whether an IV placebo solution of D5W for use in clinical trials is classified in subheading 3004.90.90, HTSUS as an "other medicament," or in subheading 2940.00.60, HTSUS, as a "sugar."

LAW AND ANALYSIS:

Merchandise imported into the U.S. 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 that 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. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any related section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in 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 interpreting 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).

At the outset, we note that because the importer submitted sufficient supplementary information to show that "Oxazolidinone 200 ml" was actually "Linezolid 200 ml" IV solution, subheading 2934.90.47 is no longer under consideration because, like the second line item on the entry documents, Linezolid 100 ml IV solution, Linezolid 200 ml IV solution is also a medicament of heading 3004. Thus, the only HTSUS subheadings under consideration for Linezolid IV solution are as follows:

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 or in forms or packings for retail sale:

3004.20.00 Containing other antibiotics

3004.90 Other

3004.90.90 Other

The term "antibiotics" is not defined in the text of the subheading or ENs to heading 3004, HTSUS. However, the EN to heading 2941 defines antibiotics within that heading thus:

Antibiotics are substances secreted by living microorganisms which have the effect of killing other micro-organisms or inhibiting their growth. They are used principally for their powerful inhibitory effect on pathogenic microorganisms, particularly bacteria or fungi, or in some cases on neoplasms. They can be effective at a concentration of a few micrograms per ml in the blood.

This heading also includes chemically modified antibiotics used as such. . . .

Natural antibiotics reproduced by synthesis (e.g., chloramphenicol) are classified in this heading, as are certain synthetic products closely related to natural antibiotics and used as such (e.g., thiamphenicol).

Additionally, the following subheading is under consideration for classification of the placebo solution:

2940.00 Sugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers and sugar esters, and their salts, other than products of heading 2937, 2938 or 2939:

2940.00.60 Other [than D-Arabinose]

EN 29.40 states, in pertinent part, that "[T]he heading excludes . . . (b) [G]lucose and lactose: . . ." EN 30.03 states, in pertinent part, that "[T]his heading covers medicinal preparations . . . . However, if put up in measured doses or in forms or packings for retail sale, they fall in heading 30.04. The heading includes: . . .(3) [N]utritional preparations for intravenous adminstration only, ie., by injection or drip into a vein."

In the May 24, 2000, CUSTOMS BULLETIN, Vol. 35, No 21, Customs published a document entitled “Guidance Concerning the Tariff Classification of Pharmaceutical Products Imported for Clinical Research.” There, Customs announced its intention to classify pharmaceutical products imported in dosage form for use in clinical trials as "medicaments" of heading 3004, HTSUS. Here, Linezolid has been approved by the FDA for Investigational New Drug [IND] status. Presently, the IV solution is imported for use in clinical trials where they are administered to patients suffering from a specific disease (MRSA), so as to cure such condition. Hence, Linezolid IV solution is used as a medicine and should be classified in heading 3004 as a medicament when ready for IV use.

However, our research shows that Linezolid is a synthetic substance that is not "closely related to natural antibiotics" as required for classification as an antibiotic by the EN to heading 2941. Although Linezolid is used for its powerful inhibitory effect on pathogenic micro-organisms, it is not a chemically modified antibiotic or a synthetic product closely related to a natural antibiotic. Therefore, Linezolid IV solution is classified as an anti-infective agent in subheading 3004.90.90, the provision for "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [O]ther: [O]ther."

For informational purposes, we now consider the classification of the placebo solution. Placebos contain no active drug substance. Their only use is in the clinical trials of a substance absent from the placebo solution. They are not themselves used for therapy or prophylaxis, as they do not contain the active ingredient necessary to treat or prevent disease. Instead, they are used to provide a control group for the collection of data. However, this particular placebo solution consists of D5W, a well-known IV solution used for the administration of therapeutic substances and for its hydrating properties. As such, it is a "nutritional preparation for intravenous administration only, i.e., by injection or drip into a vein," specifically described in EN 30.03, as belonging in heading 3004 when "put up in measured doses or in forms or packings for retail sale." Therefore, the placebo solution in this case, packaged ready for IV administration, belongs to the class or kind of goods which are principally used as a "medicament for therapeutic or prophylactic uses" of heading 3004, HTSUS. Furthermore, because this solution contains glucose (dextrose), it is specifically excluded from heading 2940 according to EN29.40(b).

Specifically, the D5W placebo solution at issue here is also classified in subheading 3004.90.90, HTSUS, the provision for "[M]edicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale: [O]ther: [O]ther."

HOLDING:

Linezolid IV solution, in 100 ml and 200 ml preparations, is classified in subheading 3004.90.90, HTSUS, as "other medicaments" and should be entered free of duty. D5W placebo solution is also classified in subheading 3004.90.90, HTSUS. However, since the item was not rate advanced at the port, no refund is owed on the placebo. The Oxazolidinone line item on the entry documents was proven to be Linezolid IV solution and should be classified as such in this case. The protest is ALLOWED with the modification that Linezolid is not classified as an antibiotic medicament.

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 Durant, Director

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