Export Compliance Daily is a Warren News publication.

Federal Circuit Upholds Drug Ingredient's Duty-Free Treatment for Listing in Pharma Appendix

The U.S. Court of Appeals for the Federal Circuit on April 26 upheld a recent lower court ruling that found an active pharmaceutical ingredient imported by Janssen Ortho eligible for duty-free treatment. In line with a February 2020 Court of International Trade decision, the Federal Circuit found darunavir ethanolate, the active ingredient in a Janssen HIV medication, is encompassed by a listing in the tariff schedule's Pharmaceutical Appendix for darunavir.

Sign up for a free preview to unlock the rest of this article

Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.

In its decision, CIT had found that, while ethanolate is not listed in table 2 of the Pharmaceutical Appendix, evidence at trial established that darunavir ethanolate is a name by which the International Non-proprietary Name darunavir is commercially known. Because darunavir is listed in Table 1, and that listing encompasses darunavir ethanolate, it's irrelevant that ethanolate does not appear in Table 2, CIT had said.

CAFC agreed. “Table 1’s listing of INN 'darunavir' does not uniquely identify the darunavir molecule,” it said. “Table 1 expressly 'enumerates products,' not molecules, 'described by' their INN,” the Federal Circuit said. And “by its plain language, the Pharmaceutical Appendix covers 'such products,' by 'whatever name known,” that are “described by” an INN listed in Table 1.” The fact that darunavir ethanolate has a different CAS registry number is irrelevant, because those numbers are not dispositive, and are only provided to “assist in” identifying the products, CAFC said.

The Federal Circuit also upheld the trade court on the irrelevance of the lack of a listing for ethanolate in Table 2. The Pharmaceutical Appendix provides that goods in Table 2 may “also be entered free of duty under general note 13.” Put another way, “by its plain language, Table 2 provides an additional list of products that may 'also be entered duty free,'” CAFC said. “Here, because Table 1 covers 'such products,' by 'whatever name [otherwise] known,' that are 'described by' the INN 'darunavir' ... and darunavir ethanolate is a product described by the INN 'darunavir' ... “it is unnecessary to reach Table 2.”