On February 10, 2020, in Acetris Health, LLC v. United States, No. 2018-2399, the Court of Appeals for the Federal Circuit found that the Active Pharmaceutical Ingredient (API) of a drug is not determinative of its country of origin, affirming in relevant part a U.S. Court of Federal Claims ruling. For those pharmaceutical products covered by the ruling, this holding contradicts the longstanding position of Customs and Border Protection (CBP), the agency tasked with making “substantial transformation” determinations, which has generally held that the country of origin of the API was determinative of country of origin. However, as discussed in more detail below, the court’s holding does not appear to apply to all manufacturing scenarios and thus, arguably, the holding is more limited than it may initially appear.
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