CBP Rules Consumers Are Ultimate Purchasers of Imported Prescription Drugs

Consumers who purchase the drug omeprazole are the "ultimate" purchasers of imported prescription medication, not the retail pharmacy that may be supplying the drug, the CBP ruled June 14.

This means that consumers, as the ultimate purchasers, should also have the medicine's country of origin named on the packaging, even if a retail pharmacy like CVS repackages the medicine, according to CBP.

A Jan. 11, 2017, inquiry to CBP’s Pharmaceuticals, Health and Chemicals Center of Excellence and Expertise asked who would be considered the ultimate purchaser of omeprazole, a drug manufactured abroad and imported by Sandoz, a division of the pharmaceutical company Novartis.

Retail pharmacy CVS receives the medication and then repackages it before selling it to purchasers. The original packaging for omeprazole has India marked as its country of origin, but the CVS packaging doesn’t include the country of origin.

The inquirer, an "individual retail purchaser," argued that CVS customers are the ultimate purchasers of the drug, and the inquirer said that, as a result, CVS wasn't following country of origin marking requirements. Meanwhile, when CBP asked Sandoz for its input on the proceeding, Sandoz argued that CVS should be the purchaser of the omeprazole because that was the outcome of prior proceedings involving hospitals that dispense drugs to patients.

CBP disagreed with Sandoz’s analysis, saying “CBP has consistently held that repackaging does not constitute a substantial transformation for country of origin purposes.” Furthermore, unlike a hospital, CVS was only repackaging the drug, not administering it or providing a service, CBP said.

As a result, the customer is the ultimate purchaser of the medication -- and they should also be aware of a medicine's country of origin.

“Sandoz and other importers of medications that are repackaged and sold to retail pharmacies for sale to customers may argue that such retail pharmacies are the ultimate purchasers because a licensed pharmacist is providing a service by dispensing the medication to provide correct quantities, strengths, indications, instructions, and warnings. However, a retail customer’s purchasing decision is not based on a particular service provided by the pharmacist, as such services are uniform from pharmacy to pharmacy,” CBP said.

The agency continued: “Instead, a retail customer as the ultimate purchaser is deciding whether or not to purchase medication from a pharmacy based on factors such as the medication’s country of origin and/or manufacturer. We further note that even if the country of origin were listed on a loose product information sheet that is sometimes distributed with prescription medication, this would not be considered sufficient marking in a conspicuous place for purposes of 19 U.S.C. § 1304 and 19 C.F.R. § 134.41. A product information sheet accompanying medication is not conspicuous or permanent, as it may get lost or separated from the container at the time the ultimate purchaser receives the medication.”