The Importer - Business Review Webinars

Navigating the regulatory Maze for
import and export of pharmaceuticals
Dan Bell, LCB, CCS.
Director, Commercial Operations & Regulatory Compliance

Scope
• Import Process – Roles & Responsibilities
• Importer of Record, Exporter, and customs brokers. Getting everyone to play nicely.
• Valuation, Tax, Duties, Classification, HTS Codes.
• Correctly Classify API & avoid overpaying duties & fees
• Identifying the Regulatory Implications of Incorrect Classification.
• Who is really holding my shipment hostage?
• OGAs – The “Alphabet Soup” of Other Government Agencies.
FDA, EMA, SFDA, USDA, CDC, DCGI, DGFT ANVISA,
• Invoice tour – Key data elements for pharmaceutical products.
Identify key data elements required for compliant and complete reporting.
• Government programs, new initiatives.
• “Emerging” & BRIC Countries
• Import & Export considerations for challenging locations.
• Best Practice Summary & Conclusions

Clinical Supply Chain Interruptions
What are the implications?
• Impact to patient recruitment &
continued treatment
• Inventory deterioration
• Missed production slots.
• Additional or rescheduled investigator visits
impacting timelines
• Import license exhaustion on quantity or date expiry

Poll Question 1
What is the primary reason given for import delays? Customs or
Agency compliance issue?

Help! Customs is holding my shipment hostage!
“What can be done to prevent Customs delays?”
“Can you assist in getting our shipment released from Customs?”
“Why do I have to pay Taxes & duties?”
“What is my HTS code? FDA Product Code?”
“Can you help us navigate the maze of required permits?”
“Can you help us make sense of the FDA import process?”

Other Government Agencies

Roles & Responsibilities - Importer of Record
The Importer:
• In most cases, is often the Sponsor or
for clinical shipments the CRO
• Responsible for all customs matters
associated with the imported cargo
• Has a bond assuring the government
he will comply with all laws.
• Must be named as the Consignee on the
Bill of Lading or will not be able to be
Importer of Record

Roles & Responsibilities - Importer of Record
The Importer:
• Responsible for accuracy of information
• Responsible for sufficiency of all
documentation
• Responsible for timeliness of all
documentation
• Responsible for proper markings
• Liable for all duties, taxes, fees, fines,
penalties
• And must retain all records for at least 5 years
from date of entry into U.S. commerce

Roles & responsibilities - Customs Broker
The Broker
• Prepares and files Customs entries
– based on information received from Importer
• Arranges Customs examination
• Arranges Other Governmental Agencies releases
• Communicates with forwarders, couriers and carriers
• Communicates with Customs on behalf of Importer
• Must have a power of attorney from Importer
• Treat Importer’s records as confidential
• May act as a third party record keeper for Importer
– Note: Broker only has Customs entry docs

Roles & responsibilities - Exporter
The Exporter:
• Provides correct, timely documentation
and information to Importer
• Marks products with country of origin
before it leaves origin.
• Obtain export license where necessary.
• Keep records to substantiate origin and
value.
• Complies with all export reporting
regulations

INCO Terms 2010

USA – Import process, Clinical Pharmaceuticals
Document Check List:
Invoice – Complete with all data that will be entered by the US customs broker,
including relevant OGA statements. This should be on shipper/exporter company
letterhead. Copies are OK, however in the case of shipments requiring certain
USDA permits, original signed invoices are required. This is a critical document
and must always be provided.
End Use Letter – This is in the form of a letter with a statement from the shipper or
importer as to the reason for the import. E.g. To test the safety and efficacy of XYZ
pharmaceutical as apart of FDA approved phase XX clinical trial. Again this is a
back-up document that may be required after initial entry has been filed.
IND Application (FDA form 1571) – This is the orig. application that was
completed by the sponsor (or their authorized representative), in order to conduct
the clinical trial in the US. This is a back-up document that may be requested after
the initial entry has been filed.

Invoice Tour
• Key data elements
• 19CFR 141.85 & 141.86

Invoice Tour - SHIPPER
SHIPPER
CLASSIC CHEMICALS AND SUPPLIES, INC
ABC STREET
ANYTOWN, WA 01234
AUSTRALIA
JOHN SMITH
TEL: +61- 3 1234 567
JSMITH@MPINC.COM

Invoice Tour – ULTIMATE CONSIGNEE
ULTIMATE CONSIGNEE/ DELIVERY TO:
SPECIALALIZED CMO SERVICES
1234 ABC ROAD
ALLENTOWN, PA 18100 – USA
JANE BROWN / PROJECT MANAGER
PHONE +1 (555) 123-4567

Invoice Tour – EXPORT COUNTRY
COUNTRY OF EXPORT: AUSTRALIA
COUNTRY OF MANUFACTURE/ORIGIN: INDIA
COUNTRY OF ULTIMATE DESTINATION: USA
GROSS WEIGHT: 305 KG
DIM= 3 PALLETS @ 117CM X 117 CM X 98 CM

Invoice Tour – IMPORTER OF RECORD
IMPORTER OF RECORD
RX PHARMACEUTICALS, INC / EIN# 12-3456789
123 ABC VALLEY ROAD
ANYTOWN , CA 91234
UNITED STATES OF AMERICA
CHUCK DAVIS
TEL: +1 555-123-4567

Invoice Tour - MANUFACTURER
MANUFACTURED BY:
AN OTHER CHEMICALS AND PHARMACEUTICALS LTD.
AURANGABAD, MAHARASHTRA - ANTIBIOTIC (PENICILLIN & CARBAPENEMS) & NON-
ANTIBIOTIC API
L-8(PART), L-9 & GUT NO.38, MIDC INDUSTRIAL AREA,
WALUJ, AURANGABAD DISTRICT - 431136
MAHARASHTRA, INDIA

Invoice Tour - TSCA
TSCA Statement:
I certify that all chemicals in this shipment are not subject to TSCA
I certify that all chemical substances in this shipment comply with all applicable rules or orders
under TSCA and that I am not offering a chemical substance for entry in violation of TSCA or any
applicable rule or order there under.

Invoice Tour - USDA
USDA Statement(s):
Does not contain any material of animal, plant or microbial origin.
Vaccine/pharmaceutical material is intended for human use only, and the material does not contain live livestock
and poultry viral agents and the material is prepared, packaged, and physically labeled in the final dosage form
ready for sale to the consumer.
Gelatin-containing human pharmaceuticals, placebos, and gel caps for use in clinical trials or other analytical
testing USDA permit # XYZ123

Invoice Tour – QTY, PCS,WEIGHT, ETC.
NO OF
PKGS.
TYPE OF
PKGS.
FULL DESCRIPTION OF GOODS
QTY
UNITS OF
MEASURE
NET
WEIGHT
(KG)
UNIT
VALUE
EXTENDED
VALUE
$US
30 SHIPPER
GBX 1234 (RX ABCD/RX 1234) 3240 VIALS 250 $1 $3240

Invoice Tour - DESCRIPTION
GBX 1234 (RX ABCD/RX
1234)
500 MG STERILE VIAL
BATCH NUMBER: AB123120X

Invoice Tour – HTS CODE
US HTS# 3003.90.0000

Invoice Tour – FDA PRODUCT CODE
FDA PRODUCT CODE: 62 H I Z 99

Invoice Tour – FDA IND #
FDA IND# 123456

Invoice Tour - CAS
CAS#: 123456-24-4

Invoice Tour – PACKING DETAIL
PACKED IN 6 VIALS/CARTON
18 CARTONS / SHIPPER
10 SHIPPERS/ PALLET (BATCHES)
3 PALLETS TOTAL

Invoice Tour - USE
ACTIVE INGREDIENT: XOPENEM IS A CARBAPENEM ANTIBIOTIC.
IT IS INDICATED FOR THE TREATMENT OF BACTERIAL INFECTIONS.

Electronic Transactions
CBP shares entry data with Other Government Agencies:

HTS – Harmonized Tariff System
The Harmonized Tariff Schedules are used to communicate duty rates and special
trade agreement regulations.
Nomenclature is the term used to describe the systematic naming of things as in a
tariff nomenclature, e.g., Harmonized System.
The Harmonized System is an international goods nomenclature consisting of:
General Rules of Interpretation (GRI’s),
Section and Chapter legal notes,
4-digit Heading and 6-digit Subheading.
Each WTO member nation has agreed to utilized the foundational international
Harmonized System nomenclature, however, duty rates are not
harmonized and are established country by country or through multilateral
agreements.

HTS – Harmonized Tariff System
U.S. Harmonized Tariff number is 10 digits long and typically formatted as 4 digits
Separated by a period, then 2 digits, a period, followed by the final 4 digits:
For example, Pharmaceutical grade Niacin API would be classified as 2936.29.1510.
The first 4 digits (2936) are called a HEADING number. This level is internationally harmonized. The
“heading” for Cough and cold medicaments is “2936” – Provitamins and vitamins, natural or
reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as
vitamins, and intermixtures of the foregoing, whether or not in any solvent.
The second level is at 6 digits (2936.29.) is called the SUB-HEADING level. This level is
internationally harmonized. The “sub-heading” for Pharmaceutical grade Niacin API is “2936.29”-
Other vitamins and their derivatives.
The third level is at 8 digits (2936.29.15) and is the level where the U.S. assigns the duty rate. The
US duty rate is applied at third level “2936.29.15”- Niacin and niacinamide. Note duty rates are
“Free”.
Finally, the forth level is at the 10 digit (2936.29.1510) is called the Statistical Suffix. These two digits
are for statistical purposes. The “Statistical Suffix” for Pharmaceutical grade Niacin API is
“2936.29.1510”- Niacin: Pharmaceutical grade.

HTS – Harmonized Tariff System

Poll Question 2
Q. Is duty payable on “bulk drug product” imported into
the USA for use in a PH II clinical trial?

HTS – Pharmaceutical Appendix & CAS
http://www.usitc.gov/publications/docs/tata/hts/bychapter/1202PHARMAPPX.pdf

Definitions – Pharmaceutical Products
HQ 963778
U.S. CUSTOMS SERVICE
GENERAL NOTICE
GUIDANCE CONCERNING THE TARIFF CLASSIFICATION OF
PHARMACEUTICAL PRODUCTS IMPORTED FOR CLINICAL RESEARCH
ACTION: Guidance concerning the tariff classification of pharmaceutical products imported for clinical research.
SUMMARY: This notice sets forth Customs views regarding the classification, under the Harmonized Tariff
Schedule of the United States (HTSUS), of pharmaceutical products, imported in bulk form or dosage form for
clinical research, for which no New Drug Application has been approved by the Food and Drug Administration
DETERMINATION
1. Unmixed (pure) compounds, imported in bulk for use in Phase I of clinical trials should not be classified as
“drugs” of Chapter 29, HTSUS. 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.
2. Mixtures of compounds, imported in bulk for use in any phase of clinical trials, should be classified as
“medicaments” of heading 3003, HTSUS.
3. Pharmaceutical products imported in dosage form for use in clinical trials should be classified as
“medicaments” of heading 3004, HTSUS.

API – EU New Regulations
• The European Union (EU) has reformed the rules for
importing into the EU active substances for medicinal
products for human use.
• 2 January 2013, all imported active substances must
have been manufactured in compliance with standards of
good manufacturing practices (GMP) at least equivalent to
the GMP of the EU. The manufacturing standards in the
EU for active substances are those of the ‘International
Conference for Harmonization’ – ICH Q7.
• 2 July 2013, this compliance must be confirmed in
writing by the competent authority of the exporting
country.
This document must also confirm that the plant where the
active substance was manufactured is subject to control
and enforcement of good manufacturing practices at least
equivalent to that in the EU.

API – EU Regulations
• The US is not currently on the EMA exempt list.
• FDA has an existing process for issuing Export Certificates
• Export Certification issued by the FDA may satisfy the new EU written confirmation
requirement.
• Certificates are currently used to confirm compliance with the rules of
Food and Drug Act
• Export Certificate cost? $175
• Link to FDA Export Certificate below for reference:
http://www.fda.gov/RegulatoryInformation/Guidances/ucm125789.htm

Valuation
1. Transaction Value is the price paid or payable at time of exportation, less non-dutiable charges,
plus any assists, royalties, license fees, or proceeds which accrue to the foreign seller.
2. Transaction Value of Identical Merchandise is used when there is no legitimate Transaction Value and
there is Identical Merchandise sold.
3. Transaction Value of Similar Merchandise is used when there is no legitimate Transaction Value and
Identical Merchandise has not been sold
4. Deductive Value is the next method to be used if none of the Transaction Value methods above are
available. This method starts with the resale price in the U.S., and deducts U.S. profit, overhead,
international and domestic freight and insurance.
5. Computed Value is the next method used by Customs if there is no resale. This method is a cost
method, starting with costs associated with material and labor and overhead to produce, plus a normal
foreign profit. An importer may select this method on the entry summary if they prefer this method over
Deductive and there is not Transaction Value (as in 1, 2, or 3 above).
6. Reasonable Adjustment Using All of the Above Methods is used as a last resort and must
be reasonable

FDA – “FLAGS”
FD0 - Indicates that FDA has determined the article, even though subject to FDA's laws and
regulations, is acceptable for CBP release without further presentation of prior notice or other
entry information to FDA.
FD1 - Indicates that the article may be subject to FDA jurisdiction, including FDA review under
801(a) of the FD&C Act. For products not subject to FDA jurisdiction, a filer can "Disclaim"
product from FDA notification requirements.
FD2 - Indicates that the article is under FDA jurisdiction and review of entry information by
FDA under section 801(a) will take place. However, the article is not "food" for which prior
notice information is required.
FD3 - Indicates that the article may be subject to prior notice under section 801(m) of the
FD&C Act and 21 CFR Part1, subpart I. , e.g., the article has both food and non-food uses.
FD4 - Indicates that the article is "food" for which prior notice is required under section 801(m)
of the FD&C Act and 21 CFR Part1, subpart I.

FDA – Product Code
The FDA Product Code is a seven characters long and is broken into the following five fields.
Industry, Class, Subclass, Process Identification Code (PIC), Product
PIC - specifies either the process, storage or dosage form depending on the type of product.
A missing or incorrect FDA product code is one of the most common reasons for a hold/rejection!
http://www.accessdata.fda.gov/scripts/ora/pcb/tutorial/tutorial.cfm

FDA – ITACS
What is ITACS? - Import Trade Auxiliary Communications System
ITACS is a newly created internet portal for import trade. It is linked to FDA’s Mission
Accomplishment and Regulatory Compliance Services (MARCS) import entry review
system. ITACS will allow users to view current FDA status on import entries and allow for
faster communication between FDA and entry filers.
Some of the benefits of ITACS:
· View current FDA status of entries
· Submit documents directly to FDA
· Documents can be submitted through ITACS instead of local FDA port office
· ITACS will be operational even if CBP/FDA interface is down
· No waiting time for return phone calls
· Detailed information regarding shipment: at the line level
Who can access ITACS?
Anyone with a valid entry number can access ITACS.
What entries can be viewed?
Any entry at any port which was successfully transmitted to CBP/FDA via ABI (i.e., broker
entry).
Link to ITACS: https://itacs.fda.gov/itacs/app/welcomeToITACS.jsf

FDA – ITACS
What is ITACS? - Import Trade Auxiliary Communications System
ITACS is a newly created internet portal for import trade. It is linked to FDA’s Mission
Accomplishment and Regulatory Compliance Services (MARCS) import entry review
system. ITACS will allow users to view current FDA status on import entries and allow for
faster communication between FDA and entry filers.
Some of the benefits of ITACS:
· View current FDA status of entries
· Submit documents directly to FDA
· Documents can be submitted through ITACS instead of local FDA port office
· ITACS will be operational even if CBP/FDA interface is down
· No waiting time for return phone calls
· Detailed information regarding shipment: at the line level
Who can access ITACS?
Anyone with a valid entry number can access ITACS.
What entries can be viewed?
Any entry at any port which was successfully transmitted to CBP/FDA via ABI (i.e., broker
entry).
Link to ITACS: https://itacs.fda.gov/itacs/app/welcomeToITACS.jsf

USDA
USDA Permit – When required, a copy of a valid
USDA permit should travel with the shipment.
Required for animal or plant derived products, either
the pharmaceutical compound or more typically when
capsules of bovine or porcine origin are used.
USDA Permits – Valid for 1 year & will state the
expiration date on the permit.
Renewals/first time permit applications can take
anywhere from 4 – 8 weeks to obtain.

USA – Import process flow
Shipper arranges
Export details
(shipping, licenses,
invoicing, etc….)
Forwarder/Carrier
prepares bill of loading
and manifest and
sends documents to
broker
Broker receives
documents, prepares
entry and files with
Customs
Customs reviews
import information
and determines if
shipment is to be
examined
Customs/OGA
examines and
decides whether
to release
YES
Customs releases
(including OGA)
Cargo moves to
final consignee
NO
Customs holds,
seizes or requires
Reexportation
Customs issues
Redelivery (within 30
days of release)
YES
Customs/OGA
finds something
wrong with
marking or
product
Importer redelivers
to Customs Custody
NO
DISAGREES
Customs
issues CF28,
Importer has 30
days to response.
Customs reviews
info
If Customs disagrees
with original
qualification or value,
a CF29 is issued
advising rate or value
advance at time of
liquidation. Importer
usually has 20 days
to respond.
Liquidation occurs,
usually 1 year from
date of entry (can be
suspended by statute
or up to 4 years by
extensions
YES
NO
Customs
reviews entry
summary info.
Questions?
Importer reviews
entry documentation,
advises broker of
changes or additional
information, otherwise
retains records for
5 years.
AGREES

The Regulatory Maze
Most countries require
permits that can take
anywhere from 30 to 90
days to import.

Regulatory Guidelines:
A Moving Target
Count the black circles
Working with experts reduces headaches

Recruitment Value
Which Country Offers Higher Value?

Recruitment Value
Clinical trial growth is focused on the countries that
have the greatest density of populations to sites.

China
Exporting Biological Samples
2 weeks
Human Serum Plasma
Ministry of Health Export Permit
vs
Whole Blood &
Tissue
HGRMO
Permit
3 months

China
Importing Reagents
Which category does NOT require a CIQ permit?
plant animal human

China
Importing Reagents
Permit approval: 2 to 4 days
Reagents containing Animal or
Plant compounds require a CIQ permit.
plant
animal
human
An application for the CIQ permit can
commence
once the following information is gathered:
• number of pieces/vials/or contents
• weight of the shipment
• precise description
(must be in accordance with actual product description)

India
Importing Pharmaceuticals
Single or Multiple Use…
Consignee or importer must apply for permits
Permitting
process:
REQUIRED FOR PERMIT APPLICATION
REQUIRED FOR EXPORT
• Clinical Trial Approval Letter from DCGI & DGFT • IEC code (Import Export Code)
• Aayat - Niryaat Form
• Import permit and/or NOC
• List of participating sites from India
• Invoice
• Registration Membership Certificate
• Packing list
• Import Export Certificate
• MSDS / COA (if applicable)
• Clinical Protocol
If commercial then complete application as per Form-8 & Form-9

Brazil
Importing Clinical Materials
In Brazil, everything
is under the microscope
• Import license: 1 month to obtain and
expires in 6 months
• Import Permit: per shipment: 7 days
• Imports heavily taxed
• If the importer is a CRO or the sponsor, a
nota fiscal is required.

Best Practices
Your company must be able to provide…
Roles and responsibilities
Engage your experts early
Requirements and capabilities
Assessment and evaluation
Avert risk, rather than risk adverse
Document validation
Build-in redundancy
Intervention options
…or work with a supply
chain partner who can

Q&A
For further Discussion or Work-shops
• Dan Bell – dan.bell@marken.com