Case Study

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Active pharmaceutical ingredients (APIs) also known as bulk active pharmaceutical ingredients, are defined by the US Food and Drugs Administration (FDA) as 'any component that provides pharmacological activity or other effect in the diagnosis, cure, mitigation, treatment or prevention of disease, or to affect the structure or any function of the body of man or animals.' Generally, APIs are therapeutic components of drug formulations or finished pharmaceutical products that also contain fillers, binders' excipients and other inactive ingredients. APIs are routinely evaluated or used by pharmaceutical companies for preclinical testing during new drug development, human clinical trials testing and commercial manufacturing of approved pharmaceutical products.

In 2009, U.S. imports of APIs and other pharmaceutical products totaled over $85 billion. Increasingly, sourcing APIs from low-cost suppliers in India, China, Eastern Europe and other emerging pharmaceutical markets has been a cost-cutting strategy embraced by most pharmaceutical and generics companies.

Importing APIs into the United States is guided by a sometimes arcane set of regulations and involves a complex interplay between FDA and the US Customs and Border Protection (CBP) agency. FDA's role in the process is to insure that imported APIs comply with all regulatory requirements outlined in the US Food, Drug and Cosmetic Act. CBP's role is to determine the admissibility of an API into the US and subsequently to levy duties (when appropriate) upon product entry.

The following case study is an example of how Marken — a global life sciences supply chain solutions company — helped a client avoid inappropriate duty charges and expedite importation of its API into the US.