Today, in Acetris Health, LLC v. United States, the Federal Circuit held that a pharmaceutical manufactured in the United States qualified for sale, under the Trade Agreements Act of 1979 (TAA), to the Department of Veterans Affairs even though the active pharmaceutical ingredient (API) came from a non-designated country, India.

In reaching this decision, the court questioned, without deciding, the longstanding Customs and Border Enforcement position that the country where the API was manufactured defined the location of “substantial transformation” for any resulting pharmaceutical. In any event, the court held that under the Federal Acquisition Regulation definition, to qualify as a “U.S.-made end product” under the TAA, the product need be either “manufactured” in the U.S. or “substantially transformed” in the U.S. – it need not be both.