Reducing Costs & Risks: A Pharma Guide To FTZ Subzones For U.S. Drug Manufacturing

By Preston Zimmerman, Jubilant HollisterStier CMO

FTZs are secure areas under U.S. Customs and Border Protection (CBP) supervision, viewed and handled as outside CBP territory, that function similarly to what are known internationally as free trade zones. Generally, anything that enters an FTZ is not taxed upon entry.

When it comes to pharmaceuticals, often the imported item is an active pharmaceutical ingredient (API) that ends up being mixed with excipients or buffers to create a drug product. Once converted into a final drug product ready to leave the zone, it then often falls under a different tax classification that significantly reduces or eliminates duties. Pharma manufacturers can use such zones to benefit from American manufacturing further upstream without taxation.

JHS’ demonstrated experience with FTZs expands the services they can offer as a CMO partner for the current American trade landscape.