With the widespread imposition of new and extensive tariffs by the U.S. government, compliance with regulations relating to Country of Origin (COO) emerged as a key compliance issue for the life sciences and health care sector in 2025, particularly for pharmaceutical and biotechnology companies. Scrutiny is anticipated to increase in this area, as the Trump Administration stood up a new Department of Justice (DOJ) Trade Fraud Task Force charged with targeting trade, tariff, and COO-related fraud. In response to anticipated stepped-up enforcement by U.S. Customs, biopharmaceutical companies – as well as wholesalers and distributors – have been scrutinizing COO statements on product labeling, as well as related representations made in connection with U.S. government contracts.

Tariffs are dependent on accurate representation of COO, and there could be significant duty implications of declaring the wrong COO. For this reason, access to duties may well become a primary object of enforcement actions. Access to lucrative Federal contracts also depends on accurate representation of COO, and alleged improper certifications may also be a focus of the Task Force.

Certification of COO is required under Federal contracts per various statutes, including the Trade Agreements Act of 1979 and the Buy American Act, a depression-era statute that applies preferences to "domestic end products." For Customs, the COO of a product is required to be legibly marked on imported articles, and this is required for accurately declaring origin for duty purposes of the assessment of tariffs, including those implemented under various regimes, including: Section 301 of the Trade Act of 1974; Section 232 of the Trade Expansion Act of 1962; the International Emergency Economic Powers Act; and the reciprocal tariffs imposed last year.

Determining the COO of pharmaceuticals and biotechnology products can be complex and is very much fact-driven. Generally, for Customs purposes, COO is determined to be the last place in the manufacturing process where a substantial transformation in name, use and character occurred. For procurement, this analysis applies generally, but there is a "carve-out" for products that are "manufactured" in the U.S.

Proactive regulatory planning that prioritizes assessment of manufacturing processes, and ultimately COO on a product-by-product basis – both for marking and Federal procurement certifications – will serve companies well given the increasing scrutiny in this area.