Wholesale Drug Distributor License

Wholesale drug distributor companies must register at the state and federal level. It is crucial for pharmaceutical distribution companies to operate within relevant laws. Find out about the registration process and licensing requirements in each state.

Wholesale drug distributors are engaged in supplying prescription drugs and medical devices to business and healthcare facilities. Distribution companies do not manufacture, prescribe, or promote, but rather are logistics experts. They help make sure the medications healthcare providers prescribe to patients make it to hospitals, pharmacies, and other healthcare facilities safely and securely.

The pharmaceutical supply chain starts with the manufacturer and moves to the distributor, who delivers prescriptions to healthcare providers and pharmacists before they are sold to patients. Distributors deliver 10 million products every business day, with operations running continuously, connecting 1,400 drug manufacturers to more than 180,000 individuals healthcare facilities across the United States.

Licensure and Facility Requirements for Drug Wholesalers

Starting a pharmaceutical distribution company is a complex process. There are a number of steps involved, including registration and licensing. State requirements vary, and it is important to be aware of your obligations in the state(s) where you plan to operate. Note that regardless of where you start your business, you will need to appoint a registered agent to receive notice of lawsuit and other legal or government notices.

Licensing Requirements

There are strict federal and state requirements regarding drug distributor accreditation criteria. Obtaining licensure starts with an applicant verifying they are engaged in wholesale distribution of prescription drugs and medical devices to parties other than the consumer or patient. Many states also require accreditation from the National Association of Boards of Pharmacy (NABP). This is known as a Verified-Accredited Wholesale Distributor (VAWD) certificate.

The licensing process requires:

• An extensive application process
• Associated fees
• Copies of internal policies and procedures
• Surety bonds

Depending on the state, background checks and fingerprinting may also be required. Ultimately, the types of licenses required vary in each state, and can change based on physical location and the types of drugs being distributed. If you are uncertain about the type of licensing you need, Harbor Compliance can help. With our services and software, you can outsource your licensing management needs, save time and money, and receive nationwide support.

If a wholesale distributor is looking to obtain licensure outside their resident state, additional licenses may be required in each state in which they plan to operate. Note that failing to operate a wholesale drug distributor company without a license or with an expired license can result in fines, civil penalties, or imprisonment. Spare your company the time, expense, and potential penalties when you work with our in-house specialists to handle initial registration, renewals, and special projects.

Depending on state and local drug enforcement policies, distributors may also be required to register with the Drug Enforcement Administration (DEA). This is most often the case when a company distributes federally classified controlled substances. The federal registration process is also detailed and failing to comply could result in delays, closures, and other penalties.

Facility Requirements

When applying for a drug wholesaler license, the owner needs to verify their chosen facility meets specific requirements. For example, the facility must:

• Allow maintenance of all drugs and devices to pharmaceutical standards
• Be of a suitable size to facilitate cleaning, maintenance, and distribution operations
• Provide adequate storage areas that provide proper lighting, ventilation, temperature, sanitation, space, equipment, humidity, and security conditions
• Provide a quarantine area for storage of drugs and devices that are deemed outdated, misbranded, counterfeit, damaged, or otherwise unfit for distribution
• Be free from any infestation
• Be maintained in a orderly and clean condition
• Not be a personal residence

Distributors need to ensure their facility has the proper security measures in place. This includes keeping access from the outside to a minimum, equipping alarm systems to detect entry after hours, implementing a verification system for all persons or entities who enter, and ensuring the outside perimeter is well lighted.

Recordkeeping

In regard to recordkeeping, businesses with a drug distributor license must verify that:

• They are establishing and maintaining inventories of all transactions involving the distribution or disposition of drugs and devices
• Records are available for inspection and photocopying by authorized officials
• Records are kept in the inspection site at a central location
• Documents are available for review within two working days of a request
• Drug and device records are securely stored and access is restricted

Policies and Procedures

Qualifying wholesale drug distributors need to maintain, enforce, and adhere to written policies regarding the receipt, security, inventory, storage, shipping, and distribution of drugs. Written policies and procedures must include the following:

• A system for handling recalls and written withdrawals
• Voluntary actions to remove defective drugs or devices from the market
• Measures to promote public health and safety
• Product tracing, authorized trading partners, verification, and wholesaler and 3PL reporting

Distributors also need emergency plans in the event of a strike, fire, flood, or other natural disasters, or national emergency. Procedures for properly disposing of and destroying containers, labels, and packaging are also required to prevent counterfeiting activities.

Virtual Distributors and Wholesalers

Virtual wholesale drug distributors are applicants that wish to sell prescription drugs or devices without physically possessing any product. Businesses that fall into this category are required to use an accredited drug distributor for distribution and purchase directly from an FDA registered manufacturer or an accredited drug distributor that purchases directly from a manufacturer.

Explore Licensing by State

Click on a link below to view licensing information in your state.

Meeting the drug distributor license requirements is not always an easy process. Fortunately, Harbor Compliance License Manager helps pharmaceutical companies maintain their licenses by automating repetitive tasks such as tracking renewals. Through License Manager, you can also access reference data for the states in which you work, reducing the time spent researching state requirements. Contact our licensing experts today to learn more.