Healthcare and Pharmaceutical Licensing Compliance Guide
Learn about nationwide licensing requirements for pharmacies.
Overview of Pharmacy Licensing Requirements
Like most healthcare related facilities, pharmacies are heavily regulated and must obtain a number of state and federally issued licenses. While licensing and registration requirements are only a part of the regulatory challenges that pharmacies face, meeting these requirements is the key to receiving and maintaining the legal authority to operate a pharmacy.
For new pharmacies, registration requirements typically begin with forming a business entity. Creating a new business entity usually consists of registering the business with the secretary of state in your state of choice, obtaining an employer identification number (EIN) from the IRS, and registering for business tax accounts through the department of revenue.
After forming a legal entity, pharmacies can begin the process of applying for operating licenses and permits, usually through the state board of pharmacy. At this point in the licensing process, pharmacies should know which schedule(s) of controlled substances they plan to distribute, the type of services that will be offered, the location of the facility, and who will be acting as the pharmacist-in-charge of the facility.
Requirements for a pharmacy permit vary by state, but many permit applications ask for:
- Business entity information
- The type of pharmacy (Retail, Hospital, Sterile Compounding, Nuclear, etc.)
- Pharmacist-in-charge information, including license number
- Articles of incorporation/formation
- A list of officers and owners of the business
- Disciplinary and criminal history for owners and officers of the pharmacy
- A list of other licensed personnel who will operate the pharmacy, such as pharmacy technicians and pharmacist interns
- Pharmacy hours of operation
- Application and license fees
Once the permit application has been submitted and approved, states typically require the facility to be inspected for compliance with various pharmacy regulations. Upon passing the inspection, a pharmacy permit will be issued.
In addition to the operating permit, pharmacies that distribute controlled substances will likely need to obtain a controlled substance registration. These registrations are usually administered by the state board of pharmacy and can often be applied for concurrently with pharmacy permit applications.
Depending on the services they offer, some pharmacies may also need to apply for supplemental state licenses. Pharmacies that distribute medical devices, for example, may be required to obtain a medical device retailer license.
Following state-level pharmacy licensure, most pharmacies must complete federal registration requirements. In general, pharmacies are required to obtain a National Provider Identifier (NPI) number as a part of meeting HIPAA standards, and pharmacies that distribute controlled substances must apply for a federal controlled substances act registration with the Drug Enforcement Administration (DEA).
Pharmacy permits and registrations are generally issued on a per-location basis, so if you operate multiple pharmacy facilities, you will need to file unique applications for each facility location.
Pharmacies that operate facilities in multiple states will face additional licensing requirements in each state that they serve. Even facilities without a physical presence in a state, such as mail order or internet pharmacies, may find themselves subject to licensing requirements when they dispense controlled substances in a new state.
Before approaching the board of pharmacy to apply for licenses or permits, pharmacies may need to foreign qualify their business entity with the secretary of state depending on their business activities in the state.
When applying for a non-resident pharmacy permit, states typically require that applicants list a pharmacist-in-charge who is actively licensed in that state. States may also require non-resident pharmacies to submit license and inspection report verifications through the Verified Pharmacy Program (VPP).
In addition to licensing requirements, pharmacies expanding services to additional states may incur a tax liability in those states. State departments of revenue commonly require entities to register for corporate income tax, and for entities with employees in the state, withholding and unemployment insurance taxes.
Pharmacies with a multi-state presence should also make sure they are enrolled as a Medicaid provider if providing services to clients covered by Medicaid. Medicaid provider enrollment is conducted at the state-level, so pharmacies need to submit separate enrollment applications for each state.
After licenses are obtained, pharmacies should turn their attention to maintaining their licenses and permits. Licenses that are not properly maintained can quickly slip into inactive status and may become revoked entirely if neglected.
Pharmacy permits typically expire annually or biennially, although some states have triennial renewal periods. In order to maintain the good standing of your pharmacy, a renewal application and fee must be submitted prior to the permit’s renewal date. Entities that operate multiple facilities will have more than one permit to renew, so it is important to carefully track when renewals must be filed for each pharmacy location.
Pharmacies must also renew controlled substance registrations on a regular basis. Most state-issued registrations renew annually, while federal controlled substance act registrations renew triennially for pharmacies.
For pharmacies with a presence in multiple states, the renewal process becomes even more involved. In many cases, multi-state entities must keep up with pharmacy permit renewals, controlled substance registration renewals, and secretary of state annual report requirements in each state where a facility is located.
In addition to these structured renewal events, pharmacies must also notify the board of pharmacist-in-charge, ownership, location, and other entity information changes as they occur. Many state boards also require the pharmacist-in-charge to complete an annual self-inspection report to ensure that the pharmacy meets regulatory requirements. In most cases these reports do not need to be submitted to the board but must be kept available and presented upon request.
Keeping up with each state’s requirements, tracking renewals, and submitting the applications on time are critical to avoiding penalties. Dedicated compliance services and software can help you keep track of varying jurisdiction requirements and relevant updates to state laws.
Explore Licensing by State
Click on a link below to view licensing information in your state.
Controlled Substance Registration - In addition to a pharmacy license, controlled substance registration registration is required in many states for pharmacies that distribute controlled substances.
NABP (National Association of Boards of Pharmacy) - Host a variety of programs and resources relating to pharmacist and pharmacy licensure and examination.
Pharmacist in Charge - A licensed pharmacist designated by a pharmacy to act as the party responsible for compliance with regulations.
VPP (Verified Pharmacy Program) - A program run by NABP that allows state boards to share information and more easily register out-of-state pharmacies.