Anyone who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, marketing, selling, shipping, repackaging, or labeling a prescription drug, or wholesale distribution of a prescription drug…must obtain a license/permit in certain states to be in compliance.

“But I didn’t know!”

This is a response that is never accepted by a government agency for a pharmaceutical company’s inaction to remain in compliance with state licensing.

In analyzing the costs of being compliant, remember these consequences for not carrying the correct state licenses and being noncompliant:

  1. If you are found to be noncompliant by your resident state licensing board, you may have your business license suspended or revoked.
  1. The state board, depending upon the infraction, may also impose civil penalties ranging from a flat fine (up to $250,000 in some states, such as North Carolina¹) to charging your company per violation or per day. At worst, there could be misdemeanor or felony criminal charges that include jail time.
  1. Being punished by your resident state board may only be the beginning:
    1. Once you have come to a resolution with your resident state board, it must then be reported to all of the other state licensing boards.
    2. Your company could then go through the same board actions with other states you are licensed with, and incur more license revocations, fines, and criminal charges.

Once the dust settles from all of the boards, there is still one final hurdle to face: how will your company recover from license revocation?

Every state board application asks if your company was ever denied a license or faced disciplinary action. This could potentially prevent your company from continuing to do business without expensive alternate strategies.

As you can see, in the pharmaceutical industry, falling out of compliance with state boards can be very costly. Consequences can include anything from license suspension by multiple states, up to felony charges and time spent in jail. Is running your own company’s risk for noncompliance worth it?

Let the state licensing experts at Two Labs help! To learn more about licensing and other important topics related to launching a pharmaceutical drug, subscribe to our blog below or request a free consultation from the Two Labs PharmaLicense experts.

¹North Carolina Wholesale Prescription Drug Distributor Laws: Chapter 106 Article 12 A § 106-145.6.  Denial, revocation, and suspension of license; penalties for violations. http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_106/Article_12a.html