What manufacturers need to know about Minnesota House Bill 400

Minnesota house with state outline

We recently notified our clients and partners of several regulatory changes that will affect manufacturers and wholesalers doing business in Minnesota. In May 2019, Minnesota Governor Tim Walz signed House Bill 400, which created an Opioid Stewardship Advisory Council to confront the opioid addiction crisis and overdose epidemic.

Parts of the law are already in effect as of July 1, 2019, and more pieces of the bill will be felt within the next year, including significantly increased licensing application fees for all drug manufacturers and wholesalers, as well as new reporting requirements and registration fees for opioid manufacturers.

Below, we have summarized the new fees and requirements for manufacturers doing business in Minnesota, however the implications may vary by company.

To see exactly how these new regulations will impact your company and for help navigating the changes, contact our team of experts.

Application Fees for Non-Opioid Manufacturers & Wholesalers

On July 1, fees for non-opioid manufacturers and wholesalers increased from between $150-$325 to a flat fee of $5,260.

Requirements & Fees for Opioid-Based Controlled Substance Manufacturers & Wholesalers

Annual Licensing Fees

Effective July 1, manufacturers of opioid-based controlled substances now face a $55,260 annual licensing fee. Regardless of how a product arrives in Minnesota or whether or not the manufacturer holds the product title when it arrives, the Minnesota Board of Pharmacy (MN BOP) states that the law applies to all manufacturers whose products end up in Minnesota.

If a company has multiple facilities that require a Minnesota license, it must pay the $55,260 annual licensing fee for the first facility, and then $5,260 for each additional facility. Distributing an opioid-based drug into Minnesota without the correct license can result in a civil penalty of up to $10,000 per violation, which can be defined as a single shipment of a single dose.

The state of Minnesota could also suspend or revoke licensing, prohibiting a manufacturer’s product from entering the state at all. Additionally, the manufacturer would be required to report the violation to every other state that it conducts business in, which may result in additional loss of state licenses.

Registration Fee by Volume

There will also be an annual $250,000 registration fee for any manufacturer that sells, delivers or distributes at least 2 million units of an opioid into or within Minnesota. The MN BOP will notify manufacturers on April 1 of each year to inform them if they will be required to pay this fee. The first registration fee will be due June 1, 2020, for products sold in the 2019 calendar year.

Required Distribution Reporting

Opioid manufacturers and wholesale distributors are now required to record and report every sale, delivery or other distribution within or into Minnesota, beginning with reporting all 2019 distributions by March 1, 2020. The penalty for failing to report sales by the March 1 deadline will be a $500 per day administrative fee.

Additionally, the bill created the Opioid Stewardship Account Fund to support prevention and treatment programs for opioid addiction and abuse. This fund will be financially supported by MN BOP, as well as federal aid and grants. Another provision to note is that Minnesota may drop the requirement that a Virtual Manufacturer must hold both a wholesale and manufacturer license, a rule that has been historically upheld in the state.

At Two Labs, keeping a pulse on these changes is at the core of our best-in-class service offering. We proactively monitor for changes in state regulations, government agency statue interpretations, and compliance requirements which affect manufacturers.

We work closely with our clients to not only update them on these changes, but to explain their impact on operations and provide detailed guidance on next steps.

Curious how these or other licensing changes might affect you? Not sure what action to take with your CMO? Click the button below to get in touch with our PharmaLicense expert team!

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