Business Licensing for Compounding Pharmacies 

In today’s drug marketplace one thing is certain - regulations are complex and ever-changing. LicenseLogix assists every type of business entity in researching, obtaining, and maintaining their licenses or permits. Our licensing specialists are experts on business and professional licenses in all 50 states within the life sciences industries, such as specialty pharmacy, mail order pharmacy, outsourcing, drug distribution, and drug manufacturing.   

Extensive License Requirements

Currently, an in-state pharmacy license is required in all states and 49 states require a nonresident or mail order pharmacy license. Massachusetts has been slow to bring its non-resident pharmacy license to the table but development of the license application is underway and is expected to be issued by the Board soon.  A separate sterile compounding license is required in states such as California, Florida, Oklahoma and Texas and a separate controlled substance registration required in many states in addition to a pharmacy license.

Fees and Wait Times Add Up

Pharmacy licensure is typically a 3-4 week long process at best, however in some states the process can take longer than several months. Some of the states with the lengthiest processing times are California, North Carolina, New Jersey, Ohio, Rhode Island, South Carolina and Texas. Initial and renewal application fees generally fall between $100 and $1,000 with the highest fees found in California.[1] These licenses typically require renewal annually or biennially, but this varies by state.

Obstacles to Entry

Prerequisites to licensure also add up fast and can be a barrier to entrance into the market if your pharmacy does not meet these initial requirements.  For example, in a number of states, the Pharmacist-in-Charge (“PIC”) must be licensed in that state.  Seating a PIC can take time and adds to the cost of a pharmacy’s licensure.   Some states also require the business to register, or foreign qualify, with the Secretary of State as a prerequisite to any pharmacy licensure.

Many states now require proof of compliance with USP 797 by either directly mentioning this requirement or making reference to USP 797. For example, Florida has adopted USP as the minimum standards to be followed for sterile compounding products.[2] The same requirement applies in Connecticut.[3] Legislation surrounding compounding pharmacies is steadily increasing as a result of the 2012 meningitis outbreak. Another route to pharmacy compliance is to become accredited and certified by the Pharmacy Compounding Association Board (“PCAB”). This accreditation and certification may eventually become a state mandated compliance requirement. For example, New Jersey introduced Bill NJ A345 last year that would require compounding pharmacies to receive PCAB accreditation. Although the bill is still pending, it has the potential be signed into law and other states may follow suit.

License Impacts Resulting from Organizational Structure Changes

If a change occurs in the structure of the pharmacy, additional updates will likely apply.  Organizational changes often trigger a new license requirement with an entirely new fee and application process. A similar situation befalls those pharmacies with a new PIC; usually requiring a letter or short form submission to provide the updated information.  The addition of new dispensing locations almost always triggers the requirement for a new license and new inspection.

Penalties for Non-Compliance

Penalties for license non-compliance in this industry are severe.  Targeted investigatory sweeps occur more and more frequently by state pharmacy boards focused on identifying unlicensed pharmacies and pharmacists operating in their states. Pharmacies of all types must stay educated and aware of licensing requirements that may be pertinent to their operations. Risk of shut down, penalties and fines, and negative publicity are all risks associated with license non-compliance. 

Regulatory Monitoring – Assistance is Here!

LicenseLogix monitors legislative and administrative changes implemented by each state’s Board of Pharmacy.  On a quarterly basis, LicenseLogix synthesizes this data and compiles a comprehensive report known as TRAC©.  TRAC© subscribers receive notifications of legislative developments, rule making notifications, licensing changes, and general updates that have taken place each quarter, and potential events to look for next quarter.

Earlier this year, LicenseLogix reported that the FDA had released its final guidance on Repackaging of Certain Human Drug Products by State-Licensed Pharmacies and Outsourcing Facilities.[4]  There have also been a number of recent state-level legislative changes pertaining to sterile compounding. For example, the State of Missouri released its final draft of its sterile compounding rule 20 CSR 2220-2.200 and additionally it was announced that Wyoming was becoming a Blueprint State for consistently of inspections of compounding facilities.[5] Professional licenses in the pharmaceutical field recently underwent changes as well, such as nonresident PIC requirements in Alabama, Michigan and Oklahoma and increased background checks in Arizona and California. New reciprocity rules were developed for pharmacists working in Wyoming, Oregon and Kentucky and continuing education requirements were revamped and increased in Idaho, Massachusetts, New Mexico, Pennsylvania, Virginia and Oregon.

LicenseLogix’s clients receive targeted license alerts to help them stay up to date with licensing changes. The licensing landscape of the pharmaceutical industry is constantly progressing to ensure safe access to medications throughout all stages of the drug supply chain. Keeping up with regulatory changes is essential to effectively and seamlessly operate a multijurisdictional compounding pharmacy. 

Click the link to learn more about LicenseLogix and how we work to keep our clients well-informed of licensing and regulatory changes. 


[1] In California, a nonresident and sterile compounding license can cost up to $1,300. 

[2] See Rule 65B16-27.797

[3] A Department of Consumer Protection Report on Connecticut's Drug Laws

[4] Electronic Drug Product Reporting for Human Drug Compounding Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act: Guidance for Industry

[5] The NABP setup requirements for states to participate in a Blueprint Program with the goal of effectively creating consistency in inspections of sterile compounding facilities. More information avalailable:Multistate Pharmacy Inspection Blueprint Program