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  • Maureen May

State Drug Licensing for Virtual Manufacturers


In the pharmaceutical industry, drug licensing is a critical aspect of ensuring compliance with regulatory requirements. This is particularly important for virtual manufacturers, who play a unique role in the manufacturing and distribution of drugs and medical devices. In this comprehensive guide, we will explore the intricacies of drug licensing for virtual manufacturers, providing valuable insights and guidance for navigating the complex landscape of pharmaceutical regulations.


Understanding Virtual Drug Manufacturing

There are various options available for pharmaceutical companies to manufacture and bring medical device and drug products to market. The traditional model involves a company that develops and manufactures their own drug product. As the pharmaceutical industry has evolved, additional manufacturing models have been developed. One increasingly employed model is the virtual manufacturer.


A virtual drug manufacturer is generally defined as a person or entity that sells its own drug but never physically possesses the product. These companies utilize contract manufacturing organizations (CMOs) that are responsible for the physical manufacturing of the drugs.


Virtual drug manufacturing offers numerous advantages that are revolutionizing the pharmaceutical industry. By leveraging technology and collaboration, virtual drug manufacturers are able to streamline the drug development process and bring innovative treatments to market faster.


How to Get Licensed as a Virtual Drug Manufacturer 

Before initiating the licensing process, virtual manufacturers must conduct thorough research on the regulatory requirements applicable to their specific jurisdiction. This includes understanding Federal regulations, state-specific requirements, and any industry guidelines or standards. It is essential to have a comprehensive understanding of the licensing process to ensure compliance and avoid any potential legal issues.


In addition to regulation by the US Food and Drug Administration (FDA), virtual manufacturers are facing increasingly complex and time-consuming state regulatory requirements for the manufacturing and distribution of their drug products. Each state regulates the manufacturing, distribution, and sale of drugs into their state. Through licensing and regulation of different business entities involved in drug manufacturing, distribution, and sale throughout the drug supply chain, states ensure product integrity and patient safety within their state.


For virtual manufacturers, complying with state licensing requirements requires identifying appropriate state agencies governing drug manufacturers, understanding state licensing regulations related to virtual manufacturers, identifying appropriate manufacturing license type based on the manufacturer’s supply chain model, and completing the required steps to apply for and obtain state licenses.


Identify State Regulatory Agency for Drug Manufacturing

The first step of achieving compliance with state licensing regulations is to identify the appropriate state agency responsible for regulating drug manufacturers. Identifying the relevant regulatory requirements in each state can be challenging, as it is often not immediately clear which state agency is responsible for governing drug manufacturers.


A majority of states have delegated responsibility for regulating drug manufactures to the state Board of Pharmacy (for instance Alabama, Kansas, and Oregon). However, this approach is not used in every state. Delegation of drug manufacturing regulatory oversight may be given to a state’s s Department of Consumer Protection (i.e., Connecticut) or Department of Health (i.e., Washington, D.C.).


The virtual drug manufacturer must identify the appropriate state agency responsible for regulating drug manufacturers in order to understand required licensing requirements for their business.


Identify State Regulatory Licensing Requirements for Virtual Manufacturers

Once the applicable state agency has been identified, virtual manufacturers must consult agency guidance, as well as state statutes and agency regulations, to understand regulatory requirements specific to the virtual manufacturing model.


The virtual manufacturing model presents unique challenges. While nearly all states have established regulatory programs related to traditional drug manufacturers, that is, those companies that physically manufacture their own drug, only approximately 30 states regulate virtual manufacturers. As the virtual manufacturing model becomes more widely employed, additional states may amend statutes and regulations to define and include virtual manufacturers as a regulated entity.


For those states that regulate virtual manufacturers, determining if a particular virtual manufacturer is regulated requires, in part, a review of the state’s regulatory definition of “virtual manufacturer.” This definition varies across states.


Washington Admin Code 246-945-001 defines virtual manufacturer as “an individual or facility that sells his or her own prescription drugs, but never physically possesses the drugs.”


In contrast to Washington State’s rather broad definition, Arizona Admin Code R4-23-110 defines, in detail, virtual manufacturer as “an entity that contracts for the manufacture of a drug or device for which the entity:


  • Owns the New Drug Application or Abbreviated New Drug Application number, as defined by the FDA, for a drug;

  • Owns the Unique Device Identification number, as defined by the FDA, for a prescription device;

  • Is not involved in the physical manufacture of the drug or device; and

  • Contracts with an Arizona-permitted manufacturing entity for the physical manufacture of the drug or device;…”


Virtual manufacturer includes an entity that may be identified as an own-label distributor, which contracts with a manufacturer to produce a drug or device and with another entity to package and label the drug or device, which is then sold under the distributor’s name or another name.”


In some cases, states may not explicitly define virtual manufacturer, but may still regulate this entity. Mississippi is one such state. While virtual manufacturer is not specifically defined within the regulations, Mississippi Rule 30-20-3001:XXXII requires registration of “virtual manufacturers.”


State licensing requirements specific to virtual manufactures are confusing and vary across states. It is important virtual drug manufacturers carefully review each state’s statutes and regulations to understand licensing requirements for virtual manufacturers.


Identify Virtual Drug Manufacturing License Type

States may regulate a virtual drug manufacturer through the requirement to obtain a license, permit, or registration. The type of license, permit, or registration required varies by state and may be based on the business supply chain model, regulatory definitions and regulatory requirements.


Some states regulate virtual manufacturers under a manufacturer registration (i.e., Connecticut). Many states (i.e., Maryland, Montana, and New Jersey) lump virtual manufacturers with wholesalers/distributors and require a wholesaler/distributor license or permit. Alabama requires a private label distributor permit for a virtual drug manufacturer whose product is shipped into Alabama.


It is essential to identify the appropriate license type required by each state. Complete Compliance Solutions partners with virtual drug manufacturers to help companies understand their state licensing requirements.


Contact us to learn more about our state licensing services.


Virtual Drug Manufacturer State Licensure Process

Obtaining necessary virtual drug manufacturing licenses can be a complex and time-consuming process. It requires careful attention to detail, adherence to regulatory guidelines, and collaboration with the appropriate regulatory authorities. Here are some key steps to navigate the licensing process successfully.


Understanding Resident State Licensing Requirements

One essential license application requirement for virtual drug manufacturers includes providing proof of licensure by the resident state agency where the virtual manufacturer’s office is physically located. If the virtual manufacturer is located within one of the approximate 30 states where virtual manufacturers are regulated, the facility must prioritize application for the resident state license. Once the resident state manufacturing license is secured, application for licensure can be made for the remaining states.


As part of the resident state license application process, an inspection may be required. In the event of an inspection, it is important the virtual drug manufacturer understand inspection requirements specific to virtual drug manufacturers.


If a virtual manufacturer’s office is located in a non-regulating state, documentation demonstrating that a resident state license cannot be obtained will be required. This documentation may include correspondence from the resident state agency confirming licensure is not required or documentation of state pharmaceutical regulations.


Prepare Documentation Required for State Drug Manufacturing Licensure

The licensing process requires the submission of various documents to state regulatory authorities. The exact documentation required to support drug license application varies by state.  These documents may include, but are not limited to:


  • Proof of FDA Drug Establishment Registration

  • Corporate ownership information

  • Articles of Incorporation

  • Certificate of Good Standing

  • Proof of Federal EIN

  • Proof of company registration with Secretary of State where application is being made

  • Registered agent information for state where application is being made

  • Fingerprinting and criminal background check documentation for key personnel and corporate officers

  • Surety bond

  • Copy of business license

  • List of drugs to be manufactured

  • List of wholesale distributors and 3PLs contracted by the virtual manufacturer

  • Facility inspection reports

  • Contract manufacturer name, proof of FDA drug establishment registration, and proof of licensure with state where application is being made.

 

Virtual manufacturers must ensure that all required documentation is accurate, complete, and in-line with the regulatory guidelines. Delays may result if incomplete applications are submitted. In addition, applications often only remain active for a defined period. If applicants fail to submit additional required documentation in a timely manner, the application may be denied and a new license application and fee will be required.

 

Complete Required Background Checks

In addition to required documentation to support the license application, states may require fingerprinting and criminal background checks for key personnel. Criminal background checks may be required for the designated representative, designated representative’s supervisor or alternate, and key corporate officers.


The fingerprinting process varies by state. Some states require digital fingerprinting through fingerprinting services, such as Identogo. Other states require rolled fingerprints utilizing pre-printed agency-provided fingerprint cards. In most cases, additional fees must be paid to support the criminal background check process.


Virtual manufacturers must understand each state’s criminal background check and fingerprinting process. It is crucial to carefully track completion of required steps to ensure background checks are completed for required personnel and to avoid potential delays in issuance of the drug license.


Engage with State Regulatory Authorities

Virtual manufacturers should establish regular communication with the relevant regulatory authorities throughout the licensing process. This may involve seeking clarification on specific requirements, providing additional information as requested, and addressing any concerns or queries raised by the agencies. Maintaining a proactive and transparent approach can expedite the licensing process and foster a positive working relationship with the regulatory authorities.


Manage Drug License Renewals

Once the necessary manufacturer licenses have been obtained, virtual manufacturers must track and manage license renewals. State pharmaceutical license expiration dates and renewal requirements vary by state. Careful tracking of renewal application requirements and deadlines is critical to ensure timely submission of renewal applications. Missing a license renewal deadline can result in a costly late fee or a cancelled license.  


​Complete Compliance Solutions manages state virtual drug manufacturer license renewals to ensure important renewal deadlines aren't missed.


Contact us to learn more about our state licensing services.


DEA Registration to Manufacture Drugs

In addition to compliance with FDA regulations and virtual drug manufacturer state licensing regulations, virtual manufacturers may be required to comply with US Drug Enforcement Administration (DEA) regulations.

 

Drug manufacturing companies involved in the manufacturing of controlled substances must apply for a registration with the DEA. Controlled substances are largely defined as drugs that have the potential to be addictive or habit-forming. Controlled substances are divided into 5 categories called Schedules based on the drug’s potential for addiction and usefulness in medicine.

 

DEA controlled substance registration and renewal can be made via online applications. DEA registration expiration dates correspond to when initial registration was issued, business activity type, and drug schedule.


Conclusion

Drug licensing is a crucial aspect of the virtual manufacturing process, ensuring compliance with regulatory requirements and establishing trust in the pharmaceutical industry. Virtual manufacturers must navigate a complex regulatory landscape, obtain the necessary drug licenses, and maintain ongoing compliance to operate legally. By understanding the licensing requirements, engaging with regulatory authorities, and adhering to industry standards, virtual manufacturers can successfully navigate the licensing process and contribute to the safe and effective manufacturing and distribution of non-prescription and prescription drugs.


Author: Maureen May 


Disclaimer: The information provided in this article is for informational purposes only and should not be considered legal or regulatory advice.

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