ASSESS YOUR COMPLIANCE NEEDS
Are your products regulated by state licensure?
States regulate combinations of different product categories.
Rx Drugs and Devices
Prescription (Rx) Drugs - drugs that can only be obtained with a physician's prescription
Rx Devices - products including contact lenses, hearing aids, dental mouthguards and dentures that must be obtained with a physician's prescription
Most states regulate the manufacturing, distribution and/or sale of Rx drugs and Rx devices in their state.
OTC Drug and Devices
OTC Drugs - non-Rx medications and supplements, as well as common consumer products such as cosmetics with UV protection, medicated shampoos, antiperspirants, and certain toothpastes and mouthwashes
OTC Medical Devices - devices that diagnose, treat, or cure a condition without a chemical action, including bandages, thermometers, home pregnancy tests, adult diapers, toothbrushes, and syringes
The definitions of OTC drugs and medical devices are broad and include many common and widely sold consumer products.
Which states require your products to be licensed?
Licensing requirements for drug and device products vary by state depending on the drug or medical device type (Rx and/or OTC).
Most states regulate the manufacturing, distribution and/or sale of Rx drugs and Rx medical devices in their state.
Approximately 20 states regulate the manufacturing, distribution and/or sale of OTC drug products and OTC medical devices in their state.
To add to the confusion, states regulate differently based on the distribution model (manufacturer, virtual manufacturer, wholesale distributor, 3PL, retailer).
Is your distribution model regulated?
States license a variety of drug and medical device product distribution models, including:
Manufacturers distributing directly or through another distributor into a regulated state
Virtual manufacturers who don’t design and manufacture the product but place their own name on the product
Wholesalers distributing another manufacturer's products into a regulated state.
Own-label and private-label distributors selling into a regulated state
Third-party logistic providers managing distribution on behalf of a manufacturer or distributor into a regulated state
Brick-and-mortar and e-retailers selling direct to consumer into a regulated state
State licenses may be required even if the manufacturer or distribution facility is not located in the state where the product will be sold.
The Risks of Unawareness
Companies often overlook state licensing requirements because they are unaware their product is regulated or that their facility operations require a license. This can pose a business risk to companies. As part of the application and renewal process, state agencies increasingly require manufacturers, distributors, 3PLs, and retailers to prove that the products they own, sell, or direct and manage shipment of are licensed before the product can be shipped into the state. As a result, a supplier or customer may ask any regulated company in the supply chain to confirm the facility holds appropriate licenses in all regulated states.
Unlicensed shipment of products into regulated states can result in substantial financial and administrative penalties, including prohibition of the product’s shipment into the state. In addition, state agencies are becoming increasingly effective at communicating with other states to verify proof of licensure and uncover details on enforcement actions taken in another state.
To avoid business disruptions and enforcement actions, it is critical that companies understand their licensing requirements.
