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How to License Your New Pharmacy

September 8, 2020

The process of becoming a licensed pharmacy can be complex. Pharmacies must obtain all the necessary licenses before they can legally begin operation and requirements for licensure vary widely by state.

Before pharmacies begin the permit application process, they are usually required to form a business entity. In consultation with a CPA and attorney, pharmacists can decide the best business structure for their needs. They must also register their business name with the state and register for state and federal taxes. This process includes applying for an Employer Identification Number (EIN) from the Internal Revenue Service.

Questions to Expect on the Pharmacy Permit Application

When applying for a permit, application questions vary from one state to another. Here are some typical requirements you may expect to see on a permit application:

  • Name, address, and contact information of pharmacy
  • Business structure and entity information
  • Names and license numbers of staff pharmacists
  • Physician information
  • Pharmacy type (retail, internet, hospital, infusion, sterile compounding, nuclear, etc.)
  • Officer and owner information
  • Accreditation information
  • Articles of incorporation/formation
  • Disciplinary and criminal history for owners and officers of the pharmacy
  • A list of non-pharmacist personnel who will operate the pharmacy
  • Pharmacy hours of operation
  • Lease agreements
  • Types of drugs to be handled at the facility
  • Application and license fees
  • Methods of delivery

Next Steps After Your Permit is Approved

Before your pharmacy opens for business, you must follow several more steps in addition to your permit application.

Your pharmacy must be inspected for compliance with state and federal regulations. If it passes, the pharmacy will receive a permit. The pharmacy will also need a controlled substance registration if it distributes controlled substances, which is available by application. Depending on your state and type of pharmacy, you may also need to apply for supplemental licenses for specific services you offer.

Multi-State Licensure

If you plan to conduct pharmaceutical operations across state lines, you will likely face additional requirements from each state. This is particularly important for internet and mail-order pharmacies and pharmacies close to state lines. The pharmacists on your staff may be required to maintain active licensure in each state they serve.

Additional requirements for multi-state licensure may include:

  • Registering your pharmacy within all the states where it operates, including qualifying your business in the states where your business is not located but may operate
  • Submitting your inspection reports and licensures through the Verified Pharmacy Program (VPP)
  • Registering your business entity for state taxes in the states where you’ll be doing business, including corporate, withholding, and unemployment insurance taxes
  • Enrolling as a Medicaid provider in all states where you intend to receive Medicaid reimbursement

How to Maintain Compliance with Current Licensure

Once you’ve received all the necessary permits and licenses, it’s important to consistently maintain them so they stay active and in good standing.

Check your pharmacy permit’s expiration date (pharmacy permit term lengths vary by state–some expire annually while others have longer terms) and submit a new fee payment and application well before the permit expires. If you have multiple locations, distribute controlled substances, or provide other special services, you will need to track renewal dates for multiple licenses.

Operating in multiple states adds another layer of complexity. In addition to multiple pharmacy permit renewals, you may also need to submit annual reports to each of the secretaries of the states in which you do business and maintain special licenses (such as controlled substances) for each state.

In addition to these regular renewals, you are responsible to notify the state board about any changes to ownership, services, locations, business structure, or your pharmacist-in-charge. The pharmacist-in-charge is expected to complete annual self-inspection reports.

By requiring pharmacy permit applications for licensure, the government protects itself, the pharmaceutical industry, and patients from medical, personal, legal, and financial harm. Although keeping track of permits, regulations, and renewals can be difficult, noncompliance can mean losing your license or permit.

To help you stay in compliance, Verisys continually monitors licensure. Verisys actively tracks licensing regulations and requirements across all U.S. states, territories, and jurisdictions.

Verisys’ real-time license verifications protect organizations from fines and exposure by actively monitoring licensure information from licensing boards in all U.S. states.

Juliette Willard Written by Juliette Willard
Healthcare Communications Specialist
Being creative is my passion! Writer. Painter. Problem Solver. Optimist.
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