Research · 7 min read
What a State Board of Pharmacy Actually Licenses
The word pharmacy hides at least five different licenses in one state's code, each attached to a place rather than a company, each renewed annually, and one of them required before a single sterile preparation may be compounded.
Key takeaways
- California Business and Professions Code section 4110 makes the pharmacy license a per-premises license, renewed annually, with a separate license required for each location.
- California renewal is also a disclosure event: the license shall not be renewed without the matters the board identifies, including notification about compounding practices and compounded human drug preparations distributed outside the state.
- A California temporary permit may run no more than one hundred eighty days, terminates on service of a notice, and confers no vested property right on the holder.
- Sterile compounding requires its own California license under section 4127, and the board must review formal revisions to the relevant United States Pharmacopeia chapter within ninety days of their becoming official.
- Both California and Washington create a distinct nonresident pharmacy license for a pharmacy that ships prescriptions in from outside the state.
- California separately licenses wholesalers and third-party logistics providers per place of business, with a designated representative present whenever the place is open and a designated representative-in-charge approved by the board, and Washington licenses each place of business that manufactures drugs.
Answer first: the license attaches to a premises, not to a brand
California Business and Professions Code section 4110 states the rule in its first three sentences. No person shall conduct a pharmacy in California unless they have obtained a license from the board. A license shall be required for each pharmacy owned or operated by a specific person. A separate license shall be required for each of the premises of any person operating a pharmacy in more than one location.
That structure decides a great deal about how to read a company's claim to be licensed. The unit of licensure is a building. A business operating five dispensing locations holds five licenses, and a business that moved to a new building did not carry the old license with it. The section adds that the license shall be renewed annually, and that the board may by regulation determine the circumstances under which a license may be transferred.
California also attaches a condition to renewal that is easy to overlook. The license shall not be renewed unless the applicant includes necessary matters identified by the board in the renewal application, including, but not limited to, notification to the board regarding compounding practices, including compounded human drug preparations distributed outside of the state.
So the annual renewal is not purely administrative. In California it is the moment a pharmacy is required to tell the board what it compounds, and specifically what it compounds and sends out of state.
The temporary permit, and the sentence that removes its security
Section 4110 also authorizes something short of a full license, and describes its fragility in unusually blunt terms.
The board may, at its discretion, issue a temporary permit upon the conditions and for any periods of time as the board determines to be in the public interest. When needed to protect public safety, a temporary permit may be issued for a period not to exceed one hundred eighty days, and may be issued subject to terms and conditions the board deems necessary.
Then comes the sentence that matters. If the board determines a temporary permit was issued by mistake, or denies the application for a permanent license or registration, the temporary license or registration shall terminate upon either personal service of the notice of termination on the permitholder, or service by certified mail with return receipt requested at the permitholder's address of record, whichever comes first.
And the section forecloses the argument a holder might otherwise make. Neither for purposes of retaining a temporary permit nor for purposes of any disciplinary or license denial proceeding before the board shall the temporary permitholder be deemed to have a vested property right or interest in the permit.
A separate subdivision covers a mobile pharmacy, and the conditions are narrow enough to show what the provision is for. The board may allow the temporary use of a mobile pharmacy when a pharmacy is destroyed or damaged and the mobile pharmacy is necessary to protect public health and safety, provided the mobile pharmacy provides services only on or immediately contiguous to the site of the damaged pharmacy, is under the control and management of the pharmacist-in-charge of the destroyed or damaged pharmacy, has a licensed pharmacist on the premises while drugs are being dispensed, takes reasonable security measures, provides the board with records of the damage and an expected restoration date, notifies the board within three calendar days of restoration, and is not operated for more than forty-eight hours following that restoration. It is a disaster provision, not a delivery model.
Sterile compounding is a separate license in California
A pharmacy license under section 4110 does not carry an entitlement to make everything. California Business and Professions Code section 4127 states that a pharmacy that compounds sterile drug products shall possess a sterile compounding pharmacy license as provided in that article.
The same section directs the board to adopt regulations under the state's Administrative Procedure Act to establish policies, guidelines, and procedures implementing the article, and requires the board to review any formal revision to General Chapter 797 of the United States Pharmacopeia and The National Formulary, relating to the compounding of sterile preparations, not later than ninety days after the revision becomes official, to determine whether amendments to those regulations are necessary.
That ninety-day review clause is a small but revealing piece of drafting. It ties a state license to a standard written by a private compendial body and obliges the state board to keep looking at it.
For a reader assessing an injectable product, the practical consequence is that being a licensed pharmacy in California and being licensed to compound sterile preparations in California are two separate statements. A company that is accurate about the first has said nothing about the second.
Shipping in from outside is its own license, in both states read here
Both states create a distinct category for a pharmacy that sits elsewhere and mails in.
California Business and Professions Code section 4112 defines any pharmacy located outside the state that is involved in the preparation, dispensing, shipping, mailing, or delivery, in any manner, of controlled substances, dangerous drugs, or dangerous devices into California as a nonresident pharmacy, and provides that a person shall not act as a nonresident pharmacy unless the person has obtained a license from the board. The section adds that the board may register a nonresident pharmacy that is organized as a limited liability company in the state in which it is licensed, and that the registration requirements apply only to a nonresident pharmacy that ships pursuant to a prescription. The board may inspect a nonresident pharmacy it has licensed, and the nonresident pharmacy must deposit a reasonable amount to cover the board's estimated reasonable costs of that inspection.
Washington's RCW 18.64.360 defines a nonresident pharmacy as any pharmacy located outside Washington that ships, mails, or delivers, in any manner, except when delivered in person to an individual, controlled substances, legend drugs, or devices into the state, and requires it to be licensed by the department of health. The section states that the license fee shall not exceed the fee charged to a pharmacy located in Washington, and permits the commission to grant an exemption from licensing upon application by an out-of-state pharmacy that restricts its dispensing activity in Washington to isolated transactions.
The isolated-transaction exemption is discretionary and application-based in the Washington text. It is not a threshold a business crosses automatically.
The licenses for companies that never dispense to a patient
The most commonly missed part of a state pharmacy code is that it licenses businesses that no consumer ever speaks to.
California Business and Professions Code section 4160 provides that a person shall not act as a wholesaler or third-party logistics provider of any dangerous drug or dangerous device unless he or she has obtained a license from the board. As with a pharmacy, a separate license is required for each place of business owned or operated, each place of business may only be issued a single license subject to a stated exception, and each license shall be renewed annually and shall not be transferable.
The staffing requirement in that section is continuous. At all times during which a place of business is open for business, at least one designated representative, in the case of a wholesaler, or designated representative-3PL in the case of a third-party logistics provider, shall be present. Every wholesaler shall be supervised or managed by a designated representative-in-charge, who shall be responsible for the wholesaler's compliance with state and federal laws governing wholesalers, and the board shall not issue or renew a wholesaler license without identification of an approved designated representative-in-charge.
The section permits a wholesaler and a third-party logistics provider under common ownership to be licensed at the same place of business only if a list of conditions is satisfied, including that each separately maintains the required records, that drugs owned by the wholesaler are not commingled with drugs handled by the logistics provider, that the same individual does not concurrently serve as the responsible manager for one and the designated representative-in-charge for the other, and that the logistics provider does not handle prescription drugs or devices owned by a prescriber.
Section 4161 extends the same architecture across the state line. A person located outside California that ships, sells, mails, warehouses, distributes, or delivers dangerous drugs or devices into California, or that sells, brokers, warehouses, or distributes them within California, is a nonresident wholesaler or a nonresident third-party logistics provider and shall be licensed by the board before doing any of those things. A separate license is required for each place of business from or through which those activities occur, and the applicant must report its agent for service of process in California, its principal corporate officers, its general partners, and — if it is neither a corporation nor a partnership — its owners, both at application and within thirty days of a change.
Washington licenses manufacturing separately again. RCW 18.64.045 requires the owner of each and every place of business which manufactures drugs to pay a license fee and to receive a license of location from the department entitling the owner to manufacture drugs at the location specified, to file a declaration of ownership and location, to notify the department immediately of any change of location or ownership, and to keep the license properly exhibited at the place of business. Failure to conform with the section is a misdemeanor, and each day that the failure continues is a separate offense.
Put together, the codes of these two states license the building where a prescription is filled, the building where a sterile preparation is made, the out-of-state building that mails in, the building that stores or brokers drugs it never dispenses, and the building that manufactures them. A single sentence on a website saying a company is licensed does not say which of those it means.
Sources
- California Business and Professions Code section 4110 — pharmacy licenseThe requirement of a board license to conduct a pharmacy; one license per pharmacy owned or operated and a separate license for each premises; annual renewal and the board's power to set transfer circumstances by regulation; the renewal condition requiring notification about compounding practices including preparations distributed outside the state; the temporary permit, its one hundred eighty day maximum, its termination on service of notice, and the statement that the holder has no vested property right; and the mobile pharmacy conditions including the contiguous-site limit, pharmacist-in-charge control, three calendar day restoration notice and forty-eight hour operating limit after restoration.
- California Business and Professions Code section 4112 — nonresident pharmaciesThe definition of a nonresident pharmacy by act of shipping into California; the licensing requirement; the provision permitting registration of a nonresident pharmacy organized as a limited liability company in its home state; the limitation of the registration requirement to shipments pursuant to a prescription; and the board's inspection power together with the deposit toward the board's estimated reasonable inspection costs.
- California Business and Professions Code section 4127 — sterile compounding pharmacy licenseThe requirement that a pharmacy which compounds sterile drug products possess a sterile compounding pharmacy license, the direction to adopt implementing regulations, and the ninety-day review obligation following a formal revision to the cited United States Pharmacopeia chapter on sterile preparations.
- California Business and Professions Code section 4160 — wholesalers and third-party logistics providersThe license requirement for acting as a wholesaler or third-party logistics provider; the separate license per place of business, annual renewal and non-transferability; the requirement that a designated representative or designated representative-3PL be present at all times the place of business is open; the designated representative-in-charge requirement and the bar on issuing or renewing a wholesaler license without an approved one; and the conditions permitting a commonly owned wholesaler and third-party logistics provider to be licensed at the same place of business.
- California Business and Professions Code section 4161 — nonresident wholesalers and nonresident third-party logistics providersThe definition of a nonresident wholesaler and nonresident third-party logistics provider by shipping into or distributing within California; the requirement to be licensed before doing so; the separate license for each place of business from or through which those activities occur; and the reporting of agent for service of process, principal corporate officers, general partners and owners at application, at renewal, and within thirty days of a change.
- Revised Code of Washington 18.64.045 — Manufacturer's licenseThe requirement that the owner of each place of business which manufactures drugs obtain a license of location entitling manufacture at the specified location, file a declaration of ownership and location, notify the department immediately of any change of location or ownership, keep the license exhibited, and the provision that failure to conform is a misdemeanor with each day a separate offense.
- Revised Code of Washington 18.64.360 — Nonresident pharmaciesThe Washington definition of a nonresident pharmacy and the requirement that it be licensed by the department of health; the provision that the license fee shall not exceed the fee charged to an in-state pharmacy; and the commission's discretion to grant an exemption on application by an out-of-state pharmacy restricting its Washington dispensing to isolated transactions.
Frequently asked questions
Is a pharmacy license issued to a company or to a location?
In California, to a location. Business and Professions Code section 4110 states that a license shall be required for each pharmacy owned or operated by a specific person, and that a separate license shall be required for each of the premises of any person operating a pharmacy in more than one location. The license is renewed annually and the board may set by regulation the circumstances in which it may be transferred.
Does a California pharmacy license cover sterile compounding?
No. Business and Professions Code section 4127 states that a pharmacy that compounds sterile drug products shall possess a sterile compounding pharmacy license as provided in that article. Holding a pharmacy license under section 4110 and holding a sterile compounding license are two separate statements about a business.
What does California ask a pharmacy at renewal time?
Section 4110 states that the license shall not be renewed unless the applicant includes necessary matters identified by the board in the renewal application, including but not limited to notification to the board regarding compounding practices, including compounded human drug preparations distributed outside of the state. Renewal is therefore also a disclosure event about compounding.
Do companies that only store or ship drugs need a state license?
In California, yes. Business and Professions Code section 4160 requires a license from the board before a person may act as a wholesaler or third-party logistics provider of any dangerous drug or device, with a separate license for each place of business, annual renewal, and no transfer. Section 4161 applies the same requirement to a nonresident wholesaler or nonresident third-party logistics provider shipping into or distributing within California.
What is a designated representative-in-charge?
In California, the individual responsible for a wholesaler's compliance with state and federal laws governing wholesalers. Section 4160 requires every wholesaler to be supervised or managed by one, requires that person to be identified and approved by the board, requires them to hold an active designated representative license at all times while serving, and states that the board shall not issue or renew a wholesaler license without an approved designated representative-in-charge.
Can an out-of-state pharmacy avoid a Washington license for occasional orders?
RCW 18.64.360 states that the commission may grant an exemption from licensing upon application by an out-of-state pharmacy that restricts its dispensing activity in Washington to isolated transactions. That is a discretionary exemption granted on application, not an automatic threshold, and the section is otherwise unqualified in requiring a nonresident pharmacy shipping prescriptions into Washington to be licensed by the department of health.