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Two Labs Blog

What manufacturers need to know about Minnesota House Bill 400

Posted by Two Labs on July 30, 2019

We recently notified our clients and partners of several regulatory changes that will affect manufacturers and wholesalers doing business in Minnesota. In May 2019, Minnesota Governor Tim Walz signed House Bill 400, which created an Opioid Stewardship Advisory Council to confront the opioid addiction crisis and overdose epidemic.

Parts of the law are already in effect as of July 1, 2019, and more pieces of the bill will be felt within the next year, including significantly increased licensing application fees for all drug manufacturers and wholesalers, as well as new reporting requirements and registration fees for opioid manufacturers.

Below, we have summarized the new fees and requirements for manufacturers doing business in Minnesota, however the implications may vary by company.

To see exactly how these new regulations will impact your company and for help navigating the changes, contact our team of experts.

Application Fees for Non-Opioid Manufacturers & Wholesalers

On July 1, fees for non-opioid manufacturers and wholesalers increased from between $150-$325 to a flat fee of $5,260.

Requirements & Fees for Opioid-Based Controlled Substance Manufacturers & Wholesalers

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Annual Licensing Fees

Effective July 1, manufacturers of opioid-based controlled substances now face a $55,260 annual licensing fee. Regardless of how a product arrives in Minnesota or whether or not the manufacturer holds the product title when it arrives, the Minnesota Board of Pharmacy (MN BOP) states that the law applies to all manufacturers whose products end up in Minnesota.

If a company has multiple facilities that require a Minnesota license, it must pay the $55,260 annual licensing fee for the first facility, and then $5,260 for each additional facility. Distributing an opioid-based drug into Minnesota without the correct license can result in a civil penalty of up to $10,000 per violation, which can be defined as a single shipment of a single dose.

The state of Minnesota could also suspend or revoke licensing, prohibiting a manufacturer’s product from entering the state at all. Additionally, the manufacturer would be required to report the violation to every other state that it conducts business in, which may result in additional loss of state licenses.

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Registration Fee by Volume

There will also be an annual $250,000 registration fee for any manufacturer that sells, delivers or distributes at least 2 million units of an opioid into or within Minnesota. The MN BOP will notify manufacturers on April 1 of each year to inform them if they will be required to pay this fee. The first registration fee will be due June 1, 2020, for products sold in the 2019 calendar year.

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Required Distribution Reporting

Opioid manufacturers and wholesale distributors are now required to record and report every sale, delivery or other distribution within or into Minnesota, beginning with reporting all 2019 distributions by March 1, 2020. The penalty for failing to report sales by the March 1 deadline will be a $500 per day administrative fee.

Additionally, the bill created the Opioid Stewardship Account Fund to support prevention and treatment programs for opioid addiction and abuse. This fund will be financially supported by MN BOP, as well as federal aid and grants. Another provision to note is that Minnesota may drop the requirement that a Virtual Manufacturer must hold both a wholesale and manufacturer license, a rule that has been historically upheld in the state.


At Two Labs, keeping a pulse on these changes is at the core of our best-in-class service offering. We proactively monitor for changes in state regulations, government agency statue interpretations, and compliance requirements which affect manufacturers.

We work closely with our clients to not only update them on these changes, but to explain their impact on operations and provide detailed guidance on next steps.

Curious how these or other licensing changes might affect you? Not sure what action to take with your CMO? Click the button below to get in touch with our PharmaLicense expert team!

Contact our PharmaLicense Experts

Topics: PharmaLicense

New regulation requirements impacting your license

Posted by Two Labs on June 4, 2019

In the pharmaceutical industry, state licensing requirements can change at a moment’s notice. Though no central “hub” exists listing all licensing updates for each state, our team of experts works with state boards on a routine basis to track all license requirement updates.

Recently, we’ve notified our clients and partners of changes that affect virtual manufacturers specifically in Arizona, Vermont, and New Hampshire.

Government agencies in these states have implemented a new requirement that Contract Manufacturer Organizations (CMO) must hold their own license in these states. This is a prerequisite for virtual manufacturers to obtain a new and/or renew a current license in these states. Let us help you determine how these, or other licensing changes, affect you. 

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Arizona:

Effective in 2019, the Arizona Board of Pharmacy has amended their qualification requirements for Virtual Manufacturers. A CMO located in the United States must hold a Manufacturer License with the Arizona Board of Pharmacy. If a CMO is located outside of the country, they will be required to provide an unredacted FDA inspection report dated within the last 2 years.

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New Hampshire:

The New Hampshire Board of Pharmacy has recently moved to require licensure of all the following entities: “Virtual Manufacturers, Virtual Distributors, Contract Manufacturers (repackager/relabelers), and Brokers/Intermediaries.”

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Vermont:

Effective for 2019, the Vermont Board of Pharmacy moved to require licensure of all entities that are engaged in the “dispensing, delivery, or distribution of prescription drugs.” Specifically, the board is now requiring CMOs located in the United States to hold a VT license. If a CMO is located outside of the United States, VT now requires an unredacted FDA inspection report dated within the last 2 years.

At Two Labs, keeping a pulse on these changes is at the core of our best-in-class service offering. We proactively monitor for changes in state regulations, government agency statue interpretations, and compliance requirements which affect manufacturers.

We work closely with our clients to not only update them on these changes, but to explain their impact on operations and provide detailed guidance on next steps.

Curious how these or other licensing changes might affect you? Not sure what action to take with your CMO? Click the button below to get in touch with our PharmaLicense expert team!

Click Here to Schedule Time

or visit Two Labs Contact Us page.

 

Topics: PharmaLicense, Two Labs

How a Trade Commercialization Team Makes Licensing Easier

Posted by Two Labs on June 26, 2018

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Licensing is a required step in the pharma industry, and unfortunately, it can be incredibly complicated. The consequences for not carrying the correct license can range from fines to an immediate stop in sales to felony charges – and that’s just the beginning.

We covered the basics in an earlier post, but while a general knowledge of the ins and outs is helpful, you’ll need more than an overview to navigate the various license types, regulations and state-specific laws.

Thankfully, you don’t have to handle it all on your own. A trade commercialization team can help you avoid detrimental licensing mistakes and set your company up for success from the start. Some of the benefits a trade partner can bring to the table include:

An ear to the (ever-changing) ground.

State licensing requirements change a lot and they vary from state to state. To make things harder, there’s no formal voting or amendment process to declare these changes and no central “hub” where you can see all updates from each state. It’s easy to miss an important change if you’re tackling licensing on your own, and unfortunately, the state boards don’t accept “I didn’t know” as an excuse.

But that’s where your  consulting partner comes in. It’s their job to stay on top of all the changes and keep you informed of the ones that will – and might – affect you.

At Two Labs, our PharmaLicense team works with these state boards on a routine basis and track all license requirement updates. We’ve built relationships with key players in the industry to make sure we never miss a change.

Deep industry knowledge.

Even after you’ve managed to successfully get your initial licenses, there are a lot of outside factors that can affect compliance throughout the life of your company. Some are unexpected (see above), but your license can be impacted due to known, consistent factors as well. For example, if your company moves, gets acquired, goes public or goes through a host of other changes, you’ll need to reevaluate your compliance and update your license ASAP.

Again, not all states are the same, and what works for some doesn’t necessarily translate to others. To make the process smoother, you’ll need a partner with a far-reaching knowledge of all regulations and industry quirks. The right trade partner will not only understand the requirements for your state, but for all states. And they’ll understand the licensing ins and outs for your company in its current form, and as it evolves.

Big picture strategy.

Obtaining your state licenses is only one step in the process of launching your product. Looking at it in a silo can cause problems for your distribution down the road. Instead, a trade commercialization partner can look at your licensing as part of the larger whole, develop a strategy that gets it approved on time and make sure it aligns with your overall launch plan.

At Two Labs, we understand how to bring a product to market, and use that industry knowledge to guide our licensing strategies. We have the tools to help you before and after licensing, and can flag opportunities for your company as we work through the process.

For many companies, licensing tends to be an afterthought, but it can delay a launch or stop shipment all together. Instead of risking it, let us help! Our PharmaLicense experts are ready to dive into your overall commercial launch plan and get hands on with licensing. Below is a link you can click on to schedule time with James, one of our PharmaLicense experts! 

Click Here to Schedule Time

Topics: PharmaLicense

How DSCSA Changes the Licensing Landscape for Third-Party Logistics

Posted by Two Labs on January 10, 2018

The Drug Supply Chain Security Act (DSCSA), passed in November 2013, has become a buzzword in the pharma industry in the past few years, and will continue to be until the completion of the implementation in 2023.  DSCSA describes creating an electronic, inter operable system that stores transaction information and history of a drug from the time of manufacture to when it is dispensed to a patient.

The big license earthquake came when the FDA defined what a Third-Party Logistics (3PL) company should be.  Before the passage of DSCSA, 3PL companies could be licensed as a wholesaler. The Wholesale and 3PL business models are similar: both company types accept products from manufacturers into their warehouses and then distribute them to customers. However, there is one major difference: the 3PL does not own the products that they are distributing. 

Because the 3PL does not take ownership of the product, the FDA decided that the 3PL should have its own category and can no longer be licensed as a wholesaler. As Federal law supersedes any state requirement, all 305 Third-Party Logistics locations listed by the FDA had state licenses that were now considered nullified.  

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The big question is: How are the 3PLs able to continue to do business in a state when all their licenses are no longer valid? This is an issue plaguing the industry.  Even the National Association Boards of Pharmacy (NABP) has been trying to help clarify. Feel free to check out their November/December issue of their publication, Innovations, page 7 where NABP leads a discussion forum to provide guidance to the wholesale industry.

As of December 2017, there are only 14 states that have established a specific license for a 3PL. This means the 3PL may continue to do business in the other 36 states (in addition to Washington, D.C.) without the requirement of a license. The state legislatures must decide for themselves whether a state will require a 3PL to hold a license, what the requirements will be, costs, etc. That small number of 14 states will both continue to grow and continue to change the landscape of licensing for pharmaceutical distribution over the next few years as the states make these decisions

Which 14 States  Require a License?

Click on the button above or visit www.twolabs.com to learn more.

Topics: 3PL, PharmaLicense, DSCSA

The Basics of Licensing: In & Out, Drug, & Facility

Posted by Two Labs on January 5, 2018

When you conduct a quick online search using the following phrases, a vast array of answers will cross your screen:

  • "License a Drug or Facility"
  • "Pharma Licensing"
  • "How to start my own Pharma Company"

The results of these searches tend to center around licensing: in-licensing, out-licensing, drug licensing, and facility licensing. How does all of this relate to launching a drug? Here are the basics:

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In-Licensing

When you hear the term "in-licensing," simply think of the word "investor". In-licensing is the process of creating a contract that allows another firm to provide capital to the development and launch process, thus taking on financial responsibility. This is a very popular licensing process for small bio-pharma start-ups to get their drug off the ground. There are pros and cons to this type of licensing; for example, it can provide the capital a company needs, but then the profits need to be shared once the drug enters the market.

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Out-Licensing

Out-licensing is more focused on opening up the delivery pipeline to assist you with getting your drug "out the door." Out-licensing encompasses finding a partnership, or partnerships, that will help identify your target market and assist you in getting your product into the right hands. This process may include working with marketing firms or legal firms. The financial relationship is very different in this type of licensing than the one outlined in the in-licensing section above.

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Drug Licensing

Only one entity in the United States "licenses" a drug, and that is the Food and Drug Administration (FDA). The FDA must approve all drugs before they can enter the market, and consequently, FDA approval is paramount before the drug actually leaves your facility and heads to the patient.

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Facility Licensing

Facility licensing may entail more than you would initially expect. Of course, if you are manufacturing your own drug, your facility must be inspected and licensed by the FDA. However, the state where your facility is located may also require a license which may or may not include an inspection. In addition to your resident state, there are other states that have requirements for a license, certification to do business, or deliver drugs within their borders. Each business location must have its own set of licenses. A company with multiple facilities may end up with dozens of facility licenses and only have one drug.

Do you have all the licenses you need?

Let Two Labs  Conduct an Analysis

Or visit www.twolabs.com to learn more.

Topics: PharmaLicense

3 Entities That Can Change Your State Licensing Strategy

Posted by Two Labs on November 9, 2017
Pharmaceutical State Licensing ChangesIn the Pharmaceutical industry, licensing is never a static process. There are many changes that can alter your licensing strategy: 
 

1. Your Company

This one is pretty obvious. There are a number of different business changes that could direct the strategy of your licensing, or the maintenance of your state licenses. Some of the most common occurrences are: a change of business entity (i.e. LLC to INC), a change of officers, or moving. These are the more common instances, but there is a wide variety of scenarios that may affect your company's licensing strategy.  Remember, each state interprets business changes differently according to its own statutes.
 
Are you making any strategic business changes? Fill out this form and let us check to see if it will affect your Licensing.
Fill Out the Form Here

2. Contract Manufacturing Organization (CMO)

If your CMO moves, it might affect your state licensing more than you would expect. States are now asking for your CMO's license number on applications, and to provide a copy of the FDA's inspection report. If any pharmaceutical manufacturer opens a new facility, they have to go through the rigmarole of an FDA inspection all over again to get an updated license. This can adversely impact your licensing if the required states aren't updated with the change.
 

3. Third-Party Logistics Provider (3PL)

Similar to the CMO, if a 3PL changes locations or opens up a new location, this may alter your state licensing. The states vary on the requirement of a 3PL's license: several states allow a company to piggyback off of its 3PL's license, a handful require your 3PL's state license to be listed, and a few print the 3PL's location on your license. In each scenario, your 3PL's business activities may adversely change your state licensing strategy and the process of maintaining your state licensing.
 
If any of these situations sounds like something your company is faced with now or potentially in the future, contact the Two Labs PharmaLicense team and let us determine if your future plans will alter your licensing strategy.
 
Fill Out the Form Here
 
For more information about Two Labs, visit www.twolabs.com
 

Topics: 3PL, PharmaLicense

Consequences Pharmaceutical Companies Can Face for not Carrying the Correct State License and Being Noncompliant

Posted by Two Labs on October 20, 2017

Anyone who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, marketing, selling, shipping, repackaging, or labeling a prescription drug, or wholesale distribution of a prescription drug...must obtain a license/permit in certain states to be in compliance.

Discover the ins and outs of State Licensing

"But I didn't know!"

This is a response that is never accepted by a government agency for a pharmaceutical company's inaction to remain in compliance with state licensing.

In analyzing the costs of being compliant, remember these consequences for not carrying the correct state licenses and being noncompliant:

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  1. If you are found to be noncompliant by your resident state licensing board, you may have your business license suspended or revoked.

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  1. The state board, depending upon the infraction, may also impose civil penalties ranging from a flat fine (up to $250,000 in some states, such as North Carolina¹) to charging your company per violation or per day. At worst, there could be misdemeanor or felony criminal charges that include jail time.
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  1. Being punished by your resident state board may only be the beginning:
    1. Once you have come to a resolution with your resident state board, it must then be reported to all of the other state licensing boards.
    2. Your company could then go through the same board actions with other states you are licensed with, and incur more license revocations, fines, and criminal charges.

Once the dust settles from all of the boards, there is still one final hurdle to face: how will your company recover from license revocation?

Every state board application asks if your company was ever denied a license or faced disciplinary action. This could potentially prevent your company from continuing to do business without expensive alternate strategies.

As you can see, in the pharmaceutical industry, falling out of compliance with state boards can be very costly. Consequences can include anything from license suspension by multiple states, up to felony charges and time spent in jail. Is running your own company's risk for noncompliance worth it?

Let the state licensing experts at Two Labs help! To learn more about licensing and other important topics related to launching a pharmaceutical drug, subscribe to our blog below or request a free consultation from the Two Labs PharmaLicense experts.

Request a Free Consultation Today!

¹North Carolina Wholesale Prescription Drug Distributor Laws: Chapter 106 Article 12 A § 106-145.6.  Denial, revocation, and suspension of license; penalties for violations. http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_106/Article_12a.html

Topics: PharmaLicense