Pharmaceutical Outsourcing Facility License

The Drug Quality and Security Act of 2013 allows compounding pharmacies to become pharmaceutical outsourcing facilities. Learn about business registration and licensing for them in all 50 states.

A compounding pharmacy is a unique facility where medications are specially mixed based on a prescriber's instructions, and formulated for an individual patient. In 2013, the Drug Quality and Security Act (DQSA) was passed, implementing regulations that created standards around bulk-ordered medications. Additionally, a new section was added to the existing Federal Food, Drug, and Cosmetic (FD&C) Act called Section 503B. This law helps control the quality and safety requirements where compounding pharmacies manufacture bulk medication.

Pharmaceutical outsourcing facilities, also known as 503B outsourcing facilities, produce large batches of sterile products, with or without a prescription. Healthcare facilities then procure these drugs for patient use. Pharmaceutical outsourcing facilities, which are subject to oversight from the Food and Drug Administration (FDA), allow pharmacists to contribute to a safe and reliable drug supply chain infrastructure in the United States.

Starting or Expanding a Pharmaceutical Outsourcing Facility

To sign up as a 503B outsourcing facility, drug compounders need to register with the FDA. They must provide relevant information, such as the products they intend to compound and if they intend to compound in bulk. This registration must be renewed annually. Following registration, the FDA completes an inspection of the facility to ensure that the required standards for 503B outsourcing facilities are met.Subsequent inspections of the facilities take place regularly. In addition to the registration process, pharmaceutical outsourcing facilities are required by the federal government to do the following:

• Comply with Current Good Manufacturing Practices (CGMP)
• Undergo inspections by FDA on a risk-based schedule
• Meet other conditions, including reporting adverse events and providing FDA with information about compounded products

State registration is also required. The exact process business owners undergo depends on their state’s requirements. In general, they will go through the following steps:

• Learn the state's business registration and licensing requirements.
• Decide on a business name and entity structure.
• Apply for a federal tax identification number from the Internal Revenue Service and register with the Secretary of State.
• Research license and registration renewal requirements and prepare to keep the business compliant.

Businesses also need to appoint a registered agent to receive notices of lawsuits and other legal or government notices.

Obtaining a Pharmaceutical Outsourcing Facility License

Licensing requirements for pharmaceutical outsourcing facilities vary by state. It is essential to verify the process in your state to ensure you are prepared every step of the way. Becoming a pharmaceutical outsourcing facility typically starts with obtaining a permit or license.

To apply, you will likely need to gather all relevant documentation, including financial statements, proof of a commercial activity license, a business plan, and more. The pharmaceutical facility will submit a letter of licensure verification for their physical location and facility. In addition to federal inspections, state inspections may also be required.

Meeting the pharmaceutical outsourcing facility license requirements is not always an easy process. Fortunately, the Harbor Compliance License Manager helps firms maintain their licenses by automating repetitive tasks such as tracking renewals. Through License Manager, you can also access Compliance Core™ – our extensive licensing database – to research the requirements in the states where you operate.

Maintenance and Renewal

There are several steps businesses need to take to ensure they continue to comply with state and federal laws. License renewal often happens on an annual or biennial basis. For example, the FDA requires pharmaceutical outsourcing facilities to renew their federal registration every year.

Keeping on track with your business' license renewals can be complicated, especially as a growing company. At Harbor Compliance, we offer a range of software and managed services that assist firms with annual licensing and other business lifecycle compliance needs, such as annual reporting and registered agent services. We help clients accurately track due dates and filing requirements so that your business will continue to be compliant with state and local requirements. Plus, you will have the time to continue working and expanding your clientele.

If you are looking for software to manage licensing tasks or want to outsource your license maintenance and business compliance duties, Harbor Compliance can help. We are available to review your business status, ensure you are in good standing in the states where you operate, and explain the steps to ensure you remain compliant with state and federal regulations. Contact our licensing specialists today to learn more.

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