Licensed and Bonded
A wholesale drug distributor delivers prescription medication from the drug manufacturer to pharmacies. Unfortunately, counterfeit and expired drugs can enter the market with the potential to harm patients. Health care practitioners and pharmacists must take care to ensure the medicines they give patients are safe and FDA-approved.
It’s important to verify that all prescription drug distributors are properly licensed or permitted. This can include background checks, fingerprinting, and a surety bond requirement. If a surety bond is required, a surety bond underwriter researches the distributor to determine their financial risk, which can include examining their business and personal financial statements, credit history, business experience, and performing a criminal background check.
When pharmacists know that their distributor is bonded, they know that the distributor must work honestly and ethically, or a claim could be made on their bond. A distributor who is not bonded does not carry that same protection.
States that require wholesale prescription drug distributors to obtain a surety bond include:
- Arizona: Full-service wholesalers and Non-resident full-service wholesalers – $100,000 bond
- California: Prescription drug wholesaler or nonresident wholesaler- $100,000 bond. If the annual gross receipts are $10 million or less in the previous tax year, then a $25,000 surety bond is acceptable.
- California: Third-Party Logistics Provider or Nonresident third-party logistics provider- $90,000 bond. If the annual gross receipts are $10 million or less in the previous tax year, then a $25,000 surety bond may be provided.
- Florida: Prescription drug wholesale distributor- $100,000 bond if gross tax receipts are over $10 million. If the gross receipts for the previous tax year was $10 million or less, then a $25,000 bond is required.
- Indiana: Wholesale drug distributor- $100,000 bond
- Iowa: Wholesale distributor- $100,000 bond, unless the distributor’s annual gross receipts from the previous tax year are less than $10 million, in which case the bond amount is $25,000
- Maryland: Prescription drug whole sale distributor- $100,000 bond for annual gross receipts of $10 million or more, and $50,000 for annual gross receipts less than $10 million
- Nebraska: Wholesale prescription drug distributor- $100,000 bond
- Nevada: Pharmaceutical wholesaler- $100,000 bond
- Oregon: Wholesale Drug Distributor- $100,000 bond
- Wisconsin: Wholesale distributor of prescription drugs- $5,000 bond
How Much Does a Surety Bond Cost?
Bond amounts for drug distributors can vary from state to state, but most are $100,000. The premium a distributor pays is based on various factors such as the bond amount and the distributor’s credit. SuretyGroup.com‘s rates start at 1% of the bond amount with good credit.
Surety Bonds must be purchased from a surety agency that is licensed to do business in the distributor’s state. SuretyGroup.com fulfills that requirement, as we are licensed in all 50 states. Contact our Surety Bond Specialists for a free quote that fits your specific situation.
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