A Practical Roadmap for Transitioning State Licenses for Sales of Prescription Drugs and Devices in Corporate Transactions

Pharmaceutical companies, such as manufacturers, distributors, and pharmacies that dispense, distribute, and sell prescription drugs and devices are subject to state licensing and other regulatory requirements. Corporate transactions involving these companies, including mergers, acquisitions, changes of ownership, or even corporate restructurings, can trigger a requirement to transition or obtain new licenses on top of the many other corporate and tax matters that are also at play.

This article explores the licensing issues facing buyers and discusses the variations in state laws that affect change-of-ownership requirements. The analysis and guidance provided in this article applies to both regular state pharmaceutical licenses and state controlled substances licenses.

Buyers should note that controlled substances licenses are often handled by separate state agencies. This article also describes the risks of noncompliance with these licensing laws and provides a practical roadmap for addressing these issues in order to help avoid a disruption of business operations or state disciplinary action.