LS&HC Horizons 2023 - Flipbook - Page 71
Hogan Lovells | 2023 Life Sciences and Health Care Horizons | United States
State licensing requirements: what medical device manufacturers
need to know
Medical device manufacturers and distributors
are subject to complex and varied state
licensing requirements. Over half of U.S. states
require some type of licensure to distribute
prescription medical devices and each state
has a unique array of statutes, regulations
and board policies.
Whether a state license is required can
turn on any number of variables, such as:
Rx/OTC; distribution of another
manufacturer’s product; shipping and selling
activities; drug components; locations
of facilities, warehouses, offices, or sales
representatives; using a third-party logistics
(3PL) provider; or consideration as a “virtual”
manufacturer or distributor.
States have many options to enforce licensing
requirements, including suspending, revoking
or denying licenses; embargo and destruction
of offending devices; cease and desist orders;
consent decrees; civil fines; and imprisonment.
In our experience, states will generally work
with the company to cure a deficiency before
pursuing more drastic remedies but, when
there is unlicensed distribution activity,
penalties should still be expected.
Given increasing state enforcement, it behooves
manufacturers and distributors to invest in
their licensing compliance. Hogan Lovells can
help identify where your operational model
triggers license requirements and even help
you obtain the necessary licenses.
Because of this complexity, along with
inconsistent enforcement, many device
manufacturers have been lax in their licensing
compliance. We have, however, observed a
growing number of state enforcement actions
and, because most states regulate device
distribution under the same scheme as drugs,
this may increase if device companies are swept
up in state efforts to comply with the recently
promulgated Drug Supply Chain Security
Act (DSCSA).
Jodi Scott
Partner, Denver
Wil Henderson
Senior Associate, Denver
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