By: Frank Fazio
Any manufacturer or private label distributor that utilizes a contract manufacturing organization (CMO) can share horror stories about the year-end renewal of the Maryland distribution license. Prior to the December 31, 2010 renewal deadline, the board determined that only facilities that physically manufactured product and had an FDA Establishment Registration could utilize the abbreviated form for manufacturers. Any entity that utilized a CMO would now have to complete the more onerous wholesaler application. Suddenly, NDA/ANDA holders and private label distributors had to scramble to obtain fingerprints and background checks of senior corporate officers while attempting to secure surety bonds. If they were not located in one of a handful of specified states they were told they needed VAWD certification from the National Association of Boards of Pharmacy (“NABP”), notwithstanding the fact that the NABP will not certify the corporate offices of a company that does not store or warehouse drugs.
We had numerous communications with the board over the past six months in an effort to reconcile the inconsistencies in their position. The board’s FAQs attempted to explain who could file the manufacturer application and defined manufacturer to include preparing, propagating and labeling. Contrary to its adoption of the customary definition, they then restricted use of the short form to only those entities that physically manufacture.
Virtual manufacturers, whether private label, or the NDA/ANDA holder whose name and NDC number are on the product label are both the labeler and propagator of those products. Although Maryland does not define propagate, Florida, which arguably has the most stringent licensing requirements, defines propagation to specifically include private label distributors.
In a communication from the board dated June 21, 2011, the Maryland board relented and potentially loosened the requirements for companies utilizing a CMO. The board noted that virtual, own-label, and private label manufacturers may again qualify for the short form manufacturer application. A company without an FDA establishment registration should be prepared to provide both proof that it owns the NDC number for the products and a copy of the CMO contract. It appears that decisions will be made by the board on a case-by-case basis.
Although Maryland’s new position is qualified, we believe that many of the companies that had to obtain surety and fingerprints for this renewal period will likely return to the prior short form application for the next renewal period. Those tasked with managing renewals can breathe a sigh of relief knowing that they won’t have to haul the company president down to his local law enforcement agency for fingerprints in the middle of the Holiday season and will not have to renew surety bonds or letters of credit. We expect that the Maryland board will either revise their regulations to capture the change, or post clarifying information on their web site.