When is a distributor license required?

A distributor license is required when the distribution of prescription medications or controlled substances exceeds 5% of the total annual sales of the business. This threshold is established to ensure that entities engaged in significant distribution activities are properly licensed and adhere to regulations designed to prevent misuse and ensure safety in the distribution chain.

Maintaining this limit helps regulators monitor and control the flow of medications, contributing to public health and safety. Businesses that stay within the 5% guideline are generally considered to be engaging in minor distribution activities and may not be subject to the same stringent licensing requirements as larger distributors. Thus, understanding the specific thresholds for distribution is crucial for compliance with state and federal regulations and to avoid potential legal issues.