Pharmacy Bond
In at least 15 different states, wholesalers involved with pharmaceutical drugs and in some cases medical equipment must obtain a pharmacy bond as part of the routine licensure requirements. If this requirement applies to your organization, read on.
What is a Pharmacy Bond?
These bonds exist to ensure that pharmacy wholesalers pay all fees and administrative costs owed to the state governing bodies that regulate drug distribution. The wholesaler must obtain the bond as part of the licensing process. If the wholesaler fails to adhere to applicable laws and regulations, the state may claim on the bond up to the penalty amount. States use bonds as a way to hold wholesalers accountable and, when necessary, recover funds.
How does a Pharmacy Bond work?
If a state agency determines that a wholesaler has violated the legal terms of the license, the agency may fine the wholesaler as a punitive action. If the wholesaler doesn't pay, the state agency can instead claim on the surety bond. The surety company that issued the bond will then investigate, and as long as the claim has merit, the surety company guarantees payment. When the surety settles a claim, however, the bonded party must pay that debt back with interest and fees added on. By making the claims process punitive, bonds help encourage pharmaceutical wholesalers to always conduct business in a manner acceptable to state laws and regulations.
Who should get a Pharmacy Bond?
Pharmacy wholesalers, in some but not all states, need to get a bond. The list of those states includes: Arizona, California, Florida, Iowa, Indiana, Nebraska, Nevada, North Dakota, Oregon, Maryland, Mississippi, South Dakota, Texas, Wisconsin, and Wyoming. It will be clear if you need a bond once you begin to pursue a state license. If so, seek out a bond immediately to avoid unnecessary delays in the licensure process. Viking Bond Service can get you a quote within 24 hours of receiving the completed application.
Who are the parties involved in a Pharmacy Bond?
Pharmacy bonds are just one category of surety bonds, which always involve three parties:
- Principal - The wholesaler required to obtain the bond, renew the bond as necessary, and settle any claims filed against the bond.
- Obligee - The state agency that outlines the bond requirement and has the right to file claims against the bond.
- Surety - The company that issues the pharmacy surety bond to the principal and steps in to settle any claims if the principal cannot - after which the principal must pay the surety back.
How much does a Pharmacy Bond cost?
In most states, pharmacy wholesalers require a bond worth $100,000, meaning the surety backing the bond agrees to settle claims up to that amount. The actual cost of the bond (called the premium) is a small percentage of the total bond amount. Pharmacy wholesalers may pay just a few thousand dollars to get a fully-compliant bond. The exact amount depends on the bond applicant's credit score, financial history, and business background. Higher-risk applicants should expect to pay more. Fortunately, thanks to the resources of a company like Viking Bond Service, they shouldn't expect to be denied just because of bad credit.
How are claims handled for Pharmacy Bond?
When the obligee (the state agency) submits a claim, the surety investigates the details thoroughly. If the claim is true and the principal continues to withhold payment, the surety settles the claim with the obligee, at which point the principal owes the surety the amount of the claim plus accrued interest and fees. As the bonded party, it's always less expensive to avoid claims.
How to get a Pharmacy Bond?
You can get a bond quote in as little as 24 hours by simply filling out a standard bond application and turning over any other documentation the surety company asks for. Once you have proof you're backed by pharmacy bond, there's one less obstacle between your organization and a professional license.
Viking Bond Service - Serving Pharmaceutical Wholesalers Nationwide
As a leading online surety serving people nationwide, there's no better place to pursue a bond than through Viking Bond Service. Get the process started by completing an online bond application at your own convenience. Or connect with one of our in-house bond experts first to ask questions and get more information. Reach out through the contact form on this page or by calling us at 1-888-278-7389.
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