A Useful Guide to Pharmacy Bonds

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What are pharmacy bonds?

Pharmacy bonds are license and permit bonds that hold wholesale distributors to pharmacies accountable by ensuring they don’t mismanage product sales or shipments. The bond may go by other names in your state, such as pharmacy wholesaler bond or wholesale drug distributor bond.

Businesses that act as wholesale distributors of drugs (prescription and non-prescription) or medical equipment may need to post this bond. It is often a required step in the application process to become licensed to operate in-state legally.

Pharmacy bonds guarantee that wholesale distributors pay fees, costs, and penalties as required. It also protects pharmacies by holding wholesalers accountable to industry laws and regulations.

If you plan to operate in one of these states, you may need a pharmacy bond:

  • Arizona
  • California
  • Florida
  • Iowa
  • Indiana
  • Nebraska
  • Nevada
  • North Dakota
  • Oregon
  • Maryland
  • Mississippi
  • South Dakota
  • Texas
  • Wisconsin
  • Wyoming

Note: If you’re looking for information on Medicare DMEPOS bonds for your pharmacy, check out our DMEPOS Surety Bond Guide.

Get Your Pharmacy Bond:

Quick Takeaways

  • Pharmacy bonds hold wholesale drug and medical equipment distributors accountable by ensuring they don’t mismanage product sales or shipments.
  • This bond guarantees that wholesale distributors pay fees, costs, and penalties as required.
  • Check with your state governing authority to determine if you need this bond and in what amount.

How do pharmacy bonds work?

Pharmacy bonds are contracts between three parties:

  1. Principal: The business (wholesale distributor)
  2. Obligee: The state governing authority that oversees the distributor and requires it to post a bond (often the state’s Board of Pharmacy)
  3. Surety: The company that underwrites and backs the bond

The surety contract guarantees that the wholesale distributor follows the requirements set by the government agency – or pays the consequences if they don’t. If the distributor violates the bond agreement, the governing agency may file a claim (up to the full bond amount) for compensation. The surety may cover the costs initially, but the principal must repay them in full.

How much do pharmacy bonds cost?

Pharmacy wholesaler bonds can vary in cost depending on each state’s requirements. You will pay a small percentage of the total bond amount, which may be around $100,000. Your rate (bond premium) will depend on several factors, including your credit score and financial situation. If you have excellent credit, you might pay as low as 1% of the bond, which may be around $100.

Is my business exempt from needing a pharmacy bond?

Here are a couple of cases where your pharmacy wholesale business may not require a bond to operate. Check with your state governing authority to know for sure.

  • Your pharmacy warehouse doesn’t engage in wholesale distribution.
  • You only dispense drugs that your business manufactures.

Get Your Pharmacy Bond Today

ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply today online or call us at 888.435.4191 to speak with an agent directly.

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About ZipBonds.com

Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”

Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.