In a new article published by the American Bar Association in its Business Law Today November 2016 issue, Hyman, Phelps & McNamara, P.C.’s Andrew J. Hull discusses the state licensing issues present in corporate transactions involving pharmaceutical companies. In the article, entitled “A Practical Roadmap for Transitioning State Licenses for Sales of Prescription Drugs and Devices in Corporate Transactions,” Mr. Hull writes:
Pharmaceutical companies, such as manufacturers, distributors, and pharmacies that dispense, distribute, and sell prescription drugs and devices are subject to state licensing and other regulatory requirements. Corporate transactions involving these companies, including mergers, acquisitions, changes of ownership, or even corporate restructurings, can trigger a requirement to transition or obtain new licenses on top of the many other corporate and tax matters that are also at play. Moreover, there are many traps for the unwary for failure to follow the state requirements on transitioning these licenses that can delay a corporate transaction or result in potential suspension of authority to conduct business.
Article at 1.
The article discusses the numerous pitfalls a buyer can face without paying careful attention to these state licensing requirements or allowing an appropriate amount of time to effect a successful change of ownership. The article also provides a practical roadmap for transitioning these state licenses in order to help ensure continuity of business operations.
The article concludes:
Navigating any form of corporate transaction is time-consuming and requires detailed work. The added detail in transactions involving pharmaceutical companies of ensuring appropriate state licensure adds yet another level of nuance and difficulty. This roadmap provides buyers and their corporate counsel with some of the information needed to ensure that these regulatory details do not present an issue after closing.
Id. at 5.