25 Tex. Admin. Code § 229.252 – Licensing Fee and Procedures

(a) License fee.
1. (1) All wholesale distributors of drugs in Texas who do not manufacture drugs in Texas must obtain a license and pay a fee. All fees are nonrefundable. Licenses are issued for one or two years as determined by the department. The license fees are based on gross annual sales as follows:
  1. (A) Distributors of compressed medical gases only (no transfilling operations) with gross annual drug sales of $0 - $20,000:
    1. (i) $250 for a one-year license; or
    2. (ii) $500 for a two-year license.
  2. (B) Wholesale distributors with gross annual drug sales of $0 - $199,999.99:
    1. (i) $400 for a one-year license; or
    2. (ii) $800 for a two-year license.
  3. (C) Wholesale distributors with gross annual drug sales of $200,000 - $19,999,999.99:
    1. (i) $650 for a one-year license; or
    2. (ii) $1,300 for a two-year license.
  4. (D) Wholesale distributors with gross annual drug sales of $20 million; and over:
    1. (i) $850 for a one-year license; or
    2. (ii) $1,750 for a two-year license.
  5. (E) $0.00 per wholesale distributor engaged in the distribution of an over-the-counter drug by a charitable organization, as described in the Internal Revenue Code of 1986, §501(c)(3), to a nonprofit affiliate of the organization to the extent otherwise permitted by law.
2. (2) A wholesale distributor of drugs who is not a manufacturer of drugs, who is required to be licensed under this section and who is also required to be licensed as a device distributor under §229.439(a)(1) of this title (relating to Licensure Fees) or as a food wholesaler under §229.182(a)(3) of this title (relating to Licensing Fee and Procedures) shall obtain a combined license and pay a combined licensing fee. All fees are nonrefundable. Combined licenses are issued for one or two-year terms as determined by the department. The licensing fee is based on the combined gross annual sales of these regulated products (foods, drugs, and/or devices) as follows:
  1. (A) For each place of business with combined gross annual sales of $0 - $199,999.99:
    1. (i) $200 for a one-year license; or
    2. (ii) $400 for a two-year license.
  2. (B) For each place of business with combined gross annual sales of $200,000 - $499,999.99:
    1. (i) $300 for a one-year license; or
    2. (ii) $600 for a two-year license.
  3. (C) For each place of business with combined gross annual sales of $500,000 - $999,999.99:
    1. (i) $400 for a one-year license; or
    2. (ii) $800 for a two-year license.
  4. (D) For each place of business with combined gross annual sales of $1 million - $9,999,999.99:
    1. (i) $500 for a one-year license; or
    2. (ii) 1,000 for a two-year license; and
  5. (E) For each place of business with combined gross annual sales of $10 million and over:
    1. (i) $750 for a one-year license; or
    2. (ii) $1,500 for a two-year license.
3. (3) All wholesale distributors of drugs who are manufacturers of drugs in Texas shall obtain a license and pay a fee. All fees are nonrefundable. Licenses are issued for one or two-year terms as determined by the department. The license fee is based on the combined gross annual drug product sales as follows:
  1. (A) wholesale distributors with gross annual drug product sales of $0 - $199,999.99 (includes a compressed and/or liquid medical gas transfiller):
    1. (i) $400 for a one-year license; or
    2. (ii) $800 for a two-year license.
  2. (B) wholesale distributors with gross annual drug product sales of $200,000 - $19,999,999.99:
    1. (i) $650 for a one-year license; or
    2. (ii) $1,300 for a two-year license; and
  3. (C) wholesale distributors with gross annual drug product sales of $20 million and over:
    1. (i) $850 for a one-year license; or
    2. (ii) $1,700 for a two-year license.
4. (4) All out-of-state wholesale distributors of drugs who distribute drugs into the State of Texas must obtain a license and pay a fee. All fees are nonrefundable. Licenses are issued for one or two-year terms as determined by the department. The license fee is based on the combined gross annual sales of drug products sold in Texas as follows:
  1. (A) For an out-of-state licensed wholesale distributor of drugs with gross annual drug sales in Texas of $20 million or over:
    1. (i) $750 for a one-year license; or
    2. (ii) $1,500 for a two-year license.
  2. (B) For an out-of-state licensed wholesale distributor of drugs with gross annual drug sales in Texas of less than $20 million (as documented by an outside auditor statement):
    1. (i) $500 for a one-year license; or
    2. (ii) $1,000 for a two-year license.
5. (5) If the United States Food and Drug Administration (FDA) determines that a product is a combination of a drug and a device, and that the primary mode of action of the product is as a drug, a person who engages in wholesale distribution of the product is subject to licensing as described in this section.
6. (6) For the purpose of collecting licensing fees under this section, a person that distributes both its own manufactured drugs and drugs it does not manufacture must obtain only a wholesale distributor of drugs (manufacturing) license. However, when calculating the amount of the licensing fee, the manufacturer must include the total for all drugs manufactured and distributed from the place of business. In addition, drug warehousing locations operated by a drug distributor, including locations from which drugs are held for limited periods of time for distribution, and which are totally separate from any manufacturing location, must be individually licensed as drug distributors.
7. (7) A firm that has more than one business location may request a one-time prorating of fees when applying for a license for each new location. Upon approval by the department, the license for the new location will have a renewal date that is the same as the firm's other licensed locations.
(b) License forms. Licensing forms may be obtained from the department, 1100 West 49th Street, Austin, Texas, 78756, or online at http://www.dshs.state.tx.us/license.shtm.
(c) License statement. The wholesale distributors' licensing statement shall be signed and verified by the owner, partner, president, or corporate designee, shall be made on the department furnished license form, and shall contain the following information:
1. (1) the legal name under which the business is conducted;
2. (2) the address of each place of business that is licensed;
3. (3) if a proprietorship, the name and residence address of the proprietor; if a partnership, the names and residence addresses of all partners; if a corporation, the date and place of incorporation and name and address of its registered agent in the state; or if any other type of association, then the names of the principals of such association;
4. (4) the names and residence addresses and valid driver's license of those individuals in an actual administrative capacity which, in the case of proprietorship, shall be the managing proprietor; partnership, the managing partner; corporation, the officers and directors; or those in a managerial capacity in any other type of association;
5. (5) for each place of business, the residence addresses of the individuals in charge thereof; and
6. (6) a list of categories which must be marked and adhered to in the determination and paying of the fee.
(d) Two or more places of business. If the wholesale distributor operates more than one place of business, the wholesale distributor shall license each place of business separately.
(e) Pre-licensing inspection. The applicant shall cooperate with any pre-licensing inspection by the department of the wholesale distributor's facilities. The department may accept reports from authorities in other jurisdictions to determine the extent of compliance with the minimum standards in this chapter for applicants located out-of-state.
(f) Issuance of license. In accordance with §229.281 of this title (relating to Processing License/Permit Applications Relating to Food and Drug Operations), the department may license a wholesale distributor of drugs who meets the requirements of these sections, and pays all fees in compliance with §229.252 of this title (relating to Licensing Fees and Procedures).
(g) License term. Unless the license is amended as provided in this section or revoked or suspended as provided in §229.254 of this title (relating to Refusal, Suspension, or Revocation of License), the license is valid for one or two years, as determined by the department.
(h) Renewal of license.
1. (1) The license application and nonrefundable licensing fees as outlined in subsections (a) and (b) of this section for each place of business must be submitted to the department prior to the expiration date of the current license. A person who files a renewal application after the expiration date shall pay an additional $100 as a delinquency fee.
2. (2) The department may renew the license for a one or two-year term as determined by the department if the licensee is in compliance with these sections and has paid all required fees, including any past due and delinquency fees.
3. (3) A person who fails to submit the renewal application and fees prior to the expiration date and continues to operate as a wholesale distributor of drugs may be subject to the enforcement provisions under Health and Safety Code, Chapter 431, and §229.254 of this title (relating to Refusal, Revocation, and Suspension of License).
  1. (A) Amendment of license. A license that is amended, including a change of name, ownership, or a notification of a change in the location of a licensed place of business required under the Health and Safety Code, §431.206, will require submission of fees as outlined in subsection (a) of this section.
  2. (B) Notification of change of location of place of business. Not fewer than 30 days in advance of the change, the licensee shall notify the commissioner of health or his successor or designee in writing of the licensee's intent to change the location of a licensed place of business. The notice shall include the address of the new location, and the name and residence address of the individual in charge of the business at the new location. Not more than 10 days after the completion of the change of location, the licensee shall notify the commissioner or his successor or designee in writing to verify the change of location, the address of the new location, and the name and residence of the individual in charge of the business at the new address. Notice will be deemed adequate if the licensee provides the intent and verification notices to the commissioner or his successor or designee by certified mail, return receipt requested, mailed to the department at 1100 West 49th Street, Austin, Texas, 78756.
(i) Exemption from licensing. Persons who engage in wholesale distribution of prescription drugs for use in humans are exempt from the licensing requirements of this subchapter, to the extent that it does not violate provisions of the Texas Dangerous Drug Act or the Texas Controlled Substances Act, the Health and Safety Code. The exemptions are:
1. (1) intracompany sales;
2. (2) the purchase or acquisition by a hospital or other health care entity that is a member of a group purchasing organization of a drug for its own use from the group purchasing organization or from other hospitals or health care entities that are members of such organizations;
3. (3) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug by a charitable organization, as described in the Internal Revenue Code of 1986, §501(c)(3), to a nonprofit affiliate of the organization to the extent otherwise permitted by law;
4. (4) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug among hospitals or other health care entities that are under common control. For the purpose of this subsection, "common control" means the power to direct or cause the direction of the management and policies of a person or an organization, whether by ownership of stock, voting rights, contract, or otherwise;
5. (5) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug for emergency medical reasons. For purposes of this section, "emergency medical reasons" includes transfers of prescription drugs by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage;
6. (6) the sale, purchase, or trade of a drug, an offer to sell, purchase, or trade a drug, or the dispensing of a drug pursuant to a prescription;
7. (7) the distribution of drug samples by manufacturers' representatives or distributors' representatives; or
8. (8) the sale, purchase, or trade of blood and blood components intended for transfusion.
(j) Sale of food, drugs, or devices. The provisions of this section regarding the sale of food, drugs, or devices includes the manufacture, production, processing, packaging, exposure, offer, possession, and holding of any such article for sale; and the sale, dispensing, and giving of any such article, and the supplying or applying of any such articles in the conduct of any food, drug or device place of business.
(k) Texas Online. Applicants may submit applications and renewal applications for a license under these sections electronically by the Internet through Texas Online at www.texasonline.state.tx.us. The department is authorized to collect fees, in amounts determined by the Texas Online Authority, to recover costs associated with application and renewal application processing through Texas Online.

Source Note:The provisions of this §229.252 adopted to be effective January 31, 1986, 11 TexReg 289; amended to be effective May 8, 1992, 17 TexReg 2997; amended to be effective February 15, 1993, 18 TexReg 661; amended to be effective July 20, 1993, 18 TexReg 4395; amended to be effective January 4, 1995, 19 TexReg 10234; amended to be effective March 12, 1997, 22 TexReg 2435; amended to be effective March 19, 2000, 25 TexReg 2071; amended to be effective July 7, 2002, 27 TexReg 5792; amended to be effective January 1, 2005, 29 TexReg 11981.