Pharmacy Bonds

What Is a Pharmacy Bond?

A pharmacy bond is a type of license and permit surety bond that aims to prevent businesses from mismanaging drug shipments and sales. It provides several benefits to consumers, including:

• Protects the pharmacies a wholesaler does business with
• Ensures that drug wholesalers adhere to federal and state laws 
• Acts as a deterrent to pharmaceutical distributors who might try to dodge laws and statutes 
• Ensures Medicare beneficiaries receive reasonably priced products and services from legitimate suppliers

This page is a guide to surety bonds for pharmacy wholesalers. View our DMEPOS Medicare Bond Guide if that better suits your needs. 

Bond Requirements for Pharmaceutical Wholesalers 

Businesses distributing or transacting drugs and medical equipment to wholesalers, pharmacies or practitioners must file a surety bond before becoming licensed in certain states. Pharmacy bond requirements vary greatly because the bond amounts and licensing regulations are established at the state level.

For example, Wisconsin requires a $5,000 pharmacy bond while Arizona requires a $100,000 pharmacy bond. However, $100,000 is the standard bond amount in the majority of states. 

How Much Do Pharmacy Surety Bonds Cost?

Pharmacy bond costs are typically 1–5% of the total bond amount. That means highly qualified applicants could pay just $1,000 for a $100,000 pharma surety bond, while others may pay $2,000–$5,000.

When you work with SuretyBonds.com, we’ll shop your bond with the surety industry’s top underwriters to find you the best rate available. Select your state below and get a quote on wholesale pharmaceutical bonds in your area:

How to Get a Pharmacy Bond

SuretyBonds.com provides the fastest and easiest way to obtain a pharmacy surety bond. Simply follow these four steps: 

1. Contact your state agency to determine the bond coverage you need
2. Apply online at SuretyBonds.com
3. Pay your invoice online or via phone
4. Receive your bond form and file it with the obligee

How Do Wholesale Pharmacy Bonds Work?

Each pharmacy surety bond binds three entities into a legal contract:

1. Principal: The pharmacy business purchasing the bond as a guarantee of lawful business operations
2. Obligee: The government agency requiring the bond to reinforce industry regulations
3. Surety: The insurance provider issuing the bond and backing the principal

The financial protection pharmacy bonds provide can pay penalties imposed by a government agency. If a distributor has unpaid fines, the government agency can file a claim to collect them. The surety will pay up to the bond’s full amount and require the pharmacy wholesaler to reimburse it.

Which Pharma Distributors Need to Be Bonded?

Most pharmacy wholesale distributors need to be licensed and bonded, but there are a couple of exceptions:

• Licensed manufacturers only dispensing drugs they manufacture might not need a bond as a part of the licensing process.
• Pharmacy warehouses typically only need to be bonded if they are engaged in wholesale distribution.

To determine whether your business needs a bond, contact the government agency regulating pharmacy licensing in your state.