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Mississippi Board of Pharmacy bonds are categorized as a type of license and permit bond because purchasing one is a prerequisite for being issued a drug facility permit.
The bond is a business owner’s pledge to operate in compliance with the Drug Supply Chain Security Act (DSCSA) and applicable requirements of the Food and Drug Administration (FDA).Failure to do so can result in claims being filed against the bond.
Who Needs Them?
The Mississippi Board of Pharmacy (MBP) issues five different types of drug facility permits, and all of them require the purchase of a Board of an MBP surety bond:
Third-Party Logistics permit
Wholesale Drug Distributor permit
Be sure to research MBP drug facility permit requirements and how to apply for a new or renewal permit.
The required bond amount varies:
For a business with annual gross receipts of $10,000 or lessfrom the prior tax year, the required bond amount is $25,000
For businesses with prior year gross receipts in excess of $10,000, the required bond amount is $100,000
There must be an active Mississippi Board of Pharmacy bond in force at all times to avoid suspension or revocation of the facility’s permit.
How Do They Work?
The three parties to the legally binding MBP surety bond agreement are referred to as the obligee, the principal, and the surety:
The “obligee” is the party requiring the bond—the Mississippi Board of Pharmacy.
The “principal” required to purchase the bond is the owner of the drug facility.
The “surety” is the surety bond company that underwrites and issues the bond.
The principal is legally obligated to pay all claims against an MBP bond once the surety determines that the claim is legitimate. But unless the principal can pay the claim right away, the surety will pay it on the principal’s behalf, creating a debt that the principal must subsequently repay.
What Do They Cost?
The surety’s main concern in determining the premium rate for a given bond applicant is the risk of not being repaid for claims. The underwriters will consider the principal’s personal credit score, financial circumstances, and industry experience, which is a good predictor of the likelihood of claims.
With good credit, the premium rate can be as low as 1% to 3%, which means that a $100,000 Mississippi Board of Pharmacy bond could cost as little as $1,000 to $3,000. A less qualified principal will be assigned a substantially higher premium rate.
Get Bonded Today
Request a convenient online quote today, or discuss your Mississippi Board of Pharmacy surety bond needs with one of our experienced surety bond specialists.
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