Like many states, Arizona requires that a non-resident manufacturer of prescription medical devices that sells or distributes its devices in Arizona, obtain a permit from the Arizona Board of Pharmacy. Arizona defines "manufacturer" to include virtual manufacturers.

On January 4, 2019, Arizona proposed regulations that are intended, according to the preamble to the proposed regulations, to require "the contracted manufacturing entity [i.e., the contract manufacturer for virtual manufacturers] to be Arizona-permitted." This means that medical device contract manufacturers would be required to obtain an Arizona permit if the manufacturer sells or distributes products into Arizona, even if the contract manufacturer with which they contract has no connection to that state. Arguably, the proposed regulations do not achieve this goal inasmuch as they simply amend the definition of virtual manufacturer such that a manufacturer who uses non-permitted contract manufacturers would not meet the definition of a virtual manufacturer, but still might be a manufacturer. However, we understand the Board is not only currently requiring adherence to the proposed regulation, but also is interpreting the proposed regulation to allow the Board to withhold permits from virtual manufacturers who sell or ship devices into Arizona, but use contract manufacturers that do not have an Arizona permit. 

Accordingly, virtual manufacturers who distribute in Arizona will now have to assess whether any contract manufactures with which they do business must also be permitted in Arizona.