FDA License to Operate in the Philippines: Who Needs One and How to Apply

The Food and Drug Administration (FDA) requires a license to operate (LTO) for establishments that manufacture, import, export, distribute, or sell health products in the Philippines. Under Republic Act No. 9711, it is prohibited to operate a drug, device, or in-vitro diagnostic reagent business; to manufacture, import, export, transfer, or distribute food, cosmetics, or household/urban hazardous substances; or to run a radiation or pest control establishment without the license to operate from the FDA. If your business handles any of these products, you must secure an LTO before commencing operations.

What an FDA License to Operate Means

Under Republic Act No. 9711, "licensing" is defined as the process of approval of an application to operate or establish an establishment prior to engaging in the manufacture, importation, exportation, sale, offer for sale, distribution, transfer, and, where applicable, the use, testing, promotion, advertisement, and/or sponsorship of health products.

An "authorization" is the permission embodied in a document granted by the FDA to a natural or juridical person who has submitted an application. It can take the form of a permit, a license, a certificate of registration, of accreditation, of compliance, or of exemption, or any similar document.

The LTO is distinct from product registration. Registration is the process of approval of an application to register health products before they may be manufactured, imported, exported, sold, offered for sale, distributed, or transferred.

Who Needs an FDA License to Operate

The FDA's licensing requirement covers establishments across several product categories. Under Republic Act No. 9711, an "establishment" means a sole proprietorship, a partnership, a corporation, an institution, an association, or an organization engaged in the manufacture, importation, exportation, sale, offer for sale, distribution, donation, transfer, use, testing, promotion, advertising, or sponsorship of health products, including the facilities and installations needed for its activities.

The law identifies specific establishment types:

• Manufacturer — an establishment engaged in production operations including preparation, processing, compounding, formulating, filling, packing, repacking, altering, ornamenting, finishing, and labeling, with the end in view of storage, sale, or distribution. A trader is categorized as a manufacturer.
• Distributor/importer/exporter — any establishment that imports or exports raw materials, active ingredients, and/or finished products for its own use or for wholesale distribution. If it sells to the general public, it is considered a retailer.
• Distributor/wholesaler — any establishment that procures raw materials, active ingredients, and/or finished products from local establishments for local distribution on a wholesale basis.
• Trader — a registered owner of a health product that procures raw materials and packing components, provides production monographs and quality control standards, but subcontracts manufacture to a licensed manufacturer.
• Retailer — any establishment which sells or offers to sell any health product directly to the general public.

"Health products" covers food, drugs, cosmetics, devices, biologicals, vaccines, in-vitro diagnostic reagents, and household/urban hazardous substances, or any combination or derivative thereof. It also refers to products that may have an effect on health which require regulation as determined by the FDA.

How to Apply for an FDA License to Operate

The FDA's Licensing and Registration Division, under each product center, is responsible for evaluating health products and establishments for the purpose of issuing authorizations and conditions to be observed. The centers are organized by major product category: the Center for Drug Regulation and Research, the Center for Food Regulation and Research, the Center for Cosmetics Regulation and Research, and the Center for Device Regulation, Radiation Health, and Research.

A practical path for applicants:

1. Determine your product category. Identify whether your products are food, drugs, cosmetics, devices, or another regulated category, since this determines which FDA center will evaluate your application.
2. Determine your establishment type. Classify your business as manufacturer, importer, exporter, distributor, wholesaler, trader, or retailer, as these are defined under Republic Act No. 9711.
3. Prepare your application. Submit the application for the appropriate authorization to the FDA. The law defines authorization to include a permit, license, certificate of registration, accreditation, compliance, or exemption.
4. Await evaluation. The Licensing and Registration Division evaluates establishments and products before issuing authorizations.
5. Comply with conditions. Authorizations carry conditions to be observed, including, where applicable, a risk management plan.
6. Maintain compliance. The FDA conducts inspections and post-market surveillance, and may issue cease and desist orders or order recalls after due process.

Penalties for Operating Without a License

Operating without the required LTO is a prohibited act under Republic Act No. 9711. Section 11(k) prohibits the manufacture, importation, exportation, sale, offering for sale, distribution, transfer, or retail of any drug, device, or in-vitro diagnostic reagent; the manufacture, importation, exportation, transfer, or distribution of any food, cosmetic, or household/urban hazardous substance; or the operation of a radiation or pest control establishment without the license to operate from the FDA.

Upon conviction, the penalty is imprisonment ranging from one year but not more than ten years, or a fine of not less than Fifty thousand pesos (P50,000.00) but not more than Five hundred thousand pesos (P500,000.00), or both, at the discretion of the court. If the offender is a manufacturer, importer, or distributor of any health product, the penalty is at least five years imprisonment but not more than ten years and a fine of at least Five hundred thousand pesos (P500,000.00) but not more than Five million pesos (P5,000,000.00).

An additional fine of one percent (1%) of the economic value or cost of the violative product or violation, or One thousand pesos (P1,000.00), whichever is higher, is imposed for each day of continuing violation. If the offense is committed by a juridical person, the Chairman of the Board of Directors, the president, general manager, or the partners and/or the persons directly responsible shall be penalized.

The director-general may also impose administrative sanctions after notice and hearing, including cancellation or suspension of any authorization for a period not exceeding one year, a fine of not less than Fifty thousand pesos (P50,000.00) but not more than Five hundred thousand pesos (P500,000.00) with an additional fine of not more than One thousand pesos (P1,000.00) for each day of continuing violation, and destruction or appropriate disposition of the health product and/or closure of the establishment.

Frequently asked questions

Do I need an FDA license to operate if I only sell food online? If your business sells health products directly to the general public, it is considered a retailer under Republic Act No. 9711. The law prohibits the manufacture, importation, exportation, transfer, or distribution of food without the license to operate from the FDA. Whether your specific online operation requires an LTO depends on your activities, so it is best to confirm your classification with the FDA.

What is the difference between an FDA license to operate and product registration? Licensing is the approval of an application to operate or establish an establishment. Registration is the approval of an application to register the health product itself. Both are separate processes, and an establishment may need both before it can lawfully manufacture, import, or distribute a health product.

What happens if I operate without an FDA license? Operating without the required LTO is a prohibited act under Section 11(k) of Republic Act No. 9711. It carries criminal penalties upon conviction, including imprisonment and fines, and the FDA may also impose administrative sanctions such as cancellation of any authorization, fines, and closure of the establishment.

Practical takeaways

• An FDA license to operate is required before manufacturing, importing, exporting, distributing, or selling health products in the Philippines.
• Health products include food, drugs, cosmetics, devices, biologicals, vaccines, in-vitro diagnostic reagents, and household/urban hazardous substances.
• Establishments are classified as manufacturers, distributors/importers/exporters, distributors/wholesalers, traders, or retailers, and each classification is defined under Republic Act No. 9711.
• Operating without an LTO is a prohibited act with criminal penalties of imprisonment and fines, plus possible administrative sanctions including closure.
• The FDA's Licensing and Registration Division evaluates applications for authorizations, which may take the form of a permit, license, certificate of registration, accreditation, compliance, or exemption.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• REPUBLIC ACT NO. 9711 - AN ACT STRENGTHENING AND RATIONALIZING THE REGULATORY CAPACITY OF THE BUREAU OF FOOD AND DRUGS (BFAD) BY ESTABLISHING ADEQUATE TESTING LABORATORIES AND FIELD OFFICES, UPGRADING ITS EQUIPMENT, AUGMENTING ITS HUMAN RESOURCE COMPLEMENT, GIVING AUTHORITY TO RETAIN ITS INCOME, RENAMING IT THE FOOD AND DRUG ADMINISTRATION (FDA), AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 3720, AS AMENDED, AND APPROPRIATING FUNDS THEREOF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.