State Certificate-of-Need (CON) programs represent one of the most significant, yet frequently overlooked, regulatory gates in biopharmaceutical market access. Originally conceived in the 1970s to control healthcare capital inflation and prevent duplicate hospital capacity, CON laws require healthcare providers to secure state regulatory approval before building new facilities, expanding bed capacity, acquiring major medical equipment, or launching new clinical services.
In 2026, as the biopharmaceutical pipeline pivots toward complex, cell and gene therapies (CGTs), CAR-T therapies, and high-cost specialty biologics, CON laws have taken on a new role. They have become a structural determinant of site-of-care access. For a manufacturer launching a gene therapy or an complex subcutaneous or intravenous specialty biologic, the number of qualified administering centers in a state is directly constrained by that state's CON framework.
This policy analysis examines the current landscape of Certificate-of-Need laws across the United States. We trace the 2025–2026 legislative reform wave, detail the specific CON triggers that affect specialty therapy administration, map the overlap with the CMS Cell & Gene Therapy (CGT) Access Model, and provide a decision framework for launch teams navigating this complex regulatory map.
What is a certificate of need and which 35 states + DC require one in 2026?
A Certificate-of-Need is a legal document issued by a state health planning agency or board. It permits a healthcare provider to proceed with a proposed facility construction, expansion, or major capital acquisition. To obtain a CON, the provider must undergo a formal review process, during which they must demonstrate that the community has a clear, unmet need for the proposed expansion. Competitor hospitals and clinics are permitted to participate in the hearings and object to the application, often creating multi-year delays or outright blocking new projects.
The federal mandate for CON programs was established under the National Health Planning and Resources Development Act of 1974, which threatened to withhold federal public health funding from states that did not implement CON laws. By 1982, every state except Louisiana had established a CON program. However, Congress repealed the federal mandate in 1987, prompting several states to dismantle their programs.
According to the National Conference of State Legislatures (NCSL) and the National Academy for State Health Policy (NASHP) 50-state scan updated December 12, 2025, 35 states plus Washington, D.C. continue to operate active CON programs. PharmaDossier's consolidated review of official state CON program documentation — program landing pages, rules, and application PDFs across these states — anchors the scope classifications below. The table lists the 35 CON states plus D.C. and groups them by their general regulatory scope.
| Program Scope | States in Category (2026) | Specialty Drug / Site-of-Care Implication |
|---|---|---|
| Full / Broad Acute-Care + Major Medical Equipment Review (28 States + DC) | AL, AK, AR, CT, DE, GA, HI, IL, KY, ME, MD, MA, MI, MS, MO, NE, NV, NJ, NY, NC, OK, OR, RI, TN, VA, VT, WA, WV, DC | Hospital beds, clinical service lines, outpatient clinics, and major medical equipment (apheresis, MRI, cleanrooms) are all reviewable. |
| Limited or Long-Term-Care-Focused Scope (5 States) | IA, MN, MT, IN, OH | Review is concentrated on long-term care or a narrow set of services/equipment (e.g., Indiana and Ohio apply CON largely to nursing homes and intermediate care), so fewer biopharma-relevant triggers than full-scope states. |
| Reforming / Sunsetting (2 States) | FL (acute-care and hospital CON repealed in 2019; nursing-home and hospice CON remain), SC (hospital CON sunsets January 1, 2027; nursing homes and home health agencies remain) | Functionally opening up for specialty-infusion and oncology site expansion, though residual long-term-care review persists. |
| No CON Program (15 States) | AZ, CA, CO, ID, KS, LA, NH, NM, ND, PA, SD, TX, UT, WI, WY | Providers can add beds, equipment, and services without state planning-board approval, driven by market demand. |
Note: Florida and South Carolina still appear on NASHP's active-CON list because each retains a residual program (Florida's nursing-home and hospice CON; South Carolina's nursing-home and home-health CON plus a hospital CON that does not expire until January 1, 2027), even though their acute-care/hospital gates—the ones most relevant to specialty biologic administration—have been removed or are sunsetting.
Which CON triggers matter for specialty biologics, cell/gene therapy, and infusion site-of-care?
For a biopharmaceutical manufacturer, a drug or biologic itself does not require a Certificate-of-Need. CON laws regulate the physical infrastructure, equipment, and facility licenses required to administer the drug. When launching a therapy that cannot be self-administered or dispensed through a retail pharmacy, the manufacturer must map out the qualified treatment centers (QTCs) or specialty clinics capable of handling the drug.
In the CON states, expanding or establishing these administration sites triggers state regulatory reviews through three primary mechanisms:
1. Major medical equipment thresholds
Administering advanced therapeutics frequently requires specialized diagnostic or processing hardware. For example, CAR-T therapies require clinical sites to have apheresis machines to harvest patient T-cells, and cell-processing laboratories equipped with specialized cleanroom equipment (such as cell counters, centrifuges, and cryopreservation units).
In many CON states, acquiring equipment that exceeds a specific dollar threshold requires a CON. For instance, in Delaware, prior to recent legislative changes, any acquisition of major medical equipment exceeding $1.5 million required a full Certificate of Public Review. If an oncology clinic wants to add an advanced apheresis suite to qualify as a CAR-T center, the cost of the equipment and associated room construction can easily trigger CON review, delaying the site's launch by 12 to 18 months.
2. Bed capacity and transplant unit restrictions
CAR-T and gene therapies are associated with severe acute adverse events, such as Cytokine Release Syndrome (CRS) and Immune Effector Cell-Associated Neurotoxicity Syndrome (ICANS). The FDA-approved labels for therapies like Casgevy (for sickle cell disease) and Yescarta (for lymphoma) require administration in accredited transplant centers or specialized inpatient units capable of providing intensive monitoring.
Hospitals in CON states cannot simply add beds to their bone marrow transplant (BMT) units or intensive care units (ICUs) to accommodate a surge in cell/gene therapy patients. Adding inpatient beds—or converting existing medical-surgical beds into specialized transplant beds—triggers a CON review. In states like New York and North Carolina, BMT bed expansion is tightly restricted based on regional occupancy formulas, limiting the capacity of even elite academic medical centers to scale their CGT programs.
3. New clinical service lines
Many CON states regulate the introduction of "new clinical services," defined as specialized healthcare services that the hospital did not previously offer. Common examples include:
- Organ and tissue transplant programs (including bone marrow transplants)
- Complex outpatient infusion services
- Radiation oncology services
If a regional hospital in a CON state wants to qualify as a treatment site for a gene therapy that requires bone marrow transplantation (such as Casgevy), but does not currently operate an approved BMT service line, it must apply for a CON. The application process requires the hospital to prove that existing BMT centers (often located at rival academic hospitals) are insufficient to meet community demand. The rival hospitals frequently object, arguing that they have excess capacity, leading to a protected regulatory battle that can freeze the manufacturer's site qualification process.
Which states repealed or loosened CON in 2025-2026?
A significant legislative backlash against CON programs has gathered momentum, driven by studies suggesting that CON laws restrict access, increase costs, and protect hospital monopolies rather than control inflation. From 2023 through the 2026 state legislative sessions, several states enacted major reforms to either eliminate CON entirely or raise the financial thresholds that trigger review.
According to a May 2026 report by the Healthcare Financial Management Association (HFMA), nearly half of the 35 active CON states have actively debated or formally signaled plans to loosen or eliminate their CON restrictions. The most critical legislative actions include:
South Carolina (S.164) — The 2027 hospital sunset
In a landmark legislative victory for CON opponents, South Carolina enacted Senate Bill 164, signed by Governor Henry McMaster on May 16, 2023. The bill immediately eliminated CON requirements for ambulatory surgical centers and most non-hospital facility types, and it schedules the repeal of all hospital and acute-care CON requirements effective January 1, 2027. Nursing home facilities and home health agencies will continue to require a CON, and the Medical University of South Carolina (MUSC) remains subject to a separate state-fiscal-review requirement for certain major capital projects.
For oncology and specialty immunology manufacturers, South Carolina is transitioning from a highly restricted market to an open market for hospital-based services, allowing regional clinics and independent oncology networks to rapidly build out new infusion suites and cell therapy sites.
Mississippi (HB 3) — Threshold deregulation
On February 4, 2026, Mississippi Governor Tate Reeves signed House Bill 3, which dramatically raised the financial thresholds that trigger CON reviews. Mississippi’s previous thresholds were among the lowest in the nation, triggering reviews for minor capital expansions. The new law:
- Raises the capital expenditure threshold from $2 million to $5 million.
- Raises the major medical equipment acquisition threshold from $1.5 million to $3.5 million.
This change allows Mississippi hospitals to build out advanced cleanrooms and acquire diagnostic or cell processing equipment without undergoing the lengthy CON review process, provided the total project cost remains under the new $5 million ceiling.
Delaware (HB 17) — Major medical equipment exemption
Delaware’s General Assembly cleared House Bill 17 (final Senate passage on April 21, 2026). The bill specifically repeals CON review (referred to in Delaware as the Certificate of Public Review) for the acquisition of major medical equipment. While construction of new facilities still requires review, clinics and hospitals can now purchase advanced scanners, apheresis systems, and cell processing hardware without state approval.
Iowa (HF 2635) and Virginia (HB 1337)
- Iowa House File 2635 (cleared by the legislature March 5, 2026) raises the financial thresholds that trigger CON review. Beginning January 1, 2027, the capital-expenditure threshold moves to $4 million, with additional inflation-indexed increases scheduled in subsequent years, removing many mid-sized equipment and facility projects from review altogether.
- Virginia House Bill 1337 (signed into law in 2026) did not eliminate CON but established an expedited COPN review pathway — completed within roughly 90 days rather than the standard 120-day review cycle (190 days when a formal fact-finding conference is required). The expedited track applies to projects such as adding psychiatric beds (up to 10 beds or 10% of a facility's beds) and certain capital expenditures of $15 million or more by non-hospital facilities.
How does CON interact with the CMS Cell & Gene Therapy Access Model?
In January 2025, the CMS Innovation Center launched the Cell and Gene Therapy (CGT) Access Model. The model is designed to improve access to innovative, FDA-approved gene therapies for Medicaid beneficiaries, starting with therapies for severe sickle cell disease (such as Lyfgenia and Casgevy). Under the model, CMS negotiates multi-state outcomes-based purchasing agreements with manufacturers on behalf of participating state Medicaid agencies.
As of 2026, 33 states plus Washington, D.C. and Puerto Rico have enrolled in the CMS CGT Access Model. However, a major structural conflict exists where the participating Medicaid states overlap with strict CON laws.
The map below illustrates this overlap, showing where a state has committed to expanding Medicaid access to gene therapies under the CMS model, but continues to restrict the physical expansion of the facilities required to administer them.
| Access Vector (CMS Model) | Regulatory Gate (CON Laws) | Operational Constraint | Impact on Patient Access |
|---|---|---|---|
| State Medicaid Enrolls in CGT Model (33 States + DC) | Bed Capacity Restrictions (e.g., ICU/BMT units) | Hospitals cannot add monitoring beds for CAR-T patients | Multi-month patient waitlists at qualified centers |
| Outcomes-Based Payment Contracts | Major Medical Equipment Gates (apheresis, cleanrooms) | Clinics cannot purchase cell-processing systems without review | Delays site qualification by 12–18 months |
| SCD Gene Therapy Access Expansion | New Clinical Service Line Approvals (BMT license) | Regional centers cannot open transplant services without CON | Limits treatment to a few congested academic medical centers |
| Financial Risk Protection | Charity-Care / Financial-Assistance Mandates | Sites must adopt mandated charity discount policies | Billing complexity and potential manufacturer PAP friction |
For example, North Carolina and Virginia are active participants in the CMS CGT Access Model, yet both states maintain highly restrictive CON laws:
- In North Carolina, any new bone marrow transplant program or cell processing laboratory requires a CON.
- Furthermore, states like Delaware, North Carolina, and Virginia require facilities seeking CON approvals to adopt strict financial-assistance and charity-care policies as a condition of approval.
For a manufacturer, this means that even if a state Medicaid agency has agreed to cover a gene therapy under the CMS model, the physical capacity to deliver that therapy remains restricted by the state's facility licensing laws. A patient in rural North Carolina may have Medicaid coverage for a sickle cell gene therapy, but may face a 12-month waiting list because local hospitals cannot expand their transplant beds without a CON.
What should a manufacturer's site-of-care / launch strategy do about CON states?
To mitigate the access barriers created by Certificate-of-Need laws, biopharmaceutical launch teams, marketing directors, and market access executives must build CON risk assessments directly into their commercialization blueprints. Navigating these geographic constraints requires a multi-layered approach that coordinates regulatory affairs, field access teams, and health system contracting.
1. Differentiate the launch strategy by CON status
Launch teams should classify target clinical sites into CON and non-CON cohorts during the pre-launch phase.
- In Non-CON States (e.g., Texas, Pennsylvania): The site qualification timeline is determined entirely by clinical training, staff credentialing, and standard provider-manufacturer contracting. Manufacturers can scale their network rapidly, allowing regional networks or independent clinics to compete for patient volume.
- In Restrictive CON States (e.g., New York, North Carolina): The qualification timeline must account for state regulatory reviews and potential legal opposition from incumbent hospital monopolies. In these regions, manufacturers should prioritize qualifying sites that already possess the necessary service line licenses (e.g., active BMT units) and equipment, rather than hoping a new clinic can acquire them in time for launch.
2. Design clinical trials with CON in mind
When executing clinical trials that require specialized administration settings (such as CAR-T or gene editing), clinical operations teams should select trial sites in states with favorable CON environments. Recruiting patients in a non-CON state prevents regulatory delays in setting up the clinical trials, accelerating the clinical evidence program. If a trial site must be placed in a CON state, the manufacturer must ensure that the investigator's facility already possesses the required service licenses and equipment (e.g., apheresis capability) to avoid a regulatory hold.
3. Coordinate with hospital capital planning teams
For therapies administered via buy-and-bill or specialized outpatient infusion, the manufacturer’s field access teams must coordinate with hospital capital planning departments. If a hospital needs to purchase a new apheresis system or build a cleanroom to support the manufacturer's therapy, the manufacturer should provide the hospital with regulatory analysis showing whether the project falls below the state's CON threshold (such as Mississippi’s new $3.5 million equipment ceiling). Helping hospitals structure their capital requests to fit within state-level exemptions can accelerate site qualification by months.
4. Provide robust patient-travel support services
Because CON laws restrict the geographic footprint of qualified treatment centers, patients living in highly restrictive CON states will frequently face travel barriers. A Medicaid or commercial patient in rural North Carolina or Virginia may have insurance coverage for a gene therapy but lack a local treatment site. To prevent abandonment, manufacturers must build robust travel, lodging, and meals assistance programs into their hub and patient support services, helping patients travel to non-CON states or less-congested metropolitan medical centers if local capacity is capped by state law.
5. Optimize internal link opportunities
Site-of-care constraints do not exist in isolation. Payer medical policies frequently steer patients to specific settings to control costs. Launch teams must coordinate their CON analysis with their broader site-of-care steering guidelines, ensuring that the physical sites allowed under state CON laws align with the preferred network defined by commercial payers. Furthermore, this policy analysis should connect with patient assistance programs, as clinical qualification delays in CON states can increase the need for bridge access programs when patients face regional facility capacity bottlenecks.
6. Address charity-care and financial-assistance mandates
In several CON states, including Delaware, North Carolina, and Virginia, the state planning board conditions CON approval on the hospital adopting specific charity-care or financial-assistance policies. For specialty drug launches, this means the local administering site may have state-mandated write-off rules for low-income patients. Manufacturers should work with hospital billing departments to ensure that manufacturer-sponsored patient-assistance programs (PAPs) are integrated smoothly with these local charity-care policies, preventing billing friction and protecting patient access.
FAQs
Does a drug or biologic itself require a certificate of need?
No. State Certificate-of-Need laws do not regulate drugs, biologics, or pharmaceutical products. Instead, they regulate the healthcare facilities, inpatient beds, clinical service lines, and major medical equipment (such as apheresis systems and infusion suites) required to administer these therapies.
Which states apply CON only to long-term care versus full acute-care/hospital scope?
While most of the 35 CON states plus D.C. maintain programs that reach acute-care hospitals, service lines, and major medical equipment, a few have a highly restricted scope. Indiana and Ohio apply CON requirements primarily to long-term care, nursing homes, and intermediate care facilities. Montana and Minnesota also run narrower programs concentrated on specific facility types or services, so standard acute-care hospital expansions and equipment acquisitions are less likely to trigger review there than in full-scope states.
How does South Carolina's 2026 CON repeal change specialty-infusion and oncology access there?
South Carolina’s Senate Bill 164 (signed May 16, 2023) immediately eliminated CON for ambulatory surgical centers and most non-hospital facility types, and it schedules the repeal of all hospital and acute-care CON requirements for January 1, 2027. Once that sunset takes effect, oncology networks, independent clinics, and hospital systems in the state will be able to add inpatient beds, open new infusion centers, and purchase major medical equipment without state planning-board approval, significantly expanding the geographic access footprint for specialty therapies.
What dollar thresholds trigger CON review for major medical equipment, and which states raised them in 2026?
CON thresholds vary widely by state. In 2026, several states raised these triggers to reduce regulatory burdens. Most notably, Mississippi signed HB 3, raising its major medical equipment threshold from $1.5 million to $3.5 million (and its capital expenditure threshold from $2 million to $5 million). Delaware enacted HB 17, which repealed CON (the "Certificate of Public Review") for the acquisition of major medical equipment, though dollar limits and reviews for facility construction and bed-capacity increases remain.
Is CON a barrier or a benefit to equitable cell/gene-therapy access?
Proponents of CON argue that it protects hospital safety-net margins and ensures that expensive services (like organ transplants) are concentrated in high-volume, high-quality centers. However, for advanced therapeutics like CAR-T, CON acts primarily as an entry barrier. It restricts the number of hospitals that can qualify as Treatment Centers, forcing Medicaid and commercial patients in rural or underserved areas to travel long distances to reach an approved site.
Sources
- National Conference of State Legislatures (NCSL). "CON-Certificate of Need State Laws." Available at: NCSL CON Laws
- National Academy for State Health Policy (NASHP). "50-State Scan of State Certificate-of-Need Programs." Updated December 12, 2025. Available at: NASHP 50-State Scan
- Centers for Medicare & Medicaid Services (CMS) Innovation Center. "Cell and Gene Therapy (CGT) Access Model." Available at: CMS CGT Access Model
- Healthcare Financial Management Association (HFMA). "States overhaul certificate-of-need laws." Published May 5, 2026. Available at: HFMA CON Report
- South Carolina Legislature. "Senate Bill 164 - State Health Facility Licensure Act (CON repeal; hospital CON sunsets January 1, 2027)." Signed into law May 16, 2023. Available at: SC Legislature S.164
- Mississippi Legislature. "House Bill 3 - CON Thresholds." Signed February 2026. Available at: MS Legislature HB3
- Delaware General Assembly. "House Bill 17 - Certificate of Public Review." Passed April 2026. Available at: DE General Assembly HB17
- Iowa General Assembly. "House File 2635 - Health Facilities Review Council." Signed March 2026. Available at: Iowa Legislature HF2635
- Virginia General Assembly. "House Bill 1337 - COPN Expedited Review." Signed April 2026. Available at: Virginia LIS HB1337
