Drug License

Drug License

How to obtain a Drug License for Wholesale Business in India?

calendar20 Jan, 2024
timeReading Time: 8 Minutes
Wholesale drug license

A wholesale drug license is required for people dealing in the wholesale business of medicines or drugs. The drugs have been defined under the Drugs and Cosmetics Act of 1940 to mean and include a wide range of medicinal implements that can be used internally as well as externally, including products such as pharmaceuticals, cosmetics, repellents, ointments, tablets, etc., which are used for curing and mitigation human diseases, disorders or though medicinal drugs differ from narcotic substances. However, the use and abuse of both have been a pertinent issue before the enforcement agencies.

There are very strict compliance requirements applicable to the stakeholders of the drug manufacturing business. For the purpose of drug enforcement and regulation in India, the Government established the Central Drugs Standard Control Organization under the aegis of the Ministry of Health and Family Welfare. CDSCO is responsible for Regulatory compliance for Drug Testing in the Country.

Understanding CDSCO

Manufacturers and Distributors of medical drugs and pharmaceuticals are required to obtain valid CDSCO licenses for the manufacturers and other entities, as per the Drugs and Cosmetics Act, 1940 and Rules, 1945. A CDSCO approval for manufacturing is obtained after going through a process of application form submission, providing details and documents about relevant disclosures, information about the manufacturing process, plant and applicant, and most importantly, the composition and raw materials used in manufacturing the drugs and medicines. The designated inspectors and commissioners carefully examine all these documents and details and send them for further scrutiny by the CDSCO, who then approves/rejects the application based on its findings. 

 Apart from providing commercial licenses to manufacturers, CDSCO is also responsible for the regulation of central as well as State Drugs Standard Control Organizations (SDCSOs)in order to ensure that the drug control measures are adequately put in place and there are no lapses on the part of the law. It lays down standards for drugs imported into the country, maintains coordination and uniformity of state laws with the Drugs and Cosmetics Act, and is also responsible for granting licenses for certain varieties of critical and life-saving drugs, such as vaccines, I.V. Fluids, antivenom drugs, wholesale drug license, etc. CDSCO license for manufacturers is thus a necessary prerequisite for any entity looking to set up a drug manufacturing unit/company in India.

Types of Drug Licenses

It is important to understand the types of drug licenses as CDSCO licenses are activity-based compliances that depend upon the type of activity undertaken by the manufacturer or distributor. For instance, if someone is manufacturing drugs, they require a manufacturing license; for selling the drugs to retailers or hospitals, they require a sales license. Similarly, for the purpose of letting any entity use or avail their drugs and medication, such as a druggist or a pharmacy, they are required to obtain a lending license from the. Based on the category, salt, and quantity of drugs and pharmaceutical products produced, drug license in Maharashtra is divided into the following categories –

1. Manufacturing License

This type of License is to manufacture drugs on a large scale for commercial purposes. It is the basic drug license in Maharashtra license required for the purpose of producing drugs and pharmaceuticals.

2. Sale License

The License for the purpose of selling or distributing drugs and cosmetics is known as a sale license. It is further bifurcated into the following categories-

  • Wholesaler License –It is a seller license that permits the sale of drugs and pharmaceuticals by wholesalers in bulk quantities to retailers and smaller corporations. A wholesaler license allows the sale of drugs in large quantities.
  • Retail Drug License –Small sellers, suppliers, and distributors of drugs and pharmaceuticals who operate or wish to open up small set-ups such as drugstores, pharmacies, dispensaries, etc., and sell the product directly to the end consumers. 

3. Loan Drug License

A loan drug license is an authorization granted by the authority to an applicant who does not have a manufacturing unit of its own but wishes to avail the manufacturing or production facilities of another license. Hence, this License is useful for an entity that imports or distributes drugs and cosmetics under third-party vendor arrangements.

4. Import License

This type of License is required by an importer of drugs and pharmaceuticals in India. Without this License, it is not possible to Import or distribute medicinal products in India.

5. Multi-Drug License

This type of License is required by applicants who own businesses in more than one state. Without a multi-state license, an importer of wholesalers cannot sell their products in more than one state in India.

Drug License Application Process

To obtain CDSCO and SDSCO approval for a wholesale drug License in India, the application process is mentioned below –

1. Making Online Application

The applicant shall proceed with making an account on the Online National Drugs Licensing System (ONDLS) of the Government of India. The applicant must log in by creating a login I.D. and password for their account.

2. Uploading Documents

The applicant shall proceed by uploading relevant documents on the portal, including Form 19, Form 20A, Form 20B, and other personal details of the applicant. The applicant shall provide scanned copies of the documents and upload them on the portal, along with the requisite government fee applicable to the application.

3. Inspection of the Premises

After submitting and paying the requisite fees, the application shall be forwarded to the concerned Drug Inspector of the area, who shall inspect the premises. The Inspector shall satisfy himself that the premise complies with the statutory requirements of the law. After inspection, the Drug Inspector shall send its report to the concerned authority.

4. Issuance of License

After inspection of the premises, the drug inspector forwards the report to the CDSCO and Concerned State Drug Enouncement Agency, which verifies and scrutinizes the application for all relevant compliances and discourse in accordance with the law. If satisfied, the authority approves the application and issues a Wholesale drugs license to the applicant.

Documents required for Wholesale drug license in India

The documents required for wholesale drug license that are to be submitted to the regulatory authorities are –

  1. Application in Form 19, along with details of the drugs intended to be sold in Form 20A and 20B.
  2. Affidavit of self-declaration by the applicant
  3. Proof of business ownership- AOA, MOA, partnership deed, etc.
  4. Cover Letter containing an expression of top interest in obtaining a license by the pharmacist/wholesaler.
  5. Challan of payment
  6. Layout and Plan of the place of business, Including ownership documents – rent agreement, lease and License agreement, etc.
  7. Copies of educational qualification of the competent person applying for a wholesaler license
  8. Challan of Rs. 3,000/-
  9. I.D. and Details of the applicant – AADHAR, PAN, Address Proof.

Requirements for getting a Drug Wholesale License in India

The requirements for getting a wholesale drug license in India are mentioned below:

  1. The applicant should be a person who has an undergraduate degree with one year of experience or a senior-secondary graduate with four years of experience who is registered with the Pharmacy Council of India. 
  2. The area of the premises should be 15 square meters and, in the case of a retail and medical shop, it should be 10 square meters. Moreover, the premises must fulfil the recruitments of a unit as laid down by the National Building Code of India, 2005.
  3. The Premises or storage facility must have adequate refrigeration, space and temperature control measures since some drugs and medicines require cold temperatures for their preservation.
  4. The people working on the premises shall have sound technical skills and knowledge about pharmacy and medicines. It is preferred that the staff working in a rug wholesale unit should be a graduate with at least one year of experience.

List of Forms Required for Drug License Application

The following forms are required to be filled and submitted by the applicant to the concerned authority for obtaining a Drug License –

  1. Form 19AA – Application for granting or renewing the licence to sell, stock exhibit or offer for sale by wholesale or distribute drugs from a motor vehicle
  2. Form 19 – Application for Grant of Wholesaler License
  3. Form 20B– License to sell drugs that are mentioned in Schedule C, C1 and X of the Drugs and Cosmetics Act, 1945
  4. Form 21B – License to sell drugs that are mentioned in Schedule C,C1 and X of the Drugs and Cosmetics Act, 1945

Fees, Validity, and time are required to obtain a Wholesale Drug License.

Wholesale drug licenses in India include a government fee which is required to be paid one-time, along with other miscellaneous fees such as affidavit, rent agreement, stamp paper of declaration, etc.

A wholesaler drug license remains valid for a period of up to 5 years. However, it can be suspended or cancelled by the regulatory authority on the grounds of any incompliance or violation of the Drugs Act.

CDSCO and other relevant drug control authorities take about 45-50 days to verify, process, and issue the wholesale drug license to the applicant.

Conclusion

Drugs and Pharmaceuticals are India’s fifth most exported goods/services, comprising almost 2% of India’s annual GDP. Due to such volumes of production and foreign trade, it is imperative that the Government put reasonable measures on the stakeholders of the market – manufacturers, distributors, importers and wholesalers. The Government has empowered the Central Drugs Standard Control Organization (CDSCO) to license, monitor and administer the country’s production, sale and distribution of medicinal drugs and cosmetics. It has the power to grant, inspect, examine, grant license, revoke and cancel the License issued to a  wholesaler of drugs and pharmaceuticals.

Frequently Asked Questions (FAQs)

1. What is referred to as a drug as per the law?

As per the Drugs and Cosmetics Act 1940, drugs are defined as “all medicines intended for external or internal; use for or in the treatment, diagnosis, mitigation, or prevention of disease or disorder in human beings or animals, and is manufactured as per the formulas described in, the authentic books of Ayurvedic, Siddha and Unani Tibb systems of medicine.”

2. Who is the drug enforcement authority in India?

In India, the task of drug regulation and enforcement is overseen by the Central Drugs Standard Control Organization (CDSCO) and the Ministry of Health and Family Welfare.

3. How many forms are required to be filed by the applicant in order to make an application for a wholesale drug license in India?

The Wholesaler is required to file Form 19, 19AA, 20A and 20B with the application for a wholesale drug license in India.

4. Which laws/regulations govern the drug and pharmaceutical wholesalers in India?

The drug and pharmaceutical manufacturers, distributors and wholesalers are governed by the Drugs and Cosmetics Act, 1940 and Rules,1945.

5. How many types of Drug Licenses are there for manufacturers and wholesalers of drugs and pharmaceuticals In India?

Based on the activity of the licensee’s activities and nature, drug license in Maharashtra is divided into three categories –
1. Manufacturing License
2. Wholesaler License
3. Retailer License
4. Import License
5. Loan Drug License
6. Multi Drug License

6. What is the procedure to obtain a Wholesale drug license in India?

To apply for a wholesale drug license in India, the applicant must submit an application with relevant documents while paying the requisite government fees. Moreover, the area drug inspector will review the application and forward it to the drug inspector before issuing the license.

7. What is the validity of a Wholesale Drug license in India?

A Wholesale Drug license in India remains valid for five years unless it is suspended or cancelled by the regulatory authorities, after which it must be renewed.

8. What are the documents required for a wholesale drug license In India?

Documents such as Application in Form 19 along with details of the drugs intended to be sold in Form 19, 20A and 20B, Affidavit of self-declaration, AOA, MOA, partnership deed of the business, Covering Letter, containing expression top interest in obtaining a license by the applicant, Challan of payment, Layout and Plan of the place of business and Copies of educational qualification of the competent person applying for a wholesaler license are required to be submitted to the regulatory authorities by the applicant.

9. What is the time taken by authorities to issue a wholesale drug license in India?

After submission of the documents, the CDSCO and other authorities take about 30-40 days for examination and scrutiny, after which the License is issued.

10. What are the Government fees to be paid by the applicant for a wholesale drug license in India?

The government fee for wholesale drug licenses in India is Rs. 3,000/- per application, which excludes other miscellaneous expenses such as fees for rent agreements, affidavits, stamp papers, etc.

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