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Priyanka Bajpayee
| Updated: 20 Feb, 2020 | Category: Drug License, Government Registration

Punishment for Selling of Medicines Without a Drug License

Drug license

The Drug License Process in India is simple yet a lengthy process. To start a business of the pharmaceutical business, it is mandatory to follow the Drug License Process. Drug License process is an initial step to take a permit by the concerned state Authority to start a Pharmaceutical business and to carry out the activities related to the pharmaceutical industry.

Any person without obtaining the drug license cannot start the business which directly or indirectly relates to the pharmaceutical industry. Failure to obtain the drug license in India can be a costly mistake which results in Penal Provisions and Punishments.

Further, for ensuring the good health of the nation and to avoid that the drugs are not being misused by the individual, it is important to have access to drugs and medicines.

In this topic, we will discuss the Drug license Process, why drug license is important for the individuals dealing in Pharmaceutical Industry, Types of Drug License issued by the authority and what are the penal provisions for selling the medicines without a Drug License.

Importance of Drug License

Before the Drug has been used by the patients, it has to go through a lengthy process, i.e. various testing and cost-effective observations and various stages, i.e. from the laboratory, clinical test, marketing to sampling. Drug License Process is mandatory for starting a business in Drugs and Cosmetics in India.

Drug License is issued to the manufacturers, retailers, wholesalers, distributors who are engaged in the business of pharmaceuticals/or carrying out the business activities related to the pharmaceutical industry.

The license is issued by the respective State Drug License Authority under the Drugs and Cosmetics Act, 1940. Drug and Cosmetics Act 1940[1] is an act to combine all the laws related to the drugs. Though the Act was amended in 1964, to involve Ayurvedic and Unani Drugs

Key factors to obtain the Drug License in India

  • Working Space- To set up a medical shop, or retail pharmacy, a minimum area of 10 square meters, is required. However, in the case of the wholesale business of Pharmaceutical, a minimum of 15 square meters is mandatory.
Note: For obtaining a license in Form 20 or 21 or both the working space (Premise) shall not be less than 10 sq. mtrs. The Same is the criteria for obtaining the license in form 20-B or form 21-B.
  • Proper Space for Storage-There is a requirement of proper storage for several medicines and vaccines which need to be stored at cool places and for the same A/C and refrigerators is necessary.
  • Expertise Staff-For smooth and efficient working qualified and experienced person is required to operate the pharmacy business.
  • Proper License by the State Authority-Once the Drug license process is done; it is approved by the State Drug License Authority.

Types of Drug License in India

Types of Drug license depends on the particular business entity. There are two types of Drug License –

  • Manufacturing License

Manufacturing Drug License is a license issued by the respective State Authority/Government under Drugs and Cosmetics Act, 1940 to the manufacturers of Allopathic, Ayurvedic, Cosmetics products. Manufacturing of drugs includes the process or part of the process of making, altering, labelling and finishing any drug or drug-related products in the ordinary course of business.

  • Sale and Loan License

Loan License is issued to the applicant not having his area of working but who plans to avail himself of the manufacturing facilities granted to another licensee.

Sale Drug License is acquired by the retailers and wholesalers who are involved in the drug distribution in India, i.e.Wholesale Drug License, Retail Drug License. For Sale Drug license, a requisite area of at least 10 sqr. mtrs is required with the proper storage facility

Apart from the above-mentioned license, different categories of Drug Licenses are-

  • Import Drug License – Import Drug License is issued to the applicants who are using imported goods for manufacturing drugs or are engaged in the distribution of Imported Drugs.
  • Multi-Drug License – Multi-Drug License is required by that person who is dealing in more than one state. A person cannot operate in more than one state without obtaining the Multi-Drug License because the Drug license process is a location-specific.

Read our article: Health License in India – Complete Overview

Steps involved in Drug License Process in India

Following steps are required to complete the Drug License Process –

Though the process is lengthy and time taking a person can directly file an application to the Government for Drug License-

  1. To obtain a User ID and Password – The Applicant has to obtain user ID and Password by giving a request letter personally along with the details of the firm.
  2. Submission of requisite documents – Applicant is required to upload the documents properly scanned (100 dpi and shall be in the black and white form). The application shall be filled precisely and to be sent electronically. In case of the absence of any document required for the Drug license process, the authority can ask for the same.

Documents required along with the application

  • In case, if the applicant is the Company -Memorandum of Association/Article of Association is required. In the case of a firm, Partnership Deed is required.
  • Applicant’s Identity proof and Address Proof.
  • Proof of Place of Working. (Owned Property (Property Papers)/Rent agreement (In case of lease Agreement)
  • Area Plan and layout plan of the premises
  • For storage (Details of Refrigerator)
  • In case the premise is situated on DDA residential flat/ plot/ building (Affidavit regarding the compliance of MPD 2021) is also to be attached.
Note: Additional Documents like-Proof of Qualification, Registration of Pharmacy and Appointment Letter is required in the case of Retail Sale Registered Pharmacist and for Wholesale Competent person.
  • Follow up with the Authority – For any update or status, the applicant needs to take a follow up with the authority. If in case the application got rejected by the Government, the fees will be forfeited by the Government.
  • Complete review of the Application – To review the complete application and to approve the same, the department will take at least 45-60 working days.

Punishment for selling of medicines without a Drug License

Running a business without a drug license can be far outstretched and can have a bad impact on the business. Non-compliances result in the punishment and imprisonment of the person selling medicine without a Drug License.

As required under clause (c) of Section 18, If a person sale any medicine without Drug license and without complying with the Drug license process, he shall be punishable with-

  • Imprisonment for a period which shall not be less than 1 year, which may extend to 3 years, and in that case the period of limitation will come under Section 468 (2)(c) of Criminal Procedure Code and
  • Fine which shall not be less than Rs.5000/-

Takeaway

Drug License Process is mandatory for obtaining a Drug License and to run a business in Drugs and Cosmetics Products. Drug License Process helps in regulating the import of drugs in India by avoiding substandard products. It controls the sale and distribution of drugs. Running a business without a drug license at a minimum will result in Fines and Punishments. Absence of Drug License can bring lawsuits, business closure, and various penalties and punishments. The Drug license Process also includes an inspection by the representative of the Authority/or Drug Inspector.

Read our article:How to Obtain Drug License in India?

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Priyanka Bajpayee

Priyanka Bajpayee has done Masters in International Business Law and well versed in content writing covering the area of legal and finance. Also, she has practical experience of almost 1.5 years in Legal compliance and secretarial work.

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