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Drug License

A Comprehensive Guide on the Prerequisites to Start Pharmacy Business in India

calendar24 Dec, 2020
timeReading Time: 5 Minutes
Pharmacy Business

The pharmacy business is an evergreen business in India that is not overwhelmed by its economic cycles. Furthermore, the growth of private hospitals and multi-specialty hospitals in India has led to astonishing growth in India’s Medicare and pharmacy business. The pharmacy business is finding good by many entrepreneurs across India as it requires minimal capital investment and space.

E-pharmacy is a kind of pharmacy that operates in the digital age via the Internet and distributes medicines to customers through the mail or devoted distribution companies. Independent Internet-only stores, electronic subsidiaries of “brick-and-mortar” hospitals, and platforms serving pharmacy companies fall into the category of “online companies“. In present times are observing a spike in e-commerce, engaging  online shopping, including selling prescription and non-prescription drugs. The idea of ​​online sale of electronic pharmacies and medicines has been in circulation worldwide for more than two decades.

What are the Formats of Pharmacy Business Available in India?

Formats of Pharmacy Business

In India, most pharmacy businesses fall under the category of managing standalone pharmacy in the disorganized segment. However, moderately, the notion of chain pharmacy or township pharmacy is growing rapidly in India; But still far behind. Hospital pharmacy, township pharmacy, and chain pharmacy are consistently established under a large corporate establishment or hospital – primarily a private limited company constitution.

The standalone pharmacies are consistently set up under a partnership or a proprietorship. However, as LLP registration can now be procured for just a sum of Rs.8000 only, it is prudent that standalone pharmacy trades also be initiated as Limited Liability Partnership or Pvt. Ltd. Company. To settle a standalone pharmacy business in a Limited Liability Partnership or Pvt. Ltd. Company will assure that the business is negotiable, ascendable, and limits the advertiser’s personal liability.

Particulars to Consider Before Incorporation of Business

Before Applying for Incorporation of Business, an Individual Must Fulfill the Following Necessary Particulars. The below discussed are the necessary particulars need to be fulfilled by an individual before filling for registration of pharmacy business in India.

Particulars to Consider Before Incorporation of Business

Tax Registrations

GST registration is a need in India whenever a business is selling goods/service. Pharmacy trade is needed to procure GST Registration and liable to pay other charges.

Pharmacy License or Drug License

To initiate  a pharmacy business, a drug license is needed. The “Central Drugs Standard Control Organization and the State Drug Standards Control Organization” governs concerns related to India’s drug licenses. Drug licenses to settle the pharmacy business are generally under the purview of the State Drug Standards Control Organization, and the list of State Drug Standards Control Organizations can be downloaded below:

List of State Drugs Control Organization

Generally, the Drug Control Organization issues two types of licenses for operating a pharmacy business.

  1.  Retail Drug License (RDL) granted to run a general chemist shop.
  2.  Wholesale Drug License (WDL) granted to an individual or entities involved in wholesale of drugs and medicines.

Land Registration

Every entrepreneur has to be determined upon the investment that it would need. Depending upon the financial plan, one has to select whether to have a rented shop or to own a shop. There is a need of either of the Sales agreement or Rent agreement. A person may take legal assistance for this cause. 

Registration of Medical Store Business

The Indian Pharmacy Act, 1948, manages to include medical stores in India. The Act declares that medical stores and pharmacies have to be incorporated with the entire requirement of the State Government. Thenceforth complies with an incorporation application, the tribunal will compromise on matters related to it.

Company Incorporation

The retail store is required to incorporate the business as an ownership or partnership or a full company from day one. Depending on which mode one wants to conduct the business. Can be mentioned below

  • Proprietorship Registration
  • Partnership Registration
  • One person Company Registration
  • Private Limited Company
  • Limited Liability Company

Shop and Establishment Incorporation

According to the municipal guidelines of the concerned municipal association, one should obtain shop and establishment registration to operate the business without any altercations made by the authorities. Also, this required certificate as supporting documentation from drug licensing and incorporation is required.

Particulars Needed To Acquire Drug License

The below mentioned are minimum requirements to acquire drug license or initiating a pharmacy business:-

Space

The minimum space of 10 square meters is needed to initiate a medical shop or pharmacy or wholesale shop. In case, the pharmacy business integrates retail and wholesale, a minimum of 15 square meters is needed.

Storage Facility

The store should have a refrigerator & air conditioner in the place of business. As per the labeling stipulation specific drugs like vaccines, Sera, Insulin Injections etc., are needed to be stored in the refrigerator.

Technical Staff

  • Wholesale: The sale of the drug by bulk will be done either in the existence of a registered pharmacist or in the presence of a skilled person, who should be a graduate with 1 year experience as per drugs or a person who has passed SSLC as per 4 years experience of drugs. In, specifically authorized by the Department of Drug Control for the cause.
  • Retail – The sale of the drug by retail should  be made in the existence of registered pharmacist authorized by the department, the registered pharmacist is needed throughout the working hours.

Documents Needed For Procuring Drug License

The particulars needed for initiating a pharmacy business differ from state to state. However, the below listed is an emblematic list of particulars needed for procuring drug license in India.

  • Application form in the lay down  format
  • Covering Letter with the determined of the application signed with the name and designation of the applicant
  • Challan of fee deposited for procuring drug license
  • Declaration form in the format lay down.
  • Blueprint for the establishment
  • Based upon the occupancy of the establishment
  • Proof of possession of the premises, if rented (rent agreement)
  • Proof of constitution of the business (Registration Certificate / MOA / AOA / Partnership Agreement)
  • Testimony of non-conviction of proprietor/partners/ directors under the Drugs and Cosmetics Act, 1940[1]
  • Testimony of an authorized pharmacist or proficient individual working full time
  • Appointment letter of authorized pharmacist/proficient individual, if the employed person.

Conclusion

Though traditional pharmacies accomplish India’s major population’s medicinal requirements, there is still an urgent requirement for online pharmacy stores that fit into the Indian Legal system. These online pharmacies make an advantageous situation for both the customers and pharmacists. In the present circumstances it is really clear that e-pharmacies will be able to meet the medical needs of a large section of the people of the country without any need. Therefore the government should immediately come up with the final e-pharmacy rules. To learn more about the prerequisites for starting a pharmacy business in India, you can refer to the blog by Corpbiz.

Read our article: How can one have the Right to Buy Pharmaceutical Drug?

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