Drug License

Procedure for obtaining Drug License in India

If you are selling medicine online make sure that all the medicines that go out for delivery must be verified by a qualified professional and you have acquired Drug License.

Topmost Indian generic drug company have been able to double its revenue in the last 5 years, and the Indian drug market size is around $85 billion. Further, it is expected that Global prescription drug spend may cross $1.5 trillion in 2021 and India is favoured location for MNCs as skilled and cheaper human resource is available as well as easy access to world’s largest drug market. In this article we shall look at the requirements for Drug License in India.

Why Drug and Cosmetic business have been strictly regulated in India?

Drug and cosmetic industry have been working in the regulated environment in the larger interest of the community.  With the tremendous growth of the healthcare sector in India, business related to drugs & cosmetics has become an evergreen business in India. This type of business requires minimum capital investment and space.

These types of businesses are usually set up under a proprietorship or partnership, but it is advisable to set up a drug-related business as LLP or private limited company as it will ensure that business is transferable and promoter’s liability is limited. Export of medicines outside India is highly regulated.  Under any circumstances, schedule H & X drugs cannot be sold customer without a valid medical prescription. For the online seller, it is mandatory to have a copy of such medical prescription and delivery must be local. Drugs cannot be sold for a minor (below 18 years), and you cannot charge delivery charges unless agreed by the customer at the time of checkout.

What is Drug License?

To start a business of Drugs & Cosmetics in India^[1], it is mandatory to obtain Drug License. The provisions related to drug license are contained in the Drugs & Cosmetics Act, 1940, and it extends to the whole of India. This act consolidates other laws related to drugs & cosmetics.

Drug Control Department is a regulatory authority which regulates the manufacture of medicines & cosmetics, storage, distribution and sale of medicines. The act was later amended in the year 1964 with the purpose of including Ayurvedic & Unani drugs.

What are some of the essential points to consider before obtaining Drug License in India?

The following points must be considered:

• Drug License is mandatory for drugs & cosmetics business;
• Drug license can be granted in commercial premises for sale of medicines & cosmetics;
• Pharmacy business need to comply with the conditions of license;
• The Drug license shall be displayed at the prominent place of premises.

Classification of Drug License in India

Drug License is classified under the following categories:

• Manufacturing License

Manufacturing Licence to manufacture allopathic/Homeopathic medicines/and cosmetics and also to repack Drugs can be granted only in the recognized Industrial areas.

• Sale License

This is issued for the sale of drugs. It is further classified into two different categories:

1. Retail Drug License
2. Wholesale Drug license

We have already discussed these two in the above paragraph.

• Loan License

It is issued to a person who intends to avail the manufacturing facilities owned by another licensee.

It may be noted that where pharmacy business is operating its business in more than two states then it is required to obtain a drug license in each state where the business is carried on. A separate license shall be issued in case drugs are sold at more than one place.

After the license is granted to the business, the licensee must ensure that all the conditions of the drug license must be complied with during business. In the case of any changes or modification in business activity, authority must be informed and all the registers, records, and forms must be maintained in a specified manner.

Drug License in India: Procedure for obtaining the license

There are different types of drug license, and it depends on the kind of business activity.

For obtaining the drug license, an application is required to be submitted by the applicant to the drug controller. An applicant must ensure that the application must contain correct information along with the necessary documents as per the guidelines of the drug & cosmetic rule. Before applying for drug license, the applicant should contact the duty officer at the mail receipt counter of the Drug Control Department for any guidance or information.

Drug control organization issues two type of license, out of which one is Retail Drug License (RDL) to run a chemist shop, and it is issued to only those persons who possess degree or diploma in pharmacy from a recognized university on the payment of the requisite fees and other is Wholesale Drug License (WDL) which is issued to a person who is engaged in the business of wholesale of drugs and medicines.

Upload the documents and form with the prescribed fee and upon completion of the online process, an inspector visits the site to verify the validity of documents. When all these steps have been completed positively, the authority issues the drug license. 

What are the basic Requirements for Drug License?

Here are the requirements for obtaining drug license:

• Area

To set up a medical shop or pharmacy, the minimum area of 10 square meters is required. In case of retail & wholesale license, the minimum area of 15 square meters is required.

• Storage

It is necessary to have a refrigerator and air conditioner on the premises because certain drugs such as vaccines, insulin injections, etc. are required to be stored in the fridge.

• Technical Staff/Competent Individual
  • Offline Sale of a drug can only be carried in the presence of a registered Pharmacist approved by the department who is required throughout the working hours in the retail shop.
  • In case of Wholesale, the sale can be made either by a registered pharmacist or another competent person who must be a graduate with one year experience in drugs or in the presence of anyone who has passed S.S.L.C having experience of four years in drugs, specially approved by drug control department.

Documents Required for obtaining Drug License in India

Here is the list of documents needed to obtain drug license in India:

• Application Form;
• Cover letter with the name & designation of the applicant;
• Copy of challan achieved by depositing fees for obtaining drug license;
• Declaration in a prescribed manner;
• Kite plan and site plan for the premises;
• The basis of possession of premises;
• In the case of rented property, ownership proof;
• Document related to the constitution of business such as Incorporation certificate/ MOA/ AOA/ Partnership Deed;
• Affidavit related to non-conviction of director/partner/ proprietor;
• Testimony of registered pharmacist or competent person and their appointment letter in case of an employed person.

Import of Drugs in India

The provision related to the import of drugs in India is specified in Schedule X, and those drugs not specified in the schedule require Import License.

In the case of import of more than one drug manufactured by the same manufacturer, the single license may be issued. Whereas in case the only manufacturer has two or more factories manufacturing drugs in different places then separate license shall be required in respect of each factory.

Conclusion

The rules and regulations for granting drugs license in India is strict. Therefore once you get the license make sure to comply with all the conditions at all time during the course of business. In case you need more information on the same, don’t bother, just contact Enterslice.

Read our article:How to start a Pharmacy Business in India