For a nation to develop and grow it is important to be healthy and in order to be so, it is important to have access to drugs and medicines. However an unrestricted access to drugs and medicines accounts for its misuse and leads way towards destruction of an individual and nation as whole and thus Indian Government has laid down stringent rules and regulations for manufacturing and distribution of drugs and medicines in the country.
About Drugs and Cosmetics Act
Passes in the year 1940, The Drugs and Cosmetics Act 1940 was prepared keeping the recommendations of Chopra Committee and has various sections in it to keep the country’s health practice in place. Section 16 of the act defines the standards of quality of drugs and Section 17 defines misbranding i.e. a drug is considered to be misbranded if it claims to be of more therapeutic value than it actually is and if a manufacturer is caught doing so, Section 18 lays down the rule for him to discontinue the manufacture of the said drug or medicine.
Also, Section 27 of the act deals with fake and adulterated drugs and Section 28 makes the mention or description of ingredients of the drugs or medicines a mandatory practice. Apart from The Drugs and Cosmetics Act 1940, there are two major drug laws in India i.e. The Narcotic Drugs and Psychotropic Substances Act 1985 and The Prevention of Illicit Trafficking in Narcotic Drugs and Psychotropic Substances Act 1985. Introduced on 23rd August 1985, the Narcotic Drugs and Psychotropic Substances Bill. 1985, it is illegal for a person to produce/manufacture or cultivate, sell, possess, purchase, transport and store and to consume any narcotic drug or substance whereas the Prevention of Illicit Trafficking in Narcotic Drugs and Psychotropic Substances Act is a drug control law which was introduced in order to enable the full implementation and enforcement of the Narcotic Drugs and Psychotropic Substances Act 1985.
Pharmacy business in India
In India, government exercises its control over medicines and drugs starting from procurement of the raw material to its manufacturing, sale and distribution and upto the time it is passed on either to a patient or consumer by a Pharmacist in retail pharmacy, hospital or a dispensary.
Pharmacy business in India which is on the growth side irrespective and unaffected by the economic cycles and moreover with time popularity of corporate hospitals and multi-functionality and specialty hospitals have contributed their fair share towards growth of the pharmacy and healthcare business in India.
Pharmacy and healthcare business has become quite popular amongst the existing and aspiring entrepreneurs because not they require minimal capital investment, they also can be started with a small space and with the multi-fold growth of multi-specialty hospitals, opening up a chemist shop is quite a lucrative option in terms of profit it earns and even if you are connected with or a part of the distribution chain in the pharmaceutical business, then also it makes sense and it is an unsaid fact which you must understand to opt for a drug license before you start with the sale, purchase and distribution of drugs or medicines without drug license because doing so is a punishable offence and has very serious repercussions.
Apply for Drug license
Drug license is basically acquiring permission from the government in order to deal with drugs or medicines and in India there are two types of drug license i.e. the retail license and wholesale license for drug distribution and sale in India and is issued subject to certain terms and conditions as per the Drugs and Cosmetics Act 1940. In other words, if you want to start or continue in a business that deals with drugs or cosmetics in India, you cannot do so unless you acquire the required license from the competent and authorized authority and license for the sale of drugs is granted only at the premises which are either for commercial purpose or the premises independent of residence, also called as mixed land use.
In India, the regulatory body of pharmaceuticals drugs and medical devices is The Central Drugs Standard Control Organization (CDSCO) and is also the head of Drugs Controller General India (DCGI), which is in turn responsible for granting the drug license to various pharmaceutical organizations and you can obtain your drug license from two authorities’ i.e.
- Central Drug Standard Control Organisation, and
- State Drug Standard Control Organisation.
There are various licenses issued for the pharmaceutical business and you can apply for the one which suits your business:
- Drug manufacturing license
- Whole drug license
- Retail drug license
- Import of drugs or cosmetics
- Import of medical equipment
- Export of medicines
If you want to start a pharmacy or medical store in India, you have to be qualified as per the specified guidelines or requirements:
- Educational qualification: In order to start your own chemist or drug store, you must either hold a degree of Bachelor of Pharmaceuticals or Masters of Pharmaceuticals and in case you don’t have the required degree, you have to find a registered pharmacist who can lend you his or her name against goodwill payment for the registration purpose simply because in order to obtain a pharmacy license, you will need qualification proofs of a minimum of one pharmacist.
- Enough storage space: In order to obtain drug license for your medical store, you need to furnish documents to prove that you have ample storage space to store the medicines and in case your pharmacy business combines both retail and wholesome business, you need to have at least 15 square meters of storage space. You can submit either a rental agreement or ownership proof of premises with a minimum of 10 square meters.
- Investment: Although opening a medical store does not need major investment, however you must do your homework regarding your investment for a shop either on rent or having its ownership plus the inventory you would need to start your medical store and depending on the city you are targeting and the size of the medical store, the rent of your medical store could vary from Rs 10,000 to Rs 10 lakhs.
- Hiring pharmacist: In order to run your medical store effectively, you would need to place a competent person on the counter throughout the working hours who apart from having knowledge about the medicines, is also good in marketing and selling skills and in order to hire a pharmacist for your medical store, you must cater for his monthly salary which would ideally vary from Rs 5,000 per month to Rs 30,000 per month depending on the city you are targeting and the desired person could either be a registered pharmacist or a graduate having at least 1 year of experience in dealing with drugs or someone who has cleared SSLC with at least 4 years of experience in dealing with drugs. The pharmacist you hire for your medical store should be registered.
- Cold storage facility: As per the Drugs and Cosmetic Act 1940, every medical store need to have a cold storage facility because it is mandatory to store certain drugs in the refrigerator such as drugs like vaccines, Sera, Insulin injections etc.
- Location: Selecting a right location from your medical store is one of the key things you need to work out before you start anything else because in case you have missed out on a good location, it will be difficult for your business to thrive.
- Contact the local wholesaler or manufacturing company: In order to have the inventory of your medical store in place, it is important for you to be aware and in touch with the local wholesaler of manufacturing company.
- Tie-up with a doctor: In order to give a boost to your medical store, an informal tie-up with the doctors of your area becomes essential.
- GST registration: Starting 1st July 2017, GST registration has become mandatory and you therefore would be required to have the GST registration of your medical store in place.
Documentation for opening a medical store
Different states of India have their set of documents checklist which you need to produce in order to obtain the drug license.
A general checklist of the required documents is as below: