Introduction: Drug Distribution in India

For a nation, readily available medicines and drugs hold one of the most important logistical necessities to ensure good health conditions for its population, and the Governments of each nation regulate the entire distribution and licensing of medicines for the same purpose.

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The Indian government, to ensure good governance and that any individual is unable to misuse or abuse the framework of distribution of drugs and medicines, and the licensing system, has come up with strict rules and regulations, defaulting which will only result in strict legal repercussions. 

The right to manufacture and sell drugs and medicines has to be obtained cautiously by applying for a license. Drug Distribution in India is governed by and has to be obtained in accordance with the provisions of the Drugs and Cosmetics Act of 1940. Through this Blog, Corpseed will give you enough information to obtain a license for drug distribution in India, without going through hurdles to obtain one. 

The Definition of Drugs, Given In the Law

In the Drugs and Cosmetics act of 1940, a ‘drug’ is defined as any medicine or device used for treating ailments, diagnosis or to prevent any disease of animals or humans externally or internally including the articles which are supposed to be applied on the skin of a human being to ward off mosquitoes and insects. In 1964, the Government of India amended the definition of drugs in the act and included Unani Drugs and Ayurvedic Drugs. 

The State Drug Standard Control Organization and the Central Drug Standard Control Organization are the bodies of the Indian Government that regulate the entire registration and licensing of drugs in India. The Central Drug Standard Control Organization acts as the head office for the Drugs Controller General of India. Every manufacturer and producer must comply with the requirements of the Drugs and Cosmetics Rule 1945.

The Purpose of Obtaining a Drug License

The Indian government, in an effort to minimize access to raw materials of drugs and medicines, to manufacture a drug or medicine has regulated and restricted the accessibility of such materials to ensure that such articles and substances are not abused or misused by any individual and hence, all retailers, manufacturers, pharmacists, sellers and whoever has anything to do with drugs and medicine has to obtain a drug license under the Drugs and Cosmetics Act, 1940. 

The actual purpose of licensing and registration process for drug licenses is that the government can keep a check on individuals and enterprises indulging with drugs and medicines in any form or format and any process from the raw material stage to the final product stage. The Drugs and Cosmetics Act of 1940, and the Drugs and Cosmetics Rules of 1945, help the Indian Government to maintain a tight hold on the quality of drugs being circulated in the Indian markets. 

The Government also exercises its dominant control when it comes to the export and import of medicines and the distribution and selling of Schedule H and Schedule X drugs which can only be distributed by a licensed distributed and only be sold in accordance with a prescription, prescribed to a patient by a licensed medical practitioner. 

Types of Drug Licenses

Pharmaceutical business in India requires the following types of licenses:

Manufacturing License: Manufacturing licenses are issued to businesses that engage in the business practice of manufacturing drugs and medicines including allopathic and homeopathic medicines and drugs in India. 

Sale License: A sale License is issued to a business that indulges in the sale of drugs and medicines and has two bifurcations namely: A retail Drug license and a Wholesale license. 

• Retail License: A retailer can sell drugs and medicines to the end consumer. A retailer can sell medicines and drugs to a dispensary, a hospital, or any research, medical or educational institute. Any retailer who is dealing in the business of medicines and drugs with stand-alone pharmacists, ayurvedic shops, cosmetics, etc. needs to have a retailer license mandatorily. 
• Wholesale License: A Wholesaler can sell to any individual or retailer who can further sell the medicines and drugs to the end consumer. A wholesaler who sells drugs must mandatorily obtain a wholesale license. 

Loan License: Loan Licenses are issued to businesses that do not own a manufacturing facility but employ any other licensee who owns a manufacturing facility or a license in order to manufacture drugs and medicine. 

Import License: Import Licenses are issued to businesses or any individual who indulges in importing medical substances and articles for manufacturing drugs or is indulged in the business of importing medicines and drugs to India. 

Multi-Drug License: Multi-Drug Licenses are issued to businesses that own and run a pharmacy in multiple states in the territory of India which have the same name. 

Conditions To Obtain A Drug Distribution License In India

The Following are prerequisite conditions to fulfil to obtain a drug license in India.

Competent Individual/Pharmacist: The most important prerequisite to obtain a license, a retailer must be a qualified pharmacist and in the case of a wholesaler, they must be a graduate having at least 1 year of experience, and an undergraduate may be considered only when they have at least 4 years of experience. 

Space: The second most important condition to fulfil when acquiring a drug license is the area of the pharmacy or the unit through which you would be conducting your business. For a retailer as well as any wholesaler, the space of the pharmacy or the unit should be at least 15 square meters. The height of the ceiling must be in accordance with the National Building Code of India, 2005. 

Storage: The third condition to fulfil is to have a storage facility that has the basic conveniences of having electronic appliances and technologies which help in the storage of medicines and drugs in a cool and dry condition. For example- Refrigerators, air conditioners, cold storage, etc. 

Technical staff: The staff of a retail pharmacy that engages with the end consumers of a medical product must have exemplary and in-depth knowledge. The staff of a wholesale pharmacy should be a graduate with at least 1 year of experience or, an undergraduate may be considered if and when they have at least 4 years of experience. 

Documents Required To Obtain a Drug Distribution License

The following documents are required to obtain a drug distribution license in India. 

• An Articles of Association and Memorandum of Association of the company/ the Partnership deed/ the LLP Agreement in case of partnership and LLPs.
• Identity proof of the director/ partner or the proprietor. 
• Documents that are related to the site i.e. a copy of the ownership document of the property or the rental agreement of the property and a no objection certificate from the owner of the property in case of a rented property. 
• A blueprint of the site plan of the premises. 
• A copy of the board resolution for obtaining a license.
• Proof of cold and dry storage availability. 
• A copy of the challan which proves that you have deposited the prescribed fee. 
• Affidavits of partner/director or proprietor (whose identity proof is attached) and the firm regarding non-conviction. 
• Affidavit from the competent person/pharmacist of the site. 
• A cover letter with the designation and name of the applicant 
• A form declaration in a prescribed format 
• The qualification certificate of the applicant
• These documents are to be attached in case of a pharmacist at a retail seller: 

1. Proof of qualification
2. Appointment letter from the employer 
3. Proof of registration at the local council of pharmacy

• These documents are to be attached in case of a pharmacist at a wholesale seller: 

1. Proof of qualification
2. Appointment letter from the employer 
3. Certificates to prove experience

Application Process For Obtaining Drug Distribution License In India

For obtaining a drug distribution license in India, One must follow the following steps: 

• The application process for obtaining a drug distribution license begins online. The applicant must have a valid contact number and an e-mail id of the business they wish to establish. Visit the respective drug control authority’s website. 
• The applicant is required to upload all the documents which are up to date with the prescribed fee. 
• Once the online application process has concluded, an inspector shall visit the pharmacy for inspection and verify the information provided by you in the online application. 
• After fulfilling all the conditions and satisfying all the government regulations through inspection by the inspector, the authority shall issue the drug distribution license to the applicant. 

Conclusion

The Indian Government strictly regulates the sale of drugs and medicines. The Application process for obtaining a Drug Distribution license could be complex as it is very important to apply for the right license of drug distribution in which your business deals with all the supporting documents. The Drugs and Cosmetics act of 1940 ensures that every business, firm, or individual is following the rules and regulations set forth by the Government of India and thus can be considered as a disciplinary law.