For doing any kind of business related to the health care sector in India, one needs to get approval from the government. These approvals have been given in the form of different types of drug license. The government is very strict while providing the approval because this sector directly impacts the health of the people. Public health is one of the crucial issues in India, if anything goes wrong with the healthcare sector, it will directly cause a loss to the health of the people. Hence this business sector is carefully monitored by the government and its authorized authorities.
The health sector is growing at a great pace in India. It comes under the top 10 businesses in India. This industry is governed by the Drugs and Cosmetics Act. Authorities that provide approvals and licenses under this act are state as well as central drug standard control organizations. In India, there are different types of medication, and the government provides different types of drug licenses to all of them separately. Without getting approval from the government, one cannot do business in the healthcare sector. Hence whether you are a retailer, wholesaler, manufacturer, or distributor of any kind of drug you must take a drug license as per your business so that you can do business freely.
What are the Different Types of Drug Licenses?
If we closely observe the Indian healthcare sector, there are different types of drugs available in the market. These drugs include allopathic drugs, homeopathic drugs, Ayurvedic drugs, etc. They are further bifurcated into some more types like wholesalers, distributors, retailers, manufacturers, etc. Now to cover all these categories, different types of drug licenses have been introduced by the Indian government. One license cannot control the entire healthcare sector, because the needs and requirements of different sectors under the healthcare sector are different. Hence drug license has been divided into the following categories:
Manufacturing Drug License
Manufacturers in the healthcare sector are those who are manufacturing drugs. These drugs can be Ayurvedic, Siddha, Unani, allopathic, cosmetic, or any other type of medication or drugs that has been specified in the Drugs and Cosmetics Act of 1940. All such kinds of manufacturers need to get approval from the government to manufacture any kind of drugs. After the proper inspection of the manufacturer as well as the manufacturing plant, the government will issue approval in the form of a license and that license is called a manufacturing drug license. This license has been issued by the state government. Which state will issue that depends on the location of the manufacturing plant.
For example, if the plant is located in Rajasthan then the Rajasthan government will issue the manufacturing drug license to such manufacturers.
Loan Drug License
There are certain kinds of businesses that want to manufacture drugs but they don’t have the equipment and the necessary facilities. In such cases, they took the help of the manufacturers who are already in the manufacturing business of drugs and have manufacturing drug licenses. They tie up with such businesses that already possess manufacturing drug licenses and start their business. Although the manufacturer already possesses a manufacturing drug license, now if two manufacturers are tied up in such a situation they have to get approval from the government again. The government will provide them a different license in the form of approval if they are satisfied and that license will be known as Loan Drug License.
For example, “A” wants to manufacture drugs but he doesn’t have the equipment and facilities to manufacture, hence she joins hands with “B” who is already running a manufacturing plant and making drugs and has a manufacturing drug license. Both of them tie up and now “B” will manufacture drugs for “A”. For such a tie-up they need to take permission or approval from the government again in the form of a Loan Drug License.
Import Drug License
As the name of the license, “Import Drug License” itself suggests who needs this license there is no need for much explanation. Import Drug License is one of the different types of drug license necessary for those who are importing products for manufacturing drugs in India or who are importing drugs in India. If anyone who is in the business of importing drugs is caught running the business without this license then a heavy penalty will be imposed on such businesses. The penalty is so much that nobody took the risk to do drug business without this license.
Multi Drug License
There are certain businesses in the healthcare sector that are not just operating in one state instead they are working in more than one state. Such kinds of businesses are known as interstate drug businesses. Businesses that are present in multiple states need to take a drug License from the government. This is one of the different types of drug license which has more formalities comparatively.
Sale Drug License
There are certain types of businesses in the healthcare sector that are engaged in selling drugs only. Such businesses need to take a Sale Drug License from the government. This can be divided into two types: Wholesale Drug License and Retail Drug License. Businesses that are doing wholesale Pharmaceutical business need to take Wholesale Drug License and the one who are doing retail business of pharmaceuticals needs to take Retail Drug License.
Key Requirements to Obtain a Drug License
There are three essential factors or we can say key requirements which one must have before applying for different types of drug license in India. These three requirements are given below:
- A minimum required area is 10 sq. meters if somebody is setting up a retail pharmacy. However, if they are in the business of wholesale drugs, the minimum area that must be required will be 15 sq. meters.
- For the storage of medicines and vaccines, a proper storage facility is required.
- Technical expert staff who have knowledge about the drugs are mandatory to run a drug business in India.
Documents Required for Drug License in India
There are some basic documents required while obtaining different types of drug license in India. The list of such required documents for a drug license is given below:
- Application Form through which one can apply for the drug license
- A copy of the Challan must be there as it will be required
- ID proof and Address proof of the one who wants to take the license will be required
- In the case of a Partnership Firm, a copy of the Partnership Deed and in the case of an LLP, a copy of the LLP Deed will be required
- Memorandum of Association i.e. MOA and Articles of Association i.e. AOA must be there
- Certificate of Incorporation as per the entity will be needed
- A copy of the Site Plan of the premises as well as a key plan of the premises, is required
- Copy of Board Resolution to obtain drug license
- Appointment letter of the authorised person of the company who is taking a drug license
- Business address proof for the drug license is required
- Proof of proper storage facility is a must
Conclusion
The healthcare sector in India is heavily regulated to ensure the safety and well-being of the public. Different types of drug licenses are issued by the government to control different aspects of this sector. These licenses cater to the diverse needs of manufacturers, importers, retailers, and wholesalers in the pharmaceutical and healthcare industries. The critical factors for obtaining a drug license include minimum space requirements, proper storage facilities, and the employment of technical experts with knowledge of drugs. After the appropriate inspection, permission to run a pharmaceutical business will be given in India.
