If you are planning to start a drugs or cosmetics business in India you should obtain a drug license before starting the business. Ever since India has become more conscious about the healthcare sector the government of India made it compulsory for all drug and cosmetic companies to obtain a drug and cosmetic license. If you are involved in selling, manufacturing, distribution, export, import of drugs or cosmetics goods then you shall obtain a drug and cosmetic from the concerned authority. In this article, we will look at the complete process for Drug License in India.

What is a drug license?

For establishing a drug or cosmetic company in India obtaining drug and cosmetic license is compulsory under a Drug and Cosmetic Act, 1940. Drug and Cosmetic Act governed by the Government of India which regulates the manufacturing, selling, distribution, storage of medicines and cosmetics. This Act is applicable across India. The Drug control department makes sure that medicines and cosmetics shall have standard quality and hygiene according to the Drug and Cosmetic Act, 1940. Section 16 of the Drug and Cosmetic Act, defines the quality of medicines and cosmetics. This Act was amended in the year 1964 with the purpose of adding Ayurvedic and Unani drugs.

Why a Drug license is mandatory in India?

Due to the simultaneous growth in the healthcare sector Drugs and cosmetics industries are blooming. It is easy to be established the Drug and cosmetic industry requires less investment and space it is also an evergreen business in India. Drug and Cosmetic industry regulated by Drug and Cosmetic Act, 1940. Due to these advantages, it becomes mandated to regulate such industries from doing wrong practices and stop them to play with the health of common people. That is why obtaining a Drug license is mandatory in India.

Different categories of Drug licenses in India

• Manufacturing license 
• Sale license 
• Loan license 
• Import license
• Multi-drug license 

Manufacturing license  

A Manufacturing license is issued to those who involve in the manufacturing of drugs or cosmetics.

Sale license 

A Sale license is issued to those who involve in the selling of drugs or cosmetics.

There are two types of sale license 

1. Retail license 
2. Wholesale license

Loan license 

This license is issued when the person does not own the manufacturing unit but uses the manufacturing unit under another person’s license.

Import license 

This license is issued to those who involve in the import of drugs from another state or nation.

Multi-drug license 

This license is issued to those who run manufacturing units in different states under the same name.

Basic requirements for obtaining drug license

When it comes to obtaining a drug license in India there are some requirements that shall be fulfilled before obtaining a drug license.

• Area
• Storage
• Competent individual

Area 

The area where medicines are going to be kept shall match the standard of Drug and Cosmetic Act guidelines. The minimum requirement of area for a retail shop is 10 square meters and for the wholesaler, the minimum requirement of the area is 15 square meters.

Storage

This is another important requirement for obtaining a drug license. The place where medicines and cosmetics shall be kept that storage shall have a refrigerator and proper air conditioner because certain medicines require a certain temperature. For example, injection, vaccine, insulin.

Competent Individual.

When it comes to the sale or distribution of the medicine competency of staff shall be needed. For retail, the retailer shall have a diploma or bachelor’s degree in medical science. For wholesalers, the staff of wholesalers shall have a graduate degree with one year of experience.

Conditions for cancellation of license in India

Quality 

Under section 16 of the Drug and Cosmetic Act, 1940^[1]. The license shall be cancelled if the manufacturer of the drug or cosmetic industry failed to maintain the quality of the goods according to Drug and Cosmetic Act’s standard.

Misbranding 

Section 17 of the Drug and Cosmetic Act, 1940 defines misbranding as a drug that is considered misbranded if it claims to have more therapeutic value than it actually is. If any manufacturer or seller does the misbranding of the drug then in case the license shall be cancelled.

Deal with fake and adulterated drugs 

If any manufacturer or seller is caught dealing with fake or adulterated drugs the license of the manufacturer or seller shall be cancelled under section 27 of the Drug and Cosmetic Act, 1940.

Application for obtaining drug license in India

• The applicant shall apply online for obtaining the license and he/she shall have a valid email address and contact number.
• In the second step to keep all the documents updated.
• In the third step upload the documents and form along with prescribed fees.
• After completion of the online process, an inspector shall visit the site and verify the validity of the documents. Section 22 of the Drug and Cosmetic Act, defines the power of the drug inspectors.
• After completing the above steps the authority shall issue the drug license.

Essential documents for obtaining a drug license in India

1. Memorandum of association (MOA), Article of Association (AOA) for a company, and in case of limited liability partnership partnership deed, or agreement required.
2. Identification proof of director/partner/proprietor.
3. Site plan and key plan of the land. 
4. Copy of board resolution permitting obtaining of a license.
5. Proof of availability of storage space as cold storage refrigerator, air conditioner.
6. Affidavit regarding non-conviction of proprietor/partner/director and the firm.
7. The affidavit from the registered pharmacist/competent person.
8. Documents related to premises copy of ownership documents of property or rental agreement.

For retailer 

• Qualification proof 
• Registration of local pharmacy council
• Appointment letter 

 For wholesaler 

• Qualification proof 
• Registration of local pharmacy council
• Appointment letter 

Conclusion – A Complete Process for Drug License

The process to obtain a drug license in India is not easy but having proper documents and requirements can make your job easy to get a license. Before applying check your documents properly. And in case of any doubts consults with an expert. Feel free to reach an expert at bizadvisors.io to obtain a drug license.

Read our article:How to Start Pharmacy Business in India