A Brief Overview on Obtaining a Wholesale Drug License

Any entity which is interested in starting a business requires an appropriate license to carry out and execute its activities. Thus, for trading or dealing with the drugs the entity requires a legal permit which is issued by the individual state government which becomes the place of the business that deals with drugs in a particular domicile. Being region-specific, the entity desirous in selling the drugs is obliged to obtain a license from the concerned state or states either to carry out its sale or manufacture the drugs.

Introduction 

Obtaining a license is mandatory in India to deal with drugs and cosmetics, the intended business unit be it an Indian individual or foreign entity are duty-bound to acquire a license from the Central Drugs Standard Control Organization (CDSCO). In accordance with the Drugs and Cosmetics Act, 1940 the entity has to submit its application to every individual state or states for the concerned state government to grant the license for sales along with manufacturing.

Governing Acts 

• Central Drugs Standard Control Organization (CDSCO) :Any business entity being desirous to manufacture or sell drugs has to apply to the state government according to the place of business this is a mandatory procedure of compliance irrespective of the nationality of the entity. Apart from getting a grant individually from the concerned state, the business entity has to apply to the CDSCO by filling out Form – 19, Form 20B, Form 21B.
  The Act consolidated all the governing laws correlating to drugs and a cosmetic which is established by the central drugs control department. The records, register etc pertaining to the business must be maintained filed and maintained properly and with further changes to the particulars of the business to be compiled with the authority.
• Drugs and Cosmetics Act, 1940:As per the Act, it covers a wide arena of manufacturing drugs or cosmetics of all kinds which is inclusive of homeopathic or allopathic medicines.
• State license for Rajasthan : License approved and granted by the state deals with the retail and wholesale distribution of drugs in India without any exemption, nevertheless, the issued license for the drug is subjective to the conditions of storage facilities in the sequel with the licensor’s premises expressly to the storage facility and retail unit.

Requirements for obtaining wholesale drug license 

• Area – one must have good space to implicate the drug storage thus the minimum pre-requisites of the area for a retail shop is 10 Sq.m, wholesale storage is 10 Sq.m, where the combination of wholesale and retail is 15 Sq.m.
• Storage – To avoid bio-molecular damage it is essential to have refrigerators or air conditioners on the premises where the drugs such as vaccines, insulin, injections are reserved.
• Technical Staff – staffing the premises with technical staffs with 1-4 years of experience is a must and helps in improvising the storage and maintenance facility.
• Cleanliness – in-order to avoid contamination proper hygiene must be maintained in the storage facility.
• Qualification – the entity or an individual who applies for the drug license should possess either one of the below mentioned qualification(s)
  • Registered pharmacists
  • 1 year of experience post graduation as a salesman in a registered wholesale drug license firm
  • 4 years of experience, without graduation in the lane as a salesperson in a registered wholesale drug license firm

Procedure for obtaining wholesale drug license 

• Documentation – the acquisitive business person has to obtain the drug license by anthologizing by documenting which includes the business plan, affidavits, disclosures, declaration, and site plan.
• Filling application = Forms like 19, 20B and 21B of CDSCO has to be filed online by scanning all the required documents as required by the authority.
• Inspection – after filing up the application the documents gets marked for inspection and the premises and details with regard to the submitted documents get verified with the comparison to the submitted documents.
• Grant of license – the final step of approval is granted after the inspector of the inspection. The business person is called up for final verification and the documents are corrected by the controller of drugs and the license is issued. The government department takes 45 to 60 working days to verify the provided information and further application gets approved.

Mandatory required documents for obtaining wholesale drug license 

• Complied application Form 19, 20B and 21B.
• Cover letter filled in with the applicant name and designation
• Proof of paid license fees
• Declaration – non conviction under Drugs and Cosmetics Act, 1940 to be signed by the owner, directors (active as well as dormant) or any other relating to the business.
• Business plan
• Documents with regard to the storage premises
• Incorporation certificate, AoA and MoA with other documents as may be required
• Full time registered pharmacist.

With the submission of the documents comes inspection by the pharmacy inspector and after strict adherence towards storage, display and sales the license gets issued.

Renewal procedure 

•  Filling up application – in order to obtain a renewal certificate, one has to apply through various forms which vary from nature of the drugs dealt and the details of the forms are

1. • Form 21C – Allopathic drugs and Schedule X drugs
   • Form 20E – Homoeopathic drugs
   • Form 19, 19B and 19C – Additional information

• – the remittance of INR 3000 with an additional charge of INR 250 for homoeopathic license and INR 500 for schedule X is made to the head of accounts through E-challan.
• Submission – with filing various documents and remitting fees the applicant have to submit the hard copy with the originals to the entry clerk in the section within 72 hours.
• Scrutiny – the drug inspector verifies all the submitted documents and inspects the premises and with satisfaction on the substantiation the renewal certificate and along with it, an issue if show cause letter and the corrective letter is issued by the deputy director.
• Personal hearing – when the inspector or the deputy director feels unsatisfactory with the documents submitted or with the inspection the owner or director or partner of the business to a personal hearing for clarification with the raised issue and only with resolving the queries of the drug inspector and deputy director one can obtain the renewal certificate.

Checklist of required documents for renewing the license 

• Form 19 has to be duly filled in by the application
• Online generated receipt or challan of fees
• Self declaration of the applicant which is duly notarized
• Updated pharmacist’s registration certificate
• Revised business plan (if any)
• Change of business area along with possession and other documents with regards to the premises (if any)
• Photo ID proof of applicant (Aadhar Card, PAN Etc.)
• Last renewal certificate (copy)

Final words – 

The manufacturing and storage of drugs and cosmetics are comparatively sensitive and complicated than compared to other field of business. Having complete purview in order to avoid complications with the manufacturing process the Government of India has laid down strict and stringent law to register and apply for licence in every state where such business is carried on (as per Drugs and Cosmetics Act, 1940).

As per Section 18(c) of Drug and Cosmetics Acts, 1940 – Continuing any business relating to drugs and cosmetics with non-compliances, such companies are levied with a fine of INR 5000 and imprisonment for 1 year which are subjective to an extension of 3 years.