Ensuring everyone has equal and fair access to drugs and medicine is the primary concern of any government. But the right to manufacture and sell drugs and medicines has to be given cautiously. Hence the government has stringent rules for granting licenses for the manufacturing and selling of drugs and medicine. The Act that governs the end to end process from manufacture to the sale of drugs in India is the Drugs and Cosmetics Act, 1940 (‘Act’).
Meaning of Drugs
Section 3(b) of the Drugs and Cosmetics Act,1940 defines “drug” to include all medicines and devices for the use of human beings or animals internally or externally, and all substances planned to be used for or in the diagnosis, mitigation, treatment, or prevention of any disorder or disease in animals or human beings, including preparations applied on the human body for the purpose of repelling insects like mosquitoes; it also includes all substances that can be used for the destruction of insects and all components of a drug – like empty gelatin capsules. The definition was amended in 1964, to include Ayurvedic and Unani Drugs.
Purpose of Drug Licence
The access to medicines and drugs must be restricted and regulated to ensure that such goods are not abused or misused by individuals. Thus, all pharmacists, wholesalers, retailers, manufacturers, sellers, dealers and importers of drugs, cosmetics, ayurvedic, Siddha and Unani drugs have to mandatorily obtain drug license under the Drugs and Cosmetics Act, 1940.
The purpose of the drug license is to grant permission to allow enterprises or individuals to engage in businesses related to drugs and cosmetics. No enterprise or individual can operate a business dealing in drugs, medicines or cosmetics without obtaining a drug license in India. In addition to a drug license, they must also obtain a trade license and a shop and establishment registration.
The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945, help the government regulate and monitor the quality of drugs sold in India. The government exercises control over drugs from the raw material stage during manufacture, sale, distribution and till it is sold on to a patient or consumer by a pharmacist in a retail pharmacy, hospital or dispensary.
The government also exercises control in the aspects related to import and export of medicines, sale of the drug to a minor, consumption of schedule H & X drugs, etc., that requires thorough monitoring and cautious execution. The drug license is granted by the drug controlling authority under the Drugs and Cosmetics Act, 1940.
Types of Drug License
- Manufacturing License– License issued to a business that manufactures drugs inclusive of allopathic/homoeopathy medicines.
- Sale License – License issued for the sale of drugs. It has the following bifurcations: – Wholesale Drug License – Retail Drug License
- Wholesale License – A drug wholesaler must obtain a wholesale licence. Wholesale means the sale of the drug to a person/retailer to further sell it.
- Retail License – A retail license is required for the retail sale of drugs. A retail sale means the sale of drugs or cosmetics for the consumption of the end consumer. Retailers can sell it to a dispensary, hospital, educational, medical, or research institute. Retailers engaged in pharmaceuticals, cosmetics, stand-alone pharmacists, ayurvedic shops, etc need this license.
- Loan License – License issued to a business that does not own the manufacturing unit but uses the manufacturing facilities of another licensee to manufacture drugs.
- Import License – License issued to any dealer importing the products for the manufacturing of drugs or is engaged in the business of importing drugs in India.
- Multi-Drug License – License issued to businesses that own pharmacies in multiple states with the same name.
Drug Controlling Authority or Regulatory Authority
The drug controlling authority as known as the drugs controller specified under the Drugs and Cosmetic Act is responsible to issue different drug licences. The drug controlling authorities (licensing authorities) are as follows:
- State Drugs Standard Control Organisation (SDSCO) – Issues licenses for the sales, distribution, and manufacture of drugs regulated by the state authorities.
- Central Drugs Standard Control Organisation (CDSCO) – Responsible for approving and issuing licenses for the newly made drugs and clinical trials of drugs. It also controls the quality of the imported drugs and coordinates with the SDSCO.
- State Drug Controlling Authority with approval by the Central License Approving Authority – Issues licenses for establishing blood banks and their components and products like Vaccines, Sera, etc.
- Department of Ayush – Issues licenses for ayurvedic, Unani, Siddha, homoeopathic and herbal products for cosmetic and medical use.
Prerequisites For Obtaining a License
- Pharmacist/ Competent Individual: The pharmacist must be qualified in the case of a retail business. In the case of a wholesale business, the individual must be a graduate with 1-year experience or an undergraduate with 4 years of experience.
- Space Requirement: The other important requirement is space, that is the area of the pharmacy/unit. For both wholesale and retail licenses the area of the pharmacy/unit should be 15 square meters. In the case of a retail and medical shop, it should be 10 square meters. The clear height of the sales premises shall be as per the guidelines laid down under the National Building Code of India, 2005.
- Storage Facility: The other important requirement is storage facility since some drugs require to be stored in low temperatures, refrigerators and air conditioners.
- Technical Staff: The retail pharmacy staff must be experienced with in-depth knowledge. The staff of the wholesale pharmacy must be a graduate with a minimum of 1-year experience or an undergraduate having four years of experience.
Application for a Drug License
The drug controlling authority or the regulatory authority is responsible for issuing the drug license. The applicant must apply to the respective drug controlling authority based on the license he/she requires as each drug controlling authority is responsible to issue different licenses (as stated above). The following is the process for obtaining the drug license:
Visit the respective drug controlling authority website
The applicant must visit the respective drug controlling authority (SDSCO, CDSCO or Ayush) depending on the type of license he/she is applying for since each drug controlling authority is responsible for the issue of different types of drug licenses.
Filing of application
The applicant must file the drug license application online on the respective drug controlling authority website. The applicant must fill all the details asked in the application form.
Upload documents
After filling in the details on the application form, the next step is to upload the documents and submit the form along with the applicable fees. The applicant must keep all the documents updated before filing the application.
Visit by drug inspector
After receiving the application form, the drug Inspector will personally visit the company premises, shop or the drugstore for the verification of documents and correctness of facts stated in the application.
Grant of the drug license
After inspection and verification by the drug inspector, the drugs controller will issue the drug license.
List of Application Forms
| Sr. No | Form No | Purpose |
| 1 | Form 8 | Application for licence to import drugs apart from those specified in Schedule X of the Drugs and Cosmetics Rules, 1945 (‘Rules’) |
| 2 | Form 8A | Application for licence to import drugs specified in Schedule X of the Rules |
| 3 | Form 9 | Undertaking accompanying an application for an import licence |
| 4 | Form 12 | Application for licence to import drugs for purpose of examination, test or analysis |
| 5 | Form 12A | Application for the issue of a permit to import small quantities of drugs for personal use |
| 6 | Form 12AA | Application for licence to import small quantities of new drugs by a government hospital or autonomous medical institution for the treatment of patients |
| 7 | Form 14A | Application from a purchaser for test or analysis of a drug |
| 8 | Form 19 | Application for grant or renewal of a license to sell, stock, exhibit or offer for sale, or distribute drugs apart from those specified in Schedule X |
| 9 | Form 19A | Application for grant or renewal of a license to sell, stock, exhibit or offer for sale, or distribute drugs by retail via dealers who don’t engage the services of a registered pharmacist |
| 10 | Form 19AA | Application for grant or renewal of a licence to sell, stock or exhibit or offer for sale by wholesale or distribute drugs from a motor vehicle |
| 11 | Form 19B | Application for license to sell, stock or exhibit or offer for sale, or distribute Homoeopathic Medicines |
| 12 | Form 19C | Application for grant or renewal of a license to sell, stock, exhibit or offer for sale, or distribute drugs specified in Schedule X of the Rules |
| 13 | Form 24 | Application for the grant of or renewal of a licence to manufacture for sale or for distribution of drugs other than those specified in Schedules C and C (1) and X of the Rules |
| 14 | Form 24A | Application for grant of a loan license or renewal of a loan license to manufacture for sale or distribution of drugs other than those specified in Schedule C, C (1) and X of the Rules |
| 15 | Form 24B | Application for grant or renewal of a license to repack for sale or distribution of drugs, being drugs other than those specified in Schedule C and C (1) excluding those specified in Schedule X of the Rules |
| 16 | Form 24C | Application for the grant or renewal of a license to manufacture for sale or for distribution of Homoeopathic medicines or a license to manufacture potentised preparations from back potencies by licensees holding a license in Form 20 C |
| 17 | Form 24D | Application for the grant or renewal of a licence to manufacture for sale of Ayurvedic, Siddha or Unani drugs |
| 18 | Form 24E | Application for grant or renewal of a loan licence to manufacture for sale of Ayurvedic (including Siddha) or Unani Drugs |
| 19 | Form 24F | Application for grant or renewal of a license to manufacture for sale or for distribution of drugs specified in Schedule X and not specified in Schedule C and C (1) of the Rules |
| 20 | Form 27 | Application for grant or renewal of a license to manufacture for sale or for distribution of drugs specified in Schedule C and C (1) excluding those specified in part XB and Schedule X of the Rules |
| 21 | Form 27A | Application for grant or renewal of a loan licence to manufacture for sale or for distribution of drugs specified in Schedules C and C (1) excluding those specified in part XB and Schedule X of the Rules |
| 22 | Form 27B | Application for grant or renewal of a licence to manufacture for sale or for distribution of drugs specified in Schedules C, C(I) and X of the Rules |
| 23 | Form 27C | Application for grant or renewal of licence for the operation of a Blood Bank for processing of whole blood and/or preparation of blood components |
| 24 | Form 27D | Application for grant or renewal of a licence to manufacture for sale or for distribution of Large Volume Parenterals/Sera and Vaccines/recombinant DNA (r-DNA) derived drugs excluding those specified in Schedule X of the Rules |
| 25 | Form 27DA | Application for grant or renewal of a loan licence to manufacture for sale or for distribution of Large Volume Parenterals/Sera and Vaccines/recombinant DNA (r-DNA) derived drugs excluding those specified in Schedule X of the Rules |
| 26 | Form 27E | Application for grant or renewal of licence to manufacture blood products for sale or distribution |
| 27 | Form 27F | Application for grant or renewal of licence for collection, processing, testing, storage, banking and release of umblical cord blood stem cells |
| 28 | Form 30 | Application for licence to manufacture drugs for purposes of examination, test or analysis |
| 29 | Form 40 | Application for issue of registration certificate for import of drugs into India |
| 30 | Form 44 | Application for grant of permission to import or manufacture a new drug or to undertake clinical trial |
List of Essential Documents For Obtaining a License
The documents essential for obtaining a sale license are:
- Constitution of the entity, Memorandum of Association (MOA), Articles of Association (AOA) for a company, partnership deed, LLP agreement in case of partnership and LLP.
- ID proof of partner/director/proprietor.
- Documents related to premises – Copy of ownership documents of property or rental agreement and NOC (No Objection Certificate) from the owner of the rented premises as the case may be.
- Site plan and key plan of the premises.
- Copy of Board resolution permitting obtaining of a license.
- Proof of availability of storage space as cold storage, refrigerator, etc.
- Copy of challan as proof of depositing fee.
- Affidavit regarding non-conviction of proprietor/partner/director and the firm.
- The affidavit from the registered pharmacist/competent person.
- Cover letter with name and designation of the applicant
- Declaration form in a prescribed format
- Applicant’s qualification certificate
- For a pharmacist at a retail sale:
- Proof of qualification
- Registration of local pharmacy council
- Appointment letter
- For a pharmacist at a wholesale sale:
- Proof of qualification
- Experience certificate
- Appointment letter
FAQs
Is the drug license and a pharmaceutical business license the same?
Yes. The drug license is also known as a pharmaceutical license. A drug license is required for all businesses involved in distributing pharmaceutical and medicines supplements.
What are the types of drug businesses that require a drug license?
All types of drugs or cosmetics businesses that fall under the Drugs and Cosmetics Act, 1940, are required to obtain a drug license before starting/establishing a drug or cosmetics business. The Drugs and Cosmetics Act covers all drugs businesses, including allopathic, homoeopathic, ayurvedic, Siddha or Unani drugs.
What are the drugs included under the Drugs and Cosmetics Act, 1940?
The drugs included under the Drugs and Cosmetics Act are as follows:
- All medicines for external or internal use of animals or human beings and all substances intended to be used for or in the treatment, diagnosis, prevention, or of any disease or disorder in animals or human beings, including preparations applied on the human body for repelling insects like mosquitoes.
- Substances (other than food) intended to affect the function or structure of the human body or intended to be used to destroy insects that cause disease in human beings or animals, as may be specified by the Central Government by notification in the Official Gazette.
- All substances intended for use as components of a drug, including empty gelatin capsules.
- Such devices intended for external or internal use in the treatment, diagnosis, prevention, or mitigation of disorder or disease in animals or human beings, as may be specified by the Central Government by notification in the Official Gazette.
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