Opening a medical store requires many registrations and must follow legal procedures before selling medicines. India’s pharmacy and healthcare sectors have grown tremendously due to the increase in corporate and multi-speciality hospitals. Establishing a medical store is a good option for entrepreneurs having less capital and want to invest in the healthcare sector.Healthcare sector in India is growing remarkably due to increase in hospitals especially multi-specialty hospitals as the diseases are increasing at a fast pace and to cope with such situation, medications and hospital facilities become the need of an hour. The medical business in India does not affect even in the situation of pandemic or economic crisis.
Pharmacies and Medical stores are considered to be the last distribution channel of medicines and other pharmaceutical essentials and this is the most profitable business of all times as compared to others. But before commencing this venture, proper analysis and planning of the same is very crucial otherwise it would result in failure of business.
Types of Medical Stores in India
he type of medical store that an individual can establish are as follows:
- Hospital medical store: It is a medical store opened inside the hospital to cater to the needs of the patients who come to the hospital.
- Standalone medical store: It is the most common form of medical store. It is small or medium-sized stores opened in residential areas that the residents visit to purchase essential medicines.
- Chain pharmacy or franchise outlets: These are medical stores in malls and shopping complexes and are part of a chain of pharmacies with branches in different areas. They are usually large-sized medical stores.
- Township medical stores: These types of medical stores are opened in a township to cater to the needs of the people residing in the town or a village.
- Stores in government premises: These medicine stores are opened under various government policies and schemes and are directly under government control. They are usually opened inside Government offices and buildings.
Hospital medical stores, chain pharmacies, and township medical stores are generally established under a larger corporate hospital or entity such as a company. The standalone and township medical stores are usually set up as shops by proprietors or partners. A person wishing to open a medical store must first decide the type of medical store they want to set up and apply for its registration and other licences.
Prerequisite for opening a Medical Store in India
- Degree– A professional degree of B pharma/M pharma for a owner is necessary for opening medical store in India and if such person does not have such degree then he has to employ a person as a pharmacist having such degrees or diploma.
- Location– Before commencing a business of medical store or pharmacy choosing of a location is an important thing to consider. A good location will always help shops to perform well and sustain in a long run.
- Making contact– Owner shall get in touch with medicine manufacturing company or the wholesalers to get the stock of medicines at his shop and hence it will give a better profit margin. But a high order quantity is required. Distributors and suppliers of medicines and other product can also be approached by the owner itself in his locality.
- Medical Store area– For starting a medical store, an area of about 100 sq feet is required and should have adequate space for refrigerator, racks, drawers, pallets, etc. Proper cemented floor and concreted roof should be there without any cracks and flakes in the premises.
- Storage– A refrigerator is required to store injections such as insulin, antibiotics, vaccines and other medicines which is required to store at comparatively low temperature.
- Investment– The initial investment on a medical store depends upon the location, area, city and other factors such as whether premises is on rent or owned, whether owner is the pharmacist only or he needs to employ some other person as his pharmacist, etc.
- Documents required– There are several documents required to apply for a medical store or pharmacy in India.
Documents required to set up Medical Store in India
- Application Form in the prescribed format with respect to Pharmacy License
- Covering letter that specifies the purpose of application along with the name, signature and designation of the applicant
- Challan for depositing fees for obtaining drug License
- Declaration form
- Key plan for using such premises
- Site plan including the design layout for the premises
- ID proofs and photos of the owners or all the partners of the premises
- Residential Address proof of the pharmacist and the applicant
- Education qualification certificate of the pharmacist
- If the premises to be used is on rent, then proof of ownership as well as rental agreement and declaration by the owner of premises
- Certificate of Incorporation or MOA, AOA or partnership deed as a proof of constitution of Company
- Non-conviction affidavit of proprietor or partner or directors as the case may be under the Drugs and cosmetics Act, 1940
- If registered pharmacist or competent personnel is hired than his appointment letter
- Affidavit of such registered pharmacist or competent person working on full time basis
Licenses and Registrations required for setting up Medical Store in India
- Land Registration– An owner can have its own piece of land registered as a medical shop or pharmacy by submitting sale agreement or rent agreement. For registering a land for this purpose involvement of various legal entities shall take place.
- Registration of business as Medical Store– Registration of Medical stores are governed by The Indian Pharmacy Act, 1948 and according to such Act, every medical store shall get itself register by submitting all the required documents to the governing body. Various Types of medical stores shall get itself registered either as a private company or sole proprietorship or as an LLP.
- Company registration– Registration of business either as a private limited company or as an LLP, etc. is very important. An applicant can apply for either proprietorship registration, partnership registration, OPC registration, Private limited company registration, LLP registration, Shop registration, etc.
- Tax Registration– GST registration is must and essential for a medical business also. Different threshold limits are taken into consideration that are available in GST registration.
- Drug License– Irrespective of nature of medical store, its type, size, turnover every medical store is require to obtain Drug license from Central or State Drug standards control organization.
Medical Store Registration
Hospital medical stores, chain pharmacies, and township medical stores are generally established as a company or LLP. The standalone and township medical stores are usually set up as partnership firms or sole proprietorships. The medical store owner should decide the type of business structure for the medical store and apply accordingly for its registration. Below are the types of business structures that a medical store owner can choose for opening the store:
Proprietorship Registration
In a sole proprietorship business, there will be only one person as the owner of the medical store. The sole owner runs and manages the medical store. There is no specific registration required to be obtained to establish a sole proprietorship. The sole proprietor or owner should get a PAN card and open a bank account to run the business.
Partnership Registration
A partnership firm means the medical store is established by two or more partners who manage the business together as per the partnership deed executed by all partners. It should be registered with the Registrar of Firms.
One Person Company (OPC) Registration
A One Person Company (OPC) is a company registered by a single person as the sole member of the company. An OPC can have only one member who runs the medical store. When a medical store is registered as an OPC company, it will get all the benefits of a company, such as limited liability to the company member, perpetual succession, separate legal entity, etc. An OPC should be registered with the Registrar of Companies (ROC).
Private Limited Company Registration
A medical store can also be registered as a private limited company with the Registrar of Companies. A private limited company is started by a minimum of two members and two directors. However, the company cannot issue a prospectus inviting the public to subscribe to its shares.
Limited Liability Partnership (LLP) Registration
Recently, Limited Liability Partnerships (LLPs) have gained popularity. Medical store owners are considering it to set up their businesses as an LLP. Two or more partners establish an LLP under an LLP agreement executed by all the partners. The functioning of an LLP is similar to a partnership firm, but it has the features and advantages of a company. An LLP should be registered with the Registrar of Companies.
Other Registrations Required for Medical Stores
Apart from the medical store registration, many other registrations and licences are required by a medical store owner to run the business. The other significant registrations which a medical store owner must obtain after registering the medical store as a sole proprietorship, partnership firm, LLP, or company are as follows:
Pharmacy Licence
A pharmacy licence is one of the major licences required to operate a medical store. The medical store owner or the appointed pharmacists should be qualified pharmacists with a degree of B. Pharm or M. Pharm to secure a pharmacy licence.
Shop and Establishment Registration
The shop and establishment act registration is required for all medical stores to operate their business. As per the municipal rules of the respective state/area municipal corporation, all stores/shops must mandatorily obtain a registration under the respective state’s Shop and Establishment Act.
GST Registration
Any business, including a medical store, requires a Goods and Service Tax (GST) registration if the aggregate turnover of the business exceeds the threshold limit in a financial year as prescribed under the GST Act. Under the GST Act, any business supplying goods having a turnover beyond the threshold limit of Rs.40 lakhs for normal category states and Rs.20 lakhs for special category states in a financial year must obtain GST registration.
Drug Licence
Every medical store needs to obtain a drug licence before commencing business. Since medical stores are involved in procuring and selling drugs, they will have to obtain a drug licence from the Central Drugs Standards Control Organisation (CDSCO) and State Drugs Standard Control Organisation (SDSCO). There are two types of drug licences that a medical store needs to obtain depending on the type of store:
- Retail drug licence: The retail drug licence is required to operate a general chemist shop. This licence can be done only in the individual’s name who possesses a diploma or degree in pharmacy from a recognised university or institute.
- Wholesale drug licence: The wholesale drug licence is given to medical stores dealing in the wholesale business of medicines and drugs. There are less stringent conditions to obtain this licence than a retail drug licence.
Establishing a medical store is a good option since the medical sector is growing in India. To open a medical store, an individual must obtain a partnership, proprietorship, LLP or company registration. Once the store is registered, the individual must mandatorily obtain other licences and registration to run the business smoothly, such as the drug licence, shop and establishment licence and pharmacy licence. The individual must also comply with store requirements as per the Drugs and Cosmetics Act, CDSCO and SDSCO rules and regulations to operate the business of selling medicines and drugs.
FAQs
What are the basic requirements to open a medical store in India?
You need to have a degree or diploma in pharmacy from a recognized institution. Additionally, you must be registered as a pharmacist with the state pharmacy council.
Is a drug license required to open a medical store?
Yes, a drug license is mandatory. You need to apply for a retail drug license from the State Drugs Control Organization or the Central Drugs Standard Control Organization, depending on the location.
How do I obtain a drug license?
To obtain a drug license, you need to submit the required documents, including educational qualifications, proof of premises, and other relevant details. The application process varies by state, so contact the local drug control office for specific information.
Can a non-pharmacist open a medical store in India?
No, only a qualified pharmacist can open and operate a medical store in India.
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