The pharma sector of India is rapidly growing. Many schemes of the government, including MSME and others, have helped many small businessmen set up their businesses for every category out of which Medical pharmacy is one of them. Government has also opened the pharmacy retail shops to provide the generic medicines at higher discount. Here is the complete guide to become a drug distributor, pharma wholesaler. This article covers the key points you should know before starting a wholesale medicine business.
Different Types Of Medical Agency Business?
Before you dive into starting your medicine business in India, you must understand the different types of pharmaceutical wholesale businesses you can start. Once you’ve successfully operated as a retailer, you can consider expanding your venture into wholesale businesses. Here are the types:
Industrial Pharmacy
Industrial pharmacy is part of the pharmaceutical industry and covers research, production, packaging, quality control, marketing, and sales of medicines. An industrial pharmacist might work for a specific pharmaceutical company, promoting its products and informing healthcare providers about how they work and their benefits.
Chain Pharmacy
A chain pharmacy is a retail pharmacy that is part of a larger network or group of pharmacies owned and operated by the same company. These pharmacies are typically found in multiple locations, often across various regions or even nationally, and they follow standardized practices and procedures. Chain pharmacies offer a consistent range of products and services, including prescription medications, over-the-counter drugs, health and wellness products, and often additional services like vaccinations and health consultations.
Hospital Pharmacy
A hospital pharmacy is a specialized department within a hospital that is responsible for the procurement, storage, compounding, dispensing, and monitoring of medications for inpatients and sometimes outpatients. Hospital pharmacies play a critical role in ensuring the safe and effective use of medications within the hospital setting.
Specialist Pharmacy
A specialist pharmacy is a pharmacy that focuses on providing medications and support for patients with complex, chronic, or rare conditions requiring specialized treatments. These pharmacies typically handle medications that are not commonly available at regular retail pharmacies and may require special handling, administration, or monitoring.
Animal Pharmacy / Veterinary Pharmacy:
Starting a medicine wholesale business can be lucrative by supplying human and veterinary medicines to hospitals, clinics, and retailers. Focus on obtaining the necessary licenses, building supplier relationships, and offering competitive pricing. With proper logistics, regulatory compliance, and gradual scaling, you can grow a sustainable and profitable venture.
Types of Medicine Wholesale Pharmacies
- Clinical Medical Stores:
A clinical medical store can be found within a doctor’s clinic or a large hospital. Whether it’s part of a doctor’s practice or a corporate hospital, it’s considered a private organization. The success of a clinical medical store depends on the overall success of the hospital or the popularity of the docto - Standalone Medical Stores:
Standalone medical stores are typically owned by a single individual or a small group. The success of these stores is influenced by factors such as market competition, the store’s location, and its reputation in the community. - Chain Medical Stores:
A chain medical store is an extension of a larger medical organization. The brand’s credibility makes it easier to generate profit, but success still hinges on factors like competition and location.
Why Do You Need a Wholesale Drug License in India?
- A wholesale drug license is mandatory for making, selling, distributing, or storing medicines in India.
- This license acts as official permission to operate a legitimate pharmaceutical business.
- It is required for businesses involved in manufacturing or distributing medicines.
- Operating without a registered drug license is illegal under Indian law.
How to Get a Drug Licence for Medicine Business?
Obtaining a wholesale drug licence to start a medicine wholesale or drug distributor business in India is a necessity for anyone looking to start a pharmaceutical business in the country. The government has strict regulations on how drugs are manufactured, stored, displayed, and sold.
GST Identification: A valid GST number is required, especially for online businesses.
Qualified Pharmacist: An affidavit proving pharmacist qualification and at least one year of experience is needed.
Application Process:
- Application forms are available online or at state drug-control offices.
- Submit documents like a cover letter, affidavit of competence, experience certificate, and other state-specific requirements.
Inspection: The CLA will inspect your premises, and a license will be issued upon approval of your setup.
The process is governed by the Drugs and Cosmetics Act, 1940. To get a license from the Food Safety and Drug Administration, you need to fill out the necessary forms and submit them to the State Licensing Authority.
The application and licensing for wholesale drug licenses are covered in Schedule C of the Drugs and Cosmetics Act, 1945. The entire licensing process takes about a month for approval, depending on the review by the Drug Inspector and the report sent to the Licensing Authority.
The type of business determines the required forms for the license. For example, a retail chemist shop needs Forms 20 and 21 (Allopathic), while an Ayurvedic chemist shop needs Form 20C. Wholesale licenses require Forms 20B and 21B, and for Schedule X drugs, Form 20G is necessary.
Why FSSAI Registration is important for the Wholesale Business?
FSSAI registration is essential for starting and operating a medicine wholesale or drug distribution business in India.
Brand Growth: Helps build a reputable brand name and grow your customer base.
Types of Licenses:
- Basic FSSAI Registration: Free for small food businesses.
- State FSSAI License: For businesses with turnover up to ₹12 lakh.
- Central FSSAI License: Required for businesses with turnover over ₹20 crore or involved in export/import.
Documentation Required:
- Proof of business location and a PAN card.
- List of food products sold (if applicable).
- Business constitution certificate and utility bills.
Compliance Maintenance:
- Regular renewal of FSSAI registration ensures compliance with regulations.
- Legal assistance is recommended for smooth renewal and adherence to guidelines.
Hiring the Staff for Your Business
Once you have procured the necessary licenses and permits, you can hire staff for your business. Some of the key positions to fill include:
- Pharmacist: 1 to 2
- Assistant pharmacist: 2 to 3
- Sales Executive: 2 to 3
- Storekeeper: 1
- Helper: 1 to 2
The salaries will depend on the candidates’ qualifications and experience. You can use online job portals to find the right staff for your business.
To Note
Having a pharma distribution business is an exciting proposition. The pharma industry is one of the fastest-growing industries in the world. It is expected to grow at a rate of 15% by 2022.
If you are planning to start a pharma distribution business, you must take into account a few things.
- First, you need a licence
- Second, you must hire staff
- Third, you must research the market
- Finally, you need to have the necessary infrastructure and fixtures to run your business.
The drug department has a set of rules and regulations for launching your distribution business. If you fail to comply with these rules, your registration will be denied. You will also need to pay Goods and Services Tax (GST) on your total turnover.
You may also want to take advantage of MSME registration. This is an MSME loan that is available through a financial institution in India. To apply for this loan, you will need to make a significant cash investment.
SWOT Analysis of a Medical Wholesale Business
Using a SWOT analysis of a wholesale medical business can help you determine the strengths and weaknesses of the industry. This is important because it enables you to assess where improvements can be made. Developing a business strategy that will give your company long-term competitive advantages is essential.
In addition to identifying the strengths and weaknesses of the medicine wholesale business, a SWOT analysis will also show you where preemptive measures can be taken to improve the industry. This is because changes in one factor often lead to changes in other factors.
For example, a SWOT analysis of a pharmaceutical distributor could identify the following weaknesses:
- Outdated medical equipment
- Low staff morale
- High-risk business models
In addition to identifying these weaknesses, a SWOT analysis of a company can also help you evaluate the QbD rollout strategy and identify opportunities. For example, if your company has a strong brand portfolio, you can enter new product categories and expand into new markets.
You must follow these key steps to start a medicine wholesale business in India. There are multiple wholesale business in India.
FAQs
How to start a medicine trading business?
To start a medicine trading business in India, follow these steps:
- Decide the Business Type: Choose whether you want to start a wholesale or retail pharmacy business.
- Get a Drug License: Apply for a drug license from your state’s Drug Control Department. This is mandatory for selling medicines. You’ll need to meet specific requirements, like having a qualified pharmacist or competent person on staff.
- Register the Business: Register your business as a legal entity (e.g., sole proprietorship, partnership, or private limited company) with the appropriate government body.
- Get a GST Registration: Register for Goods and Services Tax (GST) to comply with tax regulations.
- Find a Location: Choose a suitable location for your pharmacy or wholesale business, ensuring it meets the minimum area requirements set by law.
- Set Up Supply Chain: Establish reliable connections with pharmaceutical distributors and manufacturers to stock medicines.
- Hire Qualified Staff: Hire licensed pharmacists and trained staff to manage the sale and distribution of medicines.
- Comply with Storage Requirements: Ensure proper storage for medicines, including refrigeration for temperature-sensitive products, as per regulations.
Q. Is medicine distribution profitable?
Medicine distribution can be profitable due to the constant demand for pharmaceutical products. Distributors earn margins from supplying medicines to pharmacies and healthcare facilities. Profitability depends on factors like the range of products, market demand, competition, and efficient supply chain management.
Q. How to start a medicine stockist business?
To start a pharma stockist business, you’ll need GST registration, a wholesale drug license, proof of ownership, and other necessary permits required by regulatory authorities. It’s important to follow all the rules and regulations to legally run a pharma distribution business in India.
Q. How to check a drug license number in India?
To check a drug license number in India, you can visit the Central Drugs Standard Control Organization (CDSCO) website or the State Drugs Control Department’s portal. Look for the section related to “Drug License” or “License Verification” and enter the license number to verify its authenticity. Some states also provide mobile apps or online verification services for checking drug licenses.
Q. What is the most profitable drug market?
The most profitable drug market is the pharmaceutical industry, particularly in areas like cancer treatments, biologics, and speciality drugs. These high-demand, high-cost treatments often generate significant revenue for pharmaceutical companies.