What do you know about India's third-largest pharmaceutical market? Since the Covid-19 pandemic, pharmacies have become a $42 billion industry. Post-pandemic is set to be an ideal time to open your pharmacy if you've been thinking about it for years.
Medicine is the oldest profession of humankind. Given that survival is the first and most primal instinct, prevention and curing health risks were one of the first practices that began with the formation of civilisation. And along with advancements in civilisation and technology, there has also been advancement in medicines.
From using technology purely for research and development of drugs, we have now reached a stage where technology has become equally important to sell. You can now book a doctor’s appointment, schedule a medical procedure and even order your medicines online to be delivered to your doorstep.
There are two primary facets of the medical industry:
- Diagnostics
- Medication.
This article will discuss all there is to the pharmacy business. But first, let us look at the different types of pharmacy businesses.
Types Of Pharmacy Business
There are five primary business models through which pharmacies operate. They are as follows.
Standalone Pharmacy
These are like regular stores which sell medicines. They operate like any other business, except they have certain additional formalities and regulations. The business model is to operate only stores within a locality. The procurement of drugs by these pharmacies is based on local demand. The sale of medicine happens with the usual cash-and-carry format.
Hospital Pharmacy
These are pharmacies owned and operated by the hospital and are usually within the hospital premises. They also need to fulfil the same formalities as standalone pharmacies. But these formalities are completed by default with the regulations that have to be completed to open a hospital. These pharmacies procure drugs primarily based on the hospital’s needs and the speciality of the hospital. Non-patients can access these pharmacies also where normal cash and carried transactions occur. But they also supply medication to the hospital’s in-patients or patients under admission.
Chain pharmacy
Some pharmacies operate as chains, opening multiple shops in different localities under a single brand name. They are not separate from standalone pharmacies except for their wider reach and recognition in the marketplace.
E-pharmacy
This is the latest business model that many pharmacies are adopting. They operate solely online through a web portal or a web application. Apart from a warehouse or godown to stock the supply of medicines, they need to maintain a physical space for walk-in customers.
Registering A Pharmacy Business
Let us now look at the steps involved in starting a Pharmacy business.
Forming a Registering a Legal Entity
In every business, this is the first step. Based on the long-term and short-term vision, the founders have to decide which format of business they want to run their business in. According to the Indian Pharmacy Act of 1948, registration is mandatory. To operate a pharmaceutical business, you will need a registration certificate as proof of identity.
Tax Registrations
Again, this is common to almost all kinds of businesses and not just the pharmaceutical industry. It would be best to get all the tax registrations done for the business once the formal incorporation formalities are over. This includes obtaining a P.A.N., T.A.N. & G.S.T. number.
Getting a Drug Licence
In India, drug licences are issued by the Central Drugs Standard Control Organisation (C.D.S.C.O.) and the State Drugs Standard Control Organization (S.D.S.C.O.). In addition to prescribing standards, the state office grants licenses to assess specific parameters and infrastructure requirements (refrigeration, air conditioning to particular drugs, etc.) and engages a pharmacist with prescribed qualifications. These authorities issue two kinds of licences. A Retail Drug License and a Wholesale Drug License.
The documents required to get a drug licence are as follows:
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- Application form in the prescribed format
- Covering Letter with the intent of the application signed with the name and designation of the applicant
- Challan of fee deposited for obtaining drug licence
- Declaration form in the format prescribed
- Key plan(Blueprint) for the premises
- Site plan (Blueprint) for the premises
- Basis of possession of the premises
- Proof of ownership of the premises, if rented
- Proof of constitution of the business (Incorporation Certificate / MOA / AOA / Partnership Deed)
- Affidavit of non-conviction of proprietor/partners/ directors under the Drugs and Cosmetics Act, 1940
- Affidavit of a registered pharmacist or competent person working full time
- Appointment letter of registered pharmacist/competent person, if the employed person.
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Hiring Technical Staff
Compared to other businesses, the hiring policies of the staff at a pharmacy are not completely at their discretion. To start a pharmacy, one must have a B.Pharm degree (Bachelor in Pharmacy). Similarly, the staff hired in a pharmacy also needs to meet certain educational qualifications. These qualifications depend on the kind of drug licence, whether you have a Wholesale Drug Licence or a Retail Drug Licence. Let us look at the requirements:
Wholesale
The wholesale of drugs requires to be monitored and managed by a person who is registered as a pharmacist with the C.D.S.C.O. or S.D.S.C.O. or a competent person who is graduate with and possesses at least one year’s experience in the pharmaceutical industry or a person who has passed S.S.L.C. with at least four years of experience in the pharmaceutical industry and is specially approved by the department of drug control.
Retail
The sale of the drug by retail must be made in the presence of a registered pharmacist approved by C.D.S.C.O. or S.D.S.C.O. The registered pharmacist must be present at the physical location throughout working hours.
Conclusion
Starting any business requires a lot of prerequisites and regulatory formalities. For an essential commodity like medicine, the regulatory formalities are much more to maintain accountability while handing over such a crucial responsibility involving public health. The general registration process itself takes a considerable amount of time. And if any errors of omission or commission while completing the formalities can further delay the process. So it is always better to consult an expert with hands-on experience when it comes to registering a pharmacy business. If you have any other queries regarding the pharmaceutical business or have any requirements with registering your business, get in touch with us today. We will ensure that you get the best possible guidance and advice to help you fulfil your requirements without any hassle.
Read more:
- Requirements to Open a Pharmacy in India
- Cost of Opening a Pharmacy in India
- Pharmacy Business Profit in India
