Pharma Distribution Services- Everything you need to know!

The Indian pharmaceutical sector currently ranks fourth in terms of volume and thirteenth in terms of value in the global pharmaceutical market, with exports worth more than US $2.6 billion and domestic sales of more than US $4 million. In India, there are four categories of pharmacies: independent pharmacies, hospital pharmacies, chain pharmacies, and township pharmacies. These can all be registered as partnerships or as private limited companies, making them easily transferable or profitable for the partners.

Continue reading to see how you can establish your own pharmaceutical distribution business in India quickly and easily.

Also Read:How can you get certified for a Pharma Distribution Business in India?

1. The Legal Procedures for Opening a Wholesale Pharmacy

The Drugs and Cosmetics Act, 1940 (as revised in 1945), establishes the rules and regulations for the importation, production, and distribution of pharmaceutical products in the country. It offers provisions for the classification of medications according to specific regimens of medication.

If you want to start a medical pharmacy business, you must first obtain a licence from the Central Drugs Standard Control Organization (CDSCO) or a state drug standard control organisation using Form No. 19. The individual should hold a pharmacy degree or diploma from a recognised school or university, as well as one year of hands-on experience in the pharmaceutical industry. For any payment transaction, the pharmacist must additionally obtain a GST registration from the government.

Documents required for the application for a license include:

• A covering letter stating the purpose of the application and signed by the applicant with his or her name and position title.

• The fee for acquiring a drug licence in the form of a challan.

• Form of declaration in the format authorised by the court.

• The building's master plan (blueprint)

• If the premises are rented, you must provide proof of ownership.

• Proof of the company's formation (incorporation certificate, memorandum of agreement, agreement of association, partnership deed, etc.)

• An affidavit of non-conviction of the proprietor/partner/directors pursuant to the 1940 Drug and Cosmetic Act.

• An affidavit from a licenced pharmacist or other qualified individual who works full-time

• If you are an employed individual, you must provide an appointment letter from a certified pharmacist or competent person.

The legal responsibilities do not end here. Regular inspections by a pharmacist inspector are conducted under the supervision of the Central Drugs Standard Control Organization (CDSCO), which is headed by the Drug Controller General of India. GN Singh, the current Director General of the Indian Pharmacy Council, is severe in enforcing the norms of sale, storage, and display of medications in all local, retail, and wholesale pharmacies.

2. A location in which the medications will be stored

It is mandatory to submit all of the necessary, verifiable documentation pertaining to the location where the pharmacy will be established. The availability of suitable space for a wholesale pharmacy is a precondition. When both retail and wholesale are merged, the criteria change significantly.

Refrigerators and air conditioners are required for obvious reasons, including the potential for biomolecular damage to vaccines, sera, insulin, injections, and other medical supplies. To guarantee good hygiene, the environment should be kept clean and free of rodents.

3. Capital Expenditures Required to Start a Pharmacy Distribution Business

Maintenance costs, as well as the purchase of medicines and treatments, may be incurred in the absence of an initial investment in accordance with the needs of the business.

• The amount required for documentation and licence is around Rs 25 lakh, which includes Rs 3000 as a registration fee.

• Furniture such as shelves and cupboards, an air conditioner, and a refrigerator might cost up to two lakh rupees.

• Rs30,000 for computer equipment and Rs30,000 for office space (if rented).

• A working crew consisting of a pharmacist and two employees who are available 24 hours a day, seven days a week (70,000 per month).

• When taking into consideration the amount of inventory necessary, an investment of 40-80 lakhs is required to start a wholesale business in India.

• The cost of pharmaceuticals available in the pharmacy store is included in this figure. Medicines costing between Rs 20 lakhs and Rs 50 lakhs, on the other hand, must be provided to retailers on a loan basis in order to foster a positive professional connection.

4. Awareness of the Situation of Current Trends in Drug Dealing

According to the Pharmaceuticals and Cosmetics Act (1948), Schedule B (Rule 98) stipulates the "shelf-life" (usually 1–5 years) of drugs and the circumstances under which they should be stored. In order to avoid toxicity, the various drug formulations must be disposed of when their expiration dates have passed.

The pharmacist or the dealer should be aware of the shelf life of stored medications as well as the varying regimens for each medication. Among the "prescription medications" included in schedule H are those which are available for sale only upon the written request of the patient and provided by a licenced medical practitioner.

"Non-prescription" or "over-the-counter" (OTC) medications are available for purchase from a variety of sources, including grocery stores. It is critical to keep up with the ongoing drug studies being conducted by the government in order to be aware of the medications that have been prohibited. It is also beneficial to be aware of the drugs that are popular among medical professionals in order to ensure that they are appropriately stocked.

Medicines or cosmetic goods that are not widely used tend to have lower profit margins because they expire over time and must be removed from the shelves when they are first introduced. The pharmacy's operations can be made easier by categorizing medications according to their intended use and age.

5. Collaboration with local clinics, city hospitals, and health centers is a priority

Collaboration with established medical stores can be quite helpful when the dealer is able to develop more attractive offers and perks for the customer base. Providing better-quality pharmaceuticals at the same price or larger incentives at the same selling price to local clinics or pharmacies might ensure a broader market for a company's products or services.

Pharma stores in tier-2 and tier-3 cities prefer lower-cost pharmaceuticals from alternative pharmaceutical companies, whereas medical stores in metropolitan areas want larger discounts without cutting the list price, provided that quality is not compromised.

6. Associating with the policies of the government is mandatory

Using the Pradhan Mantri Bharatiya Janushadhi Pariyojana (PMBJP) initiative, the government hopes to reduce the cost of medical drugs by providing generic or less expensive medications to the general public. A total of 70 percent of the Indian pharmaceutical business is made up of generic drugs, with the remaining 21 percent made up of over-the-counter medicines and the remaining 9 percent made up of patented products.

According to the National List of Essential Medicines (NLEM), the pricing of pharmaceuticals listed in the First Schedule of Drugs is established consistently across the board for both branded and generic medicines that have the same active ingredient as the branded medicine. The Non-scheduled mode allows manufacturers to increase the Maximum Retail Price (MRP) by more than 10% without obtaining government approval.

Selling generic pharmaceuticals will not increase the profit margin significantly, but it will assist in obtaining benefits offered by the government in conjunction with the scheme, such as training for pharmacists or other staff members, and price reductions.

The Bottom Line

As you can see, the Indian government has enacted a number of stringent pharmaceutical rules, which you must follow if you intend to start a firm in the pharmacy sector. As a result, we recommend that you visit API First and speak with one of their consultants or group of professionals. You may rest confident that they have extensive understanding of the new rules and will assist you in obtaining certified.