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The Indian pharmaceutical industry is one of the largest pharmaceutical industries in the world. According to the India Brand Equity Foundation (IBEF), “Market size of the Indian pharmaceuticals industry is expected to reach US$ 65 billion by 2024, ~US$ 130 billion by 2030 and US$ 450 billion market by 2047.”
Entering the pharmaceutical market can be really profitable. The industry is irreplaceable because everybody needs medicines. They’re not a luxury, but a basic necessity. If you want to be a part of the Indian pharmaceutical industry, it’s time for you to start a pharmacy business of your own. Want to know how to go about it? Go through this article, where we explain all the prerequisites for starting a pharmacy business in India in 2024.
A pharmacy is a retail store where medicines and other articles are sold. It is run by a pharmacist who provides medicines based on prescriptions provided by the patients.
A pharmacy is also known as a drugstore, medical store or chemist’s shop.
Many hospitals have their own pharmacies, while many pharmacies are run independently. Some famous Indian pharmacies are Apollo Pharmacies Ltd., MedPlus Health Services Private Limited, Wellness Forever & Emami Frank Ross Limited.
The pharmacy businesses in India can be categorized in four types mentioned below:
Standalone pharmacies which generally operate in residential areas.
Hospital pharmacies which are set up inside hospitals.
Chain pharmacies which generally operate in malls and are backed by leading healthcare companies, hospitals or big companies.
Town pharmacies which operate in the township independently.
You must decide on the kind of pharmacy business you want to open.
Ensure compliance with all the mandatory requirements for launching a pharmacy business in India. This includes the following:
Minimum area requirement: 10 square meters for retail business, 15 square meters for wholesale business
Equipment requirement: Air conditioner, refrigerator for storing vaccines and other drugs
Licenses and Certificates: Wholesale/Retail Drug license, shop and establishment license, GST registration certificate, company incorporation certificate
Pharmaceutical expertise of Pharmacist: Qualified pharmacist on-site
Infrastructure: Proper storage, efficient inventory management
The following documents are required for opening a pharmacy business. All these documents must be submitted with CDSCO or your state government which issues the drug license:
Duly filled Application form.
Cover letter stating the intent with applicant’s signature.
Proof of fee payment.
Declaration form signed by the applicant.
Blueprint of the premises.
Proof of medical store’s constitution such as partnership deed, MOA and AOA.
Proof of non-conviction of owners as per the Drugs and Cosmetics Act 1940.
Affidavit of a competent person or registered pharmacist working full-time.
Appointment letter of the registered pharmacist/competent person, in case he is employed.
Documents showing ownership/possession of premises.
Owner’s Identity proof along with the passport-size photographs.
After filing the mandatory documents, you will be issued a drug license.
Now, let’s understand in detail all the steps involved in opening a pharmacy business. It is crucial to fulfill each and every step to ensure your pharmacy store has a successful launch:
It is a mandatory requirement to secure a pharmacy license to open a pharmacy business. For obtaining this license, the person needs to open a chemist store and be a qualified pharmacist, which requires securing B. Pharm/M. Pharm degree from a recognized university/college/institution.
As mentioned earlier in this post, there are four categories of pharmacy business. You must decide on whether you want to open a standalone pharmacy, hospital pharmacy, chain pharmacy or a town pharmacy.
Learn about the competitors in your area, the discounts and any reward points they are offering. Find out why a certain pharmacy sees more customers than another one near it. Conducting market research will help you to figure out where to set up your pharmacy business and how to attract customers.
You must choose an ideal location for setting up your pharmacy business. You must set it up near a hospital or an area which sees a lot of crowd.
If you set up your business in a remote area with low population density, you may not be able to see a lot of customers. Also, you must keep in mind your budget for paying shop rent while choosing the appropriate location.
You must register your pharmacy business with the Registrar of Companies (RoC). This will ensure compliance with company registration requirements in India.
Company registration is mandatory for one person companies, private limited companies and all other companies which are covered by the Companies Act 2013. However, in case of a sole proprietorship or partnership, you do not need to register your business.
Without obtaining all the necessary licenses, you cannot run a pharmacy business. You need to register your pharmacy under the Shop and Establishment act. According to the municipal rules of respective state/area municipal corporations, all the shops must obtain Shop and Establishment Act registration for their respective state. If you are in Maharashtra or Madhya Pradesh, then you will have to obtain a Gumasta License for your pharmacy store.
Additionally, you are required to obtain a drug license before you can sell medicines at your pharmacy store. The State Drugs Standard Control Organisation (SDSCO) issues licenses for the sales, distribution, and manufacture of drugs that are regulated by the state authorities. On the other hand, the Central Drugs Standard Control Organisation (CDSCO) is responsible for approving and issuing licenses for the newly made drugs and clinical trials of drugs. Furthermore, it controls the quality of the imported drugs and also actively coordinates with the SDSCO.
Depending on the type of pharmacy business, two types for drug licenses are required, namely, retail drug license and wholesale drug license. For a general chemist shop, a retail drug license is mandatory and is issued in the name of the individual who possesses a degree/diploma in pharmacy. A wholesale drug license is issued to medical stores dealing in wholesale business of drugs and medicines and the conditions for obtaining this license are less stringent as compared to a retail drug license.
A pharmacy business must acquire a Goods and Services Tax (GST) Registration Certificate if its aggregate turnover exceeds the threshold limit in a financial year.
The threshold limit specified by the GST council is Rs. 20 lakhs for all the Indian states except Hilly and North Eastern states, where this limit is Rs. 10 lakhs. Obtaining a GST registration certificate is extremely important to show compliance with GST laws.
Once you have registered your pharmacy business and obtained all the necessary licenses and approvals, you must promote your business. This involves being present on social media platforms and building a website where people can place online orders for the medicines they want to purchase.
You must provide your pharmacy business address details on Google so that whenever someone near your business wants to search for a chemist shop near them, they can find your business address in Google results and visit you easily. If you have positive Google reviews for your business, it’ll help you to attract more customers.
You can also promote your pharmacy business through local physical advertisements, such as by setting up boards or posters in permitted areas.
Pharmaceutical industry in India is one of the largest pharmaceutical industries in the world. There is a great demand and growth rate in this industry, as it serves almost all the people in India. After all, medicines are a basic need, not a luxury. If you want to set up a pharmacy business in India in 2024, make sure you follow all the steps mentioned in this blog post.
If you want to obtain a drug license, connect with Registrationwala’s consultants. We can help you to obtain this license in a smooth and hassle-free manner.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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