6 Simple Steps to Start a Medicine Wholesale Business in India

6 Simple Steps to Start a Medicine Wholesale Business in India

Pharma industry in India today ranks 4th in volume and 13th in value in the global pharmaceutical market with exports worth US Dollars 2.6 billion besides domestic sales of over US Dollar 4 million worth. The different types of pharmacy in India are standalone, hospital, chain pharmacy and township pharmacy. All of these can be registered under the partnership or as a private limited company and thus can easily be transferred or profits can be shared among the partners.

Before you proceed any further I would recommend you to also go through our article on basic steps of starting a business after reading this one to get a wide view on deciding your target market, fundraising etc.

Now let’s proceed to how you can start your own medicine wholesale business n India easily.

  1. Legal Procedure to Start a Wholesale Pharmacy

The Drugs and Cosmetics Act, 1940 (amended in 1945) states the guidelines for import, manufacture, and distribution of drugs in India. It contains provisions for classification of drugs under given schedules. To start a medical pharmacy business one needs to get a license from the Central Drugs Standard Control Organization (CDSCO) or State Drugs Standard Control body, under form No. 19. The person should have a degree or diploma in pharmacy from a recognized institution or university with 1 year experience in dealing with drugs. The pharmacist must also get the GST registration for any payment transaction.

Documents required while applying for the license-

  • Application form in the prescribed format.
  • Covering letter with the intent of the application signed with name and designation of the applicant.
  • Challan of fee deposited for obtaining drug license.
  • 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 Drugs and Cosmetics Act, 1940.
  • Affidavit of registered pharmacist or competent person working full-time
  • Appointment letter of registered pharmacist/competent person, if employed person.

The legal bindings do not end here. Regular inspections by a pharmacy inspector are held under the supervision of CDSCO, headed by Drug Controller General of India. GN Singh being the current DCGI makes it strict for all the local, retail or wholesale pharmacies to maintain the standards of sale, storage, and display of drugs.

If you want to know some more details on company registration process in India then you can Click Here.

  1. Premises to Stock the Medicines

It is mandatory to submit the proper verifiable documents regarding the area where the pharmacy is to be started. The apt space for a wholesale pharmacy is a prerequisite. The requirements change when both retail and wholesale are combined. Refrigerators and air-conditioners are a must for obvious reasons that concern the biomolecular damage to the vaccines, sera, insulin, injections, etc. The place should be kept clean and rodent free to ensure proper hygiene.

  1. Investments to Set up a Pharmacy Wholesale

With an initial investment as per the demands of the startup, the otherwise expenditures may include maintenance charges and buying of medicines and drugs.

  • Documentation and License:- Approximately  25OOO/-  including Rs 3000/- as registration fee
  • Furniture:- Shelves and cupboards, air conditioner, refrigerator may add up to 2 lacs
  • Computer system- Rs30,000
  • premises (if rented)

Working staff including a pharmacist and 2 employees for 24*7 (70,000 / month). An investment of 40-80 lakhs is required in establishing a wholesale business, considering the quantity of stock required.

Cost of drugs stocked in the pharmacy store is inclusive in this. Whereas, medicines costing around Rs 20 lakhs – Rs 50 lakhs need to be distributed to the retailers on a loan basis, in order to establish a healthy professional relationship.

  1. Awareness Related to Current Trends in Drug Dealing

In India, the schedule B (Rule 98) of Drugs and Cosmetics Act (1948) specifies the ‘shelf-life’ (mostly 1-5 years) of drugs and the conditions of storage. Beyond the expiry date, the various drug formulations must be discarded to avoid toxicity. The pharmacist or the dealer should be vigilant about the life period of stored medicines and their different schedules. For example, schedule H lists the ‘prescription drugs’ that can be sold only against a prescription issued to a patient by a registered medical practitioner. The ‘non-prescription’ or ‘over-the-counter’ (OTC) drugs can be sold even by grocery stores. It is important to stay in touch with the ongoing trials of drugs held by the government to be informed of the banned medicines. It also helps to know about the drugs popular with the medical practitioners so that they can be stocked adequately. The medicines or cosmetic products which are not popular tend to decrease the profits as they when stocked, may expire with time and need to be removed from shelves. Segregation of medicines pertaining to age groups can ease the functioning of the pharmacy.

  1. Collaboration with the Local Clinics, City Hospitals, Health Centers

Starting to market your business with previously based medical stores, is very beneficial when the dealer can come up with more exciting offers and benefits. Providing the local clinics or the pharmacies with drugs of better quality at the same price or larger incentives at same selling price can guarantee a wider market for the business. Cheaper drugs from alternate pharmaceutical companies are preferred by pharma stores of tier-2 and tier-3 cities, while medical stores of metropolitan cities prefer larger discounts without reducing the MRP, provided quality is not being compromised.

For Example, if drugs from Ranbaxy are more popular with the pharmacies in an area, but Cipla manufactures similar drugs at a cheaper price.Then, convincing the medical store owners to sell Cipla drugs can help establish the clients.

Collaboration with the local clinics/ hospitals, new medical shops or pharmacies in the area will ensure profits, this is largely based on trust and professional ethics of the dealing parties.

  1. Associating with Government Policies

Under the Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP) scheme, the government aims to provide generic or cheaper medical drugs to the people. Generic drugs form the largest segment (70%) of Indian pharmaceutical sector with OTC medicines (21%) and patented drugs forming the remaining 9%. The National List of Essential Medicines (NLEM) states that the prices of drugs under First Schedule of Drugs are fixed uniformly for all branded and generic medicines containing same active molecule. In case of non-scheduled mode, manufacturers are free to increase the Maximum Retail Price (MRP) by more than 10% of MRP. Selling generic drugs cannot improve the margin so much but this can help in availing benefits provided by the government in association with the scheme training of the pharmacist or the other staff members, discounts in prices.

The organized computer-based program helps to reduce investment in resources like human labor and capital. Pharmaceuticals and healthcare companies employ medical sales representatives. They endorse the drugs manufactured by their employer companies by distributing free samples to various clinics and healthcare units. This saves the pharmacist, the expenditure of advertising a new brand or equipment. Working with Carrying And Forwarding Agents or more popularly known as C&F dealers is another feature in pharmacy wholesale business. They purchase medicines from the pharmaceutical company and sell these to wholesalers. A company can have 2-3 CFAs in each Indian state and then pay them as per the turnover of products in a year. Pharmacy business is an excellent startup if rules and regulations are religiously followed. With minimum investment, it turns over significant profits. After all, health for all matters!

Related Post

26 Comments on “6 Simple Steps to Start a Medicine Wholesale Business in India

    • Hi Susheel Paul,
      There is no difference in taking a generic medicine franchise. The procedure is completely same as in the case of other branded company.
      1. You need to take wholesale supply license and other drug licenses which are mentioned in the article.
      2. Contact companies which manufacture drugs/ medicines and ask for their franchisee.
      3. Start selling

      Reply
  • Hi
    I have 2200square feet basement available in New Delhi. I am planning to start the medicine distribution as I have also good knowledge of cold room. Please tell me the procedure for the same.
    Thanks

    Reply
  • Can i strat generic medicine business within 5 Lacks Investment ? without any space ? (I mean beginning from Home).

    Reply
    • You cannot start a wholesale business in that budget. If you are planning to start a medical shop then I don’t think you can get licenses to sell medicines from home. And please don’t try to sell medicines without proper licenses else you might face severe consequences.

      Reply
  • · Edit

    Hlw my age is 20 now i want to start a wholesale medicine distributer,, and my budget is 20lakhs ,, can i go forward,, and plz tell me the eligibility for lisence,, and also tell me how to startup ??

    Reply
    • if you belong to a normal city like Gurgaon, Delhi etc then 20 lakh is a low budget for wholesale distributorship. Also, age is not the restriction till you have required licenses and educational degrees which are mentioned in the article.

      Reply
  • · Edit

    Good morning sir, I am interested to start medical agency at the municipality. How much budget do I need, and how to approach medical companies?

    Reply
  • · Edit

    Hello sir,

    I have 20 years of experience in API & formulation manufacturing in quality control as well quality assurance departments, I have completed my B.Sc degree in chemistry, zoology and botony,
    I can go budget upto 50 laksh, is any additional qualifications required, please suggest regarding qualifications and procedure mentioned in the Indian drug council guidelines.

    Reply
  • Hello Sir,

    I HAVE 8 YEARS EXP IN PHARMA TEACHING FIELD AND HAVE GOOD KNOWLEDGE ABOUT PHARMACEUTICALS. I HAVE PLANNED TO ESTABLISH WHOLE SALE OF DRUGS WITH INVESTMENT 1CR AT CITY. I HAVE LESS INCOME SOURCE SO IS THERE ANY CHANCE TO GET LOAN FOR BUSINESS. ALSO I AM PHARMACY BACKGROUND PERSON.

    Reply
    • Hi Seenu,

      You can apply for loan in two ways.
      1. Before starting the business- Tell the bank that you have your own 1cr and need some more money to start your business in and efficient way. Make a good business plan and projection report and approach the bank.

      2. Start with your money and once you start generating money show the statements and ITR to bank and on that behalf take the loan.

      Both the ways are great but in 2nd you take long time to come into full execution while in 1st you need to visit too many banks. You can decide as per your resources and efforts.

      Reply
  • hello sir,
    I have a degree in MSc in pharmaceautical Chemistry.
    Can i get drug license for wholesale business.
    pl, reply .

    Thanks & regards,
    Anurag.

    Reply
  • Hi

    I am a pharma graduate but do not have experience in same field. I am interested in starting my own medicine wholesale distribution business. Please guide me on how to establish lead with existing medicals where other distributors also exist.
    Also what are the payment terms that are follwed currently. Since the investment is huge what is the return time we can expect?

    Would you advise to start a business without having self capital in hand?

    Reply
    • If you are taking whole money on interest then I won’t suggest you as you are new and already many competitors are their so you might make many mistakes and loose.
      Well if you want to lead from your competitors then you need to take care of many things like consistent approach, relaxation is payments, deal with big hospitals etc. For more you can read my articles on “sales”.
      https://www.businessalligators.com/?s=sales

      You can also do a job for 5-6 months under such person who own medical wholesale contract in starting to understand the complete flow.

      Reply
  • · Edit

    Hi sir, I have done my degree in B.Sc. Chemistry. Can I start wholesale pharmacy business? Any advise? Reply me and ur number also.

    Reply
  • · Edit

    Sir I want to start a medicine wholesale business in kolkata in a very small scale. Can I start with Rs 20lakh?

    Reply
  • Hi Sir,

    I have 13 yrs experience in pharma industry with various segments. Now I have decided to start with my own pharma distributor and Liaison agents for supplying medicine to state government institution, army, ESIC and PSU sector. Could you please suggest me for starting the new distributors what are the documents are required from my end and also how much I need to invest to start?

    Reply
    • There is very less probability that big corporations will buy from you specially govt sectors because majority of time medicine manufacturing companies contact them directly, so there is no point to include a middle man in between.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share
Share