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How to start a Medical Store in India?

04/07/2018 15:08:10 General

Health is the most important part of a person’s life. The most evergreen business, unaffected by the economic cycles, is the medicine business. Healthcare and pharmacy business in India is facing tremendous growth due to gaining popularity of corporate hospitals and multi-specialty hospitals. Having a medical store is the best option for those entrepreneurs who have less space and capital and want to invest in the healthcare segment.


Despite having a remarkable importance, every medical store has a big responsibility to them. A little mistake on their part may be fatal for customers. It is because of this reason that medical stores are often required to follow many legal procedures before they start selling medicines.


Deciding upon the type of medical store:


Before proceeding for registration, an individual must decide the type of medical store one wants to own. The options available are:

  • Hospital medical store: It is inside the hospital developed to cater to the needs of the patients mostly inside the hospital.

  • Standalone medical store: It is the most common form that is present in a residential area.

  • Chain Pharmacy/ Franchise outlets: Medical stores present in the malls, and are part of a chain of pharmacies.

  • Township medical stores: It is set-up in a township to cater to the needs of the people.

  • Stores in Government Premises.


Before applying for registration of business, the individual should fulfill the following requirements:


Pharmacy Licence


In order to obtain a Pharmacy License, a person needs to be a qualified pharmacist with a degree of B. Pharm or M. Pharm.


Land Registration:


Every business has to decide upon the investment that it would need. Depending upon one’s budget, one may decide to choose between a rented shop or an own shop. Rent deed or a sales agreement is required here. A person may choose to take legal assistance for this purpose.


Registration of Medical Store Business:


Indian Pharmacy Act, 1948 governs the registration of medical stores in India. The Act states that the medical stores and pharmacies must register with all their particulars to the state government. Post submission, a registration tribunal shall decide on the matters pertaining to it.


Here constitution of the business of the medical store is important. While the hospital, chain, and township medical stores prefer to set up a private limited company, a standalone medical store is preferably set up as a proprietorship or as a partnership firm. Recently, since Limited Liability Partnerships (LLPs) have also gained popularity, medical stores are also considering it as a preferred form of business. This change is mainly attributed to the promotion of the rights of the partners that is provided in the LLP form of constitution.


Company Registration :


Registering your business as a proprietorship or partnership or full-fledged company since day one is very important. Depending on which mode you want to operate the business. The following can be probable options


Shop and Establishment Registration/ Gumasta Registration :


As per the municipal rules of the respective municipal corporation, you need to get your shop and establishment registration done in order to run a business without any hassle from the authorities. Also, this particular document is required as a supporting document from various other licensing and registrations.


Tax Registration


For any business entity, including a medical store, must acquire Goods and Service Tax registration if the aggregate turnover in a financial year exceeds the threshold limit. The limit specified by the GST Council is INR 20 lakhs for all states other than the North-Easter Hilly states where the limit is INR 10 lakhs.


Registering for Drug License


Before beginning operations, every medical store, be it big or small, will require a drug license from the Central Drugs Standards Control Organization and State Drugs Standard Control Organization. These organizations are responsible for issuing two major drug license:


  1. Retail Drug License: This license is required to run a general chemist shop. A fee has to be deposited. The registration can be done only in the name of an individual who possesses a degree or diploma in pharmacy from a recognized institute or university.


  1. Wholesale Drug License: The license is issued for medical stores, dealing in the wholesale business for drugs and medicines. Unlike Retail Drug License, there are not many stringent conditions that one has to meet in order to get this license.


Here are a few minimum requirements that are required for obtaining Drug License;


  • Area specification: Minimum area requirement of 10 square meters for common retail and 15 square meters for wholesale business.


  • Storage Facility: Medical store must be equipped with a refrigerator and air conditioner. This is emphasized because labeling specifications require certain drugs like vaccines, Sera, Insulin Injections etc. to be stored in the refrigerator.


  • Technical Staff: Both the types of medical stores require technical staff;


  • Wholesale business: The sale of the drugs shall be made only in the presence of the registered pharmacist with one-year experience in dealing in drugs or a person who has passed S.S.L.C with an experience of 4 years approved by the Department of Drug Control.

  • Retail: The registered pharmacist must be present at the time of sale of medicines during the working hours.


Documents Required for Obtaining a Drug License:


Here is a list of documents required for procuring drug license in India that may vary across different states:


  • Application form in the format prescribed in the Act.

  • A cover letter with application duly signed with the details of name and designation of the applicant.

  • Challan of the fee deposited for registration.

  • Blueprint of the premises.

  • Declaration form in the format prescribed in the Act.

  • Proof of ownership of the premises.

  • Proof of business constitution and registration.

  • Affidavit of non-conviction of proprietor or partners or directors under the Drug and Cosmetics Act, 1940.

  • Affidavit of a registered pharmacist or a person equally competent who will be working for full time.

  • Appointment letter from a registered pharmacist or any competent person, if employed.


Legal Procedures for Online Medical Stores:


Lately, since people are shifting towards ordering things online, online medical stores have developed as the most common medium of buying medicines. Consumers can procure rarest of rare drugs through utmost ease and privacy. Here are a few practices that are legal for an online medical store:


  1. All drugs, other than the over-the-counter drugs, require a prescription.

  2. Contact details of online medical stores must be of the state form in which the drug license has been procured.

  3. Verify and certify the delivered drugs.


There is uncertainty in the Indian law regarding shipping of medicines from one state to another and in the provision of taking money prior to the delivery of medicines.

Are you looking to start Medical Store in India?

Legaldocs will guide you in getting all necessary Documents and Registration required to start Medical Store in India, Please click on the following link to connect with our consultants.

Apply for Medical Shop Registration

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