What are the benefits of a Wholesale Drug License?

  • April 23, 2024
  • Dushyant Sharma
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For the sale and distribution of drugs in India, it is mandatory to obtain the wholesale drug license. By obtaining this license, a wholesale business allows retailers and customers to know that the products sold to them do not pose any health risks. This license shows compliance with the strict rules laid by the Drugs and Cosmetics Act, 1940. In this article, we will discuss the benefits of a wholesale drug license.

Meaning of the term ‘Drug’

The Section (b) of the Drugs and Cosmetics Act, 1940 defines the meaning of ‘drug’ by categorizing it to include 4 categories:

  • All the medicines that are meant for internal or external use on humans or animals, and the substances which are used for or during the diagnosis, treatment, mitigation or prevention of any disease in human beings or animals. Preparations which are applied on a human body as mosquito repellents are also included in this.
  • Substances such as empty gelatin capsules that are used as drug components are also included.
  • Substances which are other than food, and may affect the human body’s structure of function, or that are used for killing insects or vermin which spread diseases in humans or animals, as specified by the government through an Official Gazette notification from time to time.
  • Any devices which are used on the human body or an animal body externally or internally for the purpose of treating, diagnosing, mitigating or preventing a disorder or disease, as specified by the government through an Official Gazette notification from time to time after Drugs Technical Advisory Board (DTAB)’s consultation.

Overview of Wholesale Drug License

To start a business of drugs or cosmetics, one needs to obtain a Drug License. Without a drug license, no wholesaler can conduct a business related to selling drugs or cosmetics. According to the provisions of the Drugs and Cosmetic Rules, wholesalers must obtain a wholesale drug license for selling, exhibiting, storing or distributing drugs in India. The wholesale drug licenses can be issued for products like drugs and biologicals.

 

The State Licensing Authority (SLA) is the regulatory authority associated with this service, so any individual that is interested in obtaining this license must apply to this authority by submitting an application. Once SLA receives the application, it carries out an inspection before the license is granted. The wholesale drug license must be obtained from the SLA of the state he plans to do his business in. Due to not acquiring this license from the authority, the wholesaler has to face penalties. 

Basic Requirements for Wholesale Drug License

Here are some of the basic requirements for obtaining the wholesale drug license:

  • The shop or office of the wholesaler should be a minimum of 15 square meters.
  • The shop or office of the wholesaler is required to have an air-conditioner and refrigerator. 
  • Any organization or company/LLP/partnership firm is eligible to apply for the wholesale drug license.
  • The wholesale drug license is issued in the presence and supervision of a registered pharmacist or competent person. Such a person should have a minimum of 1 year experience in the field related to drugs or an SSLC passed with 4 years of experience in the field related to drugs. 
  • In a few states, the wholesale drug license is issued to only those entities with a qualified person with a degree or diploma from a reputed college or university.
  • Once the wholesale drug license is obtained, the licensee must display it on the outer side of his shop/office for future reference.

Benefits of a Wholesale Drug License

A wholesaler has endless opportunities once he has obtained the wholesale drug license. Here are some of the benefits which are connected to the wholesale drug license:

Execution of the drug-related activities

A registered pharma company must comply with the existing regulations and stay updated about the new developments. This may seem a bit of a burden but it has a positive impact on the pharma companies. By having a wholesale drug license, a pharma company maintains a seamless supply chain. Moreover, this license ensures compliance with the legislation and lets a pharma company continue its business without any legal consequences.

Helps in maintaining the hygiene level of drug

The drugs can get contaminated quickly in inadequately controlled settings. This license ensures compliance with the guidelines provided by the Central Drugs Standard Control Organization (CDSCO) under the Drugs & Cosmetic Act of 1940. These guidelines help the wholesalers to maintain the best hygiene level possible when it comes to the drugs.

Helps in improving the efficacy and management of drugs

A pharma company is positively impacted by complying with the rules laid down by government authorities. Having a valid wholesale drug license ensures that the drugs are stored properly, in a controlled setting and do not pose any health risks upon consumption. License holders receive official notices from government authorities if there are any changes in the procedures related to the procurement of drugs.

Necessary in building good relations with the retailers

The licensee, having acquired this license, is viewed as someone who follows every possible measure taken by the central government. This license helps to maintain ethical business practices which is extremely important for the drug retailers. The drug retailers are generally very concerned about the drugs quality and storage while doing business, but they do not have to worry about doing business with a wholesaler with this license as this license ensures the high quality and storage of these drugs.

The wholesale business’ credibility is boosted by the license

The business of the wholesaler is boosted by the wholesale drug license, as consumers view such a business to be following strict quality standards while distributing the drugs. Remaining compliant with the Drugs and Cosmetics Act, 1940 helps the wholesale business to develop credibility and attracts various opportunities which can help in growth of the business.

Helps in increasing the market exposure

Apart from allowing the licensee to sell, exhibit, store or distribute drugs in India, the wholesale drug license helps to increase their market reach due to increased visibility. Due to this, the licensee gets the opportunity to expand their business.

Serves as an Indian Agent or Marketing Authorization Holder

A company with a wholesale drug license is permitted to act as an Indian agent or marketing authorization holder for the foreign manufacturers wishing to get their products registered for marketing in India.

Legal consequences for running a Wholesale Drug Business without Wholesale Drug License 

According to the provisions of the Drugs and Cosmetics Act, any wholesale business engaging in any of the following activities relating to drugs without possessing a valid wholesale drug license will be imprisoned for not less than 1 year which can extend to 3 years and a fine of at least five thousand rupees might get imposed as well:

  • Manufacturing of Drugs
  • Stocking of Drugs
  • Drugs Sales, Exhibition or Distribution

Conclusion

The drug trafficking and illegal manufacturing and selling of drugs is a serious problem in India. This is why the provisions of the Drugs and Cosmetics Act are strict. The provisions for obtaining the wholesale drug license need to be complied with, and even after the license is obtained, the licensee must comply with this act. The process for applying for the wholesale drug license might seem a bit cumbersome, but it is worth the benefits it provides. It showcases compliance with the rules and regulations of the government and helps to boost the wholesale drug business’ credibility and leads to good networking which can potentially lead to business growth.

To obtain this license in a smooth and hassle free manner, you can contact the Registrationwala team. Our team leaders come with years of experience in hand and know exactly how to help you in obtaining this license without any worry. 

Frequently Asked Questions (FAQs)

Q1. Is it necessary to display the original wholesale drug license in the medical store?

A. Yes, it is absolutely necessary to display the original wholesale drug license. It must be displayed in a prominent place in a medical store so that it is easily visible. The registration certificate of the registered pharmacist and license both must be displayed in the medical store.

 

Q2. Once the working hours of the medical store are over, can the fridge used for storing the drugs be switched off?

A. Some drugs like vaccines, insulin injections, eye drops, etc. need to be stored at a certain temperature between 2ºC and 8ºC. Due to this, the fridge must not be switched off at any point of time even if the working hours are over.

 

Q3. If there is a change in the premises of the wholesale drug facility, what happens to the wholesale drug license?

A. In such a case, the wholesale drug license for the old premises needs to be surrendered and the applicant must apply for a new license for the new medical shop.

 

Q4. Are the importers of drugs required to obtain a wholesale drug license?

A. Yes, it is a legal requirement for the importers of drugs to obtain this license, along with an import license to be able to sell imported drugs in India.


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Dushyant Sharma
Author: Dushyant Sharma

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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