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For any country, the pharmaceutical industry is one of the most important industries. This industry formulates and supplies life-saving medicines, generates employment and contributes to the economic growth of a country.
By starting a pharmaceutical company, you can play a crucial role in the public healthcare domain by formulating new medicines for life-threatening illnesses. For your formulations, you can get patent protection and generate royalties.
In this blog post, we shall explain to our readers regarding which license is required to start a pharmaceutical company in the context of India.
A pharmaceutical company is one of the most profitable types of businesses. It develops new medicines through research and development (R&D) and helps save lives, which is a noble cause.
Pharma companies often get patents for their medicines. The patents grant exclusive rights to market the medicines for a period of 20 years and allows pharma companies to recoup their substantial R&D investments and generate substantial revenue via royalties and sales.
Therefore, starting a pharma company in 2025 can be a meaningful as well as a rewarding venture.
The following licenses and certifications are required for opening a pharmaceutical company in India:
The first requirement to start a pharmaceutical company is to secure a company registration certificate. For this, first, you need to decide on the appropriate business model out of the following options: (i) Private Limited Company, (ii) Public Limited Company, or (iii) One Person Company. After choosing the appropriate business model, you must file a company incorporation application, using the prescribed form, via the official MCA portal.
While filing the application, you will require certain essential documents like digital signature certificate, director identification number, articles of association and memorandum of association.
Once your application has been filed, the Registrar of Companies (ROC) will review it. If your application meets all the requirements, your company will be registered with MCA and receive a certificate of incorporation, also known as company registration certificate.
Since a pharma company deals with medical drugs, it is mandatory to secure a Drug License. This license is issued by the Central Drugs Standard Control Organization (CDSCO) and State Drugs Standard Control Organization (SDSCO).
Now, the catch here is that there isn’t one but numerous drug licenses. Each license has a different purpose. Here are the major types of drugs licenses that a pharmaceutical company needs to possess:
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A Drug Manufacturing License is mandatory for pharmaceutical businesses that engage in manufacture of drugs like allopathic drugs, homeopathy, cosmetics, ayurvedic medicines and other medicines.
This license needs to be secured by pharmaceutical companies that are involved in wholesale distribution of drugs and medicines.
For pharma companies that sell drugs and cosmetics for consumers’ consumption, securing a Retail Drug License is a must. This license is applied for by pharmacies, chemist shops and healthcare facilities dispensing medicines.
A Loan License for Drug Manufacturing is essential for pharma companies that lack their own manufacturing facilities and use manufacturing facilities of another licensed manufacturer.
Drugs Import License is required by pharmaceutical companies that import products for the purpose of manufacturing drugs or are engaged in importing drugs from overseas to India.
Another important license required for a pharmaceutical business is FSSAI License. This license is necessary if the pharma business is involved in marketing food and dietary supplements. The Food Safety and Standards Authority of India (FSSAI) is responsible for issuing this license.
By securing FSSAI License, a pharma company ensures compliance with food safety standards set forth by the Government of India. To apply for this license, an application needs to be filed via FOSCOS portal.
In order to market and distribute drugs, it is essential for a pharmaceutical company to acquire GST (Goods and Services Tax) registration. Any pharmaceutical company that is involved in the inter-state supply of goods, or having stockists and distributors in other states, or having a turnover above Rs. 40 lakhs must mandatorily register under the GST regime and obtain a GSTIN (Goods and Services Tax Identification Number).
Import Export Code is a unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT). It is a mandatory requirement for businesses involved in import or export of goods, including pharmaceutical drugs and medicines. To secure an Importer Exporter Code, the pharma company needs to file an application via the official DGFT portal.
Once this code is secured, it remains valid for an indefinite period. However, the IEC details must be updated and renewed every year. By securing IEC, a pharma business can import/export pharmaceuticals in a legitimate manner.
Patent Registration isn’t a mandatory requirement to run a pharmaceutical company. However, it is absolutely necessary to obtain this registration. This is because it grants the company exclusive rights over its invention.
This includes inventions like new medicines and methods of products, for a period of 20 years under the Patents Act 1970. Additionally, it allows a pharma company to get royalty for its invention and make a substantial amount of money.
Like a patent certificate, a trademark certificate is absolutely necessary for a pharma business, even if it isn’t a mandatory requirement. The trademark registration grants a company exclusive rights over its brand name and logo and helps it maintain its brand identity. It prevents other competitors in the market from copying the brand.
A trademark registration remains valid for a period of 10 years. After this period, the trademark can be renewed. As long as it is renewed within the prescribed period, the business enjoys continuous brand protection under the Indian Trade Marks Act 1999.
Since a pharmaceutical manufacturing company generates chemical waste and has potential for pollution, it must secure a No Objection Certificate (NOC) from the Pollution Control Board. The NOC must be obtained prior to commencing operations. To secure this certificate, the pharma manufacturing company must file an application with the concerned State Pollution Control Board.
To establish a pharmaceutical corporation, you need to secure a variety of licenses and certificates from the concerned authorities. One of the most important licenses for a pharma business is the wholesale drug license. It is a mandatory requirement for pharma businesses engaged in wholesale distribution of medicines and drugs. For assistance in securing this license, you can connect with Registrationwala!
Q1. What is Loan License for Drug Manufacturing?
A. It is a specific license possessed by a pharma company that does not have its own manufacturing facility and uses the manufacturing facility of another licensee.
Q2. Is FSSAI license necessary for pharma corporations?
A. Yes, pharma corporations must mandatorily secure FSSAI license if they are involved in marketing food and dietary supplements in addition to their pharma products.
Q3. Which license is required for importing/exporting pharma products?
A. DGFT’s Import Export Code is required for importing/exporting pharma products.
Q4. Can I opt for the OPC business model to run a pharma corporation?
A. Yes, you can opt for the OPC business model to run a pharma corporation.
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