How To Start Pharma Company in India Legally? Know the Process, Essential Licenses & Cost
After COVID, the pharma industries in India are booming. Many new startups are getting registered under the Pharma segment. Opening a pharma is just not as quick or simple as we do for other segments.
Founders must know the industry-specific requirements, licenses & company structure to choose for your new Pharmaceutical company.
To enter this field, you need to have proper knowledge, a licence, and a plan to carry on the business. Here is a blog for you that gives information related to pharma company registration and how to open a company in India. It also gives a gist of costs, licences needed, and business models to choose from. Just follow a few simple steps, and you’ll be all set!
Considering The Market Opportunity For Pharmacies In India
India has the largest pharmacy chain in the world. India is the leader in Pharmaceuticals by contributing 20% of the generic medicines to the world. Our supply meets nearly 40% of the generic medicines in the US & 50% of Africa’s.
Our country is ranked among the top suppliers, especially in generic medicines, and is expected to reach USD 130 billion by 2030, as reported by the PIB of India. No doubt that India is a 3rd largest growing country in the world for medicines.
Health demands, exports, and other government initiatives are making pharmacy a popular business in India.
Step-By-Step Guide To Register A Pharma Manufacturing Company In India:
As mentioned earlier, starting a pharma business in India requires a few simple steps:
1. Choose your business model
There are many business models to choose from, especially in the pharma sector. You have to decide in advance and plan accordingly which one to choose.
Pharma companies have different business models. They can be a company under manufacturing, distribution, marketing or sales. Make up your mind on which sector to choose and plan.
Let’s go through the business eligibility list here:
- One is expected to have a basic knowledge of pharmacy.
- One should have access to a registered commercial space.
- Make sure your business has at least one qualified pharmacist.
- Make sure to check compliance with legal requirements.
The next step is to register.
2. Register your pharmaceutical company in India
After choosing a business model, it is important to register it officially. Unofficially selling medicines is an offence in India. To legally register the company, decide the type of ownership your company must hold.
There are four major categories under this, namely sole proprietorship, LLP or Limited Liability Partnership, partnership and PLC or Private Limited Company.
The most common and preferred choice is a Private Limited Company, as it offers better credibility. Further, register with the Ministry of Corporate Affairs. It takes a PAN, TAN, and GST registration for the same. You can compare LLP vs Private Limited Company before finalising the structure.
Choose the Private Limited Company in India as it provides the best company structure for the pharma business. Thanks to the fewer liabilities, easy funding and other services. But if you’re a small business, go for LLPs as it has less cost.
3. Apply & Get your drug licence
One of the most important steps in opening a pharmacy company in India is getting a drug licence. It may be hard for some, but with the right documentation and plan, it’s easy. The State Drug Control Department provides the drug licence after approval from the CDSCO or the Central Drugs Standard Control Organisation.
Document Required To Apply for Licences
- Drug Licence India
- GST
- Company registration
- Trademark registration (if you’re opening a brand)
- FSSAI licence (for businesses selling nutritional supplements)
- GMP certification India
Other Regulations & Laws:
- CDSCO registration pharma (Central Drugs Standard Control Organisation)
- DCGI (Drug Controller General of India)
- State Drug Control Authority
These come under the Drugs & Cosmetics Act, 1940 and Rules, 1945.
They grant a wholesale drug licence in India based on the authenticity, reliability and other records of the person applying. All matters are officially carried before the issue. Depending upon your business, they issue licences like for manufacturing, a wholesale drug or a retail drug. You cannot sell a wholesale drug with a retail drug licence. If someone does so, they’ll be liable for an official penalty (in worst cases, imprisonment).
One cannot sell or manufacture drugs without a licence, either. It’s a serious criminal offence.
Need Help Choosing Right Pharma Business Model?
What are the documents required for Pharma Company Registration?
Let’s sum up the Pharma company legal requirements in India for registration –
- ID proofs of the Directors
- Qualified pharmacist(s) in the director’s team
- Rent agreement/ property proof
- Site evaluation for the business
- Affidavit related to non-conviction
- Products for manufacturing/ brochures
- Bank statements
Cost of Registering Pharma Company in India
Considering expenses is important. You have to plan the funds properly and manage the extra costs as well. Many people wonder how much money it requires to start a pharma company in India.
What is the pharma business set-up cost in India?
- Distribution company: ₹5–12 lakhs
- Marketing company: ₹15–20 lakhs
- Manufacturing company: ₹50 lakhs to ₹1.5 crore or more.
Make sure to consider the additional costs like license, compliance fees, staff salaries, marketing companies and other logistics.
There are many factors affecting the costs. The following is a range based on inclusions of licences, office setup, stock purchases, marketing and labour salaries:
- If you are opening a pharma distribution company, it takes around INR 5-12 lakhs.
- For a marketing company, it takes around INR 15-20 lakhs.
- For a manufacturing company, it takes around INR 50 lakhs to INR 2.5 crore (depending on the size and type of medicines you want to sell).
Here are some real business challenges for the Pharma Sector:
- You may get a delay on approvals due to strict regulations.
- There’s high competition in the market.
- You may feel overwhelmed to build trust among doctors and other distributors.
- You may feel a challenge to update & maintain audits.
- You may feel a challenge in maintaining supply chains and storage.
We advise you not to start compliance or legal matters by yourself. Hire a business compliance expert in India who is experienced in working with the pharmaceutical industries to guide you through the entire registration & licensing process.
Choosing Location For Your New Pharma Company in India: What To Consider?
Getting all the documentation and budget done is one thing, but where to set up the office/company is another.
Decide whether you need an industrial area with proper ventilation and space (if you plan to open a manufacturing company) or a small office with storage space (for a marketing or distribution pharmacy). Later, ensure the area meets drug safety rules & provides temperature control.
Hiring Suitable Staff For Your Pharma Company in India
Hiring the right and qualified staff is equally important to open a pharma company in India. Apart from hiring a qualified pharmacist for the drug licence (as per the law), there are other requirements as well.
Manufacturing unit requires these professionals at work:
- Production manager
- Quality control manager & staff
The distribution and marketing unit requires these professionals at work:
- A team of sales representatives.
- Marketing experts
- Accountant or HR team to handle expenses.
If you are facing difficulty in registration & setting up a new infrastructure for your new pharma company, book a call with our Actax Pharma Consultants, and we will assist you with the end-to-end company setup
Key requirements For Different Types of Pharma Company Registration in India
In India, as we mentioned earlier, there are multiple types of Pharma companies you can register, namely as Manufacturers, Distributors, and Marketing & Sales. Every type of pharma company registration has essential key requirements as follows –
For A Manufacturing Pharma Company In India –
Key requirements to open a manufacturing pharmacy company in India:
- Drug licence for manufacturing
- GMP certification
- Lab required for drug quality tests
- Machineries
- Professional technical team
The firm requires heavy investment but also promises better profit returns than other related businesses.
For A Distribution Pharma Company In India –
Key requirements to open a distribution pharmacy company in India:
- Drug licence for wholesale
- Area with storage
- Refrigerator unit for medicines
- GST
You have to build trust across hospitals, clinics, and other drug vendors. Also, make sure to have strong relations with doctors and retailers to get better profit gains.
For A Marketing & Sales Pharma Company In India –
Key requirements to open a marketing pharmacy company in India:
- Team for marketing
- Products
- Business ties with manufacturers
- A drug licence
Make sure your staff knows how to connect and communicate with doctors and pharmacies. Marketing and sales are brand-building and hence require less capital but more work. At Actax, we hold your hand every step of the way.
How Actax India can help you Register Pharma Company in India At Less Efforts?
Actax India is known as the most trusted consultants for business registration & advisory in Bangalore & Mumbai. Our advisors are experienced in various business segments like Pharma, IT, fisheries, Manufacturing, Import/Export, E-Commerce, Food & Beverages & many more.
Our diversified experience & industry specific registration & licensing knack helps you ease the entire process.
Our advisors help you with –
- Business consultation to choose the right company structure.
- Industry insights & local rules & regulations for the Pharma business.
- Help you find the right location to set up your business.
- Offering end-to-end registration support with the right documentation & licensing.
- Post registration support for GST, Trade License & Bank Account opening.
- Helps your business with complex compliance requirements like statutory audits, payroll management & ROC Filings.
- We help you with accurate accounting services with cloud accounting software integrations.
- We also provide ESI, PF registration & Compliance services for Healthcare & pharma sectors.
You can book a call with our advisors below or reach out to them on WhatsApp, and they will give you all the details about the process & compliance costs.
Final Thoughts About Pharma Company Registration in India
Opening a pharma company in India may sound complex and complicated. But with the right information, documentation, and help, it gets easy. Managing expenses is one of the main aspects to consider; later, make sure you have the documents ready. Plan and take help from the experts to guide you better. Consider the pros and cons of opening a business.
With the right guidance, you won’t regret being a pharmacist. Connect with the Actax experts today!
