Before you can buy medicines from a PCD company and sell them to chemists, clinics or hospitals, you need a wholesale drug licence. For most allopathic medicines that means the licences issued in Forms 20B and 21B under the Drugs Rules, 1945. Without them, a licensed company cannot sell to you, and you cannot legally stock or supply medicines.
This guide explains what the two licences cover, what the licensing authority looks for, the documents you will usually be asked for, and the steps from application to licence. Fees, forms of application and timelines are set by each state, so treat this as a map of the process and confirm the details with your state’s drug licensing authority before you apply.
What Forms 20B and 21B cover
The two licences are usually applied for together, because together they cover most of what a pharma wholesaler stocks:
| Licence | What it covers |
|---|---|
| Form 20B | Wholesale sale of drugs other than those in Schedules C, C(1) and X |
| Form 21B | Wholesale sale of drugs in Schedules C and C(1), excluding Schedule X |
Schedules C and C(1) include products such as many injectables and biological products that need particular care in storage. Schedule X drugs need a separate licence and are outside the scope of an ordinary PCD franchise.
A wholesale licence lets you sell to other licensed businesses: retail chemists, other wholesalers, and hospitals and clinics. Selling directly to patients needs a retail licence, which is a different application.
What the authority checks
The licence is issued for specific premises and in the name of a specific business, so the authority will want to be satisfied about three things.
1. The premises
The premises must be suitable for storing medicines: a minimum area set by the rules, clean and dry, protected from heat and direct sunlight, with proper racks. If you will stock products that must be kept cold, you will need a refrigerator, and many authorities expect a way of recording temperatures.
2. The competent person
The rules require the business to be run under the charge of a competent person: a registered pharmacist, or a person with the qualifications and experience in dealing in drugs that the rules accept. The competent person’s qualification and experience certificates, and their consent to act, are part of the application. If you do not qualify yourself, you will need to employ someone who does.
3. The applicant
The authority will want proof of who owns the business and that you have the right to use the premises: identity proof, the constitution of the business (proprietorship, partnership or company), and a rent agreement or ownership document.
Documents usually asked for
Requirements differ between states, but most applications include:
- the application form and the fee for each licence;
- a site plan or layout of the premises, with dimensions;
- proof of ownership or a rent agreement for the premises;
- identity and address proof of the proprietor, partners or directors;
- the business constitution document (for a partnership or company);
- the competent person’s qualification and experience certificates, and an affidavit or consent;
- details of the refrigerator and storage arrangements, if you will stock cold-chain products;
- an affidavit or declaration in the format your state uses.
Our post on the documents required for a PCD pharma franchise gives the wider checklist, including GST registration.
The steps, from application to licence
- Get the premises ready first. Racks, cleanliness, ventilation and, if needed, the refrigerator should be in place before you apply, because the inspection checks the premises as they are.
- Arrange the competent person. Collect their certificates and consent.
- Prepare the documents and site plan. Check the current list and the application route with your state authority; many states now accept applications online.
- Apply and pay the fees for both licences.
- Inspection. A drugs control officer may visit the premises to check what the application describes.
- Licence issued. Display the licences at the premises as required, and keep copies ready: every company you buy from will ask for them.
Do not take stock or place orders before the licences are issued.
After you have the licence
- Keep records. Purchase and sale records must be maintained, and some schedules (for example Schedule H1) carry extra record-keeping duties for the businesses that sell them.
- Report changes. A change of premises, of the competent person, or of the business constitution usually needs the authority’s approval or a fresh licence.
- Watch validity. Check how long your licence is valid for and what your state requires to keep it in force.
- Buy only from licensed sources, and keep their licence details with your records.
Planning your timeline
Allow time for each stage rather than planning to start selling the week you apply. Preparing premises, arranging a competent person, collecting documents, waiting for inspection and receiving the licence all take time, and the total varies by state and by how complete the application is. Use the waiting period to visit doctors and chemists, choose your first ranges and compare PCD companies, so that you are ready to order as soon as the licence is issued.
Common reasons for delay
- The premises do not meet the area or storage requirements at inspection.
- The competent person’s documents are incomplete or do not meet the rules.
- The rent agreement or ownership proof does not match the address on the application.
- The application is for one licence when the products you plan to stock need both.
Working with Ancare Life Sciences
Ancare Life Sciences, Panchkula, holds its own wholesale licences from the Food and Drugs Administration, Haryana (numbers on our quality and certifications page). When you start a PCD pharma franchise with us, we ask for your drug licence and GST details before the first order. If you are still planning, our guide on how to start a PCD pharma franchise shows where the licence fits in, or contact us with your questions.