How to Become a Pharmaceutical Distributor in India

How to Become a Pharmaceutical Distributor in India – India’s Pharmaceutical Industry is turning out to be one the largest industries and comes in the top 15 in the business around the whole globe. That’s why many people are entering the Pharmaceutical business and that too at the Distribution level. So, If you are also looking forward to Becoming a Pharmaceutical Distributor in India, then you came to the right page.

Market Value of Indian Pharmaceutical 

Our nation’s pharmaceutical sector is skilled in providing and developing world-class quality products at an affordable price. As the demand for medicine is constantly increasing it becomes essential to deliver that medicine to required health facilities in the required period. That’s why Pharmaceutical distribution is essential. India’s pharmaceutical market size was valued at US$ 49 billion in the year 2022, with an expectation to reach US$ 450 by the year 2047. 

Who is a Pharmaceutical Distributor?

A distributor acts as a bridge between drug manufacturers and retailers. They take the drug from the manufacturer and deliver it to Doctors, Chemists, Drug wholesalers, and other healthcare professionals. Distributors are an integral part of our healthcare system and they deliver medications and medical supplies to health facilities like hospitals and Chemist shops. Without them, our whole healthcare system would just shut down. To become a Pharmaceutical distributor you need a lot of planning, investments, and legal requirements. It might look like a tedious process but if understood well you can manage your business without any problems.

Why to become a Pharmaceutical Distributor?

Being a distributor comes with many advantages and benefits. Let’s discuss some of them.

• Being a distributor requires part-time availability. So, you don’t have to provide full-time attention.
• There are high chances of increasing your earnings and profits if you manage your work properly.
• You become your own boss and can have people working under you to make your work easy. 
•  You get monopoly rights and distributorship discounts. 

Step by Step Process to become a Pharmaceutical Distributor 

If you think that you have what it needs to be a Pharmaceutical Distributor, then make sure to follow the mentioned steps.

1. Must have a drug license– To become a Pharmaceutical distributor, you are first required to get a Drug license. You can also rent this license from someone else. This license is given by the  State Drug Control Authority with authorization to sell, store, and distribute medications.
2. Fulfill Eligibility Criteria– You are supposed to have a Degree in pharmacy or related field and should possess an experience of around 1 year in the pharmaceutical industry.
3. Get Goods and Service Tax Registration– It is a moral duty for every business owner to get the GST registration and pay the required tax. GST number allows the owner to sell, store, and deliver products lawfully and under the guidelines. 
4. Legal requirements– In this step, you have to complete all the required documents like PAN card, Adhaar card Drug License, GST number, and others.
5. Choosing Company– Decide the company whose products you want to deliver. You can choose single or multiple companies. After deciding on the company, submit your application to its distributor. 
6. Set up your infrastructure– Choose a location where all the operations can run smoothly and easily. It should have adequate storage, especially a temperature-controlled storage area.
7. Promotional Plan– The distributor should make an effective marketing plan to reach more and more Doctors, Pharmacists, Healthcare facilities, and other potential customers. Try to cover more areas to attract more customers.
8. Ensuring Quality Standards– Make sure to deliver the medical supplies and drugs within the required period in appropriate condition.

List of Required Documents

• Application form
• Cover letter with name and designation of applying candidate.
• Declaration form
• Copy of the challan issued after submitting drug license fees.
• The Blueprint and site plan of the premises.
• Possession proof such as registration, rent, or lease agreement.
• Partner deed, Incorporation certificate, or MOA/AOA for stating the constitution of business.
• Affidavit of non-convictions of directors, owners, or partners. 
• Affidavit of full-time appointment of a reputed and registered pharmacist or equivalent resource.

Investment Expenditure for Becoming a Pharmaceutical Distributor

In total a figure of around 50 lakhs to 70 lakhs is needed to start a Pharmaceutical Distribution Business in India. These costs can be divided into-

• 30,000 to 40,000 rupees for registration and licensing.
• Almost 2 to 5 lakhs for furnishing, fittings and fixtures.
• Around 1 lakh rupees for setting up IT.
• Employee costs can go from 10 lakhs to 12 lakhs per annum.

Conclusion 

In conclusion, the process required to be a pharmaceutical distributor is not that difficult if managed properly. There are certain registrations and licensing that you need to run lawfully and legally. Do keep in mind to gain some experience and a degree in pharmacy or related fields before stepping into this business. 

FAQ’s on “How to Become a Pharmaceutical Distributor in India”

Question 1. What is the margin of a pharmaceutical distributor?

Answer 1. The pharmaceutical distributor’s margin is around 8 to 12% in branded medicine and around 10 to 20 % on generic medicines.

Question 2. What role does a distributor play in the Pharmaceutical Industry?

Answer 2.  A distributor acts as a middleman between the manufacturer and the retailer. Their main function is to deliver drugs and medical supplies to Doctors, Pharmacists, different health facilities, and other potential customers. They deliver different products of different companies and help those companies to expand their market reach and share.

Question 3. How much investment is required to start a pharmaceutical distribution business? 

Answer 3. If you are interested in becoming a pharmaceutical distributor then you should be ready to spend around 50 to 70 lakhs which includes the cost of registration, licensing, furnishing, fittings, fixtures, employee costs, and other expenditures. 

Question 4. How is a distributor different from a stockist?

Answer 4. A stockist is a person who stocks the medicinal products in a warehouse on behalf of the company whereas the distributor delivers these medicinal products to retail buyers and health professionals like Doctors and Pharmacists.