Licenses to Retail/Whole Sale Drugs under the Drugs and Cosmetics Act 1940 and Rules 1945. Pharmacy Law and Ethics.

SALE OF DRUGS

The sale of drugs is controlled by the Drugs and Cosmetics Act 1940 and Rules 1945.

A licensing authority appointed by the state government grants licenses to sell drugs. The sale of drugs can be divided into two groups

• 1. Whole Sale of drugs

• 2. Retail sale of drugs

Whole Sale of drugs: 

A wholesale license is granted to sell, stock, exhibit offer for sale, or distribute drugs to licensed retailers. These are

• 1. Form 20: Wholesale license for other than those specified in Schedule C, & C (1), and X.

• 2. Form 20BB: Whole sale license for drugs other than those specified in Schedule C and Schedule C (1) from a motor vehicle.

• 3. Form 20 G: Wholesale license for drugs specified in Schedule X.

• 4. Form 21 B: Whole sale license for drugs specified in Schedule. C and C (1) excluding those specified in Schedule. X.

• 5. Form 21 B: Whole sale license for Schedule C and Schedule C (1) drugs from a motor vehicle.

Application for grant of license or renewal of license for wholesale is submitted in forms as per below details

• 1. Form 19: Application for grant or renewal of license for drugs other than those specified in Schedule X.

• 2. Form 19AA: Application for grant or renewal of a license by wholesale or distributing drugs from a motor vehicle.

• 3. Form 19-C: Application for grant or renewal of a license for drugs specified in Schedule X.

The licensing authority shall adopt the following criteria before granting a wholesale license

• 1. Average number of wholesale licenses granted in previous 3 years

• 2. Applicant occupation, trade, and business carried out at the time of submitting an application

The following are general conditions for granting and renewing wholesale licenses

• 1. The license shall remain valid for five years from the date of issue unless a license is canceled or suspended by the licensing authority. The license shall be considered canceled if not applied for renewal within six months from the date of expiry.

• 2. Application for renewal of a license shall be submitted before the expiry of the license. A fee of Rs1050/- (Rs One Thousand and Fifty) shall be paid to renew of license. Application submitted after expiry of license but before six months from date of expiry then application fee shall be Rs 1500/- with additional fee Rs 500/- per month for application in Form 19. Renewal fee Rs 500/- plus additional fee Rs 250/- per month for application in form 19AA.

• 3. Applicant shall furnish the following documents with the application: documentary proof of ownership or occupation on rental of the premises. Documents related to the constitution of the firm, or any other relevant matter that may be required for verifying the correctness of the application.

• 4. Renewal certificate for licence in Form-20BB or in Form 21BB shall be issued in Form 21-CC. Similarly, a renewal certificate for a license in Form 20-B or in Form 21-B shall be issued in Form 21-C.

• 5. Licence for wholesale drugs shall not be granted by the licensing authority until the applicant has the adequate facility to store drugs. The applicant shall also have competent persons to supervise and control the sale distribution and storage of drugs. The licensing authority shall decide the qualifications and experience of this competent person.

• 6. Licensing authority may refuse to grant a license or renew license on any of the following grounds

  • a. Applicant or licensee has been convicted offence under the Drugs and Cosmetics Act 1940 and Rules 1945.

  • b. Applicant is not a fit person to grant a wholesale license or renew a wholesale license under the Drugs and Cosmetics Act and rules.

• 7. The licensing authority shall check the following conditions of premise before granting or renewing the wholesale license in forms 20-B and 21-B.

  • a. Premise area not less than 15 square meters.

  • b. Availability of competent person. A competent person is a registered pharmacist or has passed matriculation or any equivalent examination from a recognized board with four years of experience in the sale of drugs or a degree from a recognized university with one year of experience in dealing with drugs.

• 8. Wholesale licensee shall maintain a credit memo or cash memo. In a cash memo or credit memo following particulars shall be entered:

  • a. Date of sale

  • b. Name, address, and license number of licensee to whom drugs have been sold

  • Or

  • Name, and address of authority, institution, hospital, registered medical practitioner to whom drugs have been sold

  • c. Name of drug, quantity, and batch number of drug

  • d. Name of manufacturer

  • e. Signature of a competent person

• 9. Purchase bills and carbon copies of cash memos or credit memos shall be maintained for three years from the last entry date.

• 10. All registers/records shall be preserved for not less than 2 years from the last date of entry.

• 11. Drug inspectors shall check all records.

• 12. Drugs shall be supplied to hospitals, nursing homes, registered medical practitioners, and dispensaries on written request duly signed by the head of the institution. This written order shall be preserved for not less than 2 years.

• 13. The licensee shall maintain an inspection book.

• 14. No drug shall be sold or stocked after its expiry date.

• 15. Physician samples, drugs meant for consumption by employees’ state insurance corporation, central government health scheme, Government medical store depot, armed force medical stores or any other institutions shall not be sold

• 16. The licensee shall inform the licensing authority if there is any change in the constitution of the firm. The license shall remain valid for three months. During this period fresh licence shall be issued.

• 17. Licence shall be displayed at a prominent place in premises open to the general public.

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Retail sale of the drug

Retail sale of drugs requires a license under the Drugs and Cosmetics Act and rules. Licensing authorities appointed by the state issue the following types of retail drug licenses. Licensing authority authorizes persons under its control to issue retail sale drug licenses:

• 1. Form 20: Licence to sell, stock or exhibit [or offer] for sale, or distribute drugs by retail other than those specified in Schedules C, C(1), and X

• 2. Form 20-A: Restricted license to sell, stock, exhibit, offer for sale, or distribute drugs by retail other than those specified in Schedules C, C(1)) and X for dealers who do not engage the services of a qualified person.

• 3. Form 20-F: Licence to sell, stock, or exhibit for sale or distribute retail drugs specified in Schedule X

• 4. Form 21: Licence to sell, stock or exhibit [or offer] for sale, or distribute by retail drugs specified in Schedules C and C(1) excluding those specified in Sch. X

• 5. Form 21 – A: Restricted license to sell, stock or exhibit [or offer] for sale, or distribute by retail drugs specified in Schedule C(1) excluding those specified in Sch X for dealers who do not engage the services of a qualified person

• 6. Form 21-C: Certificate of renewal of a license to sell, stock, exhibit, offer for sale, or distribute drugs

General conditions to be observed for retail sale of drug license:

• These conditions are almost similar as stated in the general requirement for a wholesale license with slight changes. Application for grant of license or renewal of license for retail sale is submitted in forms as per below details

• 1. Form 19: Application for grant or renewal of a license for drugs other than those specified in Schedule X.

• 2. Form 19 A: Application for the grant or renewal of a restricted license for the retail sale of drugs. Restricted licensee does not engage the service of a qualified person

• 3. Form 19-C: Application for grant or renewal of a license for drugs specified in Schedule X.

The licensing authority shall adopt the following criteria before granting a retail sale license

• 1. Average number of wholesale licenses granted in previous 3 years

• 2. Applicant occupation, trade, and business carried out at the time of submitting an application

The following are general conditions for granting and renewing Retail sale licenses

• 1. Applicant shall furnish the following documents with the application: documentary proof of ownership or occupation on a rental basis of the premises. Documents related to the constitution of the firm, or any other relevant matter which may be required for verifying the correctness of the application.

• 2. A fee of Rs1050/- (Rs One Thousand and Fifty) shall be paid to get a renewal license. Application for renewal of a license shall be submitted before the expiry of the retail sale of a licence. Application submitted after expiry of a license but before six months from date of expiry then application fee shall be Rs 1500/- with additional fee Rs 500/- per month for application in form 19. Renewal fee Rs 500/- plus additional fee Rs 250/- per month for application in form 19A

• 3. The license shall remain valid for five years from the date of issue. The license shall be considered canceled if not applied for renewal within six months from the date of expiry.

• 4. Renewal certificate for licence shall be in form 21-C for all types of retail sale licence.

• 5. Licence for retail sale of drugs shall not be granted by the licensing authority until an applicant has the adequate facility to store drugs as per the conditions recommended. Applicant shall also have competent persons to supervise and control the sale, distribution, and storage of drugs. The licensing authority shall decide the qualifications and experience of this competent person.

• 6. Similar criteria shall also be adopted in the renewal of existing retail sale licenses.

• 7. Licensing authority may refuse to grant a license or renew the license on any of the following grounds

  • a. Applicant or licensee has been convicted offense under the Drugs and Cosmetics Act 1940 and Rules 1945.

  • b. Applicant is not a fit person to grant a wholesale license or renew a wholesale license under the Drugs and Cosmetics Act and Rules.

• 1. The licensing authority shall check the following conditions of the premise before granting or renewing a retail sale license in the form

  • a. Premise area not less than 10 square meters.

  • b. Availability of competent person. A competent person is a registered pharmacist or has passed matriculation or any equivalent examination from a recognized board with four years of experience in the sale of drugs or a degree from a recognized university with one year of experience in dealing with drugs.

• 2. The wholesale licensee shall maintain a credit memo or cash memo bearing the name and address of the licensee and his license number granted by the Drug and Cosmetic Act 1940. In a cash memo or credit memo following particulars shall be entered:

  • a. Date of sale

  • b. Name, address, and license number of licensee to whom drugs have been sold

  • Or

  • Name, address of authority, institution, hospital, registered medical practitioner to whom drugs have been sold

  • c. Name of drug, quantity, and batch number of drug

  • d. Name of manufacturer

  • e. Signature of a competent person

  • 3. Purchase bills and carbon copies of cash memos or credit memos shall be maintained for three years from the last date of entry.

  • 4. All registers and records shall be preserved for not less than 2 years from the last date of entry unless otherwise there is any specified period to preserve it.

  • 5. Prescription shall be refilled as per the direction of a registered medical practitioner.

  • 6. Drug inspectors shall check all records to ensure that provisions of the Drugs and Cosmetics Act have been observed

  • 7. Drugs shall be supplied to hospitals, nursing homes, registered medical practitioners, and dispensaries on written request duly signed by the head of the institution. This written order shall be preserved for not less than 2 years.

Alok Bains