How to Start a Pharma Company in India

How to Start a Pharma company in India

How to Start a Pharma company in India – Healthcare and pharmaceutical sectors are showing good growth, and it seems that the future is pretty bright. Therefore, the early you start the business, the better it is. The Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in terms of value, as per a report by Equity Master. India is the largest provider of generic drugs globally, with the Indian generics accounting for 20 per cent of global exports in terms of volume.

How to Start a Pharma company in India

There is no business without investment. Be it small or large and own or franchise, there is always a need for some amount of money to be invested, to begin with. This investment will be done for different requisites including purchasing the goods, paying the employees, marketing and promotional activities. Although you are ready to invest, taking your business in a profitable way is important. To start a PCD Pharma Company, there is a need for a huge investment. You should also obtain legal certification, drug regulator policies, WHO and many others.

Basic Types of Pharmaceutical Companies

The pharmaceutical industry researches develop and manufactures thousands of medications for a variety of diseases and health conditions. The main types of pharmaceutical companies are:

  • Brand Developers: Large and established pharmaceutical companies, such as Pfizer and Novartis, have a large number of drugs on the market. These mainline pharmaceutical firms have internationally acclaimed research and development laboratories and a large number of manufacturing plants. These companies handle both research and development (R&D) and production of pharmaceuticals. Once a promising candidate is discovered, they seek a patent to protect the investment while research continues toward developing a safe and marketable drug. Of course, leading the way in the mainline pharmaceuticals sector is risky business.
  • Research and Development: Smaller research and development pharmaceutical companies may not have any approved drugs on the market, but continue to focus on research, such as clinical trial observation. Research and development firms may also be subcontractors for mainline companies requiring additional research support.
  • Generic: A number of drugs on the market no longer have patent protection. Generic pharmaceutical companies bring these drugs back to the market after patent expiration as less expensive versions.
  • Drug marketing: Marketing companies in the pharma industry help increase the market reach of drugs. At times, a manufacturing company cannot sell its product in a specific region because the company lacks a license or marketing network to do so. This is where drug marketing companies come in to facilitate sales.
  • Other Types: Additional pharmaceutical companies also exist within the pharmaceutical industry. This includes those companies that manufacturer bulk compounds and chemicals for use in the production of prescription and over-the-counter pharmaceuticals. Biological products companies represent another type of company found in the world of pharmaceuticals. They produce vaccines, serums, and blood products.

Based upon their marketing, sale and work basis irrespective of marketing and/or manufacturing type the company can fall under any categories of

  • Generic
  • Franchise
  • Pcd
  • Branded/Ethical
  • Speciality company e.g. Derma, ophthalmic, cardiac, etc
  • Export or Import
  • OTC
  • Distribution

Following Steps are needed to start a Pharma manufacturing firm in India

For every pharmacy professional setting up a Pharma company is a dream project to them. Most of them haven’t started own pharmaceutical venture due to lack of knowledge and courage to start their pharmaceutical firm. If you have experience in the niche there is nothing better than this. In the backdrop of encouragement given by the Government of India to start-up businesses, it becomes relatively easy. Here we will try to help you to start your own pharmaceutical company.

According to Experts, primarily there are five steps to start any pharmaceutical company. Out of the five steps, the first three are mandatory to start.

  • Company Registration is the first step (in case of proprietorship you can skip this process)
  • Wholesale Drug License Get Drug License Number
  • Generate Goods and Service Tax Number which is important
  • Get the trademark registered
  • FSSAI Registration (In case of selling Food and Dietary Supplements also)

Main Procedure and Sequence to proceed in starting Pharma Company

  • First and the important step is to  Write a Business Plan and find a Company Name
  • You should also know the Brand Names and Choice of molecules
  • Design of Company Logo and Printing/Promotional Material
  • Fix the infrastructure (place, premises, and building) for setup
  • Fund generation (own, loan, investment, etc)
  • Company Registration
  • Trade Mark Registration (Optional)
  • Wholesale Drug License (For both Marketing and Manufacturing Company)
  • Manufacturing License (For Manufacturing Company)
  • Goods and Service Tax Identification Number (GSTIN)
  • FSSAI License (If required)
  • Search for Vendors (For marketing Companies, Third Party/Contract Manufacturers or Loan license manufacturers. For Manufacturing Companies, Packing material suppliers, raw material & bulk drug suppliers and other requirements fulfillers)
  • Finalize Packaging and Packing, Design Material for medicines boxes, label, foils, etc
  • Start manufacturing in the case of a manufacturing company
  • Place order to a manufacturer on the basis of third-party manufacturing/ contract manufacturing/ Loan Licensing in case of a marketing company. When the products are ready to sell, initiate marketing and promoting products.

HOW DO YOU REGISTER?

After deciding the type of unit, you have to register the company under the Companies Act 1965 or Companies Act 2013.

For partnership firms, you need to register under the Limited Liability Partnerships (LLP) under Partnership Act, 1932.

To get several benefits and opportunities like loans under priority, you should do MSME registration. It can be a provisional registration or permanent.

List of Important Document needed

  • Bank challan copy or fee receipt
  • Details of the staff and consent of full-time employment
  • Layout plan
  • Purchase document or rent agreement to prove the ownership of the premises
  • Equipment and machinery purchase bills
  • Partnership deed, MOA, and AOA
  • Details of authorized partners
  • Permission and NOC from State Pollution Control Board
  • Site plan
  • Letter of Loan License
  • NOC of Municipal Corporation/Panchayat
  • Clearance from Drug Controller General of India if applicable

Requirements for Starting Pharmaceutical Manufacturing Unit:

Fixed assets:

  • Land (L)
  • Building (B)
  • HVAC (Heating, Ventilation and Air Conditioning) System (H)
  • Air Lock System (A)
  • Fitting, Finishing, and Furnishing (F)
  • Types of machinery and Lab Equipments (M)
  • Electricity Supply (E)
  • Water Supply (W)
  • Compressed Air Supply (C)
  • Investment for completing Licenses and formalities (I)
  • Other Requirements (R)

Liquid Assets:

  • Skilled and Technical Staff Wages (S)
  • Non-Skilled Worker Wages (N)
  • Repair and maintenance (H)
  • Rent if applicable (T)
  • Bank Loan installments and related expenses (I)
  • Promotional and Marketing (P)
  • Other expenses (J)

Inventory Investment:

  • Raw Material and Packaging Material Stock (R)
Investment Required for Pharmaceutical Manufacturing Company:
  • Pharmaceutical Manufacturing is a high investment project. The major portion of the investment will invest in purchasing land, Building, and infrastructure, etc. This can be prevented if you start at rented premises and building. But location, area, plant, and building infrastructure should meet with the requirement of GMP certification (WHO: GMP and/or Schedule M).
  • Area required and machinery detail for starting manufacturing unit, you can read at our article: Area and types of machinery required for each section in the Pharmaceutical Manufacturing Unit.
  • If you have own land and building that Good, but that is also an investment. We will consider it an investment. If you don’t have, you have two options: Either you purchase or you take a building at rent. In the case of rented premises, rent and/or deposited money will be calculated as an investment.

Qualification and Eligibility for EP ( experienced person) and pharmacist

  • The pharmacist may be Registered pharmacist under state pharmacy council (diploma in pharmacy, bachelor of pharmacy EP (experienced person)
  • Minimum one and half year experience at registered wholesale drug licensed firm after graduation and name is registered as EP at Drug Office and he gets his salary by cheque or account transfer because at the time of apply license bank statement is required
  • Minimum four-year experience as a salesman in registered drug licensed firm after graduation and name is registered as an EP at Drug Office.

Conclusion:

Healthcare and pharmaceutical sectors are showing good growth, and starting the pharmaceutical company could be a good choice as it seems that the future is bright. The process involves various steps. You need to gather resources and data from recognized and valid sources. The Internet makes the task much easier. Therefore, the early you start the business, the better it is.

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