How to Open a Medical Shop in India: A Complete Guide

A pharmacy business in India is a lucrative venture. The market is the third-largest worldwide and has the potential for immense growth. The country’s demand for constant healthcare products and the increase in corporate and multispecialty hospitals, especially the post-pandemic scenario, require more pharmacies in India. The requirements to open a pharmacy in India need many registrations, legal procedures, and careful planning. This blog will provide step-by-step information on how to open a pharmacy shop in India.

What are the types of medical stores in India?

Given below are the types of medical stores that an individual can establish are as follows:

• Hospital medical store: It is a medical store opened inside the hospital premises to cater to the medical needs of patients.
• Standalone medical store: This is the most common form of medical store, mostly in residential areas.
• Chain pharmacies or franchise outlets: They are typically large medical stores located in malls or shopping complexes. They are backed by healthcare companies, hospitals, or larger corporations.
• Township medical stores: These types of medical stores are independent stores opened in a township to cater to the needs of the people residing in the town or a village.
• Stores in government premises: These medicine shops are opened under various government policies and schemes and are directly under government control. They are usually found inside Government offices and buildings.

Once you decide the type of medical shop you want to open, you can then apply for its registration and other licenses.

What are the requirements for opening a pharmacy in India?

Area specification: The specified area for a medical store must be at least 10 square meters, and for a retail shop, it is 15 square meters. 

Storage facility: Medical stores must have an air conditioner and refrigerator since the labeling specifications require that certain drugs, like insulin injections, vaccines, sera, etc., be stored in the refrigerator.

Technical staff: Medical stores require technical staff, which are as follows:

• For wholesale business: The sale of medicines should be made only in the presence of a registered pharmacist with one year of experience or a person with four years of experience, as approved by the Department of Drug Control.
• For retail: Medicines should be sold during working hours in the presence of a registered pharmacist.

How to open a medical shop? 

Step 1: Market Research

When opening a medical shop in India, it will be helpful to conduct market research to help you understand the pharmacy retail market and make informed decisions. Identifying the needs and opportunities in the industry can provide a better dynamic for growing your business.

Step 2: Design a comprehensive Business Plan

A business plan to open a medical shop should have a detailed analysis of various elements of the smooth running of the business, namely:

• Legal Requirements
• Registrations
• Mission Statement
• Financial projections
• Ownership Structure
• Demographic analysis
• Competitive analysis
• Planned offerings

Step 3: Register your Medical Store

To begin your pharmacy business, you must register with local authorities and ensure your store complies with all registrations. The Indian Pharmacy Act of 1948 governs and administers the registration of a pharmacy. You must submit relevant paperwork to the state government through an official gazette. Proper registration is a must to establish a legitimate and trustworthy pharmacy business in India. You can register the medical store as a proprietorship or partnership firm.

• Proprietorship Registration

A sole proprietorship business involves only one person as the owner of the medical store. No specific registration is required to establish a sole proprietorship. The sole proprietor or owner should get a PAN card and open a bank account to run the business. Standalone medical stores are mostly sole proprietorship businesses.

• Partnership Registration

A partnership firm is established by two or more partners who manage the business together as per the partnership deed executed by all partners. It should be registered with the Registrar of Firms. Usually the township and standalone medical shops are partnership firms.

Step 4: Get a Drug License

It is mandatory for your pharmacy business to get a drug license to be eligible to open a medical store in India. To get a drug license, apply through the Central Drug Standard Control Organisation (CDSCO) or the State Drug Control Organisation. To obtain a drug license, you need to submit required documents like your pharmacy registration certificate, proof of business premises, and details of a registered pharmacist. The approval of the drug license allows you to sell medicines legally.

Step 5: Get GST Registration 

It is important to register your pharmacy business for GST to comply with tax registrations. Registration is a simpler process, and you can submit the required documents, such as your business PAN, address proof, and bank account details, on the GST portal. On verification, you will receive the GSTIN that will enable you to charge and remit GST. 

Step 6: Get a Pharmacy Licence

A pharmacy license is one of the major licenses required to be eligible to open a medical shop and be operative. To secure a pharmacy license, the medical store owner or the appointed pharmacists should be qualified with a degree of B. Pharm or M. Pharm. 

Step 7: Get a Shop and Establishment Registration

All medical stores must register under the Shop and Establishment Act to operate. According to the municipal rules of the respective state/area municipal corporation, all stores/shops must mandatorily obtain registration under the respective state’s Shop and Establishment Act. 

Step 8: Explore Funding Opportunities

Funds are required to open a pharmacy in India, covering expenses like rent, stock, and operational costs. Loans for NBFCs and financial institutions with competitive interest rates and flexible repayment options are available. Strong funding aids in opening a medical shop business in India.

Step 9: Stock Procurement

 To maintain continuous inventory, establish relationships with pharmaceutical companies and wholesalers to stock a diverse range of medicines and healthcare products.

Step 10:Marketing and Promotion

Build your brand to create awareness about your medical shop through local advertising, digital marketing, and community engagement.

Step 11: Compliance

To maintain compliance and ensure the safety and efficacy of medications, it is important to strictly adhere to drug regulations, storage guidelines, and ethical practices. You should also conduct regular audits and training programs for staff to help ensure ongoing compliance.

What documents are required for Medical Store Registration?

The following documents are required for medical store registration:

• Pharmacy license application
• Drug license deposited fee or challan invoices
• Key plan for the premises
• The basis of possession of the premises
• Identity and address proof of owners or partners
• Ownership proof of premises
• Appointment letters of registered and employed pharmacists or personnel
• Affidavit of the full-time working registered pharmacists or competent person
• Non-conviction affidavit of proprietor, partners, or directors under the Drugs and Cosmetics Act, 1940.

Conclusion

A medical shop in India offers a promising business opportunity, and providing healthcare services can be a rewarding venture. Follow the steps discussed in this blog and adhere to the tax compliances to establish a reputable medical store.

FAQs

Q1. How much investment is needed to start a medical shop?

Ans. The investment requirements to start a medical shop will vary for different sellers, mediums of payment, geographical locations, etc. Depending on where you open the medical store, you may need an initial investment ranging from Rs. 3,00,000 to Rs. 8,00,000.

Q2. How do I start a medical business?

Ans. Some of the points that can be included by medical entrepreneurs include:

• Diligent market research to identify needs and opportunities.
• A solid business plan
• Adherence to healthcare regulations and standards.
• Effective financial management
• Innovative marketing strategies

Q3. What is the profit margin in a medical shop?

Ans. A retailer's or pharmacy's profit margin will be around 16-22%. In generic medicines, it can be 20-50%. A distributor's margin is around 8 to 12 percent on branded medicines and 10 to 20 percent on generic medicines.

Q4. Which degree is required to open a medical store?

Ans. As the proprietor or the appointed pharmacist, you should have the necessary educational qualifications, which usually include a Bachelor of Pharmacy (B. Pharm) or a Diploma in Pharmacy (D. Pharm) from a recognized institution. A registered pharmacist is required to manage the storage.