Indian Pharmaceutical Industry: Procedure to Import Drugs in India

Introduction

The Indian pharmaceutical industry has been growing at a steadfast rate and this is also due to the increase in the evolution of several diseases and epidemics that plague our world every year. However, despite the advancements in technique and technology, India still largely lacks the basic medical infrastructure required for combating the increasing number of medical ailments we now face. However, this industry is without a doubt one of the most lucrative options for investment for entrepreneurs globally. As of today, entrepreneurs can even begin their own businesses in this field with digital pharmacy shops, medicine production plants, hospitals, medical nurseries, medication centers, and several other avenues.

Importance of obtaining a Drug License

• The entry into the drugs industry has not always been a very simple task due to the fact that human lives literally depend on the effectiveness of such drugs. As the need for newer drugs increases, so does the heavy vigilance on such drugs with stricter entry rules placed by the government which has increasingly restricted the entry of new entrepreneurs within the drug business through a license to be obtained by them in order to start their own drug business in India.
• Thus, the license for drugs is the most optimum barrier of the government to restrict the entry of low-grade medicines and drug producers and for ensuring the important safety standards for safeguarding human health. The drug license is basically a permission which is granted to persons who are entering into the pharmaceutical industry through the incorporation of a new in the drug, medicine or cosmetic business in India. Such a license is usually granted through a competent authority as appointed by the government under the Drugs and Cosmetics Act, 1940.
• Such a license binds restrictions on the producer of drugs and medicines or cosmetics for maintaining the quality of all the medicines produced and for ensuring that no harm shall inflict any consumer of such drugs, whatsoever.

Import Procedure for Drugs & Cosmetics in India & their Approval

The procedure for import of drugs manufactured outside India but to be sold within the nation is as follows:

• Firstly, an application needs to be submitted with the Licencing Authority under Form 40 of the Drugs and Cosmetics Act, 1940, either by the manufacturer himself, who has a valid wholesale license the for sale and distribution of drugs or any other authorized agent living in India who either has a valid License for the manufacture and sale of a drug or who has a valid wholesale License for the sale and distribution of these drugs.
• The details to be mentioned in Form 40 are as follows:
  •      The authorized signatory name.
  •      The designation.
  •      The requisite department.
  •      The complete address of the Company.

Authorized Signatory: Any person who is authorized, who is preferably a director approved by the Board of Directors in case of a company or by the proprietor in case of a proprietorship firm can be the authorized signatory for the same. The application mentioned above must be along with an affidavit in respect of the authorized person or with the Power of Attorney in the name of the authorized person. This Form shall comprise of the details of the Foreign Manufacturer’s contact person in the manufacturing site along with his complete address, (i.e., address of the manufacturing premises) and the corporate office address and the Telephone number, Fax number and E-mail address as well.

The name of the drug shall be captured as provided below:

• The brand name shall be captured.
• The different pack, pack size and different strengths of the same brand shall be captured.
• The registration fee amount (Challan number and date) shall be mentioned on the original TR 6 challan having the complete name and address of the applicant along with the details of the application to be enclosed.
• The Fee structure for such an Import Registration under Form 40 is provided below.

Fees and Form(s) and the undertakings as per Schedule D(I) (for registration of the manufacturing premises) and Schedule D(II) (for registration of the drugs.

Purpose	Fees
Registration Fee for the Manufacturing premises	USD 1500 (or its equivalent in Indian Currency)
Registration Fee for a single drug (Note: An additional fee of USD 1000 must be paid for each additional drug in case the manufacturing site remains the same.)	USD 1000 (or its equivalent in Indian Currency)

Note: The Fees shall be paid through a Challan in the Bank of Baroda, Kasturba Gandhi Marg, New Delhi110001 or any other Bank, as notified, from time to time by the authority.

The Challan and Bank details: This fee shall be paid through a challan in the Bank of Baroda, Kasturba Gandhi Marg, New Delhi-110 001 or any other Bank, as notified, from time to time by the authority. The pay order cheque is to be in the favor of Pay & Accounts Officer, DGHS, Nirman Bhavan, New Delhi-01 Challan which means that the receipt of the Cash paid into the bank, which is attested by the bank with the seal and date.

Furthermore, this fee is to be credited under the following details:

• Head of Account.
• Fees and Fines under the drugs and cosmetic rules 1940. Moreover, the conversion rate should be mentioned on this Challan.
• Electronic Payment: In case of any direct payment of fees by manufacturer in the country of origin through ECS (Electronic Clearance System) from any bank in the country of origin to Bank of Baroda, Kasturba Gandhi Marg, New Delhi-110 001, through the Electronic Code of the Bank in the Head of Account.
• Fees and Fine and Original receipt of the said transfer can be considered as an equivalent to bank Challan, subject to the approval of the Bank of Baroda.
• Furthermore, the applicant is liable to pay USD 5000 (or its equivalent in Indian Currency) for further expenditure (This includes the Inspection fees + expenditure on inspection to be borne by the company) as may be required for any inspections or visits to the manufacturing site.
• The applicant shall then be liable for the payment of testing fees directly to a testing laboratory approved by the central government in India or abroad.
• The applicant must further pay a fee of USD 300 (or its equivalent in Indian Currency) for a duplicate copy of the registration certificate, in case the original is defaced, damaged or lost.
• The registration time further provides that if the application is complete in all respects and information specified in forms D (I) & D (II) is fully complied with, then the licensing authority shall, within a period of 9 months from the date of receipt of application issue such a Registration Certificate and in exceptional circumstances and for the reasons to be recorded in writing, such a Registration Certificate may be issued within such an extended period which does not exceed 3 months.
• Further the undertaking for the compliance of the terms and conditions required by the applicant for acquiring the registration certificate and to keep the validity of the registration certificate is required.
• Then the data specified in Schedule D (I) and Schedule D (II) shall be enclosed along with the covering letter.

Furthermore, beyond this, the following documents are required to be submitted under the following heads and processes for the Import & Registration of the bulk drugs and finished product in the country:

The Covering Letter	The covering letter is one of the most important aspects of this application and must clearly and fully give out the intent of the application. This includes whether the application for the registration of the manufacturing site is being submitted for the first time, whether the application is for reregistration or renewal or is for the endorsement of additional products to an existing Registration Certificate etc. Furthermore, this covering letter should be duly signed and stamped by the authorized signatory, indicating the name & designation of the authorized signatory along with the name and address of the firm. Any exemption to the submission requirement must be clearly specified within this covering letter on the firm or the company letter head and justified within the submissions.
Authorization Letter	An authorization letter which has been issued in original by the Director or the Company Secretary or a Partner of the Indian Agent firm which reveals the name & designation of the person authorized to sign such a legal document such as Form 40, Power of Attorney etc. on behalf of the firm should be submitted at the time of submission of the application for registration. It should have a validity period as per the company policies.
Duly Filled Form-40	Such a form as per the proforma prescribed in the Drugs & Cosmetics Rules, which has further been signed & stamped by the Local Authorized Agent and a manufacturer along with name & designation and date. Form-40 should be signed by the Local Authorized Agent or manufacturer and must also have a valid sale or manufacturing License in India.
TR 6 Challan	This must be issued in case of any direct payment of fee by the manufacturer in the country of origin wherein such a fee shall be paid through the Electronic Clearance System (ECS) from any bank in the Country of Origin to the Bank of Baroda, Kasturba Gandhi Marg, New Delhi, through the electronic code of the bank to the head of Accounts as stated above and the original receipt of the said transfer shall be treated as an equivalent to the Bank Challan.
Power of Attorney	An authorization by a manufacturer to his agent in India shall be documented by a Power of Attorney executed and authenticated either in India before a First-Class Magistrate, or in the country of origin before such an equivalent authority. Such a certificate must be attested by the Indian Embassy of the said country and the original of the same shall be furnished along with the application for the Registration Certificate. Apostille Power of Attorney from Hague convention member countries is also acceptable.
Label Submission	A True copy of the label as per Rule 96 of the Act must be necessarily submitted along with the application. In case the drug comes within the ambit of an IP label claim the same must appear as per IP.

Testing of Drugs

For the registration of Bulk (Active Pharmaceutical Ingredient) drugs, consecutively three batches are asked to be submitted to the designated laboratory for testing for which the fee is to be paid by the applicant to the Laboratory as per their norms.

The applicant must then enclose adequate samples for re-analysis purposes from each of the three consecutive batches along with specification Which are given below:

• A duly notarized/Apostilled/Attested (by Indian Embassy the country of origin) and valid copy of Free Sale Certificate or Certificate to the Foreign Government/Certificate of Marketability/applicable for each drug issued by the National Drug Regulatory Authority of the country of origin must be then produced.
• A Duly notarized/Apostilled/Attested (by Indian Embassy the country of origin) and a valid copy of the GMP Certificate of WHO guidelines or the Certificate of Pharmaceutical Product (COPP) as per WHO GMP Certification Scheme/ Product Registration Certificate issued by NRA along with the proof of DMF approval by the NRA and the CEP (EDQM certificate) for each drug issued by the National Drug Regulatory Authority of the country of origin must be produced.
• A duly notarized/Apostilled/Attested and valid copy of the Manufacturing License and a Market Authorization Certificate in respect of the applied drugs issued by the National Drug Regulatory Authority of the country of origin should be provided.
• A duly notarized/Apostilled/Attested (by Indian Embassy in the country of origin) and a valid copy of Product Registration Certificate wherever applicable in respect of the foreign manufacturing sites must then be produced.

What does Drugs mean & Why is the Drug License required?

Section 3(b) of the Drugs and Cosmetics Act,1940 defines a ‘drug’ to include all medicines and devices for the use of human beings or animals internally or externally, and all substances planned to be used for or in the diagnosis, mitigation, treatment, or prevention of any disorder or disease in animals or human beings, including preparations applied on the human body for the purpose of repelling insects like mosquitoes.

It also includes all substances which can be used for the destruction of insects and all components of a drug such as empty gelatin capsules. This definition was amended in 1964 in order to include Ayurvedic and Unani Drugs.

Acquiring a drug license is mandatory for entering into the pharmaceutical or cosmetics industry in India for the following reasons:

• For ensuring that the company which produces the drug follows all the necessary safety standards and undertakes every such precaution and safety measure as may be necessary in order to make such medicines and the goods used for making the respective medicine or drug.
• For ensuring that such an entity pertains to all the safety measures while using different chemicals and drugs within their premises.
• For ensuring that the individual engaged in the business of such drugs or medicines and cosmetics has acquired prior information and knowledge regarding the usage of any harmful chemicals & medications and thereby follows the compliance obligations of the medical authorities and the medical council of the country.

Types of Drug Licenses

There are several different kinds of drug licenses based on various attributes. Every applicant shall be granted one out of the following drug license based on the eligibility and requirements stated:

Manufacturing Drug License	Such a license is required for the manufacture of Ayurvedic or allopathic medicines, cosmetics or special goods which involve the use of the above drugs. This license can be acquired from the State Government Authority.
Wholesale Drug License	Such a drug license is issued to all wholesalers who deal in the wholesale of pharmaceuticals or drug-related products. This is issued by the Central Drugs Standard Control Organization (CDSCO) and such a license can only be issued to such qualified persons who have acquired a degree or a diploma from a recognized University and also holds one year of experience with the same.
Retail Drug License	A retail drug license is usually issued to drug retailers, medicine retailers, pharmacists and medical nurseries. This type of license can be obtained from the State Drug Council.
Import Drug License	Such a license is needed for the import of pharmaceuticals and drugs and chemicals and is applied for by entities engaged in the process of inter-country drug businesses.
Multi-Drug License	This type of license must be mandatorily acquired by entrepreneurs who operate within the drug business of pharmaceutical businesses in more than one state.
Restricted Drug License	This type of license must be acquired by such individuals who are engaged in the business of consumer goods made of drugs or pharmaceuticals which includes cosmetic dealers and general stores.
Loan Drug License	This type of license must be obtained by such individuals who want to manufacture their drugs on the premises of any other drug manufacturer or a third-party business model.

Pre-Requisites for Acquiring a Drug License

Drug licenses in India are granted only to those individuals who comply with the following requirements and adheres to the same.

• Wherein the business of medicine must be managed by a specialist or a qualified pharmacist in case a retail drug license is applied for. Whereas, in the case of a wholesale drug License, a graduate with a minimum of one year experience or post-graduate with a minimum of 3 to 4 years of experience can apply for a drug license.
• Wherein all the medicines and utilities are to be kept in a clean, well-ventilated environment and within a cold storage facility. Any individual who makes an application for a drug license in India must necessarily possess a facility wherein this person can store vaccines under refrigeration, air conditioner or in a low-temperature freezing zone as approved by the drug inspector therein.
• Further, the minimum area for the opening of a pharmacy business in India must be 10 square meters. However, for obtaining a retail or wholesale pharmacy license the minimum area has been prescribed as 15 square meters. Furthermore, the premises must be equipped with all the necessary cooling facilities, safety measures and should also be well ventilated.
• The location for the premises of storage or where the production of drugs and medicines or cosmetics takes place must be within the reach of the drug inspector as well.

Necessary Documents for Obtaining Drug License

Prior to filing an application to the required authorities for obtaining a drug license in India, the applicant must possess the following documents:

• A business registration certificate.
• A Certificate of incorporation.
• All licenses that have been obtained in name of the business.
• A PAN of the applicant or business.
• An appointment letter of the applicant.
• An ID Proof of the applicant.
• The address proof of the premises to be used for the drug business.
• Other documents as prescribed by the drug inspector.

Process of Acquiring a Drug License in India

A drug license in India can be obtained from any of the following two authorities:

• Central drug standard control organization (CDSCO).
• State drug standard control organization (SDSCO) and the issuing authority may vary depending on the type of license.

The process for application is made in the following manner:

• The application for obtaining a drug license can be filed on the respective application portal of the drug regulatory authorities, which varies from state to state, as well as the nature and type of transaction.
• Next the applicant must login or register on the drug regulatory portal, file the appropriate form with all the required declarations and the supportive documents. Further the person has to also make a payment of the required fees as shown on the portal.
• After the receipt of the application, the authority shall provide a reference number or confirm a verification visit by the requisite drug inspector who shall ensure all the verifications and the correctness of information submitted and after due satisfaction of compliance shall grant the Certificate of Drug License.
• After a personal visit such a drug inspector can also call the Competent Person on his premises for further verification of all the information and his knowledge.
• Upon complete satisfaction with all the necessary documents, such an inspector shall then approve the drug permit of the applicant.