The Pharmaceutical Industry is a leading industry in India; its global reach and importance are increasing day by day, making it a valuable market for foreign as well as domestic investors. The Pharmaceutical market turnover as per FY 2023-2024 has reached ₹4.17 lakh crore, driven by both domestic sales as well as exports, and the growth rate is projected to reach US$120-130 billion by the year 2030. The future of the Pharmaceutical sector in India is secure and promising.
India has been the major exporter of Generic medicines and Vaccines globally. Around 60% of vaccines are being produced by India, making it the largest vaccine producer in the world, offering huge potential for startups, investors, and exporters. These data are inspiring enough to convince any investor who is willing to invest in the Pharmaceutical sector. It’s an ideal time to start exploring the opportunities in this field, so here is a complete guide on how to start a Pharmaceutical Company in India.
Different Types Of Pharmaceutical Business Models
Pharmaceutical business models are broadly categorized, deciding the correct type of model according to your preference is the most primary yet crucial decision as it directly affects the operation, scalability, investments, reduces the risk of business failure, along with the long-term goals and success of the company. A list of different types of Pharmaceutical Business Models has been mentioned below.
Pharmaceutical Manufacturing Business
In this, a company has to set up its facility to manufacture medicines like tablets, ointments, injectables, syrups, APIs, and other healthcare products under its own brand or offer contract manufacturing. It requires necessary drug licenses, registering with authorities such as the DSCO and GST.
Third Party or Contract Manufacturing
It is a business agreement in which a company contracts a separate manufacturer to produce medicines under the marketing company’s brand name.
How does it work?
It consists of two main bodies: Brand Owner and Manufacturer, both working in a coordinated way to sell and produce the medicines and other healthcare products.
Brand Owner – it owns the formulation , Brand name , marketing, and legal rights of the company . Focuses on Marketing, Sales, and Distribution. Place a production order with the manufacturer.
Manufacturer – Uses its staff, licenses, machinery, and equipment to manufacture the drugs and other products as per the needs of the company, and also ensures GMP compliance and Quality Control.
Ayurvedic / Herbal / Unani Model
They are obtained from natural sources and manufactured using traditional methods. With increasing drug resistance among people, Herbal medicines have become a boon due to their minimal side effects and Holistic approaches. It is regulated by AYUSH(India).
Nutraceutical / Wellness Model
It is regulated by the FSSAI (India), and its main focus is selling food-based supplements and health products.
Generic Drug Manufacturing
It refers to the production and selling of off-patent drugs but therapeutically equivalent to patented drugs in terms of dosage, safety, route of administration, and quality.
Biotechnology / Biopharma Model
The manufacturing of Vaccines, drugs, and diagnostics using biological systems, living organisms, and their derivatives. It also involves Monoclonal antibodies, insulin, vaccines, etc.
How To Start a Pharmaceutical Company in India
The golden period of pharmaceuticals has begun in India, and many investors are looking forward to pursuing their investment. Yet, the lack of knowledge has become a stumbling block for them. If you’re someone with a passion for starting a Pharmaceutical Company in India, this step-by-step guide will walk you through the entire process:
Choose A Right Business Model
The most crucial step is choosing what kind of Pharmaceutical company you want to start, as it will determine the licenses and investment required. A list of different Businesses has been hinted at below.
- Pharma Manufacturing Unit
- Third-Party/Contract Manufacturing
- Retail Pharmacy (Chemist Shop)
- Online Pharmacy
Attaining a Drug Licence
According to the Drugs and Cosmetics Act (1940), it is mandatory to own a Drug License. A list of required Documents is disclosed below:
- Premises proof (rental agreement/ownership)
- Blueprint/layout of premises
- Pharmacist’s qualification proof (for retail/wholesale)
- Company registration documents
- Affidavit and declaration forms
Establish the obligatory Infrastructure
- Meet (Good Manufacturing Practices) as per WHO standards
- Set up separate areas for storage, manufacturing, testing, etc.
- Employ qualified technical staff (production manager, QA/QC analytics)
- Install equipment as per drug category (e.g., tablets, capsules, injectables)
Register for Other Statutory Requirements
- GST Registration
- Trademark Registration (to protect your brand)
- FSSAI License (if making nutraceuticals or supplements
- Environmental Clearance (as per plant requirements )
Gain product endorsement
Apply to the State Licensing Authority with:
- Form 25/28 (manufacturing license)
- Product specifications/formulations
- Stability data
- Get product approval for each formulation you plan to manufacture.
Hire a competent workforce
- Manufacturing: Technical staff, QA/QC, machine operators
- Marketing: MRs, digital marketers, product managers
- Regulatory: Compliance officers, documentation experts
Maintain Compliance & Quality Standards
- Follow GMP and Schedule M guidelines
- Conduct stability studies, batch testing
- Renew licenses regularly
Formulate a marketing and distribution strategy
- Appoint medical representatives
- Get listed with hospitals and clinics
Build a distribution network ( distributors, retailers) - Promote via digital marketing
CONCLUSION
The pharmaceutical sector is a worthwhile sector with Government encouragement, innovations, and the present global demand for generic medicines, vaccines, and other medical supplies, making it a promising and optimistic environment for new Stakeholders. According to modern figures, it’s the right time to invest and grow in the field of pharmaceuticals.
