Drug licence for a clinic pharmacy: Form 19, 20 and 21 When a clinic needs a retail licence, how to apply, the registered pharmacist rule, and when Schedule K is enough.

A clinic needs a retail drug licence when it sells or stocks medicines for sale to the public, including patients of other doctors. The application is made in Form 19 to the state's Licensing Authority under rule 59 of the Drugs and Cosmetics Rules, 1945, and the licences issued are usually Form 20 and Form 21 together. The counter must be run by or under the personal supervision of a registered pharmacist (rule 65(2)). A doctor who only hands their own patients the medicines they prescribed does not need this licence, under Schedule K item 5, but has to keep records instead. We read the Rules as amended up to 30 Sep 2020; check later amendments and your state's procedure with the drug control office.

Do you need a licence, or is Schedule K enough?

Schedule K item 5 exempts "drugs supplied by a registered medical practitioner to his own patient", provided the doctor is not "(a) keeping an open shop or (b) selling across the counter or (c) engaged in the importation, manufacture, distribution or sale of drugs in India to a degree which render him liable" to the licensing provisions. The exemption comes with conditions: buy only from licensed dealers or manufacturers and keep purchase records with batch numbers; for medicines with a Schedule G, H or X substance, label them with the doctor's name and address and keep a numbered supply register preserved for at least two years. Our post on Schedule K dispensing covers those conditions in detail.

Regulation 6.3 of the 2002 conduct regulations makes the same distinction from the ethics side: a physician "should not run an open shop for sale of medicine for dispensing prescriptions prescribed by doctors other than himself", though supplying drugs to one's own patients is not unethical "as long as there is no exploitation of the patient". A doctor who wants a pharmacy that serves everyone should set it up as a separately licensed pharmacy, run by a registered pharmacist.

What are Form 19, Form 20 and Form 21?

Form 19 lets one application cover both Schedule C and C(1) drugs and other drugs, so a counter can apply for Form 20 and Form 21 together. Ask the drug control office which forms your stock list needs.

How do you apply for a retail drug licence?

1. Find the Licensing Authority the State Government has appointed for your area (rule 59(1)), and ask whether it takes applications online or on paper.
2. Fill Form 19 with the premises address, the categories of drugs to be sold, the names and qualifications of the registered pharmacists, and any special storage (for example a refrigerator for vaccines or insulin).
3. Pay the fee. In the copy we read, rule 59(2) sets ₹1,500 for Form 19. A renewal filed after expiry but within six months costs ₹1,500 plus ₹500 for each month or part of a month (rule 59(4)).
4. Prepare the premises. Under rule 64(1) the authority must be satisfied that the premises are adequate, have proper storage to preserve the drugs, and are in charge of a competent person. A pharmacy on a Form 20 or 21 licence must also meet the requirements of Schedule N.
5. The authority has to be satisfied about the premises before it grants the licence, so expect it to inspect.
6. On grant, display the licence in a prominent place in the part of the premises open to the public (Form 20, condition 1).

Does a clinic pharmacy need a registered pharmacist?

Yes, for prescription sales. Rule 65(2): "The supply, otherwise than by way of wholesale dealing, of any drug supplied on the prescription of a Registered Medical Practitioner shall be effected only by or under the personal supervision of a registered Pharmacist." The Explanation to rule 65 defines a registered pharmacist as a person registered under section 2(i) of the Pharmacy Act, 1948. Rule 65(15) sets the name the counter may use: "Drugstore" for licensees who do not need a registered pharmacist, "Chemists and Druggists" for those who employ one but do not compound, and "Pharmacy" or "Dispensing Chemist" for those who employ one and compound against prescriptions.

The doctor's own registration does not replace the pharmacist on a Form 20 licence. The licensee must tell the Licensing Authority of any change in the qualified staff in charge within one month (Form 20, condition 3).

What does the licence require day to day?

• Buy only from a licensed dealer or manufacturer, against a cash or credit memo (Form 20, condition 4).
• Record each prescription supply in a prescription register, or by cash or credit memo where the Rules allow, and enter the register serial number on the prescription (rule 65(3)).
• Follow the Schedule H, H1 and X conditions in rule 65(9) to (12) for those drugs.
• Keep an Inspection Book in Form 35 for the inspector's remarks (rule 65(16)).
• If you open a second clinic with a counter, take a separate licence for it (rule 62).
• Let patients buy elsewhere. The Charter of Patients' Rights says no patient is forced to buy medicines from the hospital pharmacy (right xv).

Medicines sold from a licensed counter may be taxable even when the consultation is exempt; see our post on GST on medicines dispensed by doctors and confirm with your CA.