Schedule K: the exemption that lets a doctor dispense Rule 123, item 5, and the four conditions a clinic has to meet to give medicines without a sale licence.

Schedule K is the schedule of the Drugs and Cosmetics Rules 1945 under which, by Rule 123, listed classes of drugs "shall be exempted from the provisions of Chapter IV of the Act and the Rules made thereunder to the extent and subject to the conditions specified in that Schedule". Chapter IV is the part of the Act on manufacture, sale and distribution, so the exemption is what separates a clinic dispensing to its own patients from a shop that needs a sale licence. The entry that matters to a clinic is item 5.

Which entry lets a doctor dispense?

Item 5 of Schedule K covers "Drugs supplied by a registered medical practitioner to his own patient or any drug specified in Schedule C supplied by a registered medical practitioner at the request of another such practitioner if it is specially prepared with reference to the condition and for the use of an individual patient provided the registered medical practitioner 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 provisions of Chapter IV of the Act and the rules thereunder." Three words carry the weight: "his own patient". The exemption does not cover selling to walk-ins who were not consulted.

What are the conditions?

1. Purchase only from a dealer or manufacturer "licensed under these rules", and keep records of purchases "showing the names and quantities of such drugs, together with their batch numbers and names and addresses of the manufacturers", open to inspection.
2. For a medicine containing a Schedule G, H or X substance: label it with "the name and address of the registered medical practitioner by whom it is supplied"; mark it "For external use only" or, for internal use, with the dose; enter in a register "the name of the medicine or ingredients of the preparation and the quantities thereof, the dose prescribed, the name of the patient & the date of supply and the name of the person who gave the prescription"; number the entry and put that number on the container label; and keep the register and prescription "for not less than two years".
3. Store the drug "under proper storage conditions as directed on the label".
4. Supply nothing "after the date of expiration of potency recorded on its container".

Who counts as a registered medical practitioner here?

Rule 2(ee) defines the term for these rules: a person "registered or eligible for registration in a medical register of a State meant for the registration of persons practising the modern scientific system of medicine excluding the Homoeopathic system of medicine", plus holders of qualifications under the Indian Medical Degrees Act 1916 or the Indian Medical Council Act 1956 schedules, registered dentists and qualified veterinary practitioners. Homoeopathic practitioners have their own entry in the schedule; ayurvedic, siddha and unani drugs are outside Chapter IV under section 33A of the Act. The full walk-through is in dispensing medicines at a clinic under Schedule K.

What does it look like at a small OPD?

A single-doctor clinic keeps a few items bought from a licensed distributor, invoices filed. Each time the doctor gives a strip after consultation, the attendant writes a numbered line in the register (medicine, quantity, dose, patient, date, prescriber) and puts that number and the doctor's name and address on the pack. Nothing goes to a person the doctor has not seen. The pad notes what was given, because regulation 3.7.1 of the 2002 conduct regulations says the "Prescription should also make clear if the Physician himself dispensed any medicine". Tax on dispensed medicines is covered in GST on medicines dispensed by doctors.