Overview of Drugs Manufacturing Licensing in India

The Drugs Manufacturing License is a critical authorization granted by regulatory authorities to ensure that pharmaceutical products are produced in compliance with established standards of safety, quality, and efficacy. In India, the licensing framework is governed by the Drugs and Cosmetics Act, 1940 and the associated Rules, 1945, which lay down stringent guidelines for the manufacture, distribution, and sale of drugs and cosmetics across the country.
This license acts as a regulatory safeguard, ensuring that only those facilities that meet the necessary infrastructural, technical, and procedural requirements are permitted to produce pharmaceutical formulations or bulk drugs. The issuance of a drug manufacturing license not only legitimizes the operations of a pharmaceutical manufacturer but also holds them accountable to adhere to Good Manufacturing Practices (GMP) as outlined under Schedule M of the Act.
Drugs manufacturing licenses are issued by the State Licensing Authority (SLA) for conventional pharmaceutical products and by the Central Drugs Standard Control Organization (CDSCO) for drugs falling under central jurisdiction—such as vaccines, blood products, and biotech-based formulations. Whether for a large-scale pharmaceutical corporation or a smaller loan license holder, securing a drug manufacturing license is the foundational step in entering the regulated pharmaceutical market in India.
This licensing regime plays a pivotal role in safeguarding public health by ensuring that medicines reaching consumers are manufactured in a controlled and legally compliant environment. It serves not only as a regulatory requirement but also as a mark of credibility and assurance in the highly sensitive and competitive pharmaceutical industry.

What is a Drugs Manufacturing License?

A drugs manufacturing license is a legal authorization granted to companies or individuals allowing them to produce pharmaceutical products for commercial use. This license ensures that drug manufacturing complies with standards related to quality, safety, efficacy, and good manufacturing practices (GMP).

Role of CDSCO in Drugs Manufacturing Licensing

The Central Drugs Standard Control Organization (CDSCO) is India’s national regulatory authority operating under the Ministry of Health and Family Welfare. It plays a critical role in ensuring the safety, efficacy, and quality of drugs manufactured and distributed across the country. CDSCO is primarily responsible for granting drug manufacturing licences in the following areas:

Licensing for New Drugs and Vaccines

• New Drug Approval (NDA) is a primary function of CDSCO. Before a new pharmaceutical product or vaccine can be manufactured and marketed in India, it must undergo a rigorous evaluation process.
• CDSCO assesses pre-clinical and clinical trial data, safety profiles, and therapeutic efficacy before granting permission to manufacture or import new drugs.
• This includes both chemical-based drugs and biologics, ensuring they meet national standards and international best practices.
• For vaccines, additional scrutiny is applied, including checks on cold chain logistics, batch testing, and post-marketing surveillance.

Licensing of High-Risk Drug Categories

• Certain drugs fall under Schedule X of the Drugs and Cosmetics Rules, such as narcotics, psychotropic substances, and habit-forming drugs. These are classified as high-risk due to their potential for misuse and abuse.
• Manufacturing, stocking, and distribution of these drugs require a special CDSCO license and are subject to strict monitoring and record-keeping requirements.
• The CDSCO coordinates with the Narcotics Control Bureau (NCB) and state regulators to ensure compliance with drug abuse prevention laws.

Import and Export Permissions for Pharmaceuticals

• CDSCO regulates the import of drugs and APIs (Active Pharmaceutical Ingredients) into India. This includes granting Import Registration Certificates and Import Licenses under Form 10 and Form 41.
• It ensures that imported products comply with Indian pharmacopoeia or relevant international standards.
• Export permissions are also regulated by CDSCO, especially for drugs that are controlled substances or that fall under international health regulations.
• The organization facilitates No Objection Certificates (NOCs) for export to other countries, verifying the authenticity and compliance of products with applicable laws.

Clinical Trial Approvals and Biosimilar Regulation

• Before any new drug is licensed for manufacture and marketing, clinical trials are required to assess its safety and efficacy in the Indian population.
• CDSCO grants approval for conducting Phase I, II, III, and IV clinical trials based on a detailed evaluation of trial protocols, ethical compliance, and safety data.
• It ensures compliance with the Good Clinical Practice (GCP) Guidelines, Schedule Y of the Drugs and Cosmetics Rules, and other applicable standards.
• In the case of biosimilar (biological products that are similar to already approved biologics), CDSCO provides licensing after a thorough comparability assessment involving analytical, preclinical, and clinical data.

Role of ONDLS in Drug Regulatory Approvals

The Online National Drug Licensing System (ONDLS) is a centralized digital platform developed to facilitate paperless, faster, and more transparent drug licensing and registration processes across India. It integrates various stakeholders in the pharmaceutical regulatory ecosystem, including CDSCO, State Licensing Authorities (SLAs), manufacturers, importers, and exporters.

Unified Digital Platform for Licensing

• ONDLS enables pharmaceutical manufacturers and importers to apply online for various licences, registrations, and permissions required under the Drugs and Cosmetics Act, 1940.
• It supports applications for manufacturing, sales, wholesale, retail, and import licenses, including those related to Form 25, Form 28, Form 41, and others.

Drug License - Application, Documents, Registration & Forms

In India, the manufacturing, distribution, and sale of drugs are strictly regulated under the Drugs and Cosmetics Act, 1940 and its associated Rules. To ensure public health and safety, any individual or entity engaged in the pharmaceutical business—whether manufacturing, marketing, or retail—must obtain the appropriate drug license from the relevant regulatory authority.

1.    Manufacturing License

Issued to businesses engaged in the manufacturing of drugs, including allopathic, ayurvedic, homeopathic, and unani medicines.
Granted by the State Drug Control Authority, subject to compliance with Good Manufacturing Practices (GMP) under Schedule M.
Required for both bulk drug production and formulations.

2.    Sale License

This category is further divided into:
a) Wholesale Drug License

• Required for entities involved in the wholesale distribution of drugs and pharmaceuticals.
• Wholesale refers to the sale of drugs to another licensee (e.g., retailers, hospitals) and not directly to consumers.
• Must be obtained by stockists, distributors, and suppliers.
• Pharmacist qualification or a competent person with relevant experience is generally required.

b) Retail Drug License

• Required for the retail sale of drugs to the end consumer for personal use.
• Applicable to pharmacies, chemist shops, cosmetic retailers, stand-alone pharmacists, and ayurvedic product sellers.
• Allows sales to hospitals, dispensaries, educational institutions, or directly to customers.
• Must be overseen by a registered pharmacist.

3.    Loan License

• Issued to a business that does not own a manufacturing unit but uses the facilities of an existing licensed manufacturer to produce drugs.
• Commonly used by marketing companies and third-party manufacturers.
• Requires a formal agreement with the licensed manufacturing facility.

4.    Import License

• Required for dealers or companies that import:
• Finished drugs
• Active Pharmaceutical Ingredients (APIs)
• Medical devices or cosmetics
• Issued by CDSCO (Central Drugs Standard Control Organization) under Form 10 or Form 11, depending on the purpose.
• Mandatory for both commercial import and import for R&D or testing.

5. Multi-Drug License

• Required by businesses operating pharmacies or retail outlets in more than one state under the same brand name.
• Enables centralized licensing for large pharmacy chains or franchises.
• Ensures regulatory compliance across multiple jurisdictions.

Drug Controlling Authority (Regulatory Authority)

Under the Drugs and Cosmetics Act, 1940, the responsibility for regulating the manufacture, sale, import, and distribution of drugs in India is shared between central and state regulatory authorities. These authorities are empowered to issue drug licenses, ensure quality compliance, and enforce drug laws to safeguard public health.
Below are the key drug regulatory authorities in India:

1. State Drugs Standard Control Organization (SDSCO)

• The SDSCO functions under the respective State Governments.
• Responsible for issuing licenses related to the manufacture, sale, and distribution of drugs within the state.
• Conducts inspections, enforces compliance with drug laws, and monitors drug quality at the local level.

2. Central Drugs Standard Control Organization (CDSCO)

CDSCO is the national regulatory authority functioning under the Ministry of Health and Family Welfare.
It oversees:

• Approval of new drugs and clinical trials
• Import licensing of drugs and medical devices
• Quality control of imported drugs
• Coordination with State authorities for uniform enforcement.
• The Drugs Controller General of India (DCGI) heads the CDSCO.

3. State Drug Licensing Authority with Approval of Central License Approving Authority (CLAA)

• Certain drug categories such as blood banks, blood products, vaccines, Sera, r-DNA products, and other critical biologicals require joint regulation.
• In such cases, the State Licensing Authority issues the license, but only after approval from the Central License Approving Authority (CLAA) under CDSCO.

4. Department of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha, and Homoeopathy)

• Regulates the licensing and quality control of Ayurvedic, Unani, Siddha, Homoeopathic, and herbal drugs.
• Responsible for issuing manufacturing licenses for cosmetic and medicinal products in the traditional medicine sector.
• Functions under the Ministry of AYUSH, Government of India.

For more details, please click Metacorp Drugs Licensing Services