Introduction:

Starting a pharmaceutical business in India can be a lucrative venture, given the country's vast healthcare needs and the thriving pharmaceutical market. With a rapidly growing population and increasing healthcare awareness, the demand for affordable and quality medicines is on the rise. This presents an excellent opportunity for entrepreneurs looking to make a mark in the pharmaceutical industry.

India is known as the "Pharmacy of the World" due to its significant role in global pharmaceutical production. The country is a major exporter of generic drugs and has a robust domestic market as well. The Indian pharmaceutical sector offers immense potential for growth and innovation.

If you're considering starting a pharmaceutical business in India, this step-by-step guide will provide you with valuable insights and actionable advice. From understanding the legal and regulatory requirements to setting up the infrastructure and implementing quality assurance measures, each step is crucial for a successful pharmaceutical venture. Let's dive into the process and explore the path to launching your own pharma business in India.

Step-by-Step Guide: How to Start a Pharma Business in India

Research and Planning:

Before embarking on any business venture, thorough research and planning are essential for success. When it comes to starting a pharmaceutical business in India, this holds even greater significance. Here's why:

1. Importance of Research and Planning:

Conducting comprehensive research allows you to gain valuable insights into the pharmaceutical industry, understand market dynamics, and make informed decisions. Planning, on the other hand, helps you outline your goals, strategies, and resources, setting a clear direction for your business. Research and planning enable you to mitigate risks, identify opportunities, and establish a solid foundation for your pharmaceutical venture.

2. Understanding the Pharmaceutical Industry in India:

Familiarizing yourself with the Indian pharmaceutical industry is crucial. Study the market trends, growth projections, and regulatory landscape. Identify the key players, both domestic and international, and understand their market positioning and strategies. Gain insights into the healthcare system, drug pricing policies, and government initiatives. This knowledge will help you navigate the industry landscape effectively.

3. Conducting Market Research:

Market research is vital for identifying the demand for specific pharmaceutical products, understanding customer needs, and identifying potential gaps or niches. Use surveys, focus groups, and interviews to gather data on customer preferences, purchasing behavior, and market trends. Analyze existing market data, such as sales figures, market share, and growth rates. This research will guide your product development, marketing strategies, and pricing decisions.

4. Identifying Target Customers:

Determine your target customer segment(s) based on their demographics, healthcare needs, and purchasing power. Understand their preferences, concerns, and expectations from pharmaceutical products. This information will help you tailor your products, branding, and marketing messages to resonate with your target audience.

5. Analyzing Competitors:

Identify your direct and indirect competitors in the pharmaceutical market. Analyze their product offerings, pricing strategies, distribution channels, and marketing approaches. Assess their strengths and weaknesses to identify areas where you can differentiate your business and gain a competitive edge. This analysis will help you position your products effectively and develop a unique value proposition.

6. Creating a Business Plan:

A well-defined business plan is essential for outlining your goals, strategies, and operational details. It should include components such as an executive summary, market analysis, product portfolio, marketing and sales strategies, organizational structure, financial projections, and risk management. A business plan serves as a roadmap for your business and is crucial for attracting investors or securing financing.

By investing time and effort into thorough research and planning, you set yourself up for success in the pharmaceutical industry in India. This foundation will guide your decision-making process and increase the likelihood of achieving your business objectives.

Legal and Regulatory Requirements:

Starting a pharmaceutical business in India involves complying with a comprehensive regulatory framework. Understanding the legal requirements and obtaining the necessary licenses, permits, and registrations is crucial. Here's an overview of the regulatory landscape and the key steps involved:

1. Regulatory Framework:

The pharmaceutical industry in India is regulated by various authorities, with the primary regulatory body being the Central Drugs Standard Control Organization (CDSCO) under the Ministry of Health and Family Welfare. CDSCO is responsible for the regulation and approval of drugs, clinical trials, and the issuance of licenses to pharmaceutical companies.

2. Licenses, Permits, and Registrations:

To start a pharmaceutical business in India, you need to obtain the following licenses, permits, and registrations:

· Drug Manufacturing License: This license is required for manufacturing pharmaceutical products and is issued by the State Drug Control Office. It involves compliance with Good Manufacturing Practices (GMP) guidelines and inspection of the manufacturing facility.

· Wholesale Drug License: If you plan to engage in wholesale distribution of pharmaceutical products, you need to obtain a Wholesale Drug License from the State Drug Control Office.

· Retail Drug License: If you intend to operate a pharmacy or retail outlet for selling drugs, you need to obtain a Retail Drug License from the State Drug Control Office.

· Goods and Services Tax (GST) Registration: GST registration is mandatory for businesses in India, including pharmaceutical companies. It is required for tax compliance purposes.

3. Approvals from Regulatory Bodies:

Obtaining approvals from regulatory bodies like the CDSCO and State Drug Control Office is a crucial step. The procedures involved in obtaining approvals may vary depending on the type of pharmaceutical business and the specific products involved. Generally, the following steps are involved:

· Submission of Application: Prepare and submit an application with the required documents, including the manufacturing premises details, product information, quality control procedures, and personnel details.

· Inspection and Evaluation: The regulatory authorities may conduct inspections of the manufacturing facility and review the submitted documents to ensure compliance with regulatory standards.

· Approval and License Issuance: If the application meets the requirements and passes the evaluation process, the regulatory authorities will grant the necessary approvals and issue the licenses.

4. Intellectual Property Rights (IPR):

Compliance with intellectual property rights is essential in the pharmaceutical industry. Ensure that your business respects patents, trademarks, and copyrights to avoid legal complications. Conduct thorough research and seek professional advice to ensure that your products and branding do not infringe on any existing intellectual property rights.

5. Labeling Requirements:

Pharmaceutical products in India must adhere to specific labeling requirements. Labels should include accurate information regarding product name, composition, dosage, batch number, manufacturing and expiry dates, storage conditions, and precautions. Ensure compliance with labeling regulations to provide clear and accurate information to consumers.

6. Drug Pricing Regulations:

India has regulations in place to control drug prices and ensure affordability. Familiarize yourself with the Drug Price Control Order (DPCO) issued by the National Pharmaceutical Pricing Authority (NPPA). Comply with pricing guidelines and maintain transparent pricing practices.

Compliance with the regulatory framework, intellectual property rights, labeling requirements, and drug pricing regulations is crucial for the smooth operation of your pharmaceutical business in India. Ensure that you stay updated with any changes in regulations and seek legal advice to navigate the complex regulatory landscape effectively.

Infrastructure and Manufacturing Setup:

Setting up a pharmaceutical manufacturing unit requires careful consideration of infrastructure requirements and choosing an appropriate location. Here's an overview of the key factors to consider and the steps involved in establishing a manufacturing unit:

1. Infrastructure Requirements:

The infrastructure for a pharmaceutical manufacturing unit should meet the following requirements:

· Adequate Space: Ensure that the facility has sufficient space to accommodate production areas, storage areas, laboratories, quality control units, and administrative offices.

· Layout Design: Plan the layout to ensure a smooth flow of materials and personnel, minimizing the risk of contamination and ensuring efficient operations.

· Utility Services: Ensure access to reliable and uninterrupted utilities such as electricity, water supply, compressed air, and HVAC (Heating, Ventilation, and Air Conditioning) systems.

· Waste Management: Implement proper waste management systems to handle and dispose of pharmaceutical waste in compliance with environmental regulations.

· Quality Control Infrastructure: Establish a dedicated area for quality control activities, including testing, analysis, and documentation.

2. Selecting a Suitable Location:

When choosing a location for your pharmaceutical manufacturing facility, consider the following factors:

· Proximity to Raw Materials: Select a location that allows easy access to raw materials and active pharmaceutical ingredients (APIs) to streamline the supply chain.

· Infrastructure and Connectivity: Evaluate the availability of transportation networks, including road, rail, and air connectivity, to facilitate the movement of goods.

· Regulatory Compliance: Ensure that the location aligns with the regulatory requirements for pharmaceutical manufacturing, including zoning and environmental regulations.

· Skilled Workforce: Consider the availability of a skilled and trained workforce in the area to meet your manufacturing and operational needs.

· Market Accessibility: Assess the proximity to target markets and distribution channels to facilitate product distribution and reduce transportation costs.

· Business Ecosystem: Consider the presence of a supportive business ecosystem, including suppliers, research institutions, and industry associations, which can provide valuable support and collaboration opportunities.

3. Establishing a Manufacturing Unit:

The steps involved in establishing a pharmaceutical manufacturing unit include:

4. Acquiring Land: Identify and acquire a suitable plot of land or an existing facility that meets your requirements in terms of size, location, and regulatory compliance.

5. Building Permits: Obtain the necessary building permits and clearances from local authorities, adhering to construction regulations and safety standards.

6. Facility Design and Construction: Develop a facility design plan based on GMP guidelines and pharmaceutical industry standards. Construct the manufacturing facility and associated infrastructure.

7. Machinery and Equipment: Procure and install the required machinery and equipment for manufacturing, quality control, packaging, and storage. Ensure compliance with GMP guidelines and industry standards.

8. Utilities and Services: Establish connections for utilities such as electricity, water, HVAC, and waste management systems.

9. Quality Control Setup: Set up a dedicated area for quality control activities, equipped with the necessary instruments, testing facilities, and documentation systems.

10. Regulatory Inspections: Prepare for regulatory inspections to ensure compliance with regulatory requirements and obtain the necessary approvals.

11. Staffing and Training: Recruit and train a skilled workforce to operate the manufacturing unit and adhere to quality control procedures.

Establishing a pharmaceutical manufacturing unit requires careful planning, adherence to regulatory requirements, and attention to infrastructure needs. By considering these factors and following the outlined steps, you can set up a well-equipped and compliant manufacturing facility to produce high-quality pharmaceutical products.

Procurement and Supply Chain Management:

Procuring raw materials and active pharmaceutical ingredients (APIs) is a critical aspect of pharmaceutical manufacturing. Establishing a robust supply chain and maintaining relationships with reliable suppliers are essential for smooth operations. Here's an overview of the process and the importance of quality control and regulatory compliance in procurement:

1. Procuring Raw Materials and APIs:

The process of procuring raw materials and APIs involves the following steps:

· Supplier Identification: Identify potential suppliers through industry directories, trade shows, referrals, or online platforms. Consider factors such as their reputation, experience, reliability, and compliance with quality standards.

· Request for Quotations (RFQs): Send RFQs to the shortlisted suppliers, specifying the required quantity, quality standards, delivery timelines, and pricing terms.

· Evaluation and Selection: Evaluate the received quotations based on factors like pricing, quality, reliability, and compliance. Select suppliers who meet your requirements and align with your business goals.

· Contract Negotiation: Negotiate the terms and conditions with selected suppliers, including pricing, payment terms, delivery schedules, and quality assurance requirements. Clearly define responsibilities and expectations in the procurement contract.

· Order Placement: Place orders with the selected suppliers based on the finalized terms and quantities. Ensure proper documentation of the orders.

· Delivery and Inspection: Receive the raw materials and APIs as per the agreed-upon delivery schedule. Conduct quality inspections to verify compliance with specified quality standards.

· Inventory Management: Manage inventory levels to ensure an adequate supply of raw materials and APIs, avoiding stockouts or excess inventory.

2. Importance of Building a Robust Supply Chain and Supplier Relationships:

Building a robust supply chain and establishing relationships with reliable suppliers offer several advantages:

· Consistent Supply: A strong supply chain ensures a consistent and timely supply of raw materials and APIs, minimizing production delays and stockouts.

· Quality Assurance: Establishing relationships with trusted suppliers helps maintain consistent quality standards. Reliable suppliers are more likely to provide high-quality materials that meet regulatory requirements.

· Cost Efficiency: Long-term relationships with suppliers can lead to cost savings through negotiated pricing, bulk discounts, and improved supply chain efficiency.

· Risk Mitigation: A diversified supplier base helps mitigate the risk of supply disruptions caused by factors such as natural disasters, transportation issues, or changes in supplier circumstances.

· Innovation and Collaboration: Building strong relationships with suppliers encourages collaboration, allowing for shared knowledge, innovation, and continuous improvement.

3. Quality Control and Regulatory Compliance in Procurement:

Quality control and regulatory compliance are crucial in the procurement process. Here's why:

· Ensuring Product Quality: Adhering to strict quality control measures during procurement helps ensure that raw materials and APIs meet required quality standards, reducing the risk of substandard or adulterated products.

· Regulatory Compliance: Procurement must comply with regulatory requirements, such as Good Manufacturing Practices (GMP) and regulatory guidelines for raw materials and APIs. This includes verifying the authenticity, quality, and documentation of materials.

· Supplier Audits: Conduct regular audits and assessments of suppliers to evaluate their compliance with quality standards, regulatory requirements, and ethical practices.

· Documentation and Traceability: Maintain accurate documentation of the procurement process, including supplier information, certificates of analysis, batch records, and traceability of materials used in production.

· Recall Readiness: Implement robust systems to track and recall raw materials and APIs in the event of quality concerns or regulatory non-compliance.

Adhering to quality control measures and regulatory compliance in procurement ensures the integrity and safety of pharmaceutical products, protects your business reputation, and maintains compliance with regulatory authorities.

Establishing a reliable supply chain, selecting trusted suppliers and prioritizing quality control and regulatory compliance are essential for successful procurement and the overall success of your pharmaceutical manufacturing operations.

Quality Assurance and Regulatory Compliance:

Maintaining high-quality standards in pharmaceutical manufacturing is of paramount importance. Quality assurance and adherence to regulatory compliance play a crucial role in ensuring the safety, efficacy, and reliability of pharmaceutical products. Here's an overview of their significance and the requirements for implementing Good Manufacturing Practices (GMP) and quality control measures:

1. Significance of High-Quality Standards:

High-quality standards in pharmaceutical manufacturing offer several key benefits:

· Patient Safety: Quality products minimize the risk of adverse events, ensuring the safety and well-being of patients who rely on pharmaceutical treatments.

· Product Efficacy: High-quality standards guarantee that pharmaceutical products deliver the intended therapeutic effects and meet their intended purposes.

· Regulatory Compliance: Adhering to quality standards and regulatory requirements helps pharmaceutical companies comply with local and international regulations, avoiding penalties and legal issues.

· Reputation and Trust: Maintaining high-quality standards enhances the reputation and trustworthiness of pharmaceutical companies, fostering customer loyalty and confidence.

2. Good Manufacturing Practices (GMP) and Quality Control Measures:

Implementing GMP and quality control measures is essential to ensure consistent quality throughout the manufacturing process. Key requirements include:

· Facility and Equipment: Establishing suitable manufacturing facilities and maintaining calibrated, qualified, and well-maintained equipment to ensure product quality and safety.

· Personnel Training: Providing adequate training to employees, ensuring they possess the necessary knowledge and skills to perform their roles effectively.

· Standard Operating Procedures (SOPs): Developing and implementing SOPs for all critical processes, ensuring consistent and standardized operations.

· Quality Control Systems: Implementing comprehensive quality control systems, including product testig, in-process controls, and final product release procedures.

· Documentation and Records: Maintaining accurate and detailed documentation throughout the manufacturing process, including batch records, testing records, and quality-related documentation.

· Change Control: Implementing a change control process to manage any changes that may impact product quality, ensuring appropriate evaluation and approval before implementation.

· Deviation and CAPA Management: Establishing procedures to identify and investigate deviations from established processes and implementing corrective and preventive actions (CAPAs) to prevent recurrence.

3. Quality Assurance Systems, Documentation, and Audits:

Quality assurance systems play a crucial role in maintaining and improving product quality. Key elements include:

· Quality Management System (QMS): Implementing a QMS to define quality objectives, processes, and responsibilities, ensuring a systematic approach to quality management.

· Documentation Control: Maintaining controlled and up-to-date documentation, including SOPs, batch records, specifications, and validation documentation.

· Risk Assessment: Conducting risk assessments to identify potential risks to product quality and implementing appropriate mitigation measures.

· Internal Quality Audits: Conducting regular internal audits to assess compliance with quality standards, identify areas for improvement, and ensure ongoing compliance.

· Supplier Quality Management: Establishing supplier qualification and monitoring programs to ensure that raw materials and services provided by suppliers meet the required quality standards.

4. Adhering to Regulatory Standards and Guidelines:

Compliance with regulatory standards and guidelines is crucial to ensure product safety, efficacy, and legal compliance. Key aspects include:

· Regulatory Authority Guidelines: Familiarize yourself with guidelines and requirements issued by regulatory authorities such as the Food and Drug Administration (FDA) and International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH).

· Product Registration and Licensing: Follow the appropriate regulatory procedures for product registration and licensing, ensuring compliance with regulatory requirements before commercialization.

· Pharmacovigilance: Implement pharmacovigilance systems to monitor and report adverse events associated with your pharmaceutical products.

Marketing and Sales Strategies for Pharmaceutical Businesses:

Effective marketing and sales strategies are crucial for the success of pharmaceutical businesses. Here are some key considerations and insights into implementing these strategies:

1. Branding, Product Positioning, and Market Segmentation:

· Branding: Develop a strong brand identity that reflects your company's values, mission, and unique selling proposition. Build brand awareness through consistent messaging and visual elements.

· Product Positioning: Identify the unique features, benefits, and competitive advantages of your pharmaceutical products. Position them strategically in the market based on factors such as therapeutic indication, formulation, efficacy, safety, and pricing.

· Market Segmentation: Analyze the market and segment it based on factors such as demographics, geography, healthcare needs, and preferences. Tailor your marketing messages and sales strategies to target specific customer segments effectively.

2. Building Relationships with Healthcare Professionals, Distributors, and Retailers:

· Healthcare Professionals (HCPs): Establish strong relationships with doctors, pharmacists, and other healthcare professionals who play a role in prescribing or recommending pharmaceutical products. Provide them with accurate and up-to-date information about your products through educational initiatives, conferences, and collaboration opportunities.

· Distributors and Wholesalers: Build partnerships with reliable distributors and wholesalers to ensure broad market reach and efficient product distribution. Maintain open communication channels, offer incentives, and provide sales support to encourage collaboration.

· Retailers and Pharmacies: Develop relationships with retail pharmacies and chains to ensure that your products are readily available to consumers. Provide training and educational resources to pharmacy staff, helping them understand your products and promote them effectively.

3. Digital Marketing and Online Platforms:

· Online Presence: Establish a professional website that provides comprehensive information about your company, products, and services. Optimize your website for search engines and ensure it is user-friendly and mobile-responsive.

· Social Media Marketing: Leverage social media platforms to engage with your target audience, share educational content, and create brand awareness. Utilize targeted advertising options to reach specific customer segments effectively.

· Content Marketing: Develop informative and engaging content such as blog articles, whitepapers, and videos to educate your audience about healthcare topics, disease management, and the benefits of your pharmaceutical products.

· Email Marketing: Build a database of interested customers and healthcare professionals and implement email marketing campaigns to share product updates, educational resources, and promotional offers.

· Online Advertising: Utilize digital advertising platforms to target specific customer segments and promote your pharmaceutical products. Consider pay-per-click (PPC) advertising, display ads, and sponsored content on relevant websites and platforms.

4. Compliance Considerations:

Ensure compliance with applicable laws and regulations when implementing marketing and sales strategies. Adhere to guidelines set by regulatory authorities, such as the FDA, regarding advertising, promotion, and direct-to-consumer marketing of pharmaceutical products.

It's important to continuously evaluate and refine your marketing and sales strategies based on market feedback, customer insights, and emerging trends. By effectively positioning your products, building strong relationships, and utilizing digital marketing channels, you can promote your pharmaceutical business and drive sales in a competitive market.

Financial Planning and Funding for Starting a Pharmaceutical Business:

Starting a pharmaceutical business involves careful financial planning and securing adequate funding. Here's an overview of the key financial aspects and guidance on estimating startup costs, funding sources, and financial management:

1. Estimating Startup Costs:

· Infrastructure: Determine the costs associated with acquiring or leasing suitable facilities for your pharmaceutical business, including manufacturing units, research and development labs, storage areas, and office spaces.

· Equipment and Machinery: Identify the necessary machinery, equipment, and technology required for pharmaceutical manufacturing, quality control, research, and administrative functions. Estimate the costs of purchasing or leasing this equipment.

· Personnel: Evaluate the staffing requirements for your business, including scientists, researchers, manufacturing personnel, quality assurance professionals, administrative staff, and sales and marketing personnel. Estimate the costs of salaries, benefits, and training.

· Regulatory Compliance: Consider the costs associated with obtaining licenses, permits, registrations, and certifications required by regulatory authorities. This includes fees for product registration, compliance with Good Manufacturing Practices (GMP), and quality control testing.

· Research and Development: Allocate funds for research and development activities, including formulation development, clinical trials, and regulatory approvals. Estimate the costs of hiring experts, conducting studies, and obtaining necessary approvals.

· Marketing and Promotion: Budget for marketing and promotional activities to create brand awareness, develop marketing materials, attend industry conferences, and implement marketing campaigns.

2. Funding Sources:

· Self-Funding: Utilize personal savings, investments, or assets to finance the initial startup costs. This may involve using personal funds or involving family and friends as investors.

· Loans and Financing: Explore options for business loans from banks, financial institutions, or government-backed programs specifically designed for startups. Consider the terms, interest rates, collateral requirements, and repayment schedules.

· Grants and Subsidies: Research and apply for government grants, subsidies, and incentives available for pharmaceutical businesses. These may be provided by local, regional, or national authorities to promote entrepreneurship and economic growth.

· Venture Capital: Seek funding from venture capital firms or angel investors who specialize in the pharmaceutical or healthcare sector. Prepare a compelling business plan and pitch to secure investment.

· Crowdfunding: Consider leveraging crowdfunding platforms where individuals contribute small amounts of money to support your business in exchange for rewards or equity.

3. Financial Forecasting, Budgeting, and Record Keeping:

· Financial Forecasting: Develop financial projections for the initial years of your pharmaceutical business. Estimate revenue, expenses, and cash flow to assess the viability and profitability of your venture. Consider factors such as market demand, pricing, competition, and industry trends.

· Budgeting: Create a detailed budget that outlines the expected costs and revenues for various aspects of your business. Regularly review and monitor actual expenses against the budgeted amounts, making adjustments as needed.

· Financial Records: Maintain accurate and up-to-date financial records, including income statements, balance sheets, cash flow statements, and tax-related documents. Use accounting software or engage the services of a professional accountant to ensure compliance and accurate financial reporting.

· Cost Control: Implement cost-control measures to optimize expenses without compromising quality or compliance. Monitor and analyze key cost drivers, negotiate favorable contracts with suppliers, and identify areas for efficiency improvements.

· Financial Management: Establish sound financial management practices, such as regular financial reviews, cash flow management, debt management, and investment strategies. Seek professional advice when needed to make informed financial decisions.

Effective financial planning, securing appropriate funding, and maintaining accurate financial records are crucial for the long-term success of your pharmaceutical business. Regularly review your financial performance, adapt your strategies as needed, and ensure compliance with financial regulations and reporting requirements.

Conclusion:

Starting a pharmaceutical business in India requires careful planning, adherence to regulatory requirements, infrastructure setup, procurement management, quality assurance, marketing strategies, and financial planning. Let's recap the key points covered in this step-by-step guide:

· Thorough research and planning are essential before starting a pharmaceutical business. Understand the Indian pharmaceutical industry, conduct market research, and develop a comprehensive business plan.

· Familiarize yourself with the legal and regulatory requirements governing pharmaceutical businesses in India. Obtain the necessary licenses, permits, and registrations from regulatory bodies such as the CDSCO and State Drug Control Office.

· Establish the infrastructure and manufacturing setup for your pharmaceutical business. Consider factors such as suitable location, land acquisition, building permits, and acquiring the necessary machinery and equipment.

· Develop robust procurement and supply chain management systems. Procure raw materials and APIs from reliable suppliers, ensuring quality control and regulatory compliance.

· Emphasize the significance of maintaining high-quality standards in pharmaceutical manufacturing. Implement Good Manufacturing Practices (GMP) and quality control measures, while adhering to regulatory standards and guidelines.

· Implement effective marketing and sales strategies, including branding, product positioning, and building relationships with healthcare professionals, distributors, and retailers. Leverage digital marketing and online platforms to promote your pharmaceutical products.

· Pay careful attention to the financial aspects of your business. Estimate startup costs, explore funding options, develop financial forecasts and budgets, and maintain accurate financial records.

Licensing and Registration Requirements for Starting a Pharma Business in India

Choosing the Right Business Structure for Your Pharma Company in India

Essential Skills and Qualifications for Starting a Pharma Business in India

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Tuesday, June 6, 2023

Step-by-Step Guide: How to Start a Pharma Business in India