How to Choose a PCD Pharma Franchise Company in India: A Due-Diligence Checklist

Last reviewed: 20 October 2026. This article is general information for pharmaceutical distributors and is not legal advice. Rules change; always check the current official text linked below.

A PCD (Propaganda-cum-Distribution) franchise lets a distributor or former medical representative market a pharmaceutical company's branded formulations in a defined territory. The model is simple. Choosing the right company is the hard part, and it decides almost everything that follows: whether your stock is legally saleable, whether your margins hold, and whether doctors and chemists trust what you carry.

This checklist covers what to verify, which documents to ask for, and the Indian rules worth knowing before you place an opening order.

1. Verify the legal identity of the company

Start with who you are actually contracting with.

• Trade name vs legal name. Ask for the exact legal entity (proprietorship, partnership, LLP or company) and its registered address. Make sure the name on the agreement and the invoices is the same.
• GSTIN. Check it yourself on the government's GST taxpayer search. Confirm the status is active and that the legal name and state match what you were told.
• Official contact channels. Payment instructions should come only from the company's official domain email or phone numbers. A credible company will publish these openly.

Red flag: a company that won't put its legal name, GSTIN and address in writing.

2. Understand who manufactures the product, and who answers for it

Many PCD companies are marketing companies whose products are made by a licensed manufacturer. That is normal and lawful, as long as the paperwork is right.

Under the Drugs Rules, 1945 (CDSCO consolidated version):

• Rule 2(ea) defines a "marketer" as a person who, as an agent or in any other capacity, adopts a drug manufactured by another manufacturer under an agreement for marketing, by labelling or affixing his name on the label, with a view to its sale and distribution.
• Rule 84D: "No marketer shall adopt any drug manufactured by another manufacturer for marketing of such drug by labeling or affixing his name on the label of the drug with a view for its sale and distribution without an agreement as referred to in clause (ea) of rule 2."
• Rule 84E: "Any marketer who sells or distributes any drug shall be responsible for quality of that drug as well as other regulatory compliances along with the manufacturer under these rules."

These rules apply to the company whose name appears on the label as marketer. They don't make the franchise distributor a marketer. You still hold your own wholesale-licence obligations (section 4). So ask the company: 1. Which licensed manufacturing facility makes each product you'll stock? The manufacturer's name and licence number must appear on the label. 2. Is there a marketing agreement with that manufacturer, as Rule 84D requires? 3. Can they share copies of the manufacturing licence and the product permission for the formulations you are considering?

It is also reasonable to ask about revised Schedule M (Good Manufacturing Practices and Requirements of Premises, Plant and Equipment for Pharmaceutical Products). It was substituted by notification G.S.R. 922(E) dated 28 December 2023 and is a licence condition for drug manufacturing licensees (for example Rules 74(o), 76(8) and 78(p) of the Drugs Rules), not for distributors. According to the Press Information Bureau, it has been in force for manufacturers with turnover above ₹250 crore since 28 June 2024 (PIB, 12 Feb 2025; a later PIB release of 24 Mar 2026 gives 29.06.2024). For manufacturers with turnover up to ₹250 crore, the February 2025 amendment (G.S.R. 127(E)) let units that applied in Form A extend compliance to 31 December 2025 (PIB, 12 Feb 2025). PIB's March 2026 release confirms it is effective for this group from 1 January 2026.

Red flag: certification logos on a brochure with no documents behind them. Ask for the actual licence or certificate, then check its name, scope and validity.

3. Check that every formulation is legally saleable

Before shortlisting products:

• Banned fixed-dose combinations (FDCs). The Ministry of Health has prohibited many FDCs under Section 26A of the Drugs and Cosmetics Act, including a list of 156 FDCs notified in August 2024. Cross-check each combination on CDSCO's FDC page and the consolidated list of prohibited drugs.
• Quality alerts. CDSCO publishes monthly "Not of Standard Quality" (NSQ) and spurious-drug alerts on its Alerts page. A quick search by brand or manufacturer name is worth the five minutes.
• Label basics. Check samples for the generic name next to the brand name, the batch number, manufacturing and expiry dates, the manufacturer's name and licence number, the marketer's name where applicable, and the MRP.

4. Make sure your licence covers what you will stock

Your own licence matters as much as the company's. Under Rule 61 of the Drugs Rules, 1945:

• Form 20B is the wholesale licence for drugs other than those in Schedules C, C(1) and X.
• Form 21B is the wholesale licence for drugs in Schedules C and C(1) (excluding Schedule X).
• Schedule X drugs need a separate licence (Form 20G for wholesale).

Under Rule 64, the licensing authority must be satisfied that wholesale premises are at least 10 square metres (15 square metres if you also hold a retail licence at the same premises) and are in the charge of a competent person. That means a registered pharmacist, or a matriculate with four years' experience in dealing with the sale of drugs, or a graduate with one year's experience in dealing with drugs. Rule 62 requires a separate licence for each place where drugs are sold or stocked.

Applications go to your state drugs control authority. Procedures and checklists vary by state. As one example, Gujarat publishes its drug sale licence checklist and timeline.

A responsible PCD company will ask to see your drug licence and GST registration before supplying you. If a company doesn't ask, treat that as a warning sign rather than a convenience.

5. Get the territory terms in writing

"Monopoly rights" is one of the most used and least defined phrases in PCD marketing. Before paying anything, get a written agreement that states:

• The exact territory: state, district, city or named towns.
• Which products the rights cover (all products, or only the ones you order?).
• Exclusivity conditions: is it exclusive, and does it depend on minimum purchase targets?
• Duration, renewal and termination, including what happens to your stock if the arrangement ends.
• Dispute resolution and the governing jurisdiction.

A territory promise made only on WhatsApp isn't a commitment.

6. Ask for an itemised price list, and do the arithmetic

Your profit depends on the gap between your purchase rate and what chemists will pay. The Drugs (Prices Control) Order, 2013 (DPCO 2013), administered by the National Pharmaceutical Pricing Authority (NPPA), splits the duties into two groups.

What the manufacturer must do. DPCO 2013 defines "manufacturer" to include a person who markets drugs (paragraph 2(1)(n)). - Paragraph 24(3), scheduled formulations: issue a price list and any supplementary price list in Form V to dealers, State Drugs Controllers and the Government, referring to the relevant price fixation or revision. - Paragraph 25(2), non-scheduled formulations: issue a price list and supplementary price list in Form V to the same recipients, indicating changes from time to time. - Paragraphs 24(1)–(2) and 25(1): print the MRP on the label, with "Maximum Retail Price" before it and "inclusive of all taxes" after it. For scheduled formulations (those in the National List of Essential Medicines), the MRP must not exceed the ceiling price notified by NPPA plus applicable local taxes.

What you, as a dealer, must do. - Paragraphs 24(4) and 25(3): every retailer and dealer must display the price list and any supplementary price list furnished by the manufacturer "on a conspicuous part of the premises… easily accessible to any person wishing to consult the same." - Paragraph 26: no person may sell a formulation to a consumer above the price in the current price list or on the label, whichever is less.

In practice, ask the company for its current Form V price list before you order, and display it at your premises once you trade. Check scheduled products against NPPA's ceiling-price notifications. Then clarify GST, freight, payment and credit terms, and the expiry and breakage return policy, in writing.

Free-goods schemes change your real cost. Work out PTR and PTS margins with our PTR & PTS calculator, and test offers such as "10+2" with the pharma scheme & profit calculator.

7. Match the portfolio to your territory, not the other way round

A long product list isn't the same as a useful one. Before your opening order:

• List the dominant specialties in your area (general physicians, gynaecologists, orthopaedists, paediatricians, dermatologists).
• Shortlist a focused range for those prescribers instead of a little of everything.
• Ask about stock availability and dispatch times for your chosen products. A product you can't replenish is a product you can't promote.

8. Check that promotional support follows UCPMP 2024

The Department of Pharmaceuticals' Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024 governs how drugs are promoted. The current consolidated text, "[Updated as on 1.9.2025]" and issued with Circular No. 3 of 2025 dated 1 September 2025, is available on the DoP UCPMP portal (direct PDF). The DoP describes it as a mandatory code, with complaints handled by Ethics Committees for Pharma Marketing Practices at industry associations.

Points that directly affect distributors:

• Claims must be balanced, up to date, verifiable and capable of substantiation (clause 1.3). The word "safe" must not be used without qualification, and "new" must not describe a drug that has been generally available, or a therapeutic intervention generally promoted, in India for more than a year (clauses 2.2–2.3).
• No gifts, pecuniary advantage, travel, hospitality or cash to healthcare professionals or their family members (clauses 8.1–8.4). Clause 8.1 applies to "any pharmaceutical company or its agent i.e. distributors, wholesalers, retailers, etc.", so franchise partners are covered. Travel and hospitality are allowed only where the person is a speaker at a CME/CPD programme (clauses 8.2–8.3).
• Brand reminders (clause 5.1) fall into two categories only: (i) informational and educational items, and (ii) free samples to medical professionals. Informational items are "books, calendars, diaries, journals (including e-journals), dummy device models and clinical treatment guidelines and other items for professional use in healthcare settings value of which does not exceed Rs. 1000 per item". They "should not have an independent commercial value for the healthcare professionals" (clause 5.1(i)).
• Free samples (clause 5.1(ii)) may be supplied only to persons qualified to prescribe the product. When an MR hands over samples, the practitioner's name and address must be recorded. The conditions:
• Samples are only for creating awareness about treatment options and gaining experience with the product (a).
• Packs are limited to the prescribed dosage for not more than three patients for the course of treatment, and no more than twelve sample packs per drug per healthcare practitioner per year (b).
• Each is marked "free medical sample not for sale" or similar (c).
• No pack is larger than the smallest pack on the market (d).
• An accountability and control system is kept (e).
• Hypnotics, sedatives and tranquillisers are never sampled (f).
• Companies keep sample records, and the value of samples must not exceed two percent of the company's domestic sales per year. Since the 1 September 2025 amendment, clause 5.1(ii)(g) also sets how that value is calculated.

When you assess a company's visual aids and literature, check that the claims are factual and that the generic names, dosage and safety information are present. Promotional material that overpromises is a risk to your reputation, not only theirs.

9. Red flags at a glance

• Guaranteed income or "assured returns" claims.
• Pressure to pay before you receive a written agreement and a price list.
• Certification logos with no documents, or documents whose names or dates don't match.
• Territory "monopoly" offered verbally only.

10. How Aerochem Neutron approaches PCD partnerships

We encourage every prospective partner to apply this checklist to us as well. Here is where we stand, as published on our website:

• Who we are: Aerochem Neutron is a pharmaceutical and nutraceutical business based in Ahmedabad, Gujarat, operating as a proprietorship. Our GST registration details and official contact channels are listed on our Company Information page.
• How products are made: we are a marketing and coordination company. Finished formulations are coordinated through eligible manufacturing facility partners operating under applicable statutory licences.
• Portfolio: a 250+ formulations portfolio across therapy areas including antibiotics, gastro and PPI, orthopaedic, gynaecology, dermatology, paediatric, respiratory and multivitamin ranges. You can browse the product catalogue.
• Terms: territory boundaries, product rights and commercial terms are agreed individually and documented in writing. Starting investment depends on territory size, therapy focus and SKU count, and we don't charge an arbitrary franchise fee.
• Documentation we ask for: a valid wholesale drug licence (Forms 20B/21B as applicable) and GST registration.
• Support: visual aids, product literature, reminder cards, catch covers and digital assets, with dispatches from Ahmedabad.

Ready to evaluate a territory?

Tell us your state, district and the specialties you cover, and our commercial team will review availability and help you shortlist a focused starting range.

Check PCD Franchise Territory Availability →

Have a different question? Contact our commercial team.

Frequently asked questions

What is a PCD pharma franchise? PCD stands for Propaganda-cum-Distribution. A pharmaceutical company grants a distributor marketing and distribution rights for its branded products in a defined territory. The distributor buys stock and promotes it to doctors and chemists there.

Which drug licence do I need for a PCD franchise? Usually a wholesale licence from your state drugs control authority. Form 20B covers drugs other than those in Schedules C, C(1) and X; Form 21B covers Schedule C and C(1) drugs. Many distributors hold both. Schedule X drugs need a separate licence (Rule 61, Drugs Rules, 1945).

Is a pharmacist mandatory for a wholesale drug licence? The premises must be in the charge of a competent person. That can be a registered pharmacist, a matriculate with four years' experience in dealing with the sale of drugs, or a graduate with one year's experience in dealing with drugs (Rule 64). Check your state's current checklist.

Does the marketing company or the manufacturer answer for product quality? Both. Under Rule 84E of the Drugs Rules, a marketer that sells or distributes a drug is responsible for its quality and regulatory compliance along with the manufacturer, and Rule 84D requires a marketing agreement between them.

Does UCPMP 2024 apply to franchise distributors? The code's gift and pecuniary-benefit prohibition (clause 8.1) expressly covers a company "or its agent i.e. distributors, wholesalers, retailers, etc." Distributors promoting a company's products should follow the code's rules on claims, samples, brand reminders and interactions with healthcare professionals.

Is "monopoly rights" legally guaranteed? Only to the extent your written agreement says so. Exclusivity is a contractual term between you and the company, so make sure the territory, products, duration and conditions are written down.

References (verified 19–20 Oct 2026)

1. Department of Pharmaceuticals, Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024, consolidated "Updated as on 1.9.2025", with Circular No. 3 of 2025, F. No. 31026/12/2024-Policy, dated 1.9.2025. https://ucmp.pharma-dept.gov.in/Pharma/UCPMP%202024%20for%20website_0.pdf
2. Department of Pharmaceuticals, UCPMP 2024 portal. https://ucmp.pharma-dept.gov.in/Pharma/ · DoP Policy page: https://pharma-dept.gov.in/policy
3. CDSCO, The Drugs Rules, 1945 (consolidated, updated 09.09.2024): Rules 2(ea), 61, 62, 64, 84D, 84E. https://cdsco.gov.in/opencms/resources/UploadCDSCOWeb/2022/drug_rules/Drugs%20Rules%201945_2024%2009.09.2024.pdf
4. CDSCO, Fixed Dose Combinations page. https://cdsco.gov.in/opencms/opencms/en/Drugs/FDC/
5. CDSCO, List of prohibited FDCs (156 FDCs), dated 02.08.2024. https://cdsco.gov.in/opencms/resources/UploadCDSCOWeb/2018/UploadNewsFiles/List%20of%20Prohibited%20FDC%20drugs_%20156%20FDCs_%20dated%2002.08.2024.pdf
6. CDSCO, Consolidated list of drugs prohibited under Section 26A. https://cdsco.gov.in/opencms/resources/UploadCDSCOWeb/2018/UploadConsumer/Updated%20Banned%20Drugs%20List%20(1).pdf
7. CDSCO, Alerts (monthly NSQ and spurious-drug lists). https://cdsco.gov.in/opencms/opencms/en/Notifications/Alerts/
8. Press Information Bureau, "Conditional extension of timeline to small and medium pharmaceutical manufacturers for compliance with revised Schedule 'M'", 12 Feb 2025 (PRID 2102291). https://pib.gov.in/PressReleseDetailm.aspx?PRID=2102291 8a. Press Information Bureau, MoHFW release on regulatory measures incl. revised Schedule M effective dates, 24 Mar 2026 (PRID 2244523). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2244523 8b. MoHFW notification G.S.R. 922(E), 28 Dec 2023 (revised Schedule M) and G.S.R. 127(E), 11 Feb 2025 (MSME extension, Form A), listed on CDSCO Gazette Notifications: https://cdsco.mohfw.gov.in/opencms/opencms/en/Notifications/Gazette-Notifications/
9. Drugs (Prices Control) Order, 2013, as amended (India Code): paras 2(1)(n), 24, 25, 26 and Form V. NPPA (administering authority): https://www.nppaindia.nic.in/ . https://upload.indiacode.nic.in/showfile?actid=AC_CEN_21_28_00003_195510_1517807320439&filename=dpco-inclusive-of-all-ammendmentscompressedpdf-_31.8.2025.pdf&type=order
10. Government of Gujarat (iFP), Drug Sale Licence checklist and timeline. https://ifp.gujarat.gov.in/DIGIGOV/StaticAttachment?AttachmentFileName=%2Fpdf%2Fapprovals%2Fpre_operation_approvals%2F28_Drug_Sales_License.pdf
11. GST Portal, Search Taxpayer. https://services.gst.gov.in/services/searchtp