Who holds the drug licence when a 3PL stores pharmaceutical stock — the brand or the logistics provider?

When a pharmaceutical company outsources storage to a third-party logistics provider, the drug licence does not automatically shift to the 3PL simply because medicines are physically stored at its warehouse. In India, licensing is linked to the licensed entity, approved premises, drug categories, and permitted activities. Therefore, the pharmaceutical brand remains responsible for its regulatory obligations, while the logistics provider must meet the applicable licensing and operational requirements for the activities it performs. For pharmaceutical companies seeking a compliant logistics partner, AWL India can support controlled warehousing, inventory traceability, documentation, and distribution processes.

Table of Contents

1. Who Holds the Drug Licence When a 3PL Stores Pharma Stock?
2. Who legally holds the drug licence in a 3PL arrangement?
3. What licence and warehouse requirements apply to pharma 3PLs?
4. What responsibilities stay with the pharmaceutical brand?
5. How should a compliant 3PL pharma operation work?
6. What should brands check before selecting a pharma 3PL?
7. Why AWL India is the right pharma logistics partner

Who holds the drug licence when a 3PL stores pharmaceutical stock? The answer depends on the regulatory activity, the licensed entity, the premises involved, and the category of medicines being handled.

A logistics agreement does not automatically transfer a pharmaceutical company's licence to its warehouse provider. Under India's Drugs and Cosmetics Rules, wholesale licences are issued for specific activities and categories of drugs. For instance, Form 20-B covers wholesale sale, stocking, or distribution of drugs other than those covered under Schedules C, C(I), and X, while Form 21-B applies to wholesale activities involving specified drugs under Schedules C and C(I). [1]

What does this mean for a pharmaceutical brand?

• The brand remains accountable: Outsourcing physical storage does not remove the pharmaceutical company's responsibility for complying with requirements applicable to its products and regulated activities. [1]
• The 3PL has its own obligations: Where the logistics provider undertakes licensed activities such as stocking or wholesale distribution, applicable licensing requirements can apply to its entity and premises. [1]
• The premises are important: Drug licensing documentation can include site plans and documents establishing ownership or lawful occupation of the premises. [2]
• The contract is not the licence: A commercial agreement between a pharma company and logistics provider cannot, by itself, substitute for statutory licensing requirements.

So, should a pharmaceutical company simply ask whether its 3PL "has a drug licence"? Not necessarily. It should establish whether the correct entity, premises, products and activities are covered by the applicable authorisation.

This is where a specialist logistics provider such as AWL India can add value by structuring pharmaceutical warehousing around documented processes, traceability and regulatory controls rather than treating licensing as a standalone certificate.

Does a 3PL need a separate pharmaceutical warehousing licence? There is no single universal licence that applies to every possible pharmaceutical storage arrangement. The applicable regulatory requirement depends on the products handled, the activities performed, and the legal structure of the operation.

What should a 3PL verify?

• Wholesale licence requirements: Forms 20-B and 21-B are among the licences used for wholesale activities involving different categories of medicines under the Drugs and Cosmetics Rules. [1][2]
• Competent personnel: Licensing provisions require appropriate competent persons for wholesale operations, with qualifications and experience forming part of the regulatory framework. [2]
• Premises requirements: Drug licence applications require information about the premises, including site plans and ownership or rental documentation. [2]
• Licence conditions: The licence holder must comply with conditions attached to the relevant licence and maintain appropriate records and controls. [1]

A particularly relevant development is the Government of India's February 2026 notification amending certain provisions associated with Forms 20-B, 20-BB, 21-B and 21-BB, including requirements concerning competent persons. [3]

Therefore, businesses searching for a 3PL pharma drug licence should look beyond the presence of a certificate on a wall. They should verify the licence type, licence holder, approved premises, product categories and activities covered.

Is licensing enough?

No. Licensing establishes regulatory authorisation, but pharmaceutical storage also requires appropriate operational controls.

The Central Drugs Standard Control Organisation's published regulatory material addresses requirements relating to clean and suitable premises, appropriate storage conditions, temperature controls and measures to protect medicines from deterioration. [1]

The World Health Organization similarly states that pharmaceutical products can face risks during storage, transportation, distribution, repackaging and other supply-chain activities. [4]

This distinction matters because a warehouse can possess the relevant authorisation while still requiring strong systems for temperature monitoring, stock segregation, batch traceability, security and documentation.

AWL India can support pharmaceutical businesses by integrating these operational requirements into a structured logistics environment.

If a 3PL has the necessary licence, does the pharmaceutical company become free from regulatory responsibility? No. Outsourcing logistics does not automatically outsource accountability for the pharmaceutical product.

WHO's good storage and distribution guidance recognises that several organisations and individuals can participate in the pharmaceutical supply chain. It therefore emphasises clearly defined responsibilities and appropriate quality systems across the distribution process. [4]

What should the brand continue to control?

• Product quality: The pharmaceutical company must maintain appropriate controls over product quality, specifications and applicable manufacturing or marketing obligations.
• Storage instructions: Warehouse conditions should reflect the manufacturer's approved and labelled storage requirements rather than generic assumptions about pharmaceutical products. [4]
• Batch traceability: The brand should be able to identify where individual batches were received, stored and distributed.
• Recall management: The logistics provider should maintain systems that allow affected batches to be rapidly located, segregated and accounted for during recalls.
• Returns management: Returned, damaged, expired or recalled stock should be controlled through documented procedures before any decision to return it to saleable inventory.
• Quality agreements: The responsibilities of the brand and 3PL should be clearly documented, including escalation, deviations, investigations, records and audit rights.

Why are these controls so important? WHO estimates that approximately 1 in 10 medicines in low- and middle-income countries are substandard or falsified, creating significant public-health and economic consequences. [5]

WHO Director-General Dr Tedros Adhanom Ghebreyesus has emphasised the importance of medicine quality, stating that “Quality medicines are essential to human health.” [6]

The point is straightforward: pharmaceutical logistics is part of the product-quality chain. A storage failure can affect more than inventory value. It can potentially affect medicine quality and patient safety.

For this reason, pharmaceutical companies should select a logistics provider based on demonstrated operational controls rather than warehouse capacity alone.

What does good pharmaceutical warehousing look like in practice? It involves controls at every stage, from receiving the first carton to dispatching the final shipment.

What should the warehouse control?

• Controlled receiving: Incoming products should be checked against relevant documentation, product details, quantities, packaging condition, and batch information before acceptance. [4]
• Temperature monitoring: Products requiring controlled storage conditions need appropriate monitoring, recording and documented procedures for handling temperature excursions. [4]
• Stock segregation: Quarantined, rejected, recalled, returned and saleable products should be appropriately separated to prevent accidental distribution. [4]
• FEFO inventory: First-expiry, first-out principles help ensure products approaching expiry are prioritised appropriately and reduce avoidable wastage. [7]
• Batch traceability: Warehouse systems should connect products with batch numbers, quantities, locations, movements and dispatch records.
• Access control: Restricted access helps protect pharmaceutical inventory against unauthorised handling, theft and other security risks.
• Deviation management: Temperature excursions, damaged products, discrepancies and other incidents should be documented, investigated and appropriately resolved.
• Recall readiness: Systems should allow affected batches to be identified and isolated quickly when a recall or withdrawal is initiated.

Temperature management is particularly important for products requiring controlled conditions. WHO guidance provides examples including controlled room temperature of 15°C to 25°C, refrigerator storage of 5 ± 3°C, and freezer storage of -20 ± 5°C, where these conditions are applicable to the product. [4]

These figures also demonstrate why pharmaceutical warehousing cannot be treated as ordinary storage. The facility, monitoring equipment, processes, and people all contribute to maintaining product integrity.

AWL India can help pharmaceutical businesses build logistics operations around controlled storage, systematic inventory management, traceability, and distribution discipline.

How should a pharmaceutical company evaluate a logistics provider before moving its inventory? The evaluation should cover regulatory, technical, operational, and quality capabilities.

What should the due-diligence checklist include?

• Verify licensing scope: Confirm that the applicable licence covers the relevant entity, premises, products and activities associated with the proposed logistics arrangement. [1][2]
• Check competent personnel: Establish whether appropriately qualified or experienced personnel are available wherever required under the applicable licensing framework. [2]
• Audit temperature controls: Review temperature mapping, monitoring devices, calibration, alarms, backup arrangements and procedures for handling excursions.
• Inspect segregation systems: Verify that recalled, rejected, quarantined, returned, and saleable stock cannot be confused during daily operations.
• Test traceability: Ask the provider to demonstrate how a specific batch can be tracked from receipt through storage to final dispatch.
• Review SOPs: Examine procedures covering receiving, storage, picking, packing, dispatch, returns, cleaning, pest control, deviations and emergencies.
• Evaluate business continuity: Understand how operations will continue during power failures, refrigeration breakdowns, fire, flooding, system downtime or other disruptions.
• Review recall capability: Confirm that the provider can rapidly identify, isolate and report affected stock when a recall is activated.

WHO's good distribution principles emphasise maintaining product quality throughout distribution, protecting medicines against deterioration, maintaining appropriate records and reducing risks such as theft and contamination. [7]

This is why companies searching for a drug licence 3PL should assess the entire operating model rather than selecting a provider solely because it possesses a regulatory certificate.

A strong 3PL should be able to demonstrate how regulatory requirements translate into everyday warehouse activities.

AWL India is well positioned for this requirement because pharmaceutical logistics demands an integrated approach involving storage, inventory visibility, documentation, traceability, and controlled distribution.

So, what should pharmaceutical companies look for in their logistics partner? 

They need a provider that understands that pharmaceutical warehousing combines regulatory obligations with operational precision.

The first step should always be to establish the regulatory structure before inventory moves. The brand and logistics provider should identify the applicable licences, licensed entities, approved premises, product categories, and responsibilities.

What makes AWL India a suitable partner?

• Regulatory-focused operations: AWL India can structure logistics processes around the applicable requirements governing pharmaceutical storage, handling and distribution.
• Controlled warehousing: Pharmaceutical inventory can require carefully managed environmental conditions, security, segregation and monitoring throughout its warehouse lifecycle.
• Inventory visibility: Batch and inventory-level visibility can support expiry management, stock reconciliation, recalls and distribution planning.
• Process discipline: Documented procedures and defined responsibilities help reduce operational ambiguity across receiving, storage, picking, dispatch and returns.
• Traceability: Effective warehouse systems can provide a clearer record of where products are received, stored and moved throughout the supply chain.
• Scalable infrastructure: Pharmaceutical businesses need logistics operations capable of supporting changing volumes, product portfolios and distribution requirements without compromising control.

The central question is therefore not simply, "Who physically stores the medicines?"

The better question is, "Which entity is licensed for the relevant activity, which premises are covered, and how are the responsibilities divided between the pharmaceutical company and its 3PL?"

That distinction is critical.

A logistics provider should not assume that storing pharmaceutical products automatically makes it the holder of the brand's drug licence. Likewise, a pharmaceutical company should not assume that appointing a licensed logistics provider transfers every regulatory responsibility to that provider.

A clearly structured relationship is the safer approach.

For pharmaceutical companies looking for a logistics partner, AWL India can provide the operational foundation needed to manage pharmaceutical warehousing with greater control, visibility and traceability.

References

[1] Central Drugs Standard Control Organisation, Drugs and Cosmetics Rules, 1945, Government of India.

[2] Department of Drugs Control, Government of NCT of Delhi, Procedures for Obtaining Licences.

[3] Central Drugs Standard Control Organisation, Government of India, G.S.R. 135(E), Notification regarding amendments to certain provisions of the Drugs Rules, February 2026.

[4] World Health Organization, Good Storage and Distribution Practices for Medical Products, Technical Report Series 1025, Annex 7.

[5] World Health Organization, Substandard and Falsified Medical Products, Fact Sheet.

[6] World Health Organization, Launch of report on the public health and socio-economic impact of substandard and falsified medical products, statement by WHO Director-General Dr Tedros Adhanom Ghebreyesus.

[7] World Health Organization, WHO Good Distribution Practices for Pharmaceutical Products, Technical Report Series 957, Annex 5.