Loan Licensing,  Third Party Manufacturing

What is the difference between pharmaceutical loan licensing, third party manufacturing and pcd/franchise?

Query:Sir, Please send me the difference between loan licensing, third party manufacturing and pcd/franchise in pharmaceutical marketing.

Response:

PCD/Franchising:

Pcd is the term used for propaganda cum distribution. Pcd is the term used to provide ownership of marketing rights to person/distributor or group of persons/distributors by pharmaceutical company at monopoly right for area or territory as per mutual agreed term and conditions. This requires two parties: one is pcd company and second is pcd/franchisee party/distributor. Pcd distributor has right to use company name, company’s brand names, sales, promotion, appointment of stockiest etc for his area. Distributor has also authorized to do all commercial activity on behalf of company at authorized territory or area. It is very common term used in Pharma marketing. It is also known as Pharma Franchise marketing. Pcd is very much different from other two terms in all aspects. In pcd marketing, ownership of brands and company name are the exclusive property of pharmaceutical company. Company reserves all right related to brand name, company name etc. Distributors only have authorization to use these names but don’t get ownership of these. Pharma company either be a manufactured or marketed by company. Read Complete about pharma franchise and pcd marketing

Documentations:
For Third Party manufacturing, Wholesale/Distribution Drug License and GST(if applicable) is mainly required.

Loan License Pharmaceutical Manufacturing:

For non technical persons, its confusing to differentiate between third party manufacturing and loan license manufacturing.

Loan licensing is like to start own manufacturing in already approved licensed manufacturing unit. In Loan license, you will rent a particular space in already licensed manufacturing unit for manufacturing your own brand name products. In that case, marketed by and manufactured by name will be yours own company with manufacturing address detail of rented manufacturing unit.

You are marketing company and don’t have own manufacturing unit but you want to start manufacturing by own company name but also don’t want to invest a large amount at setting-up manufacturing unit and hiring a workers and staff. You go to manufacturing unit and ask them to rent a portion of manufacturing unit to you for manufacturing your own brands. Manufacturing unit also interested to set-up partnership then both has to complete a process of documentation and approval from Drug Control Department. This tie-up is known as Loan Licensing.

In loan license you will manufacture product and you will market and supply it. Technical persons and workers will be of manufacturing company but manufacturing is handled by you or you can leave a your authorized person to look after manufacturing process.

Loan licensing is just like hiring/renting others manufacturing premises for manufacturing owns products. Loan licensing require two parties: One is marketing company and second one is manufacturing company. In loan licensing marketing company can use its company name at place of manufactured by address but address will of manufacturer’s company premises. It is similar to third party manufacturing but has few differences. In loan licensing you can use marketed by address and manufactured by name of your company.

Loan License: Under Drugs and Cosmetics Rules, A Loan license is defined as “For the purpose of this rule a loan license means a license which a licensing authority may issue to an applicant who does not have his own arrangements for manufacture but who intends to avail himself of the manufacturing facilities owned by a licensee in form 25 or in form 28 as the case may be.”

As per below example:
Marketed by:
Pharma Franchise Help
Plot no. —-, Sector—-
Karnal-132001
Manufactured by:
Pharma Franchise Help
V.P.O. Gheer-132023But actual manufacturer is
EHI Pharma
V.P.O. Gheer-132023

This process is mainly used by multinational companies to increase their production capacity and meet market demand. Ownership of brand will be property of marketing company. Quality will also be the responsibility of marketing company. Read complete information about Loan licensing manufacturing

Documentations:
For Loan License manufacturing, A Loan License is required from State Drug Control Department. A file is submitted as in case of parent manufacturing license including manufacturing unit license detail, list of approved ingredients, name of technical person, machinery detail, site plan etc. Other then this marketing company should have distribution drug license and GST number etc.

Third Party Pharmaceutical Manufacturing

In case of Third Party manufacturing, you will only give order to manufacturing company for manufacturing product with your brand name and company name. Manufacturer will manufacture product and will supply to you in ready to sell form. You can now supply it to your Cnf and distributors.

Third Party manufacturing is the term used for getting manufactured owns products from a pharmaceutical manufacturer. This is simple process and very less documentation and formalities. Suppose you want to start own marketing company and want to get manufactured your product or if you are manufacturer and don’t have approval for particular product to manufacturer, then you will contract with a Pharma manufacturer to manufacture products for you with your brand names and marketed by address. In third party manufacturing, manufacturer name and address must be mentioned. It requires marketing company and pharmaceutical manufacturer.

Take above example:
Marketed by:
Pharma Franchise Help
Plot no. —-, Sector—-
Karnal-132001
Manufactured by:
EHI Pharma
V.P.O. Gheer-132023
In third party manufacturing you can’t use your marketing company name at place of manufacturing company name. but you can mention your company as marketed by company. Ownership of brands will be property of marketing company. Quality will be responsibility of manufacturing company Read Complete detail about third party manufacturing

Documentations:
For Third Party manufacturing, Wholesale/Distribution Drug License and GST is mainly required.

If you find any correction in above detail, please inform us or write in comment box.
Hope this article is useful to you. For further queries and suggestions, please mail us at pharmafranchiseehelp@gmail.com

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Full Time Blogger, Part Time Entrepreneur and Partial Time Helper for New Start-UP's in Pharmaceutical, Ayurvedic and Nutraceutical Sector. Contact him at pharmafranchiseehelp@gmail.com

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