Starting a pharmaceutical marketing company through third-party manufacturing is a practical business model. It allows a company to launch products under its own brand name without setting up a manufacturing unit.

However, one important question is often asked by new pharma entrepreneurs:

If a product manufactured by a third party causes adverse reactions or is found substandard, who is responsible — the marketing company or the manufacturer?

This is a serious question because medicine quality directly affects patient safety, company reputation and legal compliance.

First Understand the Difference: ADR vs Quality Defect

Before discussing responsibility, it is important to understand the difference between:

• Adverse drug reaction
• Substandard quality product
• Manufacturing defect

These three situations are different.

What Is an Adverse Drug Reaction?

An adverse drug reaction means an unwanted or harmful reaction that may occur after using a medicine.

Even approved medicines can sometimes cause side effects in certain patients. This may happen due to:

• Patient sensitivity
• Allergy
• Wrong dose
• Drug interaction
• Pre-existing disease
• Improper use
• Known side effect of the molecule

An adverse reaction does not always mean that the product is substandard.

What Is a Substandard Product?

A substandard product means the medicine does not meet the required quality standards.

Examples may include:

• Low assay value
• Poor dissolution
• Incorrect API strength
• Failed stability
• Contamination
• High impurities
• Wrong composition
• Poor packaging integrity
• Failure in quality testing

This is a serious quality issue.

What Is a Manufacturing Defect?

A manufacturing defect may include:

• Broken tablets
• Moisture in blister packing
• Air leakage in Alu-Alu pack
• Crystallization in syrup
• Leakage in bottles
• Improper sealing
• Wrong batch coding
• Printing error
• Colour variation
• Tablet chipping
• Capsule leakage
• Poor suspension stability

Such defects should be reported immediately to the manufacturer.

Who Is Responsible for Product Quality in Third-Party Manufacturing?

In third-party or contract manufacturing, the manufacturer is primarily responsible for manufacturing the product as per approved standards, license conditions and quality specifications.

However, the marketing company also has responsibilities.

The marketing company should ensure that:

• Products are manufactured by a licensed manufacturer.
• Proper purchase and sale records are maintained.
• Certificate of Analysis is received for each batch.
• Product samples are checked periodically.
• Complaints are recorded and investigated.
• Defective batches are not sold knowingly.
• Any serious issue is communicated to the manufacturer immediately.

In case of investigation, authorities may ask both the manufacturer and marketing company for records and explanation.

Can the Marketing Company Also Face Action?

Yes, in some cases, the marketing company may also be questioned or investigated, especially if:

• It sold products without proper bills.
• It ignored known quality complaints.
• It marketed products with misleading claims.
• It failed to maintain purchase and sale records.
• It continued selling after receiving serious complaints.
• It stored products improperly.
• It supplied products after expiry.
• It could not prove the source of purchase.

Therefore, even if the product is manufactured by another company, the marketing company should not ignore quality control.

How Can a Marketing Company Ensure Product Quality?

A marketing company can reduce risk by following a strong quality assurance system.

1. Select the Right Manufacturer

Do not choose a manufacturer only because of low rates.

Before finalizing a manufacturer, check:

• Manufacturing license
• GMP compliance
• Product section approval
• Market reputation
• Existing client feedback
• Quality control facility
• Documentation support
• Delivery record
• Complaint handling system
• Stability study support
• Batch testing system

A slightly higher manufacturing cost is acceptable if the manufacturer is reliable and quality-focused.

2. Visit the Manufacturing Facility

If possible, visit the manufacturing unit before placing your first order.

During the visit, observe:

• Cleanliness
• Manufacturing area
• Packing area
• Raw material storage
• Finished goods storage
• Quality control laboratory
• Documentation system
• Staff discipline
• Product handling
• Temperature and humidity control

A physical visit helps build confidence and reduces future risk.

3. Sign a Quality Agreement

Before starting manufacturing, sign a written agreement with the manufacturer.

The agreement should clearly mention:

• Product details
• Batch size
• Quality standards
• Testing responsibility
• COA requirement
• Stability responsibility
• Complaint handling
• Defective batch replacement
• Recall procedure
• Liability clause
• Documentation support
• Delivery timeline
• Packaging responsibility
• Artwork approval responsibility

A proper agreement protects both parties.

4. Ask for Certificate of Analysis for Every Batch

Certificate of Analysis, also known as COA, is one of the most important documents in third-party manufacturing.

COA generally includes:

• Product name
• Batch number
• Manufacturing date
• Expiry date
• Test parameters
• Assay value
• Dissolution result, where applicable
• Description
• Identification test
• Microbial limits, where applicable
• Final quality approval

Always collect COA with every batch.

5. Test Random Batches from Independent Laboratory

Do not depend only on the manufacturer’s COA.

Periodically send samples to an independent approved laboratory for testing.

This is especially important for:

• New manufacturer
• New product
• High-value product
• Sensitive molecule
• Antibiotics
• Vitamins
• Clavulanic acid combinations
• Products with repeated complaints
• Products with stability concerns

Independent testing gives additional confidence.

6. Maintain Retention Samples

Keep retention samples from every batch supplied under your brand.

Retention samples are useful in case of:

• Market complaint
• Drug department inquiry
• Customer complaint
• Assay dispute
• Stability issue
• Packaging defect
• Legal investigation

Store samples properly as per recommended storage conditions.

7. Check Stability of Sensitive Products

Some ingredients are more sensitive to moisture, heat, light or oxygen.

Examples may include:

• Vitamins
• Minerals
• Clavulanic acid
• Enzymes
• Probiotics
• Certain antibiotics
• Herbal extracts
• Liquid preparations
• Suspensions

For such products, ask the manufacturer about stability data, overages, packaging selection and storage instructions.

8. Focus on Packaging Quality

Many quality complaints arise not because of formulation failure but because of poor packaging.

Check packaging issues such as:

• Moisture in blister
• Air leakage
• Loose cap
• Bottle leakage
• Poor induction sealing
• Weak lami tube sealing
• Label misprinting
• Wrong batch details
• Poor carton quality
• Broken tablets during transport

Good packaging protects product quality throughout shelf life.

9. Verify Batch Details Before Dispatch

Before dispatch from manufacturer, confirm:

• Product name
• Brand name
• Composition
• Batch number
• Manufacturing date
• Expiry date
• MRP
• Quantity
• Packing style
• COA
• Tax invoice
• Transport details

This avoids costly errors.

10. Maintain Proper Storage Conditions

Even a good quality product can deteriorate if stored incorrectly.

Marketing companies and distributors should ensure:

• Cool and dry storage
• Protection from sunlight
• Temperature control where required
• Proper stock rotation
• First-expiry-first-out system
• Clean storage area
• No mixing with damaged goods
• Separate storage for expired stock

Improper storage can create quality complaints.

11. Create a Complaint Handling System

Every marketing company should maintain a complaint register.

Record:

• Customer name
• Product name
• Batch number
• Nature of complaint
• Date of complaint
• Quantity affected
• Photos, if available
• Action taken
• Manufacturer response
• Replacement or recall details

A proper complaint record shows that the company takes quality seriously.

12. What to Do If a Product Complaint Is Received

If you receive a serious product complaint:

1. Stop further sale of the affected batch temporarily.
2. Collect batch number and product details.
3. Ask for product sample and photos.
4. Inform the manufacturer immediately.
5. Check available stock.
6. Send sample for testing if required.
7. Review COA and batch records.
8. Decide whether replacement, withdrawal or recall is required.
9. Maintain complete written records.

Do not ignore quality complaints.

13. What to Do If an Adverse Reaction Is Reported

If a patient or healthcare professional reports an adverse reaction:

• Record the full details.
• Note product name, batch number and expiry.
• Ask whether the medicine was prescribed.
• Record dose, duration and other medicines taken.
• Inform the manufacturer.
• Encourage reporting through the appropriate pharmacovigilance channel.
• Preserve product samples if available.
• Do not make medical conclusions without proper investigation.

An adverse reaction must be handled seriously and professionally.

14. Can Assay Reduce During Shelf Life?

Yes, in some products assay may reduce during shelf life, especially if the ingredient is sensitive or the packaging is unsuitable.

Manufacturers may add permitted overages in certain formulations to maintain potency throughout shelf life, depending on regulatory and formulation requirements.

Common reasons for assay reduction include:

• Moisture exposure
• Heat exposure
• Light exposure
• Poor packaging
• Incompatible excipients
• Poor storage
• Formulation instability
• Manufacturing process issue

This is why stability testing and packaging selection are important.

15. Can Defective Products Be Returned to Manufacturer?

Yes, this should be clearly mentioned in your agreement.

The agreement should state what happens in case of:

• Failed assay
• Leakage
• Broken tablets
• Crystallization
• Wrong printing
• Market complaint
• Substandard quality
• Stability failure
• Drug department sample failure

The manufacturer’s replacement responsibility should be written clearly before production starts.

Important Documents to Collect from Manufacturer

Before and after manufacturing, collect documents such as:

• Manufacturing license copy
• GMP certificate, if applicable
• Product permission, where applicable
• COA of each batch
• Tax invoice
• Batch manufacturing record summary, if provided
• Stability data, where applicable
• Packaging approval copy
• Artwork approval copy
• Quality agreement
• Product specification
• Testing report
• Transport document

These documents help protect the marketing company.

Quality Checklist for Marketing Companies

Before selecting a third-party manufacturer, ask:

• Is the manufacturer licensed for this dosage form?
• Does the manufacturer have proper QC facilities?
• Will they provide COA with every batch?
• Can they provide stability support?
• What is their complaint handling policy?
• What is their defective batch replacement policy?
• What is their recall procedure?
• Can you visit their facility?
• Do they have experience with your product category?
• Are their delivery timelines reliable?

Final Thoughts

Third-party manufacturing is a good business model, but product quality should never be taken lightly.

The manufacturer is responsible for manufacturing the product as per required standards. However, the marketing company must also perform due diligence, maintain records, collect COA, test random batches and respond properly to complaints.

Quality assurance is not only the manufacturer’s duty. It is a shared responsibility across the supply chain.

A good marketing company should remember:

Low rate can give short-term margin, but poor quality can destroy the entire brand.

Frequently Asked Questions

1. Who is responsible if a third-party manufactured product is substandard?

The manufacturer is generally responsible for manufacturing quality, but the marketing company may also be questioned if it failed to maintain records, ignored complaints or knowingly sold defective products.

2. Is COA enough to ensure product quality?

COA is important, but it is not always enough. Periodic independent testing is recommended, especially for new manufacturers or sensitive products.

3. Should marketing companies test every batch?

Testing every batch may not be practical for all companies, but random batch testing and testing of high-risk products is a good practice.

4. What is a quality agreement?

A quality agreement is a written document between manufacturer and marketing company that defines responsibilities related to testing, documentation, complaints, recall and defective products.

5. What should I do if I receive a product complaint?

Stop further sale of the affected batch if the complaint is serious, collect details, inform the manufacturer, review records and test the sample if required.

6. Can approved medicines still cause adverse reactions?

Yes. Some adverse reactions may occur due to patient sensitivity, allergy, interaction or known side effects, even when the product is manufactured properly.

7. What are common quality problems in third-party manufacturing?

Common issues include moisture in blister packing, broken tablets, leakage, crystallization in syrup, wrong printing, poor sealing and delayed stability failure.

8. Can I return defective products to the manufacturer?

Yes, if the agreement includes a defective product replacement or returns clause. This should be clearly written before manufacturing starts.

9. How can I check whether a manufacturer is reliable?

Visit the facility, verify licenses, check QC setup, ask for COA, review client feedback and start with limited quantities.

10. What is the best way to protect my pharma brand?

Choose a reliable manufacturer, use a written agreement, maintain documents, test random batches and respond quickly to complaints.

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