New Pharma Policy: Would Third Party/Contract Manufacturing be Banned?

As per news circulated through out web, news paper and tv, third party/ contract manufacturing is going to be banned. But we are not sure about source of these news and whether these are true or not. If these are true, then it will not be beneficial for pharmaceutical sector. A large number of manufacturing units and thousands of marketing companies have shut down. This will be great loss to pharmaceutical sector and ultimately medicines will be costlier due to monopoly of few pharmaceutical countries.

We received queries in this regard from many readers, so we decide to analysis few facts about these news. We will try to find out whether these romours are true or false.
Here we are going to discuss about fact which will be change for third party or contract manufacturing. We don’t think, third party or/and contract manufacturing is going to be banned because it is legal phenomena and helpful in growth & new business possibilities. If we study today’s big player in pharmaceutical sector, they started as marketing company. Later they established or overtake manufacturing units. Establishing Marketing Company is much easier than to start a manufacturing unit. If government bans third party/contract manufacturing, then it will effect adversely at pharmaceutical sector growth and will increase unemployment.Here look at possibilities that would be covered by New Pharma Policy:

In 2006, Draft National Pharmaceutical Policy, Heading Control on Pharmaceutical brands describe a very serious issue. This is what that should have resolved many years ago. This issue was related to brand name resemblance and same brand name for different preparations. For example, We have a Brand Name  Cef for an active ingredient Cefixime and another company is using Cef for an active ingredient Cefpodoxime. Same brand name is using for different active ingredients.

In second case, Company A and Company B, both are using same Brand Name PAR for paracetamol. This create confusion and lead to mis-branding. We have taken a example of only two companies, there are many cases where same brand name is using by number of pharmaceutical companies.  These type of activities have the potential to cause immense harm through mis-prescription and/or wrong dispensing. (We use brand name for sample purpose without checking whether they belong to any company or not. In case these belong to any company, please mail us at for correction)
In India there is no appropriate system to rectify these errors, so it was suggested that “branding of drugs and other therapeutics should be brought under the Central drug regulatory system. The drug regulator must be required to maintain a data base on brands and their compositions, and all brand registration of drugs must compulsorily be approved by the drug regulator. In particular, no change should be permitted in the composition of a given brand. Necessary changes would be made in the Drugs & Cosmetics Act, 1940 in this regard.”

Read Related: What would be Trade Margin if government fix margin for Pharmaceutical Products?

Few years back, manufacturing companies got approval with Brand Name, Generic Name and Marketed by companies Name from state drug department which was not a desirable practice when marketing is done at the national level. State authorities wasn’t check for brand name already approved/applied within state and/or approved/applied in other states. So, these types of approvals were stopped and approval from generic names were started to manufacturing companies. Once a generic approval was given to a manufacturing company, it was allowed to manufacture any number of brands with single generic approval. It worsen the condition because drug authorities don’t have any control of manufacturing from Brand Names.

At present present, manufacturing companies get approval by generic name. So drug department don’t have any control at third/contract party manufacturing and brand name fixed by manufacturing and marketing companies. Brand Name registration is at present come under Intellectual property act only and Intellectual property doesn’t cover composition or active ingredients or any technical detail.  Possibility is there government want to regularized third party manufacturing. Draft National pharmaceutical policy, 2006 suggested to transfer brand name approval to central drug regulatory system. But minimum chances of banning third party manufacturing

As per our analysis, it would be compulsory to take brand approval from central drug regulatory by manufacturing or/and marketing company before launching a new product in market other than generic approval by state authorities. Without that no marketing or/and manufacturing company shouldn’t market a product in Indian market. Brand name approval should be compulsory from central drug regulatory whether a manufacturing company has generic approval from state authorities. It will helpful in controlling brand name conflicts as all approvals will be made from single authorities and all records will be maintained. Banning of third party or/and contract manufacturing is not a solution.

One another hot issue of new drug policy is related to labeling of single active ingredient preparations. It is suggested that all single salt preparations should have only generic name, not brand name. Many developing countries have adopted this label pattern along with many developed countries. In India if this implements, it should be welcomed by pharmaceutical industry. If that happens, A single active ingredient will be like a classical preparation in ayurvedic medicines. A well known Ayurvedic Classical Preparation “Ashokarishta”. We find only company logo like Dabar, Zandu, Elzac etc and Name will be same as Ashokarishta. Likewise only Logo in single pharmaceutical active ingredient preparation would be allowed and salt name will be same below logo.

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Detail information about costing and processes of third party manufacturing

Difference between Third Party Manufacturing And Contract Manufacturing.

This is ———– from Gorakhpur, Uttar Pradesh, I read your pages, Its very helpful for every one who want to start.
Dear Sir actually I also want to start a my own pharma marketing company with four brands. I have contacted to some manufacturer for product. But I am not aware with the required things which is mandatory to start a pharma marketing company.
Their is lots of question in my mind which not only disturbing me also it creating a big confusion in my mind.
1- A big question is that what is main difference between Third Party Manufacturing & Contract Manufacturing.
2- If I have to start a marketing company so to whom should I choose (Third Party Manufacturing Or Contract Manufacturing)
3- Is it necessary to register a company before starting a marketing base company
if yes so what should i do first.
4- If i am starting with four product should i register my brand name (patient copy).
5- Which types of license is required to start a marketing company.

It is extremely request to you Please help me for these question.

1. Difference Between Third Party manufacturer and Contract Manufacture : Practically there is no major difference in both terms. These could be used for in place of each other. There is theoretical difference in both terminology.

Third Party Manufacturing term is used when a company get manufactured product with own brand name at a particular quantity timely from a manufacturing company e.g. 1000 box order as one time requirement.
Contract Manufacturing term is used when a company get manufactured product its own brands and make a contract with manufacturing company for supplying a particular quantity of its brand at regular basis e.g. 10000 boxes per month basis or 100000 boxes in a year or 1000 boxes per week like this.

In third party manufacturing, there is no time compulsion to deliver the goods whereas contract manufacturing has delivery time compulsion.
Mostly small companies work at the basis of third party manufacturing whereas medium size and big companies work at contract manufacturing basis.

Related: Difference between Third Party manufacturing and Loan License manufacturing

2. Third Party Manufacturing will be better option for you. Read in detail about Third Party manufacturing here

3. You need to register your company. Read how to register company by clicking here

4. If you have enough budget then you go for trade mark registration in starting. otherwise you can register your brand name later.

5. For starting Pharma marketing company, you will require:

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How to recognize a Loan License Manufacturer and Third Party Manufacturer?

How to recognize whether it is manufacturer or loan license manufacturer or third party manufacturer?


Manufacturer is a manufacturer. It’s not like a manufacturer or loan license manufacturer or third party manufacturer. Loan licensing and third party manufacturing are the services that are provided by any manufacturer. All have same things and manufacturing facilities. A manufacturer only, manufacturer for its and has own marketing also where as third party or loan license manufacturer don’t have own marketing or has little marketing of own products so they indulge in manufacturing of other companies products.It is difficult to recognize at first look whether it is a manufacturer or loan license manufacturer or third party manufacturer. To recognize manufacturer, check its advertisement or go to manufacturer website and check about its services. Or/and contact at number given in manufacturers advertisement or website and ask about his services. Otherwise it couldn’t be recognize by seeing a manufacturers name and plant.

Read What is the difference between pharmaceutical loan licensing, third party manufacturing by clicking here

Which is best – Third Party Or Loan License

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Which is best – Third Party manufacturing Or Loan License

Which one is the best ?3 Party Manufacturing or Loan Licensing ?


If you are start-up or small company then Third Party manufacturing is best option for you.

If you are Multi nation company and having big set-up then loan licensing is best option for you…

Difference between Loan License and third party manufacturing here

Secrets behind approval charges for Pharma Third Party Manufacturing

I am very confuse about Start marketing Pharma company. Please guide about Third Party Manufacturing, Whole sale License & Brand name approval Cost.I was various third party manufacturer are told about product permission cost is per Product of Rs.30000/-Approx. Kindly provide complete details of Product Permission Cost.


Read about third party manufacturing here

At present Brand name approval is not issued by drug department. Product permission at present is issued at generic names. Manufacturer gets approval at generic name of medicines like if a product with name “abc” having active ingredient paracetamol in it then manufacturer will get approval to manufacture paracetamol. Manufacturer have to take approval once and can manufacturer it for various brands. Most of manufacturer’s charge 1500 to 3000 per product as approval charges.

Above is for general products. If your product is a new molecule or contains any of new molecule in product or product is not approved from DCGI then manufacturer has to take approval from DCGI. That cost nearly 15000/- per product. That’s the work for manufacturer and in most of cases cost of approval is bear by manufacturer itself. In some special case, manufacturer don’t have approval of products and they charge from marketing companies for approval of products.

In you case may be your product come under DCGI approvals and manufacturer’s don’t have approval for products manufacturing. For approval they are asking to you about 30000/- per products approval.

read in detail about pharma products approval here

what are the documents required to start own drug company through contract manufacturing?

Query:Your article at was immensely helpful. thank you!

I am a resident of Patna, Bihar and currently i am in the lookouts to start my own drug manufacturing. I intend to avail contract manufacturing facility for products that I can sell.
In addition to that helpful article of yours, i would be immensely grateful if you can help me with the below mentioned queries as well.
What are the documents required to start my own drug manufacturing company (manufacturing here refers to getting medicines manufactured through contract manufacturing )?

What are the approvals ,I need to get before initiating the manufacturing of a particular composition?
Already, thankful for your efforts.


You will need whole sale drug license number and Goods & Service Tax Number of your company to start company through contract manufacturing. Read in detail about starting company through contract manufacturing by clicking here

Regarding approvals read our article: How to get approval of pharma products?

Hope above information is helpful to you….

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How to find third party/contract manufacturing clients?

I want to start as third party/contract manufacturer.
I am new to this, kindly help me on how to approach clients/companies

For third party/contract manufacturing, you can use following marketing tools:

Hope this information will be helpful to you…

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Third Party Manufacturing Price List Required


I want my these products get it manufactured the products are listed below:

  • Meropene, inj.
  • Pipracillin & Tazobactum inj.
  • Ceftazidine inj.
  • Ceftazidine and Tazobactum inj.
  • Cefoperazone & Sulbactum inj.
  • Ceftriaxone inj.
  • Ceftriaxone & Sulbactum inj.
  • Amikacin Sulphate inj.
  • Tobramycin Sulphate inj.
  • Pantoprazole inj.
  • Rabeprazole Sodium & Ddomperidone Tab.
  • Pantoprazole & Domperidone tab.
  • Cefuroxime Axetil Tab.
  • Cefuroxime Axetil & Potassium Clavulanate Tab.
  • Ofloxacin Tab.
  • Ofloxacinn & Ornidazole Tab.
  • Rabeprazole Sodium Tab.
  • Aceclofenac,Paracetamol & Serratiopeptidase Tab.
  • Diclofenac Potassium, Paracetamol & Serratiopeptidase Tab.
  • Aceclofenac & Paracetamol Tab.
  • Serratiopeptidase Tab.
  • Multivitamin, Multimineral, Antioxidant, Lycopene & Genseng.
  • Cefpodoxime Axetil & Potassium Clavulanate Tab.
  • Protien Power with DHA & GLA.
  • Ferrous Ascorbate, Folic Acid & Zinc Tab.
  • Calcium Citroil, Calcium Carbonate, Omega 3(EPA + DHA ),Boron, Folic Acid, Methylcobalmin.
  • Amoxycillin, Potassium Clavulanate Tab.
  • L-Arginine Tab.

I want complete third party manufacturing price list.


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What are the licenses required for a Hospital for Third Party Pharmaceutical Manufacturing Licensing?


First of all thank you for your extremely informative article “What is the difference between pharmaceutical loan licensing, third party manufacturing and pcd/franchise?”.

We are associated with a non-profit Hospital in West Bengal. We provide healthcare at lowest affordable cost to the poor and needy patients. We are in search of a system to reduce the cost of medicine as best as we can, certainly not compromising with the quality. In this regard I have gone through your above mentioned article. Now I have the following query:

What are the licenses required for a Hospital to get the medicines manufactured by Third Party Pharmaceutical Manufacturing Licensing? The Hospital will use those medicines under Generic Name, for own consumption only, and will not market to any other customer. Thank you and with regards,



Hospital or any other institution require third party manufacturing by owning wholesale drug license and GST number. If you want generic medicines, you don’t need to go through third party manufacturing. You can get generic medicines from any generic medicine manufacturers directly at very reasonable rates.

If you want to go into third party manufacturing. Read our article Third Party Manufacturing

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