Setting up pharmaceutical manufacturing unit is lit bit difficult work as compare to setting up manufacturing units in other sectors. Pharmaceutical Manufacturing unit has to compile with many rules and regulations. First part is to set-up of plant and basic requirement for manufacturing unit. A Pharmaceutical manufacturing unit should compile with two regulations:
- Factory Act regulations
- Good Manufacturing Procedure Requirements ( i.e. WHO: GMP, Schedule M under drug & cosmetic act or applicable in concern country)
Topic Covered in This Article:
- Pharmaceutical Manufacturing
- What to do first
- Area Required
- Company Registration
- Manufacturing License Procedure and Documents Required
- Drug Wholesale/Distribution License Procedure
- Goods and Service Tax Identification Number (GST Number)
- Machinery and Analytical Equipments Required
- Technical Staff
- Steps to Start
- General Manufacturing Sections
- Scope of Pharmaceutical Manufacturing Unit
- Marketing and Sales Ways
- Investment Required
What is manufacturing in Pharmaceutical Sector?
Pharmaceutical manufacturing means a set of operations that includes purchasing of raw material, processing, production, packaging, releasing, storage and shipment of medicines and pharmaceutical products in accordance with good manufacturing practice.
What to do first?
Before starting pharmaceutical manufacturing unit, one should have basic knowledge about manufacturing in pharmaceutical sector and/or he/she should employee/partner with persons who have good knowledge of manufacturing and analytical procedures. Without having basic knowledge of manufacturing, it is difficult to compete or survive even after investing huge amount.
Searching for premises is also crucial step in manufacturing unit set-up. Location and building should compile with Good Manufacturing Practice (GMP) standards. GMP standards and plant specifications may slightly very depend upon country policy and requirements.
Space and Area Required:
The manufacturing plant should have adequate space for:-
- Receiving and storing raw material
- Manufacturing process areas
- Quality control section
- Finished goods store
- Rejected goods/drugs store
Different sections required different criteria for space and requirements. Here we will discuss about minimum area required for each section set-up for pharmaceutical manufacturing unit.
For External Preparation section like cream, ointments etc, Minimum of 30 square meters is required for basic installation and 10 square meters for ancillary area. Formulation of external preparations and internal preparations should be separate to avoid contamination.
For Liquid Dosage Form Section like syrup, suspensions etc, Minimum of 30 square meters is required for basic installation of machineries and 10 square meters for ancillary area.
For Solid Dosage Form Section like Tablets, capsules and powder requires more area for machinery installation and ancillary.
Tablet section requires minimum of sixty square meters area for basic installation and twenty square meters area for ancillary for uncoated tablets. If coating section is required then it should be separate from other section having minimum of thirty square meters area for basic installation and ten square meters for ancillary area.
Capsule section requires minimum of twenty five square meters area for basic installation and ten square meters for ancillary.
Powder section requires minimum of thirty square meters area for basic installation and ten square meters for ancillary.
Ophthalmic Preparation Section is sensitive section like parenteral section. Section should be in separate building or separately placed from other sections mentioned above. Fully air locked, sterile and non contaminated area is required for ophthalmic preparations. Minimum area require for ophthalmic section is twenty five square meters and ancillary area is ten square meters.
Parenteral section like ampoules and vials for injections etc are of two types. One is Dry Parenteral preparations like dry powder for injection and second is liquid injections. It is most sensitive section in pharmaceutical manufacturing unit. It should be in separate building and dry powder should also be separate from liquid section. Area requirement also change according to large volume parenterals and small volume parenterals types.
Minimum area require for parenteral section is One Hundred and fifty square meters for basic installation and one hundred square meters for ancillary activities.
- Premises, Building and plant as per GMP standards
- Constitution of Firm and/or Company
- Section wise partition in plant
- Technical Persons (Manufacturing chemist and Analytical Chemist)
- Machinery and laboratory Equipments
- HVAC Unit
- Workers and Supervisors
- List of medicines to be manufactured
- NOC from required departments whichever applicable like pollution board, MC etc.
- Manufacturing License and Distribution License
- Registration of Factory under Factory Act
- Raw Material Suppliers
- Packaging Material Suppliers
- Distributors and/or marketing companies for output consumption
A manufacturing unit may require different types of licenses and registrations depend at location and country. Most important license for setting up pharmaceutical manufacturing unit is Manufacturing License. List of generally required licenses are:
- Company Registration (If required)
- Drug Manufacturing License
- Drug Distribution License (For Distributing finished goods)
- Testing Laboratory License
- Good and Service Tax (GST) or any Tax registration required in concern country
- NOC from other departments if required
Company registration may be required or not depend at type and size of organization. For proprietorship and partnership, company registration could be skipped. We have written in detail about company registration in our article: How to Register Company?
Manufacturing License Procedure and Documents Required:
Manufacturing license of pharmaceutical products and medicines are come under Drug Control Authority in concern country e.g. USFDA (USA), DCGI (India), DCC (South Africa) etc. You should know about where to apply for drug manufacturing license in your country.
(In India, Drug manufacturing License is issued by state drug controller generally located at capital region of concern state of Indian Territory. State Drug Controller is appointed by state government and work under guidelines of Drug Controller General of India (DCGI). You have to apply for grant of pharmaceutical manufacturing unit to state drug controller.)
Complete all requirements and acquire all documents related to justifying requirements. Apply for medicine manufacturing license at concerning authority. After receiving the application (Online or Offline mode), drug authorities inspect the plant by visiting at plant and check for requirements and manufacturing/quality procedure as per laws and regulation, and good manufacturing practice.
If requirements are found to be satisfactory, manufacturing license has to be issued and you can start manufacturing of medicines.
List of general documents we are listed below (Documents requirements may be changed according to concern country laws and regulations and/or any amendments):
- Introductory Covering Letter mentioning Name and address of plant and administration office
- Application at prescribed Form and format
- Prescribed Fee Receipt
- Details of constitution of firm, partnership or Company
- Documents related to Ownership of premises or Rent or Lease documents
- Identification Proof of all Authorized persons, proprietor, partners and/or directors
- Details of Technical Staff e.g. Manufacturing Chemist and Analytical Chemist with education documents and approval certificates which is applicable
- List of machineries and laboratory equipments
- Site Mater File
- Blue print of Plant and layout of premises specifying installation of machinery and equipments
- Design and Layout of HVAC system
- List of medicines to be manufactured in manufacturing unit
- Water analysis report
- NOC if required from other departments like health department, pollution department or MC etc.
- Factory Act Registration if applicable
Drug Wholesale and Distribution License:
Manufacturing drug license documents are almost same for most of countries but drug wholesale and distribution license requirements may change according to country. Some countries may not have requirement for drug distribution license for manufacturing unit. In many countries you also require to take distribution license for distributing medicines with manufacturing license.
In India, you require to take wholesale and distribution license for medicines also along with manufacturing license to distribute and sell finished good to marketing companies and distributors.
Read in detail about wholesale and drug distribution license by clicking here
Goods and Service Tax (GST) Registration:
Every country has own tax structure and way to collect tax. Name of taxes may also vary according to country. Almost every country has own tax laws and tax structure. Register your firm/company under Tax laws is also an essential part of any business. Confirm about taxes and laws applicable for selling and purchasing at medicines in your country and register accordingly.
In India, All businesses and services fall under Goods and Service Tax. At present medicines attract 5% and 12% tax under GST and for above 20 lakh annual turnover, firm/companies are required to take GST identification number.
Machineries and Analytical Equipments:
Different sections required different type of machinery and analytical testing required. If we will discuss about in detailed machinery here, this article will become excessive lengthy. We have written separate article for requirement of machineries and analytical equipments for pharmaceutical Unit read here
Essential Machinery list is as follow:
All the machines are in SS-304 and contact part in SS-316
Liquid /Syrup/Seuspension Section:
- High speed mixer for 1000 liter tank
- S. tank- 1000 liter capacity with wheel and cover lid
- S. tank- 200 liter capacity with wheel and cover lid
- Colloidal Mill
- Liquid filling machine
- P. cap sealing machine
- Liquid filtration unit
Capsule/ Tablet/Powder Section:
- Air compressor
- Air conditioner
- Blister packing machine
- Alu-Alu Packing Machine
- Capsule filling machine
- Capsule Loader
- Tablet Punching Machine
- Coating Pan
- Mass mixer- 100 kg
- Multi mill
- FBD- 30 kg// tray drier(24 treys)
- Double cone blender 100 kg
- Powder Filling and Sealing Machine
- Batch printing machine
- RO plant
- Lab equipments
- AHU (Air Handling Unit) and Air Lock System
Qualification and eligibility of technical person may vary according to countries. Generally minimum of two technical persons is required by a pharmaceutical manufacturing unit for efficient running and following GMP norms. One is for handling Manufacturing Process and one is for handling analytical processes like Quality control and assurance. Person handling manufacturing processes may be named as Manufacturing chemist, production chemist, production officer, supervisor etc. Person handing analytical processes may be named as Quality Control Chemist, Analytical Chemist etc.
Steps to Start Pharmaceutical Manufacturing unit:
- Prepare a Business Plan
- Choose Company Name
- Finalize location for premises for manufacturing unit (must compile with norms)
- Incorporation of Company (Proprietorship/partnership/private limited etc)
- Company Registration
- Arrangement of Documents, authorized staff and requirements.
- Furnishing and Finishing of premises as per WHO:GMP regulations or as per concern country rules and regulations. (In India as per Drug and Cosmetic Act Schedule M)
- Purchase of required machinery and analytical equipments for smooth running of plant (Read detail of machinery required for manufacturing unit here)
- Prepare a file with all necessary documents
- Prepare Site Master File
- NOC for any other department like pollution department, CLU etc what it asked for.
- Submit file for manufacturing licensing Authority
- After acceptance of file, Drug authority will conduct physical inspection before granting manufacturing license
- Apply for Wholesale and Drug Distribution License
- Apply for Goods and Service Tax (GST) Registration
- After getting manufacturing license, start of manufacturing of medicines can started.
General Manufacturing Sections
You have number of options in pharmaceutical Manufacturing unit. You can set-up single section/unit and/or more than one and/or all sections together in your manufacturing unit. Manufacturing Unit Sections are:
- Tablet/Capsule Section
- Liquid/Syrup Section
- Parenteral (Liquid/Dry Injection) Section
- Ophthalmic/Eye/Ear/Nasal Drop Section
- Powder (Protein powder, Medicated powder etc) Section
- Inhaler/Spray Section
- Surgical/Medical Device Section
- Suppositories Section
Scope of Pharmaceutical Manufacturing Unit:
- Prescription/Branded Medicine Company
- Generic Medicine Company
- OTC (Over the Counter) Medicine Company
- Pharmaceutical Distribution and Hospital Supply
- Derma and Other specialty Products
- Surgical Dressing Company
Marketing and Sales Ways:
- Third party manufacturing
- Contract Manufacturing
- Loan license manufacturing
- Own marketing and Distribution Channel
A pharmaceutical Manufacturing unit required two type of investment i.e. fixed assets and Liquid assets. Fixed assets means investment at building, land, infrastructure and finishing-furnishing etc. Liquid assets means investment at men power, raw material, rent, promotional and marketing expenses etc.
It’s not possible to calculate exact investment theoretically because it depends many factors like area, location, country, land cost, rent, machinery and equipment cost at that area, salary of employees and workers etc. We need actual data to calculate investment. This topic we covered broadly in our article: How much investment required to set-up plant?
If you don’t want to set-up pharmaceutical manufacturing unit but want to set-up pharmaceutical company then marketing company is also a better option. Read requirements to set marketing company here