Drug quality is not the responsibility of only one person or company.

Different participants are responsible for different stages of the pharmaceutical supply chain:

• Manufacturer
• Marketing company
• PCD franchise company
• Franchisee
• C&F agent
• Distributor or stockist
• Transporter
• Retail pharmacy

The party responsible for a particular quality problem depends on:

• Where the defect originated
• Who owned or controlled the product
• How the product was manufactured
• How it was stored and transported
• Who approved the label and claims
• Whether proper records were maintained
• Whether complaints were reported and investigated

A common query is:

“We are planning to enter the pharmaceutical business as a PCD franchisee in Odisha. Who will be responsible if there is a quality issue—the manufacturer, marketer or distributor? What documents should we collect, and how can we find a reliable company?”

The practical answer is:

The manufacturer and marketer carry major responsibility for product quality, while every person in the distribution chain is responsible for preserving that quality and following applicable storage, sale, documentation and recall requirements.

Quality Responsibility at a Glance

Manufacturer

Primarily responsible for:

• Manufacturing under valid licence
• Following GMP
• Using approved raw materials
• Correct formulation and strength
• In-process quality control
• Finished-product testing
• Batch release
• Stability and shelf life
• Correct packaging
• Manufacturing records
• Investigation of manufacturing defects

Marketing Company

Responsible along with the manufacturer for:

• Product quality
• Regulatory compliance
• Correct marketed-by information
• Selecting a compliant manufacturer
• Approved product composition
• Label and promotional claims
• Complaint handling
• Recall coordination
• Pharmacovigilance support
• Maintaining agreements and records

Franchisee, Distributor or Stockist

Responsible for:

• Purchasing through a licensed source
• Proper storage
• Required temperature control
• Protection from moisture and sunlight
• Batch and invoice traceability
• Expiry management
• Prevention of tampering
• Selling only through lawful channels
• Cooperating in complaints and recalls

Retailer

Responsible for:

• Purchasing from licensed suppliers
• Proper storage
• Prescription compliance
• Not selling expired products
• Maintaining applicable records
• Proper dispensing
• Supporting product recall

Manufacturer’s Responsibility for Drug Quality

The manufacturer has the most direct control over how a medicine is produced.

Its responsibilities generally include:

Raw-Material Control

The manufacturer should:

• Purchase materials from qualified suppliers
• Check identity and quality
• Verify specifications
• Maintain Certificates of Analysis
• Test materials as required
• Reject unsuitable materials

The manufacturer should not rely blindly on the raw-material supplier’s COA.

Manufacturing Process

The manufacturer must follow approved:

• Master Formula Records
• Batch Manufacturing Records
• Standard operating procedures
• In-process specifications
• Cleaning procedures
• Equipment controls

A wrong quantity, incorrect mixing time, contamination or process deviation can directly affect product quality.

Finished-Product Testing

Before batch release, the product may require testing for parameters such as:

• Identification
• Assay
• Dissolution
• Disintegration
• Content uniformity
• Microbial limits
• Related substances
• pH
• Viscosity
• Fill volume
• Physical appearance

Testing depends on the dosage form and approved specification.

Batch Release

Only an authorized batch should be released for sale.

The manufacturer should review:

• Manufacturing records
• Packing records
• Test results
• Deviations
• Reconciliation
• Investigation reports

Stability and Shelf Life

The manufacturer should have adequate technical support for the stated shelf life.

The product should remain within specification when stored under the labelled conditions throughout its shelf life.

Packaging Quality

The manufacturer is also responsible for ensuring that packaging:

• Protects the product
• Is compatible with the formulation
• Carries correct batch details
• Is properly sealed
• Prevents contamination and leakage
• Uses approved label matter

Is the Marketing Company Also Responsible?

Yes.

A marketing company cannot completely avoid responsibility by saying:

“We did not manufacture it; contact the factory.”

When a company places its name on the product as “Marketed by,” selects the manufacturer and commercializes the product, it has significant responsibility.

The marketer should conduct proper due diligence before placing products in the market.

Marketer’s Responsibilities

These may include:

• Selecting a licensed manufacturer
• Verifying product permission
• Checking manufacturing capability
• Approving legally compliant artwork
• Receiving batch-wise COA
• Maintaining a quality agreement
• Monitoring complaints
• Coordinating recalls
• Ensuring truthful promotion
• Keeping traceability records
• Reporting safety concerns through the appropriate process

Marketer Cannot Transfer Everything Through an Agreement

A commercial agreement may divide responsibilities between the manufacturer and marketing company.

However, an agreement cannot necessarily remove statutory responsibility toward regulators, distributors or patients.

The agreement helps determine:

• Who performs testing
• Who releases the batch
• Who handles complaints
• Who bears replacement cost
• Who investigates defects
• Who conducts recall
• Who retains samples

But both parties must still meet applicable legal obligations.

Is the PCD Franchisee Responsible?

A PCD franchisee normally does not manufacture the product.

However, the franchisee may still be responsible for activities under its control.

These include:

• Buying only from an authorized source
• Checking invoice and batch details
• Storing products properly
• Preventing sale of expired stock
• Maintaining temperature conditions
• Not altering labels
• Not repacking products without authorization
• Avoiding misleading promotional claims
• Reporting quality complaints immediately
• Supporting recall activity

A franchisee should not continue selling a suspected batch merely because the company has not yet responded.

When Can a Distributor Be Responsible?

A distributor may be responsible when the product was originally manufactured correctly but became defective because of poor distribution practices.

Examples include:

• Insulin stored without required refrigeration
• Syrup bottles kept in excessive heat
• Products exposed to rain or moisture
• Tablets stored in direct sunlight
• Damaged cartons supplied to retailers
• Batch numbers or labels altered
• Expired stock sold
• Products purchased from an unauthorized source
• Counterfeit products introduced into the supply chain

In such cases, the manufacturer may not be the only responsible party.

Transporter’s Responsibility

Transportation can affect medicine quality.

Transport-related problems may include:

• Excessive temperature
• Water damage
• Rough handling
• Glass breakage
• Leakage
• Theft
• Package tampering
• Delivery delays

Responsibility depends on the transport agreement, packaging, shipment conditions and evidence of where damage occurred.

For temperature-sensitive products, transport conditions should be clearly defined and monitored.

Quality Problem vs Adverse Drug Reaction

An adverse reaction is not always a quality defect.

Quality Defect

Examples:

• Tablet has insufficient active ingredient
• Syrup is contaminated
• Pack has wrong label
• Capsule is leaking
• Product fails dissolution
• Bottle contains foreign particles

Adverse Drug Reaction

An adverse drug reaction may occur even when the product meets all quality specifications and is used correctly.

Examples may include:

• Allergy
• Nausea
• Drowsiness
• Known drug-related reaction

Both situations require investigation, but they are not automatically the same.

Examples of Responsibility

Example 1: Product Fails Assay

If laboratory testing confirms that a tablet contains less active ingredient than required, the manufacturer and marketer may face responsibility.

Example 2: Product Damaged by Heat

If a distributor stores temperature-sensitive medicine in excessive heat against labelled conditions, the distributor may be responsible for the deterioration.

Example 3: Wrong Composition Printed

If the marketer approved incorrect artwork and the manufacturer printed it without detecting the mistake, responsibility may involve both parties.

Example 4: Expired Product Sold

If a retailer knowingly sells an expired product, the retailer may be directly responsible, although the supply chain and return policy may also be investigated.

Example 5: Counterfeit Product

Responsibility may fall on the person who manufactured, introduced, stocked or sold the counterfeit product, depending on the investigation.

Example 6: Unapproved Promotional Claim

If the product is manufactured correctly but the marketing company or franchisee promotes it for an unapproved indication, the marketing party may be responsible for the promotional violation.

Documents a Franchisee Should Ask from the Company

A franchisee should collect documents from both:

1. The PCD or marketing company
2. The actual manufacturer

Do not rely only on a product catalogue and price list.

Documents Related to the Manufacturer

1. Manufacturing Licence

Check:

• Name of manufacturer
• Factory address
• Licence number
• Validity or retention status
• Approved dosage forms
• Relevant manufacturing sections

The address on the licence should match the “Manufactured by” address on the product.

2. Product Permission

Ask for evidence that the manufacturer is permitted to manufacture the exact product.

Check:

• Composition
• Strength
• Dosage form
• Product category
• Manufacturing site

A general manufacturing licence alone does not prove that every product offered is permitted.

3. GMP Certificate

Ask for the current applicable GMP certificate or evidence of compliance.

Confirm:

• Issuing authority
• Manufacturing-site address
• Dosage-form coverage
• Validity

An ISO certificate does not replace a drug manufacturing licence or GMP compliance.

4. Batch-Wise Certificate of Analysis

Collect a COA for every supplied batch, particularly for important products.

The COA should normally mention:

• Product name
• Batch number
• Manufacturing date
• Expiry date
• Specifications
• Test results
• Conclusion
• Authorized approval

A general sample COA is not enough for all future batches.

5. Batch Release Document

A batch-release certificate or suitable release confirmation shows that the batch was reviewed and approved before dispatch.

6. Approved Artwork

The final artwork should match:

• Approved composition
• Product permission
• Batch details
• Manufacturer details
• Marketing-company details
• Schedule warning
• Storage condition
• MRP
• Dosage form

7. Manufacturer–Marketer Agreement

This should confirm that the manufacturer is authorized to manufacture products for the marketing company.

8. Quality Agreement

A quality agreement should define:

• Batch testing
• Release responsibilities
• Documentation
• Stability
• Complaints
• Defects
• Product returns
• Recall
• Retention samples
• Change control

This is different from a basic commercial manufacturing agreement.

9. GST and Company Documents

Collect:

• GST certificate
• PAN or business details
• Company constitution documents, where relevant

10. Testing-Laboratory Details

Check whether testing is:

• Conducted in-house
• Outsourced to an approved laboratory
• Supported by valid reports

Documents Related to the PCD or Marketing Company

1. Wholesale Drug Licence

If the company is stocking, billing or distributing allopathic medicines, check its applicable wholesale drug licence.

2. GST Registration

The legal name on GST, invoice, agreement and licence should be consistent.

3. Company Registration Documents

Depending on constitution:

• Proprietorship proof
• Partnership deed
• LLP registration
• Certificate of incorporation

4. Authorization Letter

Ask for an authorization confirming that you are permitted to promote or distribute products in the agreed territory.

5. Monopoly or Territory Agreement

This should clearly mention:

• Territory
• Product range
• Minimum purchase
• Payment terms
• Duration
• Sales expectations
• Conditions for cancellation
• Conflict handling

A monopoly letter is a commercial document. It is not a quality certificate.

6. Trademark or Brand Authorization

Check whether the marketing company owns or is authorized to use the product brands.

7. Price List

The price list should clearly show:

• Net rate
• MRP
• GST
• Pack size
• Scheme
• Transport terms

8. Expiry and Replacement Policy

Obtain written terms for:

• Near-expiry stock
• Expired stock
• Breakage
• Leakage
• Transit damage
• Product recall
• Defective batches

9. Complaint Contact

The company should provide a clear quality-complaint contact with:

• Responsible person
• Email
• Phone number
• Reporting process

Documents the Franchisee Itself May Need

If you will purchase, stock, sell or distribute allopathic medicines, your own business structure may require:

• Wholesale drug licence
• GST registration
• Firm registration
• Licensed premises
• Approved competent person
• Purchase and sale records
• Proper storage facilities

If you work through a licensed distributor, the billing, stocking and supply arrangement should be documented clearly.

Check the exact requirements with the Drugs Control Administration before beginning operations.

Why COA Alone Is Not Enough

A COA is important, but it is not a complete guarantee.

A COA:

• Applies to a particular batch
• Is prepared from tested samples
• Does not prove that storage remained proper after release
• Does not replace supplier qualification
• Does not replace product permission
• Does not replace complaint investigation

For important or high-risk products, the marketer or franchisee may consider periodic independent testing through a suitable laboratory.

Can a Franchisee Independently Test Products?

A franchisee or marketing company may obtain samples tested from a competent laboratory, subject to proper sampling and documentation.

Independent testing can help verify:

• Assay
• Dissolution
• Microbial quality
• Physical parameters
• Packaging or label concerns

However, the sample should be representative and properly handled.

An informal test of an incorrectly stored or unsealed sample may not give a reliable conclusion.

How to Find a Trusted and Reliable Manufacturer

Step 1: Do Not Select Only Through Google Ranking

A good website or advertisement does not prove manufacturing quality.

Use online research only for initial shortlisting.

Step 2: Verify the Manufacturing Licence

Check the original or digitally verifiable licence.

Confirm it directly through:

• Issuing State Drug Licensing Authority
• Official regulatory portal, where available
• Written verification, when required

Do not depend on a cropped WhatsApp image.

Step 3: Verify Product Permissions

Ask for product-wise permission for the formulations you intend to purchase.

Step 4: Visit the Manufacturing Unit

Where commercially practical, inspect:

• Production areas
• Quality-control laboratory
• Raw-material warehouse
• Finished-goods warehouse
• Packaging area
• Hygiene
• Documentation system
• Retention-sample room
• Complaint system

A factory visit can reveal much more than a brochure.

Step 5: Evaluate Quality Documentation

Ask for:

• Sample COAs
• GMP certificate
• Quality policy
• Product-permission documents
• Complaint and recall process
• Quality agreement

Step 6: Check Regulatory History

Review available official information relating to:

• Not-of-standard-quality reports
• Product recalls
• Regulatory alerts
• Licence suspension
• Warning or enforcement action

One isolated complaint does not always prove that an entire company is unreliable, but repeated unresolved problems are a serious warning.

Step 7: Ask Existing Clients

Speak with two or three genuine customers.

Ask about:

• Product quality
• Delivery time
• Stock availability
• Replacement
• Complaint response
• Documentation
• Payment disputes

Do not rely only on references selected by a salesperson without verification.

Step 8: Start With a Controlled Order

Begin with:

• Limited products
• Moderate quantity
• Fast-moving formulations
• Products with adequate shelf life

Review performance before increasing investment.

Step 9: Test Selected Batches

Periodic independent testing can provide additional confidence, particularly for:

• New manufacturers
• High-risk products
• Costly products
• Products with previous complaints

Step 10: Sign a Written Agreement

The agreement should cover both commercial and quality responsibilities.

What Should a Quality Agreement Include?

A practical quality agreement may cover:

• Approved product composition
• Manufacturing site
• Raw-material control
• Packaging specifications
• Batch testing
• COA
• Batch release
• Stability
• Change control
• Deviations
• Out-of-specification results
• Complaints
• Adverse-event communication
• Recall
• Retention samples
• Regulatory inspection
• Defective-product replacement
• Document retention
• Audit rights

Do not depend only on a purchase order.

How to Handle a Quality Complaint

When a complaint is received:

1. Record Complete Details

Collect:

• Product name
• Batch number
• Manufacturing date
• Expiry date
• Invoice
• Complaint description
• Photographs
• Storage details
• Quantity affected
• Source of product

2. Isolate the Suspected Stock

Do not mix it with saleable stock.

3. Inform the Company Immediately

Send a written complaint rather than only making a telephone call.

4. Stop Sale if Necessary

Where the complaint may create safety or serious quality concerns, stop further sale of the suspected batch pending assessment.

5. Preserve Samples

Keep:

• Unopened market sample
• Affected sample
• Packaging
• Invoice
• Transport records

6. Investigate

The investigation may review:

• Retention sample
• Manufacturing records
• Test results
• Distribution history
• Storage temperature
• Similar complaints
• Packaging integrity

7. Take Corrective Action

Action may include:

• Replacement
• Product recall
• Laboratory testing
• Regulatory communication
• Corrective and preventive action

Product Recall Responsibilities

Recall should be a coordinated process.

Manufacturer and Marketer

Usually lead:

• Investigation
• Risk assessment
• Recall decision
• Regulatory coordination
• Communication
• Reconciliation

C&F and Distributors

Should:

• Stop dispatch
• Identify customers
• Segregate stock
• Return products
• Maintain records

Franchisees and Retailers

Should:

• Stop sale
• Inform customers or channel partners as instructed
• Isolate stock
• Return affected batches
• provide reconciliation

A franchise agreement should explain recall cooperation.

Red Flags While Selecting a Company

Avoid or investigate carefully when a company:

• Refuses to share manufacturing licence
• Cannot provide product permission
• Offers only a generic sample COA
• Gives an inactive factory address
• Promises every product at an unusually low price
• Frequently changes manufacturers without notice
• Has no written replacement policy
• Avoids written quality agreement
• Supplies products with very short expiry
• Uses misleading approval claims
• Refuses a factory visit
• Does not investigate complaints
• Asks for large advance without documentation

ISO, GMP and WHO-GMP: Understand the Difference

GMP

GMP is directly relevant to pharmaceutical manufacturing quality.

WHO-GMP or COPP

These documents may be relevant for certain manufacturing and export purposes, but should be verified for:

• Issuing authority
• Site
• Products or dosage forms
• Validity

ISO

ISO certification may indicate a management-system certification.

However, ISO does not replace:

• Manufacturing licence
• Product permission
• GMP compliance
• Batch testing

Do not select a manufacturer only because it displays several logos.

Practical Responsibility Matrix

Manufacturing Defect

Likely responsibility:

• Manufacturer
• Marketer may share regulatory responsibility

Incorrect Approved Label

Likely responsibility:

• Manufacturer
• Marketer
• Party that prepared or approved the artwork

Poor Storage

Likely responsibility:

• Warehouse
• C&F
• Distributor
• Franchisee
• Retailer, depending on where it occurred

Transit Damage

Likely responsibility:

• Transporter
• Dispatching party
• Receiving party, depending on evidence and contract

Expired Product Sale

Likely responsibility:

• Seller
• Distributor or retailer involved
• Other parties may be examined if stock was improperly pushed or recalled

Misleading Promotion

Likely responsibility:

• Marketer
• Franchise company
• Franchisee or sales team involved

Counterfeit Product

Likely responsibility:

• Person or entity introducing, stocking, distributing or selling it
• Investigation may involve the full supply chain

Practical Answer for a New Franchisee

Before placing the first order:

1. Take or arrange the required wholesale drug-licence structure.
2. Verify the PCD company’s legal identity and wholesale licence.
3. Verify the manufacturer’s manufacturing licence.
4. Check product-wise permissions.
5. Collect current GMP evidence.
6. Obtain batch-wise COAs.
7. Sign an authorization and territory agreement.
8. Obtain written expiry and replacement terms.
9. Sign or review a quality and recall arrangement.
10. Start with a controlled order.
11. Maintain proper storage and batch records.
12. Report quality complaints immediately.

Final Thoughts

Drug product quality is a shared responsibility.

The manufacturer is directly responsible for manufacturing, testing and releasing a compliant product.

The marketer is also responsible for product quality, regulatory compliance, labelling, manufacturer selection and post-market complaint handling.

The distributor, franchisee, C&F agent and retailer are responsible for maintaining product quality during storage, transport and sale.

Therefore, the correct answer is not:

“Only the manufacturer is responsible.”

The correct answer is:

Each party is responsible for the activities under its control, while the manufacturer and marketer carry major responsibility for the product placed in the market.

A franchisee can reduce risk by verifying licences, collecting batch documents, maintaining proper storage and working only with companies that have transparent quality and recall systems.

Frequently Asked Questions

1. Is only the manufacturer responsible for drug quality?

No. The manufacturer has primary manufacturing responsibility, while the marketer also shares responsibility for quality and regulatory compliance. Distributors and retailers are responsible for proper storage, handling and sale.

2. Is the marketer responsible if the medicine is manufactured by another company?

Yes. Printing “Marketed by” does not completely remove quality responsibility from the marketing company.

3. Can a distributor be responsible for a quality failure?

Yes, particularly where deterioration was caused by poor storage, temperature exposure, tampering or improper transport.

4. Is COA compulsory for every order?

A franchisee should obtain or have access to a batch-specific COA. Company documentation practices and product category may vary, but batch-wise quality evidence is strongly advisable.

5. Is a GMP certificate enough to prove quality?

No. GMP is important, but product permission, batch testing, complaint history, storage and actual manufacturing practices must also be checked.

6. Is an ISO certificate equal to a GMP certificate?

No. ISO certification does not replace pharmaceutical manufacturing licence or GMP requirements.

7. Should a franchisee test products independently?

Periodic independent testing may be useful as part of quality assurance, especially when onboarding a new manufacturer or investigating a complaint.

8. What should be done after receiving a quality complaint?

Record the complaint, isolate the batch, inform the company in writing, preserve samples and stop sale where necessary pending investigation.

9. Who bears the cost of defective-product replacement?

This should be covered in the agreement. Responsibility generally depends on the cause of the defect and investigation results.

10. How can I verify a reliable manufacturer?

Verify licences and product permissions, visit the facility, review quality documents, check regulatory history, contact customers, test selected batches and start with a limited order.

Looking for Ayurvedic Franchise or Distribution Opportunities?

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