This article will help you to understand about who is responsible for procurement of raw material in loan licensing in pharmaceutical industry either original manufacturing company or loan licensee.
If you don’t have knowledge of terminology used in pharmaceutical manufacturing like loan license, third party manufacturing, contract manufacturing then first you need to understand the concept of loan licensing and Third-party/contract manufacturing.
Loan Licensing manufacturing and Third-party/contract manufacturing, both are the ways to procure own brand’s products by pharmaceutical marketing company without owning a pharmaceutical manufacturing unit. But there is very much difference in both types.
In loan licensing, manufacturing company agrees to allow marketing company to use plant and machinery of manufacturing unit and manufacture own pharmaceutical products. For allowing marketing company, pharmaceutical manufacturing company has to apply for approval from state drug licensing authority. This approval is known as loan license.
In third-party manufacturing or contract manufacturing, manufacturing company completes all manufacturing process and provide ready to sell product brand names owns by marketing company with marketed by address of marketing company.
An article providing detailed differentiation is linked below on which below queries is arises. Have a look at queries related to who is responsible for raw material procurement in loan license manufacturing.
Question: I am thankful to you for posting your article in the link https://pharmafranchisehelp.com/loan-licence-pcd-pharma-franchise-third-party-manufacturing/. It is very much clear about understanding Third Party Manufacturing and Loan Licensing.
I request you to add the right to source raw Materials – who would source RMs and what is the law of obtaining Dual Use NOC under drug authority states.
Answer: Raw Material: In Loan License, Raw material procurement is responsibility of Loan licensee as loan licensee is working as manufacturer in manufacturer’s unit.
All NOC like fire NOC, pollution NOC etc will be related to original manufacturing unit and will be provided by Manufacturer for taking loan license.
Loan license works as Dual Use NOC, no need of DUAL USE NOC…
In third party manufacturing, Raw material procurement is responsibility of pharmaceutical manufacturing company, not marketing company.
Question: Is that Loan Licensing is mandatory in contract manufacturing / Conversion of APIs. ?
If yes, can you help me by providing the existence of Law?
Answer: Loan Licensing is not mandatory in contract manufacturing / Conversion of APIs. You can get manufactured your pharmaceutical finished products at a third-party basis or contract manufacturing basis only without involvement of loan licensing.
You just need to set-up pharmaceutical marketing company and contact a pharmaceutical manufacturer providing third party or contract manufacturing facility.
Read in detail about How to start marketing company through third party manufacturing basis?