How to Increase the Size of The Reach of Your Pharma Business With Third Party Manufacturing
India is among the largest markets for pharmaceuticals in the world and is a world-class center for manufacturing of medicines. From regional brands with a small footprint to huge exporters, a multitude of pharmaceutical companies are operating across the nation. Yet, many businesses--especially growing or mid-sized ones--face the same challenge: how to expand without overloading costs, compliance pressure, and operational complexity.
This is why manufacturing by third parties can be a very effective growth strategy.
If you're launching an innovative pharma company moving into new markets or expanding your production capacity Third party manufacturing can assist you in scaling more efficiently and with greater efficiency. This blog explains what third party manufacturing is, what it does and why it's important in India and how it functions and its advantages, the most common mistakes, and concrete examples, all written in a simple language that is easy to comprehend.
Third party manufacturing refers to outsourcing the manufacturing of pharmaceutical products to a licensed manufacturer that manufactures medicines under the brand name of your company. The manufacturer has a factory, equipment trained workforce, as well as approvals from the regulatory authorities. Your focus is on marketing, branding distribution, as well as the growth of your business.
For instance, for instance, an Indian pharmaceutical company with its headquarters within Ahmedabad or Delhi could have powerful doctors as well as marketing networks but there is no manufacturing facility. Instead of investing millions of dollars in the construction of factories, they work with a manufacturer from a third party in states such as Gujarat, Himachal Pradesh, Maharashtra or Uttarakhand, which are with a history of manufacturing clusters for pharmaceuticals.
The medications are made in accordance with your specifications, labelled according to your brand and delivered by you to distribute throughout India.
This is a very well-liked model in India due to the fact that it allows companies to get into the pharmaceutical market at a lower cost while ensuring the regulatory requirements.
The Indian pharmaceutical industry is controlled, cost-sensitive and competitive. Expansion without a clear plan could lead to problems with compliance or financial pressure.
The main reason that third-party manufacturing is so important in India is its cost-efficiency. Establishing a manufacturing plant involves a large capital investment, including land machines, licenses, quality management systems, employees and periodic inspections by officials like those of the Drug Controller General of India (DCGI). For many companies this is not feasible at the beginning or in growth phases.
Another factor to consider is the complexity of regulatory requirements. Indian manufacturing of pharmaceuticals must be in compliance with Schedule M, GMP standards and state drug authority standards, and occasionally WHO-GMP and export-related certifications. Third-party manufacturers operate within these guidelines, which reduces the regulatory burden for your company.
Third-party manufacturing also helps the speed of market entry. Instead of spending years establishing facilities, firms can introduce new products in just a few months. This is vital in a rapidly-changing market where the demand patterns change rapidly.
In India where demand from regional areas is diverse ranging from metros to tier-2 and 3 cities, scalability is a key factor. Third party manufacturing allows companies to expand or reduce production quantities according to market trends without stress on operations.
Understanding the process will help you make better choices and avoid common mistakes.
First, you must define the requirements for your product. You determine what kind of medication you'd like to make: capsules, tablets, syrups, ointments and injections or nutraceuticals. You will also decide on strengths and compositions, packaging styles and the market you want to target.
The next step is to select the appropriate manufacturers. In India manufacturing facilities are scattered throughout pharma hubs such as Baddi, Sikkim, Ahmedabad, Hyderabad, and Pune. Select manufacturers with expertise in the product category you are looking for and have valid manufacturing licenses.
After selecting, you check their manufacturing capabilities, certifications, Quality systems, certifications, and the history of compliance. This can include the verification of GMP certificates and manufacturing licenses, as well as audit reports, as well as samples of quality of the product.
After finalization the third party manufacturing agreement is then signed. The agreement specifies the specifications of the product prices, cost, minimal order quantities and delivery timeframes as well as confidentiality, quality accountability and legal obligations.
The production process then starts according to approved formulas and samples. In this phase tests on batches as well as quality checks and documentation are completed. Following approval, the products are shipped to your warehouses or distributors.
In this process the coordination of documentation and communication play a significant part. The most successful pharmaceutical companies treat the third party manufacturers as long-term collaborators rather than as short-term suppliers.
One of the most significant benefits is that it requires less investment and a lower risk. Instead of investing heavily in infrastructure it is better to invest in branding, and expansion of sales.
Another advantage is the speed of scaling. If the demand for your product grows in states such as Maharashtra, Uttar Pradesh, or Tamil Nadu, production can be increased without a delay. This flexibility is extremely beneficial in India's diversified and highly price-sensitive market.
Manufacturing by third party companies also offers access to technical knowledge. Numerous manufacturers specialize in particular dose forms, or segments for therapeutic use. Their expertise can help to improve the quality of products and stability as well as compliance.
The efficiency of operations is another plus. It is possible to avoid the daily management of your factory and labor issues, as well as maintenance of machines, as well as inspections by regulatory authorities. Your management team is able to concentrate on business development and doctor-patient relationships.
Cost efficiency increases because of the bulk purchase of raw materials as well as the sharing of manufacturing resources. This can lead to price competition that is vital in the Indian industry of pharma, where margins are often tight.
Many Indian pharmaceutical companies struggle with a lack of production capacity. The product might be successful in a particular region, however expanding across the country is difficult without stronger manufacturing support. Third-party manufacturing eliminates this obstacle.
Compliance with regulations is a further major issue. Small businesses may not have the internal skills to handle audits as well as documentation and quality control systems. Partnering with reputable manufacturers will ensure compliance to Indian drug laws and minimizes the possibility of product recalls or penalties.
Another issue that is common is delayed launches of products. Establishing a factory takes time, but opportunities in the market aren't waiting around. Third-party manufacturing enables businesses to release new products quicker and react quickly to market demands.
Export-oriented businesses also reap the benefits. Manufacturers who have WHO-GMP certification or export approvals aid businesses to meet international standards, which makes it easier to access market segments in Africa, Asia, and the Middle East.
One of the biggest errors is selecting manufacturers based on the cost. Pharmaceutical manufacturing, low-cost can result in inadequate quality, compliance problems and lasting brand damage.
Another mistake that is common is not doing appropriate due diligence. Many companies fail to physically inspect manufacturing facilities or to verify permits. This can lead to unreliable supply or other regulatory issues later.
In the absence of clear agreements, you are as well as risky. Unclarified terms regarding quality responsibility, delays or confidentiality can lead to disputes. Each detail must be documented in detail.
Communication issues are another issue. In the absence of regular updates and accurate reporting, minor problems can become major issues. Communication channels that are clear and easy to follow are vital.
Finally, some companies do not pay attention to quality control after production starts. Regular audits and reviews of batches are vital to ensure consistency in quality of the product.
Before you begin, identify your company's goals. Are you looking to expand regionally or launching new products or launching exports? The goal you have set will determine the kind of manufacturer you'd like to work with.
Always check manufacturing permits and GMP compliance with the state drug regulators. Request stability and sample data prior to final approval.
Visit the factory whenever you can. The production environment can help you assess cleanliness, discipline, and professionalism.
Begin with small quantities when you are trying the new manufacturing process. When trust and consistency are established, you can increase production.
Maintain a strong and reliable documentation system and records. This will protect your business from audits and help build trust with your doctors and distributors.
Take a look at a mid-sized pharmaceutical company that is based within North India focusing on cardiovascular and diabetic drugs. The company was able to distribute in some states, however it had only a small manufacturing capacity.
Instead of constructing a new plant, they joined forces with a manufacturer from a third party in Gujarat that has WHO-GMP certification. This enabled them to expand their product line, keep high quality, and expand into other states.
As time went on, the partnership assisted them in entering export markets while ensuring that operational costs were in check. The company was focused on engagement with doctors and marketing, while the manufacturer took care of manufacturing and compliance.
This type of story is not uncommon in India and illustrates the benefits of manufacturing by third parties.
Third-party manufacturing isn't only an option, it is a proven growth method in Indian manufacturing of pharmaceuticals. It lets businesses expand without major investment, lessen the burden of regulatory compliance, and expand operations with ease.
In a vast country yet competitive as India in which cost control, compliance and speed are important Third party manufacturing can help pharmaceutical companies remain open and focused on expansion.
By selecting the most suitable manufacturing partner, ensuring quality control, and developing long-lasting partnerships, pharmaceutical companies can achieve sustainable growth and enhance their market position.
Your email address will not be published. Required fields are marked *
