Who is responsible for Raw Material Procurement in Loan License and third-party/contract manufacturing?


Raw Material Procurement in Loan License and third-party/contract manufacturing:

Loan licensing and third-party/contract manufacturing are ways of procuring products from a pharmaceutical company without owning a pharmaceutical manufacturing unit. However, loan licensing differs from contract manufacturing in many aspects. In loan licensing, a manufacturer agrees to allow a marketer to use its plant and machinery for manufacturing the marketer’s own pharmaceutical products. The manufacturer applies for approval from the state drug licensing authority for this agreement. This is called a loan license.

In third party manufacturing, a contracted manufacturer performs all of the manufacturing and distributes the ready-to-sell product with the company brand owned by the marketing company. This blog will explain who is responsible for procuring raw materials for pharmaceutical products in the case of a loan licensee or original manufacturer. 

Casca Remedies strives to publish complete, informative blog posts for its users. After Publishing the blogs, we are getting many queries and comments from our users. We try hard to respond to each query in a timely manner. Here are answers to the few questions you have been asking us recently.

Question: Is Loan Licensing Mandatory in Contract Manufacturing / Conversion of APIs?

Answers: Loan Licensing is not mandatory in contract manufacturing for pharmaceutical/food companies/cosmetics. You can get your pharmaceutical finished products manufactured at a third-party basis or contract manufacturing basis only without involvement of loan licensing. You just need to set-up a marketing organization and contact a pharmaceutical manufacturer.

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Question: I am thankful to you for posting your article in the link: “https://www.cascaremedies.com/third-party-contract-manufacturing-in-india/ ”It is very much clear about the understanding of third-party contract manufacturing. I request you to also Add About the requirement of the company to procure raw materials. Who sources RMs? and also explains the law involved in obtaining a Dual Use NOC under drug authority states?

Answer: Raw Material- In Loan License, raw material procurement is the responsibility of the loan license. He or she is working as a manufacturer in the manufacturer’s unit. 

  • All NOCs relating to the manufacturing unit, such as NFPA Fire NOC, Pollution NOC etc., will be provided by the manufacturer for taking a loan license.
  • The loan license works as Dual Use NOC, which means no need for a separate DUAL USE NOC.
  • In third-party manufacturing, the pharmaceutical manufacturing company is responsible for procuring raw materials. not a marketing company.

If you Still do not understand the terminology used in pharmaceutical manufacturing, such as loan licensing, third-party manufacturing, and contract manufacturing, consult with our marketer – fill the following form and get a call back within 15 mins.

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