India is presently experiencing an exceptional rise in contract-manufacturing production and outsourcing. Third-party manufacturing in pharma is now the backbone of organizations seeking growth without requiring large investments in establishing manufacturing units. It is a well-known fact that India is nicknamed “Pharmacy of the World.” Therefore, there is a remarkable rise in the need for quality medicines worldwide. Hence, the market worth is expected to rise to approximately ₹10.2 trillion by the year 2030.
The main force propelling this rise is a transition in favor of cost-cutting production and large-scale generic production. Additionally, digitalization and the benefits of the Government of India’s “PLI Scheme” attract international entrepreneurs to Indian territories.
How Third-Party Manufacturing in Pharma Works?
The operational process of the third-party manufacturing model in the pharma sector is simple yet efficient for all of those involved.
First of all, a marketing firm or an individual identifies a product line. Then they finalizes the formulas they are interested in marketing.
Later, they tie up with a licensed manufacturing facility that has the equipment and labor for the task.
The manufacturer takes care of the entire production process, right from raw material selection to the testing of the products.
Subsequently, they pack the products with the buyer’s label and ship them off for market distribution. This procedure means the seller markets the products, and the expert takes care of the production process, which involves complex science.
Why Start Pharma Third-Party Manufacturing in India?
- Low Capital Investment: It requires little to no initial out-of-pocket cost for land leasing or investing in a physical laboratory.
- WHO-GMP Units: Collaboration with disciplinary experts enables you to immediately gain access to top-notch equipment and international standards for quality.
- Operational Flexibility: The third-party manufacturing firm can easily enlarge or scale down the lines of products depending on the latest market trend.
- High Profit Margins: By reducing operating expenses and producing fewer units, the firm can now realize better financial gains.
- Expertise: There are professional experts from the manufacturer’s side who are pharmacists and scientific researchers who ensure safety standards are met.
Must Read: What is Third Party Manufacturing in Pharma? A Complete Beginner’s Guide
Eligibility to Start Pharmaceutical Third-Party Manufacturing
Starting a business in this sector will demand both legal requirements and a professional experience in the pharma sector. We invite anyone interested in this field, but we must not modify the technical requirements.
Legal Requirements:
Drug License (DL)
GST Number
FSSAI (Food Safety and Standards Authority of India)
DCGI Approval
Non-Objection Certificate (NOC)
Trademark Registration
Who Can Apply for Third-Party Manufacturing?
- Pharma professionals with experience in sales or manufacturing.
- Marketing companies that are interested in holding proprietary brand labels.
- Startups and entrepreneurs are making their first move into the healthcare sector.
- Distributors and exporters are preparing to export good-quality Indian medicines.
Technical and Educational Standards
Even though there isn’t a strict educational qualification for running a pharmaceutical business. If you have a background in pharmacy with a B. Pharma or D. Pharma, it will work best for you. If you don’t have a pharmacy background, you need to employ a technical staff member with a valid license for the storage of medications.
Step-by-Step Process to Start Third Party Manufacturing in Pharma
1. Product Range Selection: Finalize the list of products and drug molecules that you would like to manufacture on your own.
2. Manufacturer Selection: Be sure to partner with a reputable pharma manufacturing company that has WHO-GMP, DCGI, and ISO standards.
3. Trademark Registration: Register your brand names so that there will be no legal issues or duplication of brands.
4. Branding and Packaging: Provide your approved graphics, logos, and package designs of the final products to the manufacturer.
5. Sign Agreement: Enter into a contract or agreement that defines the cost structure and timelines involved in the shipping process.
6. Place Your Order: Put in the initial order and wait for the production cycle. It will take anything between 45 to 60 days for the new production.
Documents Required for Third-Party Manufacturing
- Wholesale Drug License: This is a must-have for selling and distributing drugs.
- GST Registration Number: Required for taxation purposes and other financial transactions.
- Company Profile: Includes directors and the officially registered address of the company.
- Non-Objection Certificate (NOC): Required because without this document the manufacturer is not allowed to print the brand name.
- Trademark Certificate: Proof of ownership for your brand identity and product names.
Cost to Establish Third-Party Manufacturing in Pharma Industry
The cost of launch for a pharma marketing company can be quite low compared to opening a company. The estimated amount that can be invested in a limited range of products would be ₹2 Lakh to ₹5 Lakh. This amount will include approximately ₹15,000 to ₹20,000 for the drug license and GST registration.
So, you’ll need some for the initial supply, depending on the manufacturer’s minimum order quantity. The initial investment for the first batch of a product for many manufacturers would be at least ₹50,000 for each product.
How to Choose the Best Partner for Third-Party Manufacturing in Pharma?
Choosing the right third-party manufacturing partner can be the most important decision that will impact your business’s success and the future reputation that comes with it.
- Verify Certifications: First, you have to make sure that the pharma manufacturing unit you choose has the latest WHO-GMP accreditations and a positive track record of timely deliveries.
- Review Quality Standards: You must also be sure that the lab has the right equipment to test each product batch through stability studies.
- Check Their Experience: The top pharma manufacturing companies have a great experience in third-party production. So, verify their manufacturing experience and hire a skilled manufacturer without zero mistakes.
- Check Manufacturer’s Market Reputation: You must need to verify manufacturer’s market reputation and their customers review. A reliable third-party manufacturing pharma company always delivers quality products for getting market exposure.
- Finalize Manufacturer: The best manufacturer will also give you high-quality samples to test the effectiveness of the product. This will help you decide whether to go through with the purchase.
Future Outlook of Third-Party Manufacturing in India
The future of this industry is bright, as the whole world is shifting towards affordable generic medicines. Today, Indian generic medicines contribute over 20% of the world’s generic medicines, which will further increase. In addition, the evolution of personalized health care will also generate tremendous demand for niche players.
Also Check: Top 10 Pharmaceutical Third-Party Manufacturing Company in India
Consequently, small- to medium-scale marketing firms will find their application essential, as they will be useful for reaching rural as well as international markets. Therefore, investing in third-party manufacturing will create a sustainable business model even for the trillion-rupee Indian pharmaceutical market.
Final Words
Thus, entering the pharmaceutical business can be an exceptionally fulfilling and high-return business venture. By taking advantage of the third-party manufacturing in pharma, you can easily avoid the challenges associated with massive investments in infrastructure.
India is the ideal location for pharmaceutical business owners due to its growing market and low investment requirements. Companies such as JM Laboratories reflect the high quality and reliability needed to succeed in the highly competitive arena of the pharmaceutical business.
Frequently Asked Questions (FAQs)
What is the minimum capital needed to begin third-party drug manufacturing?
The initial investment for starting a business requires a minimum of two to five lakh Indian rupees.
Would it be possible to enter the pharma manufacturing sector without a related degree?
Yes, you can start by hiring a registered pharmacist to handle all the technicalities.
What is the typical timeframe for completing the manufacturing cycle?
The production process normally takes from forty-five to sixty days before completion.
What are the essential legal steps to launch a pharma marketing brand?
The process involves obtaining a drug license and GST, which are then followed by establishing a partnership with a certified manufacturing unit.
How does independent production differ from the contract manufacturing model?
Companies must be established for own manufacturing, whereas third-party manufacturing involves outsourcing manufacturing to specialists.
Published Date: January 02, 2026, Author: Jm_Labs