Difference Between Contract Manufacturing and Third Party Manufacturing

Difference Between Contract Manufacturing and Third Party Manufacturing – When we talk about the pharmaceutical industry, we know that it a forever prospering industry for sure, as the demand for pharmaceutical medicines is rapidly growing worldwide. Thus Third-party manufacturing and contract manufacturing are playing a vital role in meeting this increasing demand, as many small to medium-sized pharma companies are taking advantage of these two terms. Here we will understand the Difference Between Contract Manufacturing and Third Party Manufacturing so you can easily select the best appropriate term for your pharmaceutical business.

What is Contract Pharma Manufacturing

Contract Pharma manufacturing is a business model used in the pharmaceutical industry in which a company outsources the pharma products from the production companies based on its own formulations, designs, and specifications. The pharma client provides the raw materials and product formulations, and in some cases, they participate in the production process to look after the quality standards the manufacturing company meets while doing production work. Here are the key features of the contract for pharmaceutical manufacturing:

• The pharma client gives the product formula to the manufacturing company
• There is a high-level of customization and control owns by clients
• The manufacturing process is based on the guidelines that given by the pharma client
• This concept is suitable for companies that have their own R&D units and unique pharma product designs.

Benefits of Contract Pharma Manufacturing

• In the contract manufacturing, there is full control of a client over the product and quality.
• This is ideal for the customized or niche markets.
• It minimizes the cost of the production as there is no requirement for in-house manufacturing units.
• Contract manufacturing companies can work for different pharma companies at a time.
• The pharma client companies can focus on other functional and sales work.

What is Third-Party Pharma Manufacturing

On the other hand, Third-Party Manufacturing involves outsourcing the pharma products from the manufacturing companies that produce pre-developed drug formulations and generic medicines. In this term, the products are marketed by the pharma companies under their brand name. The third-party pharma manufacturing company has the only right, which is drug formulation, and the buyer holds the right of packaging and branding of the medicines. It is a very popular model in the Indian pharmaceutical industry, especially for the startup and small-sized pharma companies. Here are the key features of the Third-Pharma Manufacturing services:

• The manufacturer company only owns a drug formulation
• There is a limited scope for customization
• This term is ideal for the marketing-focused pharma companies
• This is the fastest and most cost-effective process in the market.

Benefits of Third-Party Pharma Manufacturing

• The startup and small-sized pharma companies need not set up their own production units or buy a large manufacturing space or land.
• In this term, there is less requirement for the investment to operate the pharma companies because of third-party pharma manufacturing companies.
• This is a hassle-free way to produce the pharmaceutical medicine and extend your product portfolio.
• The pharma companies don’t need manufacturing licenses or facilities; that makes it the go-to-market strategy.

The Key Differences between both the Manufacturing Models

Here is the key difference between the Contract Pharma Manufacturing and Third-Party Pharma Manufacturing:

Conclusion

We have answered the Difference Between Contract Manufacturing and Third Party Manufacturing breifly with the meaning, benefits, features, and differences. Hope you will find the best manufacturing process and get the high-quality medicines at the best prices.