Loan License For Drug Manufacturing

What Is a Loan License For Drug Manufacturing?

A loan license for drug manufacturing is a legal permit allowing a company or individual to produce pharmaceuticals using facilities owned by another request. It enables cost-effective production, faster market entry, and compliance with regulatory standards. 

This arrangement streamlines the manufacturing process while ensuring adherence to legal requirements and quality control measures.

What Is A Loan License?

A loan license is a legal authorization granted by a regulatory authority to a pharmaceutical company, allowing it to manufacture drugs or medicinal products on behalf of another company. 

Simply put, it’s like permitting one company to produce medicines for another company. 

The company holding the loan license ensures the manufacturing process complies with all regulatory standards and requirements. However, the intellectual property rights and ownership of the drugs or products usually remain with the company that holds the original license or formula.

Who Required Loan License For Drug Manufacturing?

Companies or individuals intending to manufacture pharmaceutical drugs but lacking their manufacturing facilities require a loan license for drug manufacturing. This license allows them to utilize existing facilities owned by another licensee to produce medicines legally. 

It is particularly beneficial for startups or companies looking to minimize capital investments in setting up their manufacturing units. By obtaining a loan license, they can leverage the licensed facility’s infrastructure, expertise, and regulatory compliance, enabling them to enter the market faster and more cost-effectively.

Advantages Of Obtaining a Drug Manufacturing Loan License

A Drug Manufacturing Loan License offers several advantages:-

  • Cost-Effective Production: Companies can avoid capital investments by utilizing existing facilities under the loan license arrangement, reducing costs.
  • Faster Market Entry: With a loan license, companies can expedite bringing their products to market by leveraging manufacturing capabilities, enabling quicker production and distribution.
  • Focus on Core Competencies: By outsourcing manufacturing, companies can focus on research, development, and marketing, optimizing resource allocation.
  • Compliance Assurance: Partnering with a licensed manufacturer ensures compliance with regulatory standards, minimizing regulatory risks.
  • Flexibility and Scalability: Loan license arrangements offer flexibility in adjusting production volumes according to market demand without owning manufacturing units.
  • Risk Mitigation: Sharing manufacturing responsibilities spreads operational and financial risks, including regulatory compliance and demand fluctuations.
  • In summary, obtaining a drug manufacturing loan license provides companies with efficient, compliant manufacturing solutions, enabling focus on innovation and market expansion while minimizing risks and capital investments.

What Documents Are Needed For The Cdsco Loan License?

For a loan license from the Central Drugs Standard Control Organization (CDSCO), you typically need:

  • Application Form – Fill out and sign the CDSCO’s application form.
  • Covering Letter – Write a letter to the CDSCO explaining your intent and providing applicant details.
  • Proposed Site Plan – Include a layout plan of the manufacturing premises.
  • Site Master File – Submit a detailed infrastructure, facilities, and equipment document.
  • Technical Staff Details – Provide information on the qualifications and responsibilities of technical personnel.
  • Quality Control Documents – Include specifications, testing methods, and procedures.
  • Agreement with Licensee – Attach a copy of the contract with the licensee.
  • Power of Attorney: If needed, submit a power of attorney authorizing representation.
  • Declaration of Compliance – Declare compliance with CDSCO and regulatory requirements.
  • Other Supporting Documents – Provide any additional documents requested by the CDSCO.

How To Get a Loan License For Drug Manufacturing?

To acquire a loan license for drug manufacturing, follow these steps:

  • Understand Regulatory Requirements: Familiarize yourself with regulations like the Drugs and Cosmetics Act and Rules.
  • Identify a Licensor: Find a licensee who owns a manufacturing facility and is willing to collaborate under a loan license agreement.
  • Submit Application: Complete the application form provided by the regulatory authority with the necessary details.
  • Provide Documentation: Gather required documents such as a cover letter, site plan, technical staff details, quality control documents, and agreement with the licensee.
  • Ensure Compliance: Ensure manufacturing premises comply with regulatory standards for drug manufacturing, storage, and quality control.
  • Pay Fees: Fulfill prescribed license fees as mandated.
  • Facilitate Inspections: Allow regulatory inspections to verify compliance.
  • Await Approval: Wait for review and approval of the application.
  • Maintain Compliance: Continuously adhere to regulatory requirements and terms of the loan license agreement.

By following these steps, individuals or companies can successfully secure a loan license for drug manufacturing.

What Is The Validity Of a Drug Manufacturing Loan License?

The validity of a drug manufacturing loan license is typically determined by the regulatory authority issuing the permit. 

It may vary depending on factors such as the type of drugs being manufactured, compliance with regulatory requirements, and any specific terms and conditions stated in the license.

What Is The Cost Of Loan License For Drug Manufacturing?

The cost of a loan license for drug manufacturing varies depending on the drug’s classification. Generally, Class A and B drugs incur lower fees, while Class C and D drugs typically have higher associated costs. Regulatory bodies determine the prices, which may be subject to periodic updates or revisions.

What Is The Renewal Cost Of The Loan License For Drug Manufacturing?

The loan license for drug manufacturing renewal costs several components. These include a Renewal Fee of ₹6,000 and an Inspection Fee of ₹1,500. Additionally, there is a Late Fee of ₹1,000 per month for overdue payments. 

It’s important to note that the total renewal cost varies according to the duration of the payment delay. Therefore, to determine the exact renewal cost, one must consider the base fees along with any applicable late fees incurred due to delayed payment.

How Can I Renew My Drug Manufacturing Loan License?

To renew your drug manufacturing loan license, follow these steps:

  • Review Expiry Date – Ensure you are aware of the expiry date of your current loan license to initiate the renewal process on time.
  • Prepare Renewal Application – Complete the renewal application form provided by the regulatory authority. Ensure all required information is accurately filled out and up to date.
  • Gather Required Documents – Compile all necessary documents as specified by the regulatory authority for the renewal process. This may include updated site plans, technical staff details, quality control documents, and other relevant paperwork.
  • Submit Application and Fees—Within the stipulated timeframe, Submit the completed renewal application and the prescribed renewal fees to the regulatory authority.
  • Compliance Verification – Regulatory officials may conduct inspections of the manufacturing premises to verify compliance with regulatory standards.
  • Await Approval – Wait for the regulatory authority to review your renewal application. Once approved, your drug manufacturing loan license will be renewed, allowing you to continue operations legally.
  • Maintain Compliance – Throughout the renewal process and beyond, ensure continued adherence to all regulatory requirements and standards to maintain the validity of your license.

You can successfully renew your drug manufacturing loan license by following these steps and fulfilling all regulatory requirements.

What Is The Loan License Agreement?

The Loan License Agreement serves as a legally enforceable contract between the licensor, who retains ownership of the manufacturing facilities, and the licensee, who is granted the privilege to utilize said facilities for drug manufacturing. 

This comprehensive agreement delineates the terms and conditions governing the utilization of the facilities. It encompasses meticulous specifications regarding quality control protocols, adherence to regulatory standards, and the delineation of financial obligations, including royalties or fees. 

The costs affiliated with the Loan License Agreement are subject to variation contingent upon several factors, notably including the duration of the license term and the provision of any supplementary services extended by the licensor.

Who Is Eligible For A Drug Loan License In India?

The eligibility criteria for obtaining a loan license in India vary based on the sought license type. However, standard measures include:

  1. Business Structure – The business must register as a Limited Liability Partnership (LLP), Private Limited Company, or public limited company.
  2. Ownership – Indian citizens or entities must own and control the business.
  3. Net Worth – The business must meet the requirements of RBI’s minimum net worth.
  4. Capital Adequacy – Meeting RBI’s capital adequacy requirements is mandatory.
  5. Business Experience: The business must possess at least three years’ experience in the lending industry.
  6. Background Checks—Owners and directors must undergo background checks to ensure they have no prior criminal or financial history.
  7. Compliance with Laws – Full compliance with applicable laws, including anti-money laundering regulations, is necessary.
  8. Insurance – Adequate insurance coverage is required to protect customers and the business.

It’s crucial to note that specific requirements may vary. Consulting a professional such as a lawyer or financial advisor is advisable to ensure awareness of all eligibility criteria and requirements.

What Is The Difference Between A Loan License And A Repacking License?

A Loan License allows manufacturing using another licensee’s facilities, while a Repacking License permits repackaging drugs without manufacturing. Costs vary based on regulatory requirements and operational factors.

How will ELT Corporate help You get a Loan License For Drug Manufacturing?

ELT Corporate, a top-notch legal firm, simplifies the process of obtaining a loan license for drug manufacturing. Here’s how we make it easy for you:

  1. Expert Guidance: Our experienced team provides expert support.
  2. Documentation Assistance: We help prepare and organize all necessary documents.
  3. Regulatory Compliance: We ensure strict adherence to legal standards.
  4. Application Submission: We handle timely submission of your application.
  5. Follow-up and Communication: We keep you informed and handle queries.
  6. Customized Solutions: Our services are tailored to your unique needs.

With ELT Corporate, obtaining your loan license is stress-free and efficient. Let us handle the complexities while you focus on your business growth.


Which license do we need for third-party manufacturing of medicines/drugs?

For third-party medicine or drug manufacturing, you’ll need a Manufacturing License under the Drugs and Cosmetics Act. Costs vary based on factors like regulations and license duration.

What is Form 24 A in pharma?

Form 24 A is the formal application submitted for the grant or renewal of a loan license. This license pertains to drug manufacturing for sale or distribution, excluding those specifically listed in Schedule C, C(1), and X.

What is Form 25 A in pharma?

Form 25 A is the license granted for the manufacture or distribution of drugs, excluding those specified in Schedules C and C(1) and X.

What is Form 27 A in pharma?

Form 24 A serves as the application for the grant or renewal of a loan license for the manufacturing or distribution of drugs, excluding those listed in Schedule C, C(1), and X.

How long does it take to obtain a Loan License?

Acquiring a loan license for pharmaceutical manufacturing in India typically requires approximately one month. Pharmadocx Consultants expedites and simplifies this process for clients.

What Are Schedule C Drugs According To The Drugs And Cosmetics Act Of 1945?

Schedule C drugs encompass pharmaceuticals containing biological products. Examples include serums, adrenaline, and vitamins.

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