DRUG REGULATORY AFFAIRS

CREADIT -1

Punam A. Malode
Roll no-08

Contract Manufacturing
You should always seek to contract for the manufacture of your product before considering
licensing. Contracting maintains your complete ownership of the product. You simply agree on a
price for manufacturing the product, and the manufacturer delivers the number of units you request.
You will pay cash upfront for this.

Licensing
If you need a large number of units, you should consider licensing. This arrangement puts all the risk on the
manufacturer. Under a licensing agreement, you agree to let a manufacturer make as many copies of your
product as it can, and you get paid a licensing fee. The manufacturer will expect to make money on the
product as well, so you must be prepared to make less on a percentage basis than you would if you retained
full ownership of the rights to the product

LOAN LICENCE

LOAN LICENCE DEFINATION: ‘ A licence issued by a licensing authority to a applicant who

does not have his own arrangements for manufacture but who intends to avail himself of
the manufacturing facilities owned by another licence’’ Condition of a loan licence under
the rules :71 B ,74B, 76B.78 B.

Drug manufacturing can be outsourced from a loan licensee

According to Drugs & Cosmetics Act 1940 and Drugs & Cosmetics Rules 1945, a loan licensee is a
manufacturer of drugs who may be a company or a unit or a body corporate or any other
establishment having no drug manufacturing facilities, but who intends to avail himself
manufacturing facilities owned by a licensee in Form-25.

Loan licensee is responsible for the quality of the drugs manufactured by him. The manufacturer
whose facilities the loan licensee is availing is not responsible for the quality of the drugs
manufactured by a loan licensee in his premises.

A person, whether he is a proprietor, firm or a company, having a license to manufacture for sale or
distribution of drugs on Form-25 under Rule-69A has a right to manufacture his products in his own
manufacturing premises or in the premises of another manufacturer. The loan license is defined
under Rule 69-A and 75-A of the Drugs & Cosmetics Rules 1945.

A loan licensee/person using the premises and equipments and staff of another drug licensee is a
manufacturer within the meaning of 69-A of the Drugs & Cosmetics Rule 1945. Before granting a
loan license the licensing authority shall satisfy himself that the manufacturing unit has adequate
equipments, staff, capacity of manufacturer and facility for testing before undertaking the
manufacture on behalf of the applicants for a loan license.

Under third party agreements the Licensee or Loan Licensee firm/unit, normally renowned and
brand leader, enters into a Memorandum of Understanding (MOU) with the manufacturing
company and the manufacturing company agrees to manufacture generic/patent-proprietary
products of a licensee or loan licensee in the manufacturing facility belonging to the manufacturing
company at agreed terms.

There is no third party manufacturing agreement provision in Act and Rules. But there is no
prohibition for manufacture of drugs on third party agreements by a licensee or loan licensee in the
Drugs & Cosmetics Act 1940 and Drugs & Cosmetics Rules 1945.

LICENSING AUTHORITIES : LICENSING AUTHORITIES Each state government appoints

licensing authorities To issues licence for manufacture,distribution and sale of drugs or cosmetics
for a specified area and also having empowered to cancel or suspend the licence

FORM 24 A: Application for grant or renewal of a loan licence to manufacture drugs other the
schedule C , C1and X drugs FORM 24E: Manufacture for sale of ayurvedic or unani drugs FORM
25 E: loan licence to manufacture for sale ayurvedic or unani drugs FORM 25A: loan licence to
manufacture for sale or for distribution or drugs other than those specified n schedules C,C1 and X
drugs FORM 28A: licence to manufacture for sale or for distribution of drugs specified in schedules
C and C1

FORM27A: Application for grant or renewal of a loan licence to manufacture for distribution of
drugs in schedules C&C1 FORM 32 A: loan licence to manufacture for sale or for distribution

PROCEDURE FOR GETTING LOAN LICENCE : Application for a grant of loan licence
should be made in the prescribed forms 24A,27A with Rs-200/- or 600/- respectively The applicant
has to obtain & submit a letters from the licence holder which facilities are to be availed for the
manufacture. The licence authority must be satisfied that the licence holder should posses the
necessary equipment ,staff capacity for manufacture &facilities for testing for a loan licence.
In case the licence of the person (i.e the licence holder) whose facilities are being utilised by the
licence is cancelled or suspended the loan licence will also be deemed cancelled or suspended.
Licence authority should inspect the each bath ,maintain the records or not for a period of 5 years
from the date of manufacturing The licence should maintain control samples of each bath of drug
manufactured.

PROCEDURE TO OBTAIN DRUG MANUFACTURING LICENCE IN LOAN PREMISES

Stage 1 : Application for grant of Loan Manufacturing Licence(application form in Form 24A ,
27A, 24E respectively )

Documents to be attached along with the application form : Receipt of payment of Fees. Documents
such as partnership-deed, Memorandum and Articles of Association. List of Drugs/Cosmetics to be
manufactured in duplicate. Copy of the letter written to the manufacturer whose premises,
machinery equipments are to be taken on loan. Copy of consent letter of the manufacturer who
gives his premises, Machinery and equipments on loan. Labels and cartons of the Drugs to be
manufactured. In case, the application is for the products covered under C and C (1) category, then
the details of stability data are required.

Stage2 Inspection The application is scrutinized and premises inspected . Stage 3 Grant of Licence
If all conditions as prescribed by the act are complied license is granted

PROCEDURE TO RENEWAL DRUG MANUFACTURING LICENCE IN LOAN

PREMISES (Licenses in Forms 25A, 28A, 25E can be renewed. ) Stage 1 Application for renewal
of Loan Manufacturing Licence (The applicant has to make application in the requisite
form( 24A,27A,24E)
Contract Manufacturing Arrangements for Drugs:
This draft guidance, when finalized, will represent the Food and Drug Administration's (FDA's)
current thinking on this topic. It does not create or confer any rights for or on any person and does
not operate to bind FDA or the public. You can use an alternative approach if it satisfies the
requirements of the applicable statutes and regulations. If you want to discuss an alternative
approach, contact the FDA staff responsible for implementing this guidance. If you cannot identify
the appropriate FDA staff, call the appropriate number listed on the title page of this guidance.

Application for grant of renewal of a loan licence to manufacture

cosmetics for sale.
1. I/We____________________________________of___________________________
_____________________________________________________________________
___hereby apply for the grant/renewal of a loan licence to manufacture
Cosmetics for
sale on the premises situated
at____________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
__________________the following Cosmetics:-
2. Name of
Cosmetics_______________________________________________________
3. The names, qualifications and experience of the expert staff actually
connected with
the manufacture and testing of the specified products in the manufacturing
premises.
4. I/we enclose.
(a) A true copy of a letter from me/us to the manufacturing concern whose
manufacturing capacity is intended to be utilized by me/us.
(b) A true copy of a letter from the manufacturing concerned that they agree to
lend
the service of their expert staff, equipment and premises for that manufacture
of
each item required by me/us and that they will analysis every batch of finished
products and maintain the registers of raw materials, finished products and
reports
of analysis separately on this behalf.
(c) Specimens of labels, cartons of the products proposed to be manufactured.
5. A fee of rupee___________________________________________ has been credited
to Government under the Head of
Account___________________________________________
____________________________________________.
Date____________________ Signature____________
Enter here the name and address of the manufacturing concern where the
manufacture will be

actually carried out and also their licence number.

INTRODUCTION
This guidance describes our current thinking on defining, establishing, and documenting the
responsibilities of each party (or all parties) involved in the contract manufacturing of drugs subject
to Current Good Manufacturing Practice (CGMP). In particular, we describe how parties involved
in the contract manufacturing of drugs can utilize Quality Agreements to delineate their
responsibilities and assure drug quality, safety, and efficacy. This guidance applies to the
commercial manufacturing2 of Active Pharmaceutical Ingredients (APIs or drug substances, or their
intermediates), finished drug products, combination products, and biological drug products.3 4 For
the purposes of this guidance, the term “manufacturing” includes processing, packing, holding,
labeling operations, testing, and operations of the Quality Unit.
1 This draft guidance has been prepared by the Office of Manufacturing and Product Quality in the
Center for Drug Evaluation and Research (CDER) in cooperation with the Center for Biologics
Evaluation and Research (CBER), the Center for Veterinary Medicine (CVM), and the Office of
Regulatory Affairs (ORA) at the Food and Drug Administration (FDA).
2 In this guidance, the term commercial manufacturing refers to manufacturing processes that result
in commercial product, i.e., drug that is intended to be marketed, distributed, and sold or intended to
be sold. For purposes of this guidance, the term commercial manufacturing does not include
research and development activities or the manufacture of material for clinical trials or treatment
Investigational New Drugs (INDs), or for veterinary investigational files (INADs or JINADs).
3 This guidance covers the following categories of drugs: human drugs, veterinary drugs, certain
combination products, biological and biotechnology products, finished products, active
pharmaceutical ingredients (APIs or drug substances, or their intermediates), and drug constituents
of combination drug/device products. This guidance does not cover the following types of products:
Type A medicated articles and medicated feed, medical devices, dietary supplements, or human
tissues intended for transplantation regulated under section 361 of the Public Health Service Act.
4Quality Agreements described in this guidance should also be used by Owners of combination
products as they are subject to requirements under 21 CFR 211, 21 CFR 820, or both (see 21 CFR
4.3). In addition to facilitating compliance with requirements under 21 CFR 211, Quality
Agreements with Contracted Facilities would also be appropriate for demonstrating compliance, in
part, with 21 CFR 820.50 (Purchasing Controls) and with 21 CFR 820.80(b)
.
FDA’s guidance documents, including this guidance, do not establish legally enforceable
responsibilities. Instead, guidance documents describe the Agency’s current thinking on a topic and
should be viewed only as recommendations, unless specific regulatory or statutory requirements are
cited. The use of the word should in Agency guidance documents means that something is
suggested or recommended, but not required.
DEFINING THE “WHO” AND “WHAT” OF CONTRACT MANUFACTURING
Manufacturing pharmaceutical products or materials may involve many discrete unit operations and
activities. The entire process may be conducted by the owner of the drug, or, alternatively, the
owner may engage an outside party or parties to complete the entire manufacturing process, or one
or more discrete operations, under contract. In this document, when discussing the roles and
responsibilities of the parties to such contractual relationships, we will refer to the party that
introduces (or causes the introduction of) a drug into interstate commerce as the Owner of the drug,
whether such drug is covered by a marketing application/license or not.5 In this guidance, outside
entities performing manufacturing operations for the product Owner are called Contracted
Facilities.
Some of the manufacturing operations Contracted Facilities perform for Owners include, but are not
limited to: (1) formulation; (2) fill and finish; (3) chemical synthesis; (4) cell culture and
fermentation, including biological products; (5) analytical testing and other laboratory services; and
(6) packaging and labeling. Owners may benefit from using contracted facilities in many ways,
including enhanced speed and efficiency in specific processes, expertise in a specific technology,
and expanded capacity. In all cases, the Owner is responsible for assuring that drugs introduced for
interstate commerce are neither adulterated nor misbranded as a result of the actions of their
selected Contracted Facilities. All Contracted Facilities must assure compliance with applicable
Current Good Manufacturing Practices for all manufacturing, testing or other support operations
performed to make a drug(s) for the Owner.
This guidance describes how contract manufacturing operations fit within the larger scheme of
pharmaceutical quality systems and presents the Agency’s current thinking on the roles and
responsibilities of entities involved in contract manufacturing arrangements.

ESTABLISHING RESPONSIBILITIES OF CONTRACT MANUFACTURING

Statutory and Regulatory Framework

Under section 301(a) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C.
301(a)), manufacturers are liable for introducing or causing the introduction of adulterated or
misbranded drugs into interstate commerce. Under section 501(a)(2)(B) of the FD&C Act (21
U.S.C. 351(a)(2)(B)), a drug is adulterated if “the methods used in, or the facilities or controls
2 Contains Nonbinding Recommendations Draft—Not for Implementation 70 71 72 73 74 75 76 77
78 79 80 81 82 83 84 85 86 87 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107
108 109 110
Finally, the ICH guidance for industry Q10 Pharmaceutical Quality Systems (ICH Q10) states that
the control and review of any outsourced activities is ultimately the responsibility of the
“pharmaceutical company”—for the purposes of this guidance, the product Owner—, especially in
ensuring that processes are in place to assure the control of activities outsourced to Contracted
Facilities and the quality of purchased materials. ICH Q10 indicates that these processes should
incorporate quality risk management and include the following critical activities:

Before outsourcing manufacturing activities, the Owner should conduct a risk review that evaluates
the extent of controls required for the particular supplier and the particular product or service
covered by the agreement, and based on this risk, assess the oversight appropriate and assess the
suitability and competence of the potential Contracted Facility(ies) to carry out the activity (e.g.,
audits, material evaluations, qualification).

Owners and Contracted Facilities should define the responsibilities and communication processes
for quality-related activities of the involved parties, and document these in a written agreement
between the Owner and Contracted Facility.

Owners should monitor and review the performance of the Contracted Facility and identify and
implement any needed improvements.

All parties performing manufacturing operations should monitor incoming ingredients and materials
to ensure they are from approved sources using the agreed supply chain.8

These principles of quality management extend to contract manufacturing, and FDA expects parties
engaged in contract manufacturing operations to implement quality management practices. This
guidance is intended to build upon the quality management principles and recommendations
outlined above and illustrate key points in developing and executing contracted manufacturing
arrangements.
DOCUMENTING CONTRACT MANUFACTURING ARRANGEMENTS
When an Owner seeks the services of a Contracted Facility to perform all or part of the
manufacturing, processing, packing, holding, or testing of a drug product, CGMP regulations (i.e.,
21 CFR 200.10(b) and 21 CFR 211.22(a)) hold the Owner’s Quality Unit ultimately responsible for
approving and rejecting drug product manufactured by the contract manufacturer.9 Further, under
21 CFR 210.2(b), the Contracted Facility must comply with CGMP regulations that apply to the
operations in which that Contracted Facility is engaged. Although the CGMP regulations do not
explicitly require Owners and Contracted Facilities to document their respective responsibilities in
contract manufacturing arrangements, the regulations do require that Quality Unit responsibilities
and procedures be in writing (21 CFR 211.22(d)). FDA believes that implementing a written
Quality Agreement facilitates compliance with § 211.22(d). Therefore, FDA recommends that
Owners and Contracted Facilities establish a written Quality Agreement to record their respective
responsibilities in contract manufacturing arrangements. The following sections describe the
Agency’s current thinking regarding the documentation of agreed upon responsibilities in a Quality
Agreement, as well as the basic elements of a Quality Agreement.
FDA’s guidance for industry Cooperative Manufacturing Arrangements for Licensed Biologics
provides additional information regarding the responsibilities of licensed biological product
manufacturers and those of contract manufacturers.
7 FDA’s guidance for industry Quality Systems Approach to Pharmaceutical CGMP Regulations at
14.
used for, its manufacture, processing, packing, or holding do not conform to or are not operated or
administered in conformity with current good manufacturing practice to assure that such drug meets
the requirements of this chapter as to safety and has the identity and strength, and meets the quality
and purity characteristics, which it purports or is represented to possess.” .
Additionally, drug products may be deemed misbranded under a variety of provisions (section 502
of the FD&C Act (21 U.S.C. 352)). Because the Agency considers contractors an “extension of the
manufacturer’s own facility,” both Owners and Contracted Facilities are responsible for ensuring
that their products are not adulterated or misbranded (21 CFR 200.10). As amended, the Act also
specifies that current good manufacturing practice (CGMP) includes the implementation of quality
oversight and controls over the manufacture of drugs, including the safety of raw materials,
materials used in drug manufacturing, and finished drug products. See FDCA, as amended by the
Food and Drug Administration Safety and Innovation Act (Pub.L. 112-144, Title VII, section 711).
With respect to contract manufacturing, both Owners and Contracted Facilities must also work
together to establish and maintain quality oversight of contracted manufacturing operations and the
materials produced under contracted manufacturing arrangements.

Contract Manufacturing and Quality Management: Existing Guidance

Various Agency guidance documents indicate how quality management principles relate to contract
manufacturing operations. These important guidance documents describe some of the roles and
responsibilities of product Owners and Contracted Facilities.6 The ICH guidance for industry Q7
Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients (ICH Q7)
recommends that manufacturers evaluate contractors for CGMP compliance both by establishing a
formal agreement that delineates CGMP responsibilities, including quality measures, and also by
auditing the contractor’s facilities. Product Owners may hire another party “to perform the
operational processes that are part of a manufacturer’s inherent responsibilities” and “[Quality]
systems call for quality agreements (contracts) that clearly describe the materials or service, quality
specification responsibilities, and communication mechanisms.”7 The ICH guidance for industry
Q9 Quality Risk Management (ICH Q9) recommends a comprehensive evaluation of suppliers and
contract manufacturers through auditing and implementing supplier quality agreements.