What is Pharmaceutical Contract Manufacturing?

 Pharmaceutical contract manufacturing involves outsourcing the production of pharmaceutical products to third-party manufacturers.

Through a contract manufacturing arrangement for pharmaceutical products, businesses can produce health supplements, vitamins, creams, and tablets without investing in the equipment and infrastructure required for in-house production.

 A Guide To Pharmaceutical Contract Manufacturing

Pharmaceutical contract manufacturing is an arrangement where a business contracts a third-party manufacturer to produce a specific type and quantity of pharmaceutical products instead of managing the production in-house.

Contract manufacturing can be used to produce:

• Health supplements - mineral tablets, vitamin gummies, Omega-3 oil capsules, dietary supplements, probiotics

• Sports nutrition products - energy bars, electrolyte powders

• Creams and gels - topical formulations for skincare, serums, and lotions

• Over-the-counter medicines

The pharmaceutical manufacturing industry is highly regulated. Production facilities for pharmaceuticals need to meet strict criteria under the Good Manufacturing Practice standard, including temperature and humidity controls, proper sanitation, specialised equipment, and documentation of all processes.

Small to medium businesses that lack the capital to invest in these resources work with contract manufacturers to create the products needed for sale.

Each contract manufacturer offers a different level of service - some only handle production, while others provide complementary services such as research and development, quality testing, and packaging. 

 How Pharmaceutical Contract Manufacturing Arrangements Work

 Request For Quote

Businesses approach pharmaceutical contract manufacturers with a Request For Quote (RFQ). The RFQ contains information about the type of product, delivery format, ingredients, and desired quantity. The manufacturer reviews the RFQ and initiates a consultation to discuss the feasibility of the product, minimum order quantities (MOQs), and production timeline.

 Ingredient Sourcing

The required ingredients are sourced by the contract manufacturer across a network of suppliers. Manufacturers ensure that the raw materials meet strict quality and regulatory standards, and test all ingredients before use in production.

 Product Development and Testing

The contract manufacturer conducts research and development to create the specific product. The formulation is refined through bench testing to ensure the final product meets both safety standards and consumer expectations.

 Bulk Production

Production will begin once the formula is finalised. The manufacturer operates under GMP standards, ensuring a consistent quality for each batch. Throughout production, quality assurance processes review production batches to prevent contamination.

 Labelling and Registration

 Contract manufacturers often assist businesses in preparing the required documents for product registration with the TGA. This is a critical step in obtaining the proper labelling for the product to be sold locally or shipped and sold overseas.

 Packaging and Distribution

Pharmaceutical products are then packaged with the business's branding and prepared for distribution to retailers, pharmacies, or directly to customers.

 

Benefits of Pharmaceutical Contract Manufacturing

 Cost Efficiency

Businesses can avoid the capital expenses of buying specialised production equipment, hiring additional skilled staff, and establishing production facilities. This significantly reduces the cost of production, allowing businesses to enjoy higher margins when selling the finished product.

 

Faster Time-To-Market

Contract manufacturers have streamlined production processes, allowing products to be created, registered, and ready for sale sooner. White-label products, which are preformulated by the manufacturer, have short production timelines that enable businesses to launch into the market in a reasonably fast turn-around.

 Product Development Expertise

Contract development and manufacturing organisations (CDMOs) have in-house teams of nutritionists, scientists, and pharmacists for custom product formulation and testing. Businesses can leverage the expertise provided by manufacturers to create a differentiated product that appeals to untapped consumer markets.

 Regulatory Support

Pharmaceutical manufacturers support businesses in obtaining the required registration and approval from the TGA, minimising the risks associated with regulatory compliance when producing a new pharmaceutical product.

 Consistent Quality

Contract manufacturers have quality assurance processes in place to ensure a consistent level of quality across all batches of the finished product, resulting in a higher overall product quality.

 What to Look for in a Pharmaceutical Contract Manufacturer

 CMO vs CDMO

There are two main types of pharmaceutical contract manufacturers - contract manufacturing organisations (CMOs) and contract development and manufacturing organisations (CDMOs). CMOs focus solely on production, while CDMOs provide more comprehensive support, covering product development and packaging.

CMOs are tailored to pharmaceutical companies looking to outsource production, while CDMOs support businesses that lack the internal capability to create custom-formulated products.

 Licensing Credentials

Pharmaceutical contract manufacturers should have GMP-compliant production facilities. Work with a manufacturer that holds AUST L and AUST R licensing: AUST L-licensed facilities are able to produce complementary medicines, such as vitamins or herbal supplements, while AUST R-licensed facilities are required to produce registered medicines, including prescription medication.

 White Label vs Private Label

White label and private-label manufacturing offer two different types of pharmaceutical manufacturing services. White label services supply pre-formulated products that businesses can sell under their own brand, while private-label services involve the creation of a custom formulation according to the business's specifications.

 

Pharmaceutical Contract Manufacturing in Australia

Lipa Pharmaceuticals is Australia's leading pharmaceutical contract manufacturer for vitamins, pharmaceuticals, and health food supplements.

We have an end-to-end service model that covers market research to identify opportunities for product development, the development and testing of the product formula, bulk production of the finalised product, labelling, regulatory compliance support, and packaging.

We also partner with pharmaceutical companies to supply high-quality products based on established formulas. Our comprehensive technology transfer framework ensures every aspect of production adheres to the original standard of quality for the product.