- The Indian pharmaceutical sector is globally recognized for its capacity to deliver safe, effective, and affordable medicines. Within this framework, certain categories of drugs—such as Large Volume Parenterals (LVPs), Sera, Vaccines, and recombinant DNA (r-DNA) derived drugs—are of exceptional importance due to their critical role in public health.
- Given the high degree of technical precision and regulatory oversight required for their manufacture, the loan license mechanism under the Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945 offers an efficient pathway for entities seeking to enter this domain without establishing independent manufacturing infrastructure.
Scope and Applicability
The loan license framework applies to the manufacture of:
- Large Volume Parenterals (LVPs)
- Sera
- Vaccines
- Recombinant DNA (r-DNA) derived drugs
What is a Loan License?
A Loan License is an authorization issued by the State Licensing Authority (SLA) that permits a firm or individual (the applicant) without its own manufacturing facility to utilize the infrastructure of a manufacturer who already holds a valid drug manufacturing license.
- The facility must be approved, GMP-compliant, and legally licensed for manufacturing the intended category of drugs.
- Both the loan licensee and the actual manufacturer share responsibility for the quality, safety, and efficacy of the products manufactured.
- This mechanism helps bridge gaps between research, innovation, and commercial production by allowing non-manufacturing companies to bring products to the market.
Legal Basis
- Drugs and Cosmetics Act, 1940
- Drugs and Cosmetics Rules, 1945
- Application for loan license: Form 24-B
- Grant of license: Form 25-B
- Applicable to Large Volume Parenterals, Sera, Vaccines, and r-DNA derived drugs, excluding Schedule X drugs (psychotropic/narcotic substances with high misuse potential).
Who Can Apply?
- Pharmaceutical companies without their own manufacturing plant.
- Research-based biotech firms developing r-DNA derived drugs or vaccines.
- Marketing authorization holders (MAH) who intend to outsource manufacturing.
- Start-ups and SMEs in the healthcare sector looking to commercialize innovations without heavy infrastructure investment.
Application Process for Loan License
Step 1: Filing of Application
- Application is submitted in Form 24-B to the SLA of the state where the manufacturing site is located.
- Required government fees must be paid via challan/online mode.
Step 2: Submission of Documents
The following documents are generally required:
1. Duly filled Form 24-B signed by the applicant.
2. Covering letter with details of products and purpose.
3. Copy of agreement between applicant and manufacturer.
4. Copy of valid manufacturing license of the facility.
5. Details of technical staff and qualified person-in-charge.
6. Site master file and premises layout plan.
7. List of products to be manufactured with formulation details.
8. Fee payment proof.
9. Certificate of analysis/test reports (if applicable).
Step 3: Inspection
- The SLA deputes Drug Inspectors to visit and verify the manufacturing premises.
- Compliance with Good Manufacturing Practices (Schedule M) and biosafety standards is checked.
- Documentation and agreements are verified.
Step 4: Approval & Issuance of License
- Once the site and documentation are found compliant with regulatory norms, the SLA grants the loan license in Form 25-B.
- The license clearly specifies the approved products and remains valid for a standard period of 5 years, subject to renewal
Conditions of Loan License
The licensee must ensure:
- Batch testing & quality assurance: Every batch manufactured must undergo QC testing in compliance with pharmacopeial standards.
- Record maintenance: Manufacturing and testing records must be properly maintained and produced on request.
- Joint responsibility: Both the loan licensee and manufacturer are liable for quality failures or non-compliance.
- Labeling & packaging: Must clearly display manufacturing and license details.
- Periodic renewals: Application for renewal should be made before expiry, with updated documents.
Timelines & Fees
- Processing Time: Typically 60–90 days, depending on SLA efficiency and inspection scheduling.
- Government Fees: ₹6,000 for loan license (Form 24-B) + additional product-wise fees as per Drugs Rules.
- Renewal: Same fee structure applies; renewal must be sought before expiry.
Benefits of Loan License in Biopharma Sector
- Cost-effective entry: Enables firms to launch products without investing in manufacturing plants.
- Access to advanced facilities: Ensures manufacturing is carried out in established GMP-certified units.
- Promotes innovation: Especially useful for vaccine and r-DNA based product developers.
- Public health benefits: Ensures faster availability of critical medicines.
- Encourages partnerships: Between marketing firms and manufacturers, enhancing industry collaboration.
Compliance and Penalties
- Any violation of conditions (non-compliance with GMP, falsification of records, substandard products) may result in suspension or cancellation of the license.
- Offenders may also face penalties under the Drugs and Cosmetics Act, including fines and imprisonment, depending on the severity.
Conclusion
- The Loan License for manufacturing Large Volume Parenterals, Sera, Vaccines, and r-DNA derived drugs (excluding Schedule X drugs) serves as a crucial regulatory pathway for companies seeking to commercialize life-saving medicines without setting up manufacturing units of their own.
- By following the prescribed procedure, ensuring GMP compliance, and maintaining transparency in documentation, applicants can leverage this system to bring critical products to market efficiently and responsibly.
- In today’s biopharma landscape, the loan license model not only fosters innovation but also strengthens India’s position as a global leader in pharmaceutical manufacturing and supply of essential biologics.
For more details, please visit Metacorp Pharma Licensing
807 627 2381
