pharmaceutical manufacturing plant business plan

Pharmaceutical Business Plan Template

Written by Dave Lavinsky

Pharmaceutical Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their pharmaceutical companies.

If you’re unfamiliar with creating a pharmaceutical business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a pharmaceutical business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Pharmaceutical Business Plan?

A business plan provides a snapshot of your pharmaceutical business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Pharmaceutical Company

If you’re looking to start a pharmaceutical business or grow your existing company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your pharmaceutical company to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Pharmaceutical Businesses

With regards to funding, the main sources of funding for a pharmaceutical business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for pharmaceutical businesses.

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How to write a business plan for a pharmaceutical company.

If you want to start a pharmaceutical company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your pharmaceutical business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of pharmaceutical business you are running and the status. For example, are you a startup, do you have a company that you would like to grow, or are you operating pharmaceutical companies in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the pharmaceutical industry.
• Discuss the type of pharmaceutical business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of pharmaceutical company you are operating.

For example, you might specialize in one of the following types of pharmaceutical businesses:

• Generic Pharmaceutical Manufacturing : this type of pharmaceutical business develops prescription or over-the-counter drugs products that do not have patent protection.
• Vitamin & Supplement Manufacturing: this type of pharmaceutical company primarily develops products that contain ingredients intended to supplement the diet.
• Brand Name Pharmaceutical Manufacturing: this type of pharmaceutical business engages in significant research and development of patent-protected prescription and over-the-counter medications.

In addition to explaining the type of pharmaceutical business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of patents awarded, the extent of your product portfolio, reaching X number of distributors under contract, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the pharmaceutical industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the pharmaceutical industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the pharmaceutical industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your pharmaceutical company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: healthcare providers, chain pharmacies, independent retailers, and consumers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of pharmaceutical business you operate. Clearly, individuals would respond to different marketing promotions than hospitals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other pharmaceutical businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes imported alternatives, herbal remedies, or customers’ nutritional self-care. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of products do they manufacture?
• What are their research and development capabilities?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide product development?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a pharmaceutical company, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of pharmaceutical business that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you manufacture patent-protected prescription medications, or a range of vitamins?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your pharmaceutical business. Document where your company is situated and mention how the site will impact your success. For example, is your pharmaceutical company located in an industrial district, near a major medical and/or scientific hub, or near input markets? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your pharmaceutical marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Advertise in trade publications
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your pharmaceutical company, including meeting with potential customers, creating and distributing product information, developing and manufacturing products, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to produce your Xth product, or when you hope to reach $X in revenue. It could also be when you expect to expand your pharmaceutical business to a new city.  

Management Team

To demonstrate your pharmaceutical company’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing pharmaceutical businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a pharmaceutical business or successfully running a R&D company.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions including your sales projections. For example, will you manufacture a line of general sales products, or will you specialize in manufacturing controlled drugs? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your pharmaceutical company, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a pharmaceutical company:

• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your facility blueprint or a list of products you manufacture.  

Writing a business plan for your pharmaceutical business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the pharmaceutical company industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful pharmaceutical company.  

Pharmaceutical Business Plan Template FAQs

What is the easiest way to complete my pharmaceutical business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your pharmaceutical business plan.

How Do You Start a Pharmaceutical Business?

Starting a pharmaceutical business is easy with these 14 steps:

• Choose the Name for Your Pharmaceutical Business
• Create Your Pharmaceutical Business Plan
• Choose the Legal Structure for Your Pharmaceutical Business
• Secure Startup Funding for Your Pharmaceutical Business (If Needed)
• Secure a Location for Your Business
• Register Your Pharmaceutical Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Pharmaceutical Business
• Buy or Lease the Right Pharmaceutical Business Equipment
• Develop Your Pharmaceutical Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Pharmaceutical Business
• Open for Business

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Other Helpful Business Plan Articles & Templates

Pharmaceutical Company Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Medical and Healthcare » Pharmacy

Are you about starting a pharmaceutical company? If YES, here is a complete sample pharmaceutical business plan template & feasibility report you can use for FREE .

If you are pharmacist and you are certain that you have a winning formula when it comes to producing effective generic drugs; drugs / medicine that has been tested and proven to meet the requirement for such products, then you should consider launching your own generic pharmaceutical manufacturing company.

It is a business that is still pretty much open for investors to come and compete for the available market in the country you intend launching the business.

A Sample Pharmaceutical Company Business Plan Template

1. industry overview.

The Generic pharmaceutical and medicine manufacturing companies primarily develop prescription and over-the-counter drug products that are used to prevent or treat illnesses in humans or animals.

Generic drugs are produced and distributed without patent protection, and industry operators are not significantly engaged in the research and development of new drugs.

It is important to mention that the generic pharmaceutical manufacturing industry does not include manufacturers of nutritional supplements, cosmetic beauty products or similar products.

All over the world, the pharmaceutical industry is highly regulated. This is so because the devastating effect of fake drugs or drug abuse can’t be quantified.

As a matter of fact, there are several universal laws and regulations that govern the patenting, testing, safety, efficacy and marketing of drugs.

For example, in the united states, new pharmaceutical products must be approved by the Food and Drug Administration (FDA) as being both safe and effective before they can be allowed to go into the market.

Statistics has it that global spending on prescription drugs grew to a whopping sum of $954 billion in 2011 and The United States accounts for more than a third of the global pharmaceutical market, with an estimate of $340 billion in annual sales

The Generic Pharmaceutical Manufacturing Industry is a thriving sector of the economy of countries like India, China, united kingdom , Germany and the United States of America.

Statistics has it that in the united states alone, the industry generates a whooping sum of well over $66 billion annually from more than 1,203 registered and licensed generic pharmaceutical manufacturing companies scattered all around the United States of America.

The industry is responsible for the employment of well over 67,699 people. Experts project the industry to grow at a 4.1 percent annual rate from 2011 to 2016. Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd. have the lion share of the available market in the Generic Pharmaceutical manufacturing industry in the United States of America.

A close study of the Generic Pharmaceutical Manufacturing industry shows that the industry is expanding rapidly. This is due to the demand for the industry’s products by the aging population with more chronic illnesses.

So also, with the regulatory provisions of the Patient Protection and Affordable Care Act expand consumer access to prescription insurance and provide increased opportunities for product development.

Going forward, the industry revenue growth is expected to outpaced revenue growth for the Brand Name Pharmaceutical Manufacturing industry.

A large number of brand name drugs manufacturers lost patent protection for blockbuster drugs beginning in 2010; demand for generics subsequently grew, as consumers demanded affordable versions of these high-profile products. These trends are expected to continue in the next five years.

A recent report published by IBISWORLD shows that the Generic Pharmaceutical Manufacturing industry has a low level of concentration, with the top four companies accounting for 30.2 percent of industry revenue in 2016.

Having a large operation as a generic manufacturer does not offer the same advantages as it does for brand name producers.

The report further stated that generic drug manufacturers can be smaller because the cost of research and development is significantly lower than it is for brand name companies; however, operators can still benefit from economies of scale through savings on administrative and capital costs.

Moreover, a company’s presence in both generic and brand drug markets can buffer company revenue against volatility in price or demand for any one specific drug.

The bottom line is that; the Generic Pharmaceutical Manufacturing industry is still very much open for new entrant; the competition within the industry is not as stiff as similar industry.

If your product is good, it can gain fair share of the available market in any country or region you intend launching the business.

2. Executive Summary

Harry Tancredo® Pharmaceuticals, LLC is a licensed and standard generic pharmaceutical manufacturing company that will be located in an industrial area in Concord – New Hampshire.

We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of a long-term renewal on an agreed terms and conditions that is favorable to us.

The facility has government approval for the kind of production business we want to run and the facility is easily accessible and we are deliberate about that because we want to facilitate easy movement of raw materials (chemicals and packaging containers) and finished products (drugs / medicines).

Harry Tancredo® Pharmaceuticals, LLC is in the generic pharmaceutical manufacturing industry to engage in developing and producing generic drugs, marketing and distributing generic drugs and gaining regulatory approval for generic drugs.

We will manufacture standard and effective pharmaceutical products such as mental health and lipid regulators, anti diabetics and respiratory, pain and antibacterial, nervous system disorders and antihypertensive, antiulcerants and thyroid, dermatological and hormonal contraceptives, and ADHD and anticoagulants.

We are also in business to make profits at the same to give our customers value for their money; we want to give people and businesses who patronize our pharmaceutical products the opportunity to be part of the success story of our brand.

We are aware that there are several big scale and small scale generic pharmaceutical manufacturing companies scattered all around the United States and Canada whose products can be found in every nooks and crannies of The United States and Canada, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that can easily accept our products and brand.

We ensured that our facility is easy to locate and we have mapped out plans to develop a far-reaching distribution network for wholesalers of pharmaceutical products all around Concord – New Hampshire and throughout the United States of America.

Much more than producing quality, effective and safe generic pharmaceutical products, our customer care is going to be second to none.

We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they purchase any of our product and also to become our loyal customers and ambassadors.

Harry Tancredo® Pharmaceuticals, LLC will ensure that all our customers (wholesale distributors) are given first class treatment whenever they visit our factory.

We have a CRM software that will enable us manage a one on one relationship with our customers (wholesale distributors) no matter how large the numbers of our customer base may grow to.

We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them. Harry Tancredo® Pharmaceuticals, LLC is family business that will be owned by Harry Tancredo and his immediate family members.

Harry Tancredo who is the Chief Executive Officer of the Company is Graduate of Pharmacology and he holds a Master’s Degree in Business Management (MBA).

He has well over 12 years of experience working in related industry as a senior production manager prior to starting Harry Tancredo® Pharmaceuticals, LLC. He will be working with a team of professionals to build the business and grow it to enviably height.

3. Our Products and Services

Harry Tancredo® Pharmaceuticals, LLC is going to run a standard and licensed generic pharmaceutical manufacturing company whose products will not only be sold in Hartford – Connecticut but also throughout the United States of America and Canada.

We are in the generic pharmaceutical manufacturing industry to make profits and also to give our customers value for their money.

We will ensure that we do all that is permitted by the law in the United States of America to accomplish our business goal and objective. These are some of the products that we will be offering;

• Developing and producing generic drugs
• Marketing and distributing generic drugs
• Gaining regulatory approval for generic drugs
• Mental health and lipid regulators
• Anti-diabetics and respiratory
• Pain and antibacterial
• Nervous system disorders and antihypertensive
• Anti-ulcerants and thyroid
• Dermatological and hormonal contraceptives
• ADHD and anticoagulants

4. Our Mission and Vision Statement

• Our vision is to establish a standard generic pharmaceutical manufacturing Company whose products will be not only be sold in Concord – New Hampshire, but also throughout the United States of America and Canada.
• Our mission is to establish a standard and world class generic pharmaceutical manufacturing Company / brand that in our own capacity will favorably compete with leaders in the industry.
• We want to build a business that will be listed amongst the top 20 generic pharmaceutical manufacturing brands in the United States of America and Canada.

Our Business Structure

Harry Tancredo® Pharmaceuticals, LLC is a business that is established with the aim of competing favorably with other leading generic pharmaceutical product brands in the industry.

This is why we will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)

Production / Plant Manager

Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

• Machine Operators
• Accountants / Cashiers

Distribution Truck Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization.
• Responsible for overseeing the smooth running of the pharmaceutical production plant
• Part of the team that determines the quantity and quality of pharmaceutical products that are to be produced
• Maps out strategy that will lead to efficiency amongst workers in the plant
• Responsible for training, evaluation and assessment of plant workers
• Ensures that the steady flow of both raw materials to the plant and easy flow of finished products through wholesale distributors to the market
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Ensures that the plant meets the expected safety and health standard at all times.
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Oversees the smooth running of the daily office and factory activities.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Responsible for the purchase of raw materials and packaging materials
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Ensures that the organization operates within stipulated budget.
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Accountant / Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distribute mails in the organization
• Handles any other duties as assigned by the line manager

Production Workers / Machine Operators:

• Responsible for preparing, blending, compounding and packaging pharmaceutical products
• Handle labeling of pharmaceutical products
• Operate machines used in the manufacturing mental health and lipid regulators, ant diabetics and respiratory, pain and antibacterial, nervous system disorders and antihypertensive, antiulcerants and thyroid, dermatological and hormonal contraceptives, and ADHD and anticoagulants
• Assist in packaging and loading pharmaceutical products into distribution trucks
• Assists in loading and unloading pharmaceutical products
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
• Assists the transport and logistics manager in planning their route according to a delivery schedule.
• Local-delivery drivers may be required to sell products or services to pharmaceutical stores and businesses on their route, obtain signatures from recipients and collect cash.
• Transports finished goods and raw materials over land to and from manufacturing plants or retail and distribution centers
• Inspect vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

6. SWOT Analysis

We are quite aware that there are several generic pharmaceutical manufacturing companies both large and small in the United States of America and Canada which is why we are following the due process of establishing a business so as to compete favorable with them.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Harry Tancredo® Pharmaceuticals, LLC employed the services of an expert HR and Business Analyst with bias in start – up business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Harry Tancredo® Pharmaceuticals, LLC;

Part of what is going to count as positives for Harry Tancredo® Pharmaceuticals, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, our state of the art machines and equipment, the wide varieties of pharmaceutical products that we produce, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

A major weakness that may count against us is the fact that we are a new generic pharmaceutical manufacturing company in the United States and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business especially when big names like Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd. et al are already determining the direction of the market both in the United States and in the global market.

• Opportunities:

The opportunities available to generic pharmaceutical manufacturing companies with a wide range of products are enormous. This is due to the fact that almost all Americans and people from all over the world take drugs / medicine for different reasons.

As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for pharmaceutical products and also to create our own new market. We know that it is going to requires hard work, and we are determined to achieve it.

We are quite aware that just like any other business, one of the major threats that we are likely going to face are economic downturn and unfavorable government policies . It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new generic pharmaceutical manufacturing company in same location where ours is located.

7. MARKET ANALYSIS

• Market Trends

A close study of the trends in the Generic Pharmaceutical Manufacturing industry shows that the industry is expanding rapidly. This is due to the demand for the industry’s products by the aging population with more chronic illnesses.

So also, with the regulatory provisions of the Patient Protection and Affordable Care Act expand consumer access to prescription insurance and provide increased opportunities for product development. Going forward, the industry revenue growth is expected to outpaced revenue growth for the Brand Name Pharmaceutical Manufacturing industry.

Lastly, the generic pharmaceutical manufacturing industry is the adoption of eco – friendly approach towards the production and packaging of its products. As a matter of fact, the industry’s adoption of eco-friendly practices will likely persuade environmentally conscious consumers to buy its products, while increasing operators’ efficiency.

8. Our Target Market

When it comes to selling pharmaceutical products, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who resides in our target market locations.

In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to engage in developing and producing generic drugs, marketing and distributing generic drugs and gaining regulatory approval for generic drugs. Hence our target markets are;

• Health Facilities
• Pharmaceutical Products Wholesalers
• Retail Pharmacy Stores
• Everybody in our target market location

Our competitive advantage

A close study of the generic pharmaceutical manufacturing industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other generic pharmaceutical manufacturing companies in New Hampshire and throughout the United States and Canada.

Harry Tancredo® Pharmaceuticals, LLC is launching a standard generic pharmaceutical product brand that will indeed become the preferred choice of residence of Concord – New Hampshire and every city where our generic pharmaceutical product will be retailed.

Part of what is going to count as competitive advantage for Harry Tancredo® Pharmaceuticals, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, our state of the art pharmaceutical production machines and equipment, the wide varieties of generic pharmaceutical products that we produce our large and far reaching national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups generic pharmaceutical manufacturing companies) in the generic pharmaceutical manufacturing industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Harry Tancredo® Pharmaceuticals, LLC is established with the aim of maximizing profits in the generic pharmaceutical manufacturing industry in both the United States of America and Canada and we are going to go all the way to ensure that we do all it takes to sell a wide range of generic pharmaceutical products to a wide range of customers.

Harry Tancredo® Pharmaceuticals, LLC will generate income by selling the following pharmaceutical products;

• Antiulcerants and thyroid

10. Sales Forecast

One thing is assured when it comes to generic pharmaceutical manufacturing company, if your products are well – packaged and branded and if your production plant is centrally positioned and easily accessible, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Concord – New Hampshire and every city where our generic pharmaceutical products will be sold and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the generic pharmaceutical manufacturing industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Concord – New Hampshire.

Below is the sales projection for Harry Tancredo® Pharmaceuticals, LLC, it is based on the location of our business and other factors as it relates to small scale and medium scale generic pharmaceutical manufacturing company start – ups in the United States;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $550,000
• Third Fiscal Year-: $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor manufacturing same generic pharmaceutical products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Harry Tancredo® Pharmaceuticals, LLC and also the kind of generic pharmaceutical products we will produce, we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market in our target market locations.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time and also for our products to favorable compete with other leading generic pharmaceutical manufacturing brands in the United States of America and Canada.

We hired experts who have good understanding of the generic pharmaceutical manufacturing industry to help us develop

In other to continue to be in business and grow, we must continue to sell our generic pharmaceutical products to the available market which is why we will go all out to empower or sales and marketing team to deliver our corporate sales goals.

In summary, Harry Tancredo® Pharmaceuticals, LLC will adopt the following sales and marketing approach to sell our generic pharmaceutical products;

• Introduce our generic pharmaceutical products brand by sending introductory letters to pharmacy stores, hospitals, residence, pharmaceutical merchants, retailers and other stakeholders in Concord – New Hampshire and other cities both in the United States of America and Canada
• Open our generic pharmaceutical manufacturing company with a party so as to capture the attention of residence who are our first targets
• Engage in road show in targeted communities from time to time to sell our products
• Advertise our products in community based newspapers, local TV and radio stations
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our generic pharmaceutical product brands
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

In spite of the fact that our generic pharmaceutical manufacturing plant is a standard one with a wide range of pharmaceutical products that in few years from now will favorably compete with other leading brands in the industry like Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd.

We will still go ahead to intensify publicity for all our products and brand. We are going to explore all available means to promote Harry Tancredo® Pharmaceuticals, LLC.

Harry Tancredo® Pharmaceuticals, LLC has a long-term plan of distributing our generic pharmaceutical products in various locations all around the United States of America and Canada which is why we will deliberately build our brand to be well accepted first in Concord – New Hampshire before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for selling our products but to also effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Harry Tancredo® Pharmaceuticals, LLC;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our generic pharmaceutical product brand
• Install our Bill Boards on strategic locations all around major cities in the United States of America and Canada
• Engage in road show from time to time in targeted communities
• Distribute our fliers and handbills in target areas
• Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our products.
• Ensure that our products are well branded and that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized and well branded.

12. Our Pricing Strategy

When it comes to pricing for products such as generic pharmaceutical products, there are two sides to the coin. We are aware of the pricing trend in the generic pharmaceutical manufacturing industry which is why we have decided to produce various sizes of pharmaceutical products as regulated by the industry.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our products are sold a little bit below the average prices of various generic pharmaceutical product brands in the United States of America.

We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our generic pharmaceutical product brands.

• Payment Options

The payment policy adopted by Harry Tancredo® Pharmaceuticals, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Harry Tancredo® Pharmaceuticals, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for generic pharmaceutical product purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for the purchase of our products.

13. Startup Expenditure (Budget)

Starting a standard generic pharmaceutical manufacturing company is indeed a capital – intensive business. This is so because the amount required in setting up a generic pharmaceutical production plant is not a piecemeal. The bulk of the start – up capital will be sent on leasing or acquiring a facility and also in purchasing mixing, blending, compounding and packaging equipment.

Aside from that, you are not expected to spend much except for purchase and servicing of distribution trucks, purchasing raw materials, paying of your employees and utility bills. These are the key areas where we will spend our start – up capital;

• The total fee for registering the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
• Marketing promotion expenses for the grand opening of Harry Tancredo® Pharmaceuticals, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
• The cost for hiring Business Consultant – $2,500.
• The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
• The cost for construction of a standard generic pharmaceutical production plant – $100,000.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• The cost for start-up inventory (mixing, blending, compounding and packaging equipment, raw materials, and packaging materials et al) – $80,000
• Cost for store equipment (cash register, security, ventilation, signage) – $13,750
• Cost of purchase of distribution vans – $60,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• The cost for our opening party – $10,000
• Miscellaneous – $10,000

We would need an estimate of $500,000 to successfully set up our generic pharmaceutical manufacturing company in Concord – New Hampshire. Please note that this amount includes the salaries of all the staff for the first 3 month of operation.

Generating Funds / Startup Capital for Harry Tancredo® Pharmaceuticals, LLC

Harry Tancredo® Pharmaceuticals, LLC is a family business that is owned and financed by Harry Tancredo and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sell of stocks
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of any business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Harry Tancredo® Pharmaceuticals, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our generic pharmaceutical products a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Harry Tancredo® Pharmaceuticals, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and construction of standard generic pharmaceutical production plant: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members and friends: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of the Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with vendors – pharmacy stores, hospitals, pharmaceutical products wholesale suppliers / merchants: In Progress

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• Drug Prescription Delivery Business Plan [Sample Template]

How to write a business plan for a pharmaceutical manufacturer?

Putting together a business plan for a pharmaceutical manufacturer can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing pharmaceutical manufacturer, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for a pharmaceutical manufacturer?

What information is needed to create a business plan for a pharmaceutical manufacturer.

• How do I build a financial forecast for a pharmaceutical manufacturer?

The written part of a pharmaceutical manufacturer business plan

• What tool should I use to write my pharmaceutical manufacturer business plan?

Having a clear understanding of why you want to write a business plan for your pharmaceutical manufacturer will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a pharmaceutical manufacturer business plan.

To have a clear roadmap to grow the business

Running a small business is tough! Economic cycles bring growth and recessions, while the business landscape is ever-changing with new technologies, regulations, competitors, and consumer behaviours emerging constantly.

In such a dynamic context, operating a business without a clear roadmap is akin to driving blindfolded: it's risky, to say the least. That's why crafting a business plan for your pharmaceutical manufacturer is vital to establish a successful and sustainable venture.

To create an effective business plan, you'll need to assess your current position (if you're already in business) and define where you want the business to be in the next three to five years.

Once you have a clear destination for your pharmaceutical manufacturer, you'll have to:

• Identify the necessary resources (human, equipment, and capital) needed to reach your goals,
• Determine the pace at which the business needs to progress to meet its objectives as scheduled,
• Recognize and address the potential risks you may encounter along the way.

Engaging in this process regularly proves advantageous for both startups and established companies. It empowers you to make informed decisions about resource allocation, ensuring the long-term success of your business.

To get visibility on future cash flows

If your small pharmaceutical manufacturer runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your pharmaceutical manufacturer's future cash flows.

So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.

The good news is that your pharmaceutical manufacturer business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.

To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.

By diligently monitoring your pharmaceutical manufacturer's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.

To secure financing

Whether you are a startup or an existing business, writing a detailed pharmaceutical manufacturer business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your pharmaceutical manufacturer has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for a pharmaceutical manufacturer, let's take a look at what information is needed to create one.

Need a convincing business plan?

The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

Writing a pharmaceutical manufacturer business plan requires research so that you can project sales, investments and cost accurately in your financial forecast.

In this section, we cover three key pieces of information you should gather before drafting your business plan!

Carrying out market research for a pharmaceutical manufacturer

As you consider writing your business plan for a pharmaceutical manufacturer, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your pharmaceutical manufacturer.

Your market research might reveal that consumers may be looking for more natural or organic pharmaceuticals, as well as ones that have fewer side effects. It could also suggest that there might be an increasing demand for medications that are easier to take, such as ones that can be taken in tablet or liquid form.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your pharmaceutical manufacturer.

Developing the sales and marketing plan for a pharmaceutical manufacturer

Budgeting sales and marketing expenses is essential before creating a pharmaceutical manufacturer business plan.

A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.

This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.

The staffing and equipment needs of a pharmaceutical manufacturer

Whether you are at the beginning stages of your pharmaceutical manufacturer or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.

To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.

A pharmaceutical manufacturer might incur staffing costs such as salaries for scientists, technicians, production staff, and administrative personnel. They might also incur equipment costs such as purchasing, leasing, and maintaining laboratory and production equipment, such as centrifuges, autoclaves, and manufacturing facilities.

To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.

Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your pharmaceutical manufacturer.

What goes into your pharmaceutical manufacturer's financial forecast?

The objective of the financial forecast of your pharmaceutical manufacturer's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for a pharmaceutical manufacturer are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

Your pharmaceutical manufacturer forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

Ideally, your reader will want to see:

• Growth above the inflation level
• Expanding profit margins
• Positive net profit throughout the plan

Expectations for an established pharmaceutical manufacturer will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The projected balance sheet of your pharmaceutical manufacturer

The balance sheet for a pharmaceutical manufacturer is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

• Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
• Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your pharmaceutical manufacturer's liquidity and solvency:

• Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
• Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your pharmaceutical manufacturer's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The projected cash flow statement

A cash flow forecast for a pharmaceutical manufacturer shows how much cash the business is projected to generate or consume.

The cash flow statement is divided into 3 main areas:

• The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
• The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
• The financing cash flow shows how much cash is raised or distributed to investors and lenders

Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

It is also a best practice to include a monthly cash flow statement in the appendices of your pharmaceutical manufacturer business plan so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting a pharmaceutical manufacturer.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the pharmaceutical manufacturer, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your pharmaceutical manufacturer business plan, let's have a look at the written part of the plan.

The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.

Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.

The written part of a pharmaceutical manufacturer business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

In your pharmaceutical manufacturer's business plan, the first section is the executive summary — a captivating overview of your plan that aims to pique the reader's interest and leave them eager to learn more about your business.

When crafting the executive summary, start with an introduction to your business, including its name, concept, location, how long it has been running, and what sets it apart. Briefly mention the products and services you plan to offer and your target customer profile.

Following that, provide an overview of the addressable market for your pharmaceutical manufacturer, current trends, and potential growth opportunities.

Next, include a summary of key financial figures like projected revenues, profits, and cash flows.

Finally, in the "ask" section, detail any funding requirements you may have.

2. The presentation of the company

As you build your pharmaceutical manufacturer business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.

Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.

When describing the location of your pharmaceutical manufacturer, you could emphasize the potential benefits of its location. It may be situated in a region with access to a large population, which could open up opportunities for new customers. It might also be close to a major transportation hub, which could ease the process of shipping materials and products. Additionally, the area could have a robust pool of qualified workers, which could help ensure that your business is staffed with capable personnel.

Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.

It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.

3. The products and services section

The products and services section of your pharmaceutical manufacturer business plan should include a detailed description of what your company sells to its customers. 

For example, your pharmaceutical manufacturer may offer research and development services to customers, such as creating new drugs for specialized treatments. It may also offer manufacturing services to produce the drugs in bulk. Additionally, the company may be able to provide quality assurance services to certify the drugs meet certain standards. These products and services can help customers to access the drugs they need and ensure they are of high quality.

The reader will want to understand what makes your pharmaceutical manufacturer unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When you present your market analysis in your pharmaceutical manufacturer business plan, it's crucial to include detailed information about customers' demographics and segmentation, target market, competition, barriers to entry, and any relevant regulations.

The main objective of this section is to help the reader understand the size and attractiveness of the market while demonstrating your solid understanding of the industry.

Begin with the demographics and segmentation subsection, providing an overview of the addressable market for your pharmaceutical manufacturer, the key trends in the marketplace, and introducing different customer segments along with their preferences in terms of purchasing habits and budgets.

Next, focus on your target market, zooming in on the specific customer segments your pharmaceutical manufacturer aims to serve and explaining how your products and services fulfil their distinct needs.

For example, your target market might include individuals who are aged 65 and over. These individuals are likely to require medication for multiple health issues and would benefit from long-term use or maintenance medications. Additionally, they may be unable to afford the medications or have difficulty understanding how to use them, thus providing a market for the pharmaceutical manufacturer to provide support and education.

Then proceed to the competition subsection, where you introduce your main competitors and highlight what sets you apart from them.

Finally, conclude your market analysis with an overview of the key regulations applicable to your pharmaceutical manufacturer.

5. The strategy section

When crafting the strategy section of your business plan for your pharmaceutical manufacturer, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.

The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.

For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.

In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.

Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.

Your pharmaceutical manufacturer could face the risk of a costly recall if a drug is found to be unsafe or ineffective. This could happen if a drug is improperly tested or if there is a manufacturing defect. In addition, your manufacturer may be exposed to potential lawsuits from patients who have experienced adverse reactions or from competitors whose products have been infringed upon. These risks could have a serious financial impact on your business, and may even put your reputation at risk.

6. The operations section

The operations of your pharmaceutical manufacturer must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your pharmaceutical manufacturer - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You may have key assets such as the research and development of new drugs and processes. This could include patents, trade secrets, and the know-how of the team that develops such products. Additionally, you might have intellectual property such as trademarks, logos, and designs associated with certain products or services. This kind of IP can help ensure that your products are identified and stand out from the competition.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will present the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of what goes in your pharmaceutical manufacturer business plan, let's look at the solutions you can use to draft yours.

What tool should I use to write my pharmaceutical manufacturer's business plan?

There are two main ways of creating your pharmaceutical manufacturer business plan:

• Using specialized business planning software,
• Hiring a business plan writer.

Using an online business plan software for your pharmaceutical manufacturer's business plan

The modern and most efficient way to write a pharmaceutical manufacturer business plan is to use business plan software .

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your pharmaceutical manufacturer's business plan

Outsourcing your pharmaceutical manufacturer business plan to a business plan writer can also be a viable option.

These writers possess valuable experience in crafting business plans and creating accurate financial forecasts. Additionally, enlisting their services can save you precious time, enabling you to concentrate on the day-to-day operations of your business.

It's important to be mindful, though, that hiring business plan writers comes with a cost. You'll be paying not just for their time but also for the software they use, and their profit margin.

Based on experience, a complete business plan usually requires a budget of at least £1.5k ($2.0k) excluding tax, and more if revisions are needed after initial meetings with lenders or investors - changes often arise following these discussions.

When seeking investment, be cautious about spending too much on consulting fees. Investors prefer their funds to contribute directly to business growth. Thus, the amount you spend on business plan writing services and other consulting services should be negligible compared to the amount you raise.

Another aspect to consider is that while you'll receive the output of the business plan, you usually won't own the actual document. It will be saved in the consultant's business plan software, which will make updating the plan challenging without retaining the consultant on a retainer.

Given these factors, it's essential to carefully weigh the pros and cons of outsourcing your pharmaceutical manufacturer business plan to a business plan writer and decide what best suits your business's unique needs.

Why not create your pharmaceutical manufacturer's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a pharmaceutical manufacturer business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my pharmaceutical manufacturer business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating a pharmaceutical manufacturer business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
• A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
• A business plan has 2 main parts: a financial forecast outlining the funding requirements of your pharmaceutical manufacturer and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your pharmaceutical manufacturer business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

• How to write a business plan to secure a bank loan?
• Business plan cover page tips
• Business plan vs pitch deck
• What should you include in your business plan appendices?
• Key steps to write a business plan?
• Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing a pharmaceutical manufacturer? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to Start a Pharma Company in 10 Easy Steps

David Blok | Posted on September 19, 2023 | Updated on March 26, 2024

Introduction

Step 1: market research and pharmaceutical business ideas.

• Step 2: Creating a Business Plan

Step 3: Regulatory Compliance and Legalities

• Step 4: Team Building and Talent Acquisition
• Step 5: Location and Infrastructure

Step 6: Product Development

Step 7: clinical trials and approval process.

• Step 8: Manufacturing and Supply Chain Management

Step 9: Marketing and Sales

• Step 10: Scaling Your Business
• Frequently Asked Questions (FAQs)

Let’s face it: if you are reading this, you are one of two people: the entrepreneurial mind that dreams of building a business in an impactful industry, or you’re passionate about science and research and want to contribute to the better health of humanity.

Whether you envision yourself as a Pharma tycoon or simply long to casually drop ‘I make drugs for a living’ at dinner parties, the time has come for you to admit it – you want to build a Pharma company.

Why is a Pharmaceutical company a good investment?

Starting any company takes time, energy and money, but a Pharma business has even more to consider: it requires a combination of scientific expertise, business acumen, and regulatory knowledge. Whether you’re considering how to start a pharmaceutical business or exploring pharmaceutical business ideas you’re not just selling any products here, you’re impacting the health of people. I know what you are thinking: if it’s so difficult, why do people keep investing in Pharma?

Pharmaceutical manufacturing companies can be extremely profitable:

• These companies show resilience during market downturns, rising in R&D investments to stay competitive & flexible (Grand View Research Report, 2023).
• The industry has experienced significant growth during the past two decades, with Pharma revenues worldwide totaling 1.48 trillion dollars in 2022 (statista, 2024). Still don’t believe it? Check out this blog and discover India’s top Pharma Companies to find out h ow profitable pharma companies are in India.

Being such a lucrative market, it’s a natural good investment, especially if you have a good idea – which I’ll get to in the next chapter.

This brings us to our topic at hand, welcome to your comprehensive guide on how to make your venture a reality. In the upcoming sections, we’ll delve into the why’s and how’s of building a successful Pharma empire. Get ready for insights, anecdotes, and much more.

Let’s dive in!

The first step is always the hardest because there is nothing before it. On the flip side it’s a great opportunity to set the direction of your company. Your business is a blank canvas at this point, and you get to bring your vision to life, so the best way to set the wheel in motion is by understanding everything about the industry gap you are trying to fill, in practical terms, whether your idea is viable or not.

Before you dismiss market research as a formality, ask yourself: “Is there a chance my solution is old news compared to what’s already out there?”.

Unless you have the cure for cancer in your pocket, someone’s advancements in your field are worth taking a look at. At this stage, you should focus on two things:

• Understanding market trends and directions.
• Realizing if your big idea is profitable.

Market research will identify unmet needs within the healthcare system, such as patient preferences. By looking at emerging technologies, you can direct your research and development strategy.

Your company’s direction is in your hands at this point, and isn’t that exciting?

Where to start your research?

Start looking at insightful industry reports, academic journals, and the latest industry news, but remember to use credible and reputable sources.

The most important thing is to stay updated, especially on everything that concerns your big idea; market research will back it up. Staying on top of trends also ensures your product is aligned with market demand, and that you have a competitive edge, also called your unique selling proposition.

Step 2: Business Plan and Funding your Pharmaceutical Company

Once you’ve settled on an idea, it’s time to start shaping it into an actual enterprise. Welcome to a pivotal chapter: creating the blueprint of your operations, aka your business plan. Don’t have the faintest idea of what a business plan consists of? Pharmaoffer has got you covered.

Fundamentals of a bulletproof Business Plan:

• A market analysis – which you already did in Step 1.
• Outline of management and the company organization.
• All your products/services – which you probably already know.
• Customer segmentation.
• Marketing plan.

Pitch Perfect

Why is a detailed business plan crucial, you may ask? This plan isn’t just a formality; it’s your golden ticket. This single document is meant to convince stakeholders and investors that you’re not a risk; you’re a calculated and promising investment, which will increase trust and the chances of getting the funds you need.

So don’t be scared to dive deep into the big questions like who will benefit from your pharmaceutical innovations, and what makes it profitable. Paint the financial portrait of your venture with clarity—how will the funds be utilized, and what’s the return on investment? Venture capitalists, government grant applications, and loans are great routes to explore. Your business plan will prepare you to pitch your idea to the right people.

Okay, this is where it gets tricky, but it’s why pharmaceutical business entrepreneurship isn’t for everybody. You are too far along in this journey to stop now, so it’s better to keep going.

Regulating to triumph

We know that acronyms like FDA, GMP, and CEP may be scary, but like we said from the start of this journey: when it comes to the health of the population, you can’t risk it. Regulations ensure your company is ethical and safe. Dismissing them puts your entire operation at risk of getting a bad reputation, not to mention facing penalties later on. Oh, and besides, no funding without compliance is just not going to happen!

What is your business structure?

Now, let’s talk about how to set up and open a Pharma business. Should you go for an LLC (more partnership-oriented) or a corporation, and why does it matter?

The selection of a business structure is a crucial decision for a company because it impacts various aspects, including:

• Legal responsibilities.
• Liability protection.
• Ability to raise capital – we know this sounds like a broken record on this one, but money it doesn’t grow on trees, right?

Remember, it’s not just about paperwork; your business structure shapes the core of your company. Speaking of structure and shape, it’s time to shape your physical company.

Step 4: Building your A-team

You’re the mastermind behind this venture, but you don’t have to do everything yourself. Like a formula, it takes plenty of ingredients to make one solution. In this section, you’ll select the best people to represent and help grow your business.

The trick to knowing whom to hire is simple: point out the necessary fields for your business to run that you need to hire for, and find people who can excel at them. Think R&D, supply chain management, sales, and, of course, medical professionals. ´

Extra tip: remember that sometimes you don’t want to hire the best technical person, but someone who can complement your team’s attributes, like, for example, someone with a proven track record of adaptability and communication.

Step 5: Location, Location, Location

The perfect location is a no-brainer: it is the one closest to your potential partners. Places like research centers for experiments, hospitals for data, or universities for talent scouting are where you wanna be. Just think of how your idea can improve with these extra resources.

A place to call…office

Ideally, if you picture a creative and productive atmosphere, it won’t be a cramped space, poorly lit with bad chairs, that won’t cut it. Your facilities are the day-to-day of your operation, where some say, the real magic happens, so make sure your spaces are up-to code and optimized for the tasks at hand. Remember, a positive environment boosts morale and increases efficiency.

Admit it, you’ve been thinking of this since the very beginning of this adventure. After all, this is what you came here for. Whether it’s a new drug or medical device, the development phase is the fun, and most important part. Let your R&D work shine to bring your vision to life.

Trials and tribulations

Having a finished product means one thing, and one thing only in the Pharma world: clinical trials. Clinical trials aim to provide a scientific basis for advising and treating patients.

But don’t be discouraged if it doesn’t work out. Even when researchers don’t obtain the outcomes they predicted, the trials results can help point scientists in the correct direction of their research. Trials present their challenges, but as cliché as it is, every challenge is an opportunity in disguise and a testament to your team’s innovation capacities.

Think you heard enough about clinical trials? These are the final stages before your product enters the market, and needless to say, it won’t enter without the green light. How do you make sure it’s approved then?

• Rigorous protocol adherence.
• Collaboration with regulatory bodies.
• Scientifically proven efficacy and safety.
• Real-world testing for validation.

Extra tip: real-world testing is a good option to further validate and solidify product claims that may give you an interesting competitive edge.

Passing this frantic stage is a monumental milestone, and it’s one foot in the door of your Pharmaceutical business success. If you are in this stage, or just looking to dive deeper into the complexities of API’s clinical trials, check out our blog, API Clinical Trials: From Preclinical Trials to Post-Marketing Surveillance.

Step 8: Pharmaceutical Manufacturing and Supply Chain Management

Quality control isn’t just between your lab and office walls most of the time unless you manufacture everything in-house, but is that cost-effective?

We are not going to go into this question but leave it for a promising blog about the pros and cons of API in-house manufacturing or out-sourcing. This time we’re going to talk about the Pharmaceutical company’s supply chain.

As you need to make sure every substance you use is under the same quality control as your business, how can you be positive you are purchasing APIs from a qualified supplier?

We’re not gonna lie, unfortunately this step can be a dead end as many API manufactures aren’t registered in a public contact base.

You really need to know the business and ask around, a total nightmare. This is our mission statement: at Pharmaoffer we want to match the best certified API manufacturers with businesses like yours, so to provide resources for both and enrich Pharmaceutical business supply chain with qualified options.

Your supply ally

When choosing the right suppliers, the biggest worry is compliance standards, so make sure your supplier:

• Meets all compliance standards.
• Is up to speed with industry best practices.
• Has the means to make deliveries on schedule.

You have a finished product, your team is working and the place up and running, so it’s time to find some clients. We do this with a marketing and sales strategy.

What do people think of when they hear your company’s name? Do you have a logo? These are some of the questions you need to clear with the proper professionals.

Branding is understandably the last thing on your mind, but don’t make the mistake to overlook it indefinitely. Nowadays, if your business doesn’t look good it won’t be credible. Branding is how you present your company to the world. It’s your mission statement, your corporate culture, and your values. It will help you find your market and secure a strong position in it.

Getting the word out

Marketing is about business survival, there is no denying it. In this increasingly visual world it’s not enough to have a great product, you need to present it well to elevate it. The way you do so is with marketing tools.

Now don’t fall into cheap marketing tactics: in Pharma you can’t make any false claims, exaggerate benefits, or show dubious testimonials. This will kill your entire operation. Marketing in the Pharma sector demands a careful balance of awareness-raising and ethical considerations. Credibility is central, so keep it real, and let your amazing product and integrity attract customers.

Because we understand how complex marketing strategies can be, at Pharmaoffer we wrote you a startup guide to navigate online marketing in the pharmaceutical sector called Online marketing in pharma; where to start?   Feel free to take a look.

Step 10: Scaling Your Pharmaceutical Business

You finally have a Pharma company, congratulations and we take no credit for it. Now that you have a growing business, the question is: How big do you wanna get? We’ve seen how much does it cost to start a pharmaceutical company and remember that scaling and it isn’t just about growth, it’s about smart growth. Scaling is about expanding your operation, and it should be a calculated decision.

To make the right move you need to be on top of market demand, KPIs tracking, and consult your team to know when it’s the right time to do it.Bigger the business, bigger the challenge.

Bigger the business, bigger the challenge

A bigger business is a complex one. From staffing to resource allocation, be prepared to adapt your business strategies as you expand.

Extra tip: keep your staff informed and let them be a part of the change. It will make them more involved in your business success.

You made it to the end yay!

We saw how to start a Pharmaceutical company investment which is no small endeavor, but it’s a rewarding one for sure! You are building something of your own, following your heart and creative dreams and the best of all, you’re saving lives while you do it, how great is that?

Okay, it’s time to get to work, so roll up those sleeves, and get started if you haven’t already. We have no doubts that if you pay attention to these 10 steps, you have what it takes to build your successful Pharmaceutical company.

Needing further assistance to find the right API suppliers for your business? Fill in the form to contact Pharmao ff er and schedule a free meeting to take your business to the next level.

Is it hard to start a pharmaceutical company?

Yes, but it's also rewarding. Be prepared for regulatory hurdles and significant initial investment.

How long does it take to launch pharma company?

On average, it could take 1–3 years, depending on the business model, licensing, and other factors.

Can I start a pharma company without a medical background?

Yes, although you'll need a team of experts in medical and scientific fields. Your role may be more focused on business strategy and growth.

What are the biggest challenges in starting a pharma company?

Regulatory compliance, securing funding, and market competition are some of the biggest hurdles you'll face.

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Pharmaoffer is a B2B platform where you can find all qualified API suppliers in one place

/ Article

Building effective business development in pharma.

By  Mark Lubkeman ,  André Kronimus , and  Filip Hansen

At a time of rapidly evolving scientific breakthroughs and, coincidentally, of the expiration of many blockbuster drug patents, the key to innovation and revenue growth is pharmaceutical business development. While some innovation and new revenue can come from internal pipelines and assets, business development teams are under intense pressure at most companies to supplement internal efforts with external licensing agreements and M&A. Unfortunately, those teams are frequently unable to deliver the transactions needed for innovation and growth.

Often a major reason for this shortfall is that executive team members are not fully aligned on the role of business development in achieving the company’s strategic priorities. They may agree in theory that business development should pursue partnerships, ecosystems, and collaborations, but that consensus falls apart when it comes to making decisions about specific deals.

We have identified six success factors that enable more rapid and effective decision making, which, in turn, will lead to substantially enhanced business development performance.

Subscribe to our Biopharma E-Alert.

Biopharma m&a and licensing remain strong.

Biopharma M&A deal value more than doubled between 2017 and 2019, from $138 billion to $336 billion, and valuations reached all-time highs. Most of those deals involved midsized biotech companies, for which the average premium paid was close to 70%, with an average EV/sales multiple of nearly 8x. All in all, close to 60% of new therapeutic drugs in the last five years have been externally sourced.

The COVID-19 pandemic slowed biopharma M&A activity in 2020, especially in the first half of the year. But since the core drivers of deals remain intact—scientific breakthroughs, expiring patents, and an increasing focus on key therapeutic areas or on modalities such as cell and gene therapy—deal activity will continue to rebound. A recent example is AstraZeneca’s acquisition in late December of Alexion for $39 billion.

Moreover, biopharma companies can finance transactions cheaply with today’s very low interest rates. They also have significant financial resources to pursue business development. BCG’s ValueScience team estimates that the top 20 biopharma companies have more than $700 billion in cash, short-term investments, and additional debt capacity. But as a result, many companies are pursuing the same assets, driving up valuations and the risk of overpaying.

Six Success Factors for Pharma Business Development While we focus here on M&A, the six success factors we have identified will enable business development teams to create value through both M&A and licensing. (See Exhibit 1.)

1. Prioritize what business development needs to accomplish for the company. Executive team members often have differing views about how to prioritize business units, technology areas, and technology platforms and what types of deals to pursue (early- versus late-stage R&D deals, for example, or transformative versus tuck-in acquisitions). To ensure alignment, it’s critical that team members agree on how and where they want to create value. Will they use business development to generate near-term revenues or to build the pipeline for future innovation? Will they seek to maximize the core, expand into adjacent markets, or explore new frontiers? (See Exhibit 2.)

As part of this prioritization process, the executive team needs to regularly review and agree on how much revenue growth the current internal portfolio or pipeline will deliver. Only then can it determine the revenue gaps that business development needs to address in which specific therapeutic areas or modalities—and with what urgency. It’s astonishing how often management teams are misaligned on this simple setting of objectives, which often results in business development teams wasting time assessing opportunities that are fundamentally unattractive to the executive team and will never get approved. To avoid such situations, the team should ask itself two key questions about every transaction early on: What revenue gap will the transaction fill? And who on the executive committee will champion the transaction from start to finish? By forcing these decisions early, the team can avoid a lot of wasted time.

2. Build relationships with prospective targets. Executive teams should commit to building relationships with potential partners or acquisition targets for two or three years. Proactive sourcing, screening, and relationship building are far better for deal execution than simply showing up at the target’s headquarters with a banker and an offer. An established relationship will give a prospective buyer an edge over other bidders, perhaps even preempting the bidding process altogether. Such relationships can also accelerate due diligence.

Active engagement with potential targets over several years also gives companies a better grasp of the range of potential deals available. It might, for example, make a pharmaceutical company more likely to take small equity stakes in a number of promising biotechs, perhaps supporting Phase 1 trials with its own clinical and regulatory expertise.

3. Agree on how to assess value. Depending on one’s assumptions when valuing a target, the same transaction may seem spectacularly attractive or exceptionally unattractive. So teams need to agree about how they will value all aspects of each deal and then apply that valuation with discipline. Too often, companies end up redoing their analysis and engaging in repetitive decision making because they haven’t agreed on valuation approaches or metrics from the start.

One common valuation pitfall is to focus only on core asset value, that is, the value of the cash flow generated by current and future products in the market. Valuation models need a wider lens, encompassing multiple dimensions of value, including the following:

• Synergies. What is the value of cost, revenue, and capability synergies across the value chain—for example, in R&D, manufacturing, and sales?
• Platform Value. What is the value of the future products a technology platform might make possible?
• Strategic Value. What is the value of preempting a competitor from acquiring an asset, gaining access to a large proprietary data set, or being recognized as a leader in an emerging field?

Because these advantages are less tangible than core assets, large swings in valuation are possible depending on the underlying assumptions. We have found that companies with a clearly defined and endorsed valuation approach are able to use a common “language” in their deliberations, leading to better, faster decision making. These advantages are amplified when the company is highly transparent about the underlying assumptions and entertains a range of scenarios and associated probabilities.

4. Define integration issues early. Executive and business development teams are frequently so focused on due diligence and valuation that they don’t consider the integration process until after a term sheet has been signed. Integration issues should be considered at the outset, when assessing the deal’s attractiveness and viability, and in parallel with due diligence. Teams should ask such questions as: Will the acquired company be a distinct entity or be integrated into the acquiring company? What governance will be applied to the acquired assets? How will cost synergies factor into the valuation?

Knowing the answers to these questions early on is critical to realizing the full potential of the transaction. Our research shows that successful integration can drive 8% to 10% more value compared with the average transaction. Planning for that success right from the start is essential.

5. Enable agile business development teaming and governance. Even when a company has a clear vision for the transaction, it still needs an agile process and governance to execute the deal quickly and effectively. But because the business development process is highly cross-functional (and often involves many junior-level people), it can be unclear who has the authority to make decisions and who will provide the necessary analytical resources. In addition, preexisting governance committees (such as executive committees) often meet too infrequently to keep up with the fast pace of business development decision making.

To address these challenges, we recommend three best practices:

• Designate resources. Within each function, several senior staff members with business development experience and authority should be on call. This will help build continuity and organizational learning.
• Establish clear processes and responsibilities. All members of a business development project team should be aligned on processes, deliverables, and timelines. That should include who is responsible for what and who has what decision rights. For example, who in R&D will calculate the probability of success of a specific asset under review?
• Create nimble governance. A few members of key governance committees should meet more frequently than the entire group (perhaps even on a weekly basis, depending on deal volume) and have the authority to mobilize the entire committee within 24 or 48 hours if there’s an urgent issue to be addressed.

6. Design an organizational structure suited to strategic priorities. Because companies have different revenue gaps and objectives and use business development in different ways, there is no single “right” organizational structure. One company might focus on early-stage and another on late-stage acquisitions. One company might be looking for deals to strengthen the core business, another to build up new therapeutic areas. A company’s business development organization must be suited to its strategic purpose, whatever that may be. There are three main approaches (with various permutations) to consider:

• Centralize business development in one group. A central function maximizes scale, alignment of activities, and resource prioritization. This setup works well for companies looking to make relatively few late-stage or transformative acquisitions.
• Separate R&D and commercial transactions. Assessing an early-stage R&D acquisition requires a different mix of expertise than assessing a late-stage, commercial acquisition. When a company intends to pursue both types of transactions, it’s best to keep at least some of these due diligence activities separate. But such companies can still centralize certain functions—valuation modeling, for example—in order to maximize scale.
• Separate by business lines or therapeutic areas. It can be sensible to separate business development activities by business lines or therapeutic areas at different levels of maturity. This arrangement works well if a company has a mature business area looking for transformative deals and a smaller business unit looking for technology platform acquisitions. Here again, certain aspects of the business development process, such as valuation modeling, can be centralized for scale and efficiency.

Current market conditions present unique opportunities to tap into external innovation and drive revenue growth, but the inherently complex and cross-functional nature of business development makes it difficult for many pharmaceutical companies to execute effectively. As a result, these companies are not winning the transactions necessary for future success. We believe that the six success factors described above can significantly improve business development capabilities and are worth serious consideration by management teams.

Managing Director & Senior Partner

ABOUT BOSTON CONSULTING GROUP

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

© Boston Consulting Group 2024. All rights reserved.

For information or permission to reprint, please contact BCG at [email protected] . To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com . Follow Boston Consulting Group on Facebook and X (formerly Twitter) .

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Four ways to make sure your pharma manufacturing strategy delivers value

A manufacturing network strategy that optimizes resources, embeds resilience, and confers a competitive edge is increasingly important in the life-sciences sector. However, for many, the approach to manufacturing has been focused on responding to trigger events, such as M&As, growth or capacity constraints, demand surges, an acute need to cut costs, new product launches, or regulatory changes.

This has resulted in a patchwork of subscale manufacturing sites and contract development and manufacturing organization (CDMO) relationships spread across the globe for many pharma manufacturers. COVID-19 disruptions brought focus to the risks in this patchwork approach and led many pharma companies to reassess their manufacturing networks and strategies, shifting from reactive tactics to a strategy rooted in manufacturing optimization.

However, companies that invest the time, effort, and resources in devising their manufacturing strategies can reap significant rewards. We have seen companies realize 10 to 20 percent baseline cost reductions by overhauling their manufacturing strategy. But there are many reasons beyond cost savings, including resilience, agility, and sustainability, to optimize manufacturing networks and strategies. We share four ways to optimize a manufacturing strategy and how to avoid the common pitfalls.

Five common pitfalls that can tank a manufacturing refresh

Our work with pharma companies has uncovered five common mistakes that can frustrate efforts to design and implement an optimized manufacturing strategy.

• Reacting to triggers versus proactively driving manufacturing strategy. If a manufacturing strategy is a rushed response to a trigger event rather than a strategic tool or ongoing maintenance activity, it often fails to deliver on its promises. Decisions made under pressure are rarely underpinned by robust and comprehensive analysis and are likely not sustainable over time.
• Being too narrowly focused. Often companies focus too narrowly on their manufacturing footprint and labor costs, losing sight of total costs and broader opportunities, such as make-or-buy decisions, which can bring major benefits. A variety of other important factors, such as logistics, talent availability, efficiencies, quality, regulatory, CDMO capabilities, proximity to R&D, and supplier base, may also be overlooked, limiting the effectiveness and scope of manufacturing decisions in both the short and long terms.
• Basing decisions on emotions rather than data. Given the nature, scale, and risk of significant manufacturing decisions, fear and doubt may motivate people to hinder change rather than validate and support it. It can sometimes be difficult for employees to shutter a specific site, even if it is suboptimal, because it has a unique history in the organization—for example, the original headquarters. Emotions and skepticism can best be overcome with a robust business case based on an in-depth analysis of requirements and facts.
• Pursuing short-term goals at the expense of long-term potential. The value of a manufacturing strategy lies in long-term bets. However, often many factors used to choose a new site are short term. The attractiveness of a given location may change substantially in the five to ten years until the site is fully operational, so basing decisions on near-term criteria can result in suboptimal network designs.

For example, one large pharma company developed a comprehensive seven-year strategic plan to save 15 percent of its cost of goods. However, after more than two years into the timeline, the company had fallen 18 months behind schedule. The plan lacked committed executive involvement and, as a result, struggled under consistent second-guessing that paralyzed forward progress.

Best practices for a successful manufacturing strategy

There are four best practices that we have seen pharma companies follow in developing a successful, sustainable manufacturing strategy (Exhibit 1).

1. Create business-driven aspirational goals

• Put business first. Network strategy design should relentlessly focus on business requirements. Manufacturing strategies that establish the business need and guiding principles can go back to them in times of misalignment, leadership pushback, or critical decisions. This can include setting guardrails around the time frame for payback, such as a breakeven within five years or limitations on when a brick-and-mortar expansion may be considered. For example, a large pharma company recently developed a plan to redesign its manufacturing network and consolidate its distribution footprint. The project team first defined its guiding principles, then created five alternative scenarios that addressed the pain points, and finally used workshops to decide on the respective costs, benefits, and risks. After selecting the best-integrated scenario, the company realized $100 million annualized savings.

Companies that allow every option to be considered, think holistically, and make step-change decisions are better positioned to achieve transformative change.

For example, a pharma organization recently relocated one of the largest facilities in its network and realized it could also optimize processes more comprehensively to create substantial value. Although this was a massive effort, it was more efficient, financially rewarding, and beneficial to supply chain performance than the several small moves the organization could have made instead. While large efforts like this only make sense in certain circumstances, they can yield greater benefits relative to the effort involved.

2. Make strategy design comprehensive

• Make operations strategy an input to network strategy. A holistic approach to manufacturing strategy factors in all the elements of operations strategy, such as make or buy, the product portfolio, technology outlook, and the value chain of the future—not just manufacturing sites. Therefore, the manufacturing strategy needs to include all the internal (for example, internal sites) and external (for example, CDMOs) aspects of the manufacturing network, and the manufacturing strategy design and detailed planning phases need to accommodate strategic partners (Exhibit 2).
• Segment the manufacturing network. As supply chains become more complex, the manufacturing strategy needs to be tailored to each value chain. For example, one company with a diverse portfolio differentiated its manufacturing strategy so that large capital equipment would be manufactured closer to customers while manufacturing locations for small goods were more flexible since they could be shipped long distances more easily.
• Think beyond total landed cost. The best manufacturing designs used to be dictated by total landed cost. But today, to deliver full value, organizations must consider many more factors, such as risk, resilience, and supply chain responsiveness, to determine risk-adjusted total delivered value. For example, regionalization has become a key concern since the pandemic has exposed the limitations of global supply chains. Also, sustainability, increasingly at the forefront of strategic supply chain decision making, will have both immediate and long-term cost implications.

3. Use analytics and solutions scenarios to support selection

• Take time to get the facts. It is critical to collect good data and align on the facts with relevant business leaders to ensure that the initiatives are credible. For example, one organization pushed to move quickly into analysis but then lost weeks aligning the organization on the conclusions to its analysis because leaders questioned the validity of the underlying data. This not only jeopardized timelines but also damaged the credibility of the decision process. A firmly grounded fact base provided the foundation needed to overcome emotional or biased resistance.
• Start broad, then quickly narrow down . It is best to start with a wide funnel of different solution scenarios, then rapidly narrow down to those predicted to have the highest potential. This allows many possibilities to be considered and increases the chances of converging on the best. Some best practices include the following:
• grouping ideas into scenarios so that they can be efficiently assessed against hypotheses, versus assessing each one individually
• updating the inputs as the strategy is syndicated and new information comes to light
• involving the right people along the way so they are aligned on the full array of opportunities and the analytic rigor that’s deployed throughout the effort
• referencing the business need and guiding principles to assess scenarios and using the defined guardrails to narrow options

Exhibit 3 shows how one organization analyzed more than 200 potential combinations of sending and receiving sites. A solid financial model allowed the uneconomical options to be quickly removed from the solution set, leaving about 100 sites. These were grouped into scenarios and syndicated with a broad set of leaders who provided additional input, such as better receiving sites or missing or inadequate documentation that would extend a project’s timeline and budget. Guiding principles were relied on to steer major trade-off decisions. This iterative process enabled the company to narrow down its options to the strategy it ultimately pursued.

One pharma company developed a five-year manufacturing strategy that would save 20 percent on cost of goods, but it required closing a historically significant site. Fact-based arguments won over emotion, and leadership supported the decision to move ahead with the strategy.

4. Systematically manage execution

• Create a dynamic road map, not an answer. Manufacturing strategy has a long-term, global scope and exists to manage a dynamic, ever-evolving situation. A dynamic road map that links to long-range planning and is flexible allows an organization to adapt to changes during the road map’s five- to ten-year life span. A company should also define triggers for when the strategy should be reassessed and refreshed, such as in the following instances:
• when major changes occur, such as in tax, regulatory, and products or programs, that may require significant moves or a new site, as well as a refreshed strategy
• periodically, even without major changes (for instance, companies may want to bookmark every three to five years to make sure the strategy is still optimal given more gradual alterations to the landscape)
• Institute a rigorous stage-gate process. While stage gates are common in processes like R&D, many organizations do not use them to manage manufacturing opportunities. A clearly defined and communicated stage-gate process ensures alignment at the level of detail required to progress to subsequent stages and limits the tendency to redo analysis and revert to a prior stage after a gate has been passed. The stage-gate process can be used to benchmark and measure annual tangible goals, provide a sense of progress, and combat a lack of urgency that can sometimes afflict a long-term network strategy.

Exhibit 4 shows how a stage-gate process can work. The strategy encompasses all the moves, while each move may progress through the stage gates individually.

• Support execution with a manufacturing transfer office. Manufacturing strategy and transfer is a capability rather than an event. Companies achieve greater value in manufacturing strategy if they support it with dedicated capabilities and governance. Some best practices include the following:
• Have a single leader own strategy from development through execution, thus ensuring incentives are aligned throughout the program.
• Organize reporting so that the leader reports high into the organization to keep the strategy a priority.
• Structure a decision-making process and authorities to support ongoing governance and ensure micro-decisions are in line with the big picture.
• Integrate moves into the profitability of sending and receiving sites. Measuring the profit-and-loss implications of transitions ensures that the sending and receiving site leaders focus on the transfer as if it were a part of their business. This will help ensure timelines are met and resources coordinated to support the handover activities necessary for success. While this requires facility leaders to implement significant change management practices, it also gives them appropriate accountability and control. One organization that took this approach experienced a step change in collaboration—the sending and receiving sites became much more engaged in finding solutions to challenges.

A formula for long-term success

For many companies, manufacturing strategy is a major opportunity for cost improvements as well as better strategic positioning and resiliency. But long-term success depends on foundational elements that include executive sponsorship, a commitment to building capabilities, decision-making authority at senior levels, the inclusion of manufacturing sites, and a dedicated team to manage the process. Companies that put these elements in place and pursue the best practices we have described above will be well prepared for an unpredictable future.

Hillary Dukart is an associate partner in McKinsey’s Denver office, Laurie Lanoue is a partner in the Montreal office, and Parag Patel is a partner in the Chicago office.

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Planning and Designing a Pharmaceutical Manufacturing Facility

Design overview of pharmaceutical facilities.

• Location and access to transportation and utilities
• Climate and environmental conditions
• Facilities layout and equipment requirements
• Security and safety considerations

Design Principles for Pharmaceutical Facilities

Environmental impact of pharmaceutical facilities, facility layout and operation.

• Location: The location of a pharmaceutical plant should be based on the availability of resources and the proximity to customers. The plant should also be located in an area with low temperatures and good air quality.
• Extension: Facilities should be designed with an extension in mind, in order to accommodate future growth. This includes planning for manufacturing areas, storage areas, and utility rooms.
• Design: Pharmaceutical plants should be designed using best practices in order to minimize risks and ensure safe and effective production. The design should also take into account future updates and expansions.
• Equipment: The type and size of equipment used in a pharmaceutical plant should be based on the products being produced. The layout of the equipment should be planned in order to minimize the risk of contamination and maximize efficiency.
• Materials: The materials used in a pharmaceutical plant should be of the highest quality and purity. The storage, handling, and transport of these materials should be designed to minimize the risk of contamination.
• Waste: Pharmaceutical plants produce a variety of waste products that must be properly disposed of. The plant should be designed with this in mind, in order to minimize environmental impact.
• Security: Pharmaceutical plants are a target for criminals, so security should be a top priority. The facility should be designed with security in mind, including the placement of cameras, alarms, and fences.

Security and Safety in Pharmaceutical Facilities

• Implementing effective security measures to protect against unauthorized access and theft.
• Designing adequate emergency response plans to address potential accidents or incidents.
• Ensuring that the facility is properly ventilated to avoid exposure to harmful gases and fumes.
• Providing dedicated space for storage of hazardous materials.
• Creating a safe work environment for employees by providing appropriate equipment and training.

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Welcome to the United Nations

How Africa can manufacture to meet its own pharmaceutical needs

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Why can’t Africa manufacture the medicines it needs?

The COVID-19 pandemic exposed Africa’s inadequate capabilities and capacity to manufacture and supply essential drugs and personal protective equipment (PPEs) needed to curb the disease. 

Although pharmaceutical products are currently manufactured in countries such as South Africa, Kenya, Morocco and Egypt, as a whole Africa currently imports more than 80 per cent of its pharmaceutical and medical consumables. It is unsustainable.

But as far back as 2007, the New Partnership for Africa’s Development (now the African Union Development Agency, AUDA-NEPAD) sought to address Africa’s overreliance on imports of pharmaceutical products when it developed  the Pharmaceutical Manufacturing Plan for Africa (PMPA) , as mandated in the Assembly of AU heads of state decision of 2005.

In 2012, the Assembly of Heads of State endorsed a PMPA business plan which consists of a package of technical solutions to some of the critical challenges confronting the continent’s pharmaceutical industry.

Some of the proposed solutions include strengthening the regulatory systems and establishing a one-stop-shop for information, data and business intelligence for industry players—governments, the private sector, Regional Economic Communities and so on. 

To boost local pharmaceutical production and in turn improve public health outcomes, the PMPA business plan strongly encourages the procurement of medical products from Africa-based companies.  

In addition to strengthening the procurement and supply chain management systems, the plan recommends the use of pooled procurement as a mechanism to incentivize local manufacturers to address maternal, new-born and child health. 

Improved access, quality, availability and affordability of pharmaceutical products, as well as increased economic benefits through sustainability, competitiveness, and self-reliance of the industry, are some of the objectives of the business plan.

The PMPA business plan underscores the urgency in addressing the challenges facing the industry. One such challenge is a lack of affordable financing and modern technology, which hampers business expansion.

Other challenges are Africa’s small fragmented markets and weak regulatory frameworks.

Inadequate human resource capacity also impedes the growth of Africa’s pharmaceutical sector as do poor procurement and supply chain systems and policy incoherencies in countries’ trade, industry, health, and finance departments.

Due to a lack of financial capacity, companies make little or no investments in research and development and in protecting intellectual property. 

No single company, government department or organization can by itself address these challenges; it is precisely why the PMPA business plan advocates for multisectoral and multi-stakeholder collaboration. 

The good news is that some opportunities are available to be explored. 

For example, the African Continental Free Trade Area (AfCFTA) , if successfully implemented, will address the challenge of small fragmented markets that have for a long time disincentivized pharmaceutical manufacturing investors. 

African manufacturers, currently operating in small fragmented markets, cannot compete with their Asian counterparts that operate in vastly larger markets and therefore enjoy economies of scale. Economies of scale help businesses save money due to higher production volumes. 

When all African countries ratify the AfCFTA, it will integrate a market of 1.3 billion people and potentially 2.2 billion people by 2050. African manufacturers can be expected to enjoy significant economies of scale and scope. Free trade under the AfCFTA should begin in January 2021. 

A pooled procurement mechanism will encourage leading global generic pharmaceutical manufacturers to build plants in Africa or partner with African pharmaceutical companies to manufacture generic products. There is a need for this form of strategic support for Local Pharmaceutical Production (LPP).

Russia and Bangladesh are examples of countries that have deliberately and successfully supported the development of LPP. As a result, these countries have experienced an increase in foreign direct investments in the sector. They have also benefited from training and skills development, accelerated technology transfer and job creation. 

Africa should be expected to reap these kinds of benefits were it to fully embrace strategic support for LPP. Besides, it would compel countries to strengthen regulatory systems.

Already African manufacturers of pharmaceuticals have been brought into a federation to enable them to share information and business intelligence and to have a unified voice. And plans are underway to establish a fund for the sector, which will cushion companies’ financial inadequacies.

In June this year, the AU launched the Africa Medical Supplies Platform which promotes the procurement of medical supplies from local manufacturers and taps into the harmonized regulatory systems created in the context of the PMPA.

Countries will invariably need to formulate education policies that foster research and development in pharmaceuticals as well as encourage thousands to acquire the skills required in the industry.

Undoubtedly, Africa needs integrated markets. It must implement trade facilitation policies. Countries need to strengthen and harmonize their regulatory systems to assure the quality of medical products and ensure that local manufacturers adhere to international standards.

When fully implemented, the PMPA business plan will create jobs for millions of Africa’s unemployed and usher in a knowledge economy that will drive the Fourth Industrial Revolution.

To answer the question at the beginning of this piece, yes, Africa can potentially manufacture its medicines. The PMPA business plan is the way to go.  

Dr. Janet Byaruhanga is Senior Programme Officer, Public Health, at the African Union Development Agency (AUDA-NEPAD).

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Sample Pharmaceutical Manufacturing Business Plan

Pharmaceutical manufacturing business plan sample.

Since time immemorial, man has always placed a premium on his health and well being.

From our forefathers who devised means, methods and materials, however crude, to help cure diseases and ward off illnesses; to the present day, where modern technological advances in medicine and health practices are ensuring high standard of living and age longevity .

At the center of these strides, has been the discovery and synthesis of drugs to combat a variety of ailments and diseases. The case is no different in Africa. Especially when one considers the recent outbreaks of the Ebola and Lassa fevers, which galvanized the government and international health organizations into marshaling men and resources in combating the epidemics.

With a growing population domiciled by a large youth base, an expanding economy as well as the need to provide affordable and quality healthcare, establishing a generic pharmaceutical manufacturing company and in other nations of the world commands favorable business indices. ARCpoint Labs is a popular drug testing and screening franchise you can also look into.

Tremendous progress has been made in the pharmaceutical industry. This has seen the production of a variety of drugs that has enhanced human life expectancy.

We are not going into details on that, but seek to provide you with a pharmaceutical manufacturing business plan sample. But why do you need this?

Do you know start your own pharmaceutical company?

You will find this useful if you need a guide on how to handle the planning of your business.

HOW TO SET UP A PHARMACEUTICAL COMPANY

• Observe all the rules and obtain relevant certification. 

Licenses required to open a pharmaceutical company

To start a pharmaceutical manufacturing company, one must first and foremost be a registered pharmacist with the Pharmaceutical Certifying Board of your country. In lieu of this, the would-be investor must procure the services of a registered pharmacist, whose license can be employed for the purpose.

In-depth knowledge of the workings, composition and effects/efficacy of drugs is critical, not only for the survival of the small scale pharmaceutical manufacturing business but more importantly to safeguard the lives of end-users.

• Gain Relevant Exposure and Experience.

To successfully start a pharmaceutical manufacturing company, the investor should intern at an existing pharmaceutical distribution company outfit that runs a drug manufacturing plant.

If possible, such an internship can be done at no cost to the outfit. The period will serve as a guide to witnessing standard operating procedures, sales and marketing strategies, business accounting and other critical aspects of the business. Also the would -be investor can fully be subsumed in the day-to-day running of the generic pharmaceutical company business, observe how decisions are made and the routes employed in making them.

In effect, the investor is exposed to the rigors of administering an existing pharmaceutical manufacturing plant, without having to commit funds to the venture.

• Have lofty dreams but start small. 

Dilip Shanghvi, founder of the largest pharmaceutical manufacturing company in India,  Sun Pharma, began business in 1983, with staff strength of 2 marketers and a small manufacturing facility.

A number of options can be picked; a mini factory that focuses on one product line like pain relievers or entering into partnership with a contract manufacturer to produce a line for one product. This step is necessary to test the waters (market) and to gradually gain market acceptability and share. Develop a business plan for a pharmaceutical manufacturing business that focuses on niche generic drugs offering potential for growth.

How much does it cost to start a pharmaceutical company? Starting a pharma company and going immediately into competition with older industry players, in more popular patent drugs, could spell doom for the new startup. This is because the markets for these type of drugs are usually saturated, hence it would require enormous resources and extensive marketing to establish a foothold in such markets.

So instead off with the production of anti-infectives (drugs administered for the treatment of communicable diseases), a drug manufacturing company could decide to focus on drugs that help in the treatment and containment of lifestyle diseases, especially as most African nations begin to grow a large middle class.

Drugs in this class include those for psychiatry, neurology and cardiovascular uses. The reasoning behind this strategy is that consumers, who desire to live longer, will more often than not, take such generic drugs, in order to boost their health and achieve longevity.

• Develop a Robust Marketing and Sales Plan

A newly established pharmaceutical manufacturing company must devise ways and means, by which end users can be exposed to its drug offerings. This will often involve taking unconventional paths in finding  markets, obtaining agreement with hospitals and medical facilities, promotional trades and any other activity that will engender the sales of its products. All these must be taken into due consideration when calculating the minimum investment to start a pharma company.

At this early stage, the pharmaceutical manufacturing company must also draw up a robust distribution network, which will ensure that its drugs are available at all times. Necessary pharma company registration procedure and licensing must also be done.

• Plan for Location and Equipment

As the pharmaceutical manufacturing company gathers steam, as you evolve effective marketing and distribution networks, it becomes imperative that one keeps his focus on the big picture: transitioning into a large, profitable drug manufacturing outfit.

This will not happen by the wave of a magic wand. Rather the investor must save and plow back profits, into acquiring suitable and strategically located factory space, machinery and equipment. The cost of starting a pharmaceutical company must consider how raw materials will be sourced and be readily available in order to support full time production.

In all, the success setting up a pharmaceutical manufacturing plant, and indeed any other business, will depend on factors such as the drive and willingness to take calculated risks, having an eye on the future trends that will shape the industry, cultivating excellent customer service and support and placing a premium on research and development.

Here is a sample business plan for starting a pharma production company.

All too often, lots of pharmaceutical manufacturing businesses have closed shop. On close examination, the problems that led to this situation has been due to inadequate planning. This happens through a rushed or shabbily written plan or as a result of lack of its implementation. No matter how good a plan is, none or partial implementation renders it useless. Let’s get to details;

Executive Summary

EV Pharmaceuticals is a new and registered pharmaceutical manufacturing business to be located in Salt Lake City, Utah. We bring expertise as well as experience into the field of drug making. These drugs range from anti-malarial drugs to mood stabilizers as well as hormone replacements. Further reference to this will be made shortly. We have obtained all and fulfilled all regulatory guidelines which are relevant to our smooth operations.

• Products and Services

At EV Pharmaceuticals, we produce a wide range of pharmaceutical products. These consist of antipyretics, stimulants, antibiotics, stimulants, anti-malarial drugs, tranquilizers, oral contraceptives, analgesics as well as mood stabilizers. All of these have their functions and will be produced while abiding to all regulatory and minimum requirements.

In addition to the production of these pharmaceutical products, we will also offer advisory services to professionals who may require such.

• Vision Statement

At EV Pharmaceuticals, our vision is to be a major name in the pharmaceutical business. We are not only seeking to break into the league of major players but to be known for quality. To achieve this brand recognition, a lot of work needs to be done which we are capable of.

• Mission Statement

Our mission is to make quality drugs accessible to users across the United States. We will be using cutting edge technology to achieve our aims. Our operations are also research focused. This enables us to develop or improve on available medications for different conditions.

Running a successful pharmaceutical manufacturing business requires significant funding. In other words, the pharmaceutical manufacturing industry is capital intensive. Our immediate financial need amounts to $3,000,000.00. This will be obtained through loans from 2 major banks. This loan comes with a quarterly interest rate of 2%.

Funds raised will be used in the purchase of equipment a factory space as well as storage and distribution vehicles. Our running costs will also come from this amount and will take 20% of the amount.

• SWOT Analysis

We have decided to gauge our performance by taking a SWOT analysis. This process has been revealing and has shown areas that need to be improved on. This analysis was carried out by a reliable independent business consulting firm. The findings are summarized as follows;

Our strength as a business lies in our capacity to anticipate problems and proffer far-reaching solutions before they arise. This is made possible through our pool of highly qualified manpower who have been carefully selected. Their quality reflects in our ability to run a thriving business that is able to withstand the odds.

In spite of our strength in identifying and creating solutions to problems before they arise, we still have a weakness.

This comes in the form of our size. This limits our reach in the short-term. We view this weakness as only temporary as we embark on expanding our operations once the conditions are right.

• Opportunities

Where others see problems, we see opportunities. We have assembled a highly motivated workforce. These are fully dedicated to exploring better ways of providing solutions/products to a market in need. Therefore we are constantly researching using the best scientific procedures as well as state-of-the-art equipment.

There are threats that may affect our operations. These include unfavorable government policies that may be made and implemented. Another area that can affect our business is when there is an economic meltdown. Any of these could pose a serious challenge to our business operations.

• Financial Projection

Based on available information on the performance of the pharmaceutical manufacturing industry in the past 5 years, there is great potential for profitability. We have done our research and have created a three-year financial projection. The results have been encouraging and show the following;

• First Financial Year $590,000.00
• Second Financial Year $900,000.00
• Third Financial Year $1,700,000.00
• Competitive Advantage

Our competitive advantage exists in the form of our common passion as a team of professionals. These consist of people with varied expertise in the field of pharmacy, branding, marketing, administration and product design and distribution. We are all bonded by the common passion to provide only the best pharmaceutical products.

• Target Market

Nobody wants to be plagued by ailments. However these can come at any time due to a variety of reasons. It is a fact that most people take different medications for different reasons. This presents us with a huge market to cater for.

By filling the need for quality medication, our pharmaceutical manufacturing business caters for the needs of a wide market.

If you have read to this point, you should have gained a better understanding of how this works. Our pharmaceutical manufacturing business plan sample stands as a guide to help you write one without much difficulty. We always state that implementation is equally important too.

Therefore, your plan should be such that can be easily read, comprehended and implemented.

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Planning and Designing a Pharmaceutical Facility: A Process Designer's View

Pharmaceutical Technology Europe

Planning manufacturing capacity in the pharmaceutical industry is not for the faint-hearted. How can process designers help their clients to overcome some of the problems they face when planning to introduce new capacity? This article sets out to explain some of the techniques that are being employed in the early stages of project development.

Planning for new manufacturing capacity in the pharmaceutical industry is notoriously difficult. New potential blockbuster compounds are discovered that are predicted to have a big future, yet can fail at the last hurdle. Older products coming 'off patent' may unexpectedly get a new lease of life meaning that existing production capacity must be increased. Consequently, many production facilities are built as multiproduct or general purpose manufacturing units to cater for the wide variety of compounds, processing characteristics and volumes required.

This article discusses the need for site master plans that form the basis for future manufacturing development, and addresses some of the early stage process development activities that influence the fundamental basis of the project. Methods employed in the later stages of project execution will form the basis of a second article, which will be published in the future.

This first article discusses some of the ways in which experienced external service providers can add value to the early stages of pharmaceutical facility planning and design by providing

• an independent and objective viewpoint
• methods and experience to analyse the process as a whole
• modelling and simulation tools
• benchmarking data
• methods and procedures to formulate a robust basis for the project to proceed.

Site Master Planning

Despite the high-tech image of pharmaceutical facilities, many of today's manufacturing plants are over 20 years old and have developed in an unstructured manner. Support services will often have been provided individually on a project-by-project basis where, with hindsight, a more holistic approach would have been more cost-effective. Time pressures on new projects may have resulted in new facilities being located in the most convenient position rather than the best location for the overall site development.

Consequently, many companies have identified the need for a more structured planning approach to their future site developments, involving

• rationalization of existing site facilities
• reduction in operating costs in support services
• surveying and census of newly acquired facilities
• upgrading for good manufacturing practice (GMP), environmental health and safety (EHS) or to incorporate new technologies
• improvements in flows and departmental relationships.

Each pharmaceutical company understands its own business better than any other organization and in this respect the site master plan is best undertaken by the company's own resource. However, an external services provider can often add value by

• bringing an independent and objective approach
• providing census techniques, questionnaires and workshops
• providing industry benchmarking
• offering specialist knowledge in key technology areas
• providing resources to enable the study.

The resulting master plan will provide the cornerstone for future development of the manufacturing site and a framework within which, each future project can fit. The illustration provided in Figure 1 gives an overview of the entire process.

Figure 1: Development of the site master plan.

Process Design

Once a new candidate active compound has been identified, a pharmaceutical company sets out to develop the manufacturing process. Almost without exception this results in the generation of a batch process though it is well understood that continuous processes are more efficient and cost only a fraction of the equivalent batch process. Speed-to-market and concerns over validation of the process have meant that a pharmaceutical company's approach to process development is conservative. From a process engineer's point of view, it seems that the end result of a huge amount of engineering effort simply produces a scaled-up version of the laboratory plant.

Pharmaceutical manufacturing processes are typically developed by a team of chemists, each of whom are individually responsible for small parts of the overall process, and typically use simple laboratory glassware and equipment. Recently, however, operators are questioning why they constrain the kinetics, thermodynamics and fluid mechanics of pharmaceutical processes to the limited confines of a stirred tank. This is where the experienced process contractor, if involved early enough, can add value to the process development process. Analysed in a methodical manner, the specific characteristics of each process become evident and alternative processing methods then identified.

One of the best methods available has been developed by Britest Ltd, a nonprofit company founded in 1998, whose members include AstraZeneca, GlaxoSmithKline and Foster Wheeler. Britest's objective is to deliver major competitive benefits to chemical and pharmaceutical companies by designing the best processes and manufacturing strategy for each member, using a set of proprietary tools, known as the Britest tools. Utilizing Britest methodology encourages the user to develop a greater understanding of the process as a whole, resulting in radically different options being considered. These tools are a time-effective way of starting the development process and determining all the potential (and unfeasible) process options.

Process Modelling and Simulation

Once the process is available, the next stage of its development is to analyse and refine the design. This is where modelling and simulation provide invaluable aids to the decision-making process. With the computer model, numerous design alternatives can be investigated quickly and easily, enabling the capital cost of the facility to be minimized. Demand for resources and debottlenecking can be determined (Figure 2) as well as confirmation of production rates and illustration of manufacturing schedules. In addition to equipment-focussed process modelling for debottlenecking and utility analysis, the operational aspects of a facility can be modelled and analysed.

Figure 2: Simulation of utility demand versus time.

The computer model adds value at all stages of the design process from early conceptual design through to the ultimate operation of the facility. There are a number of different modelling methods available to the engineer. Both static and dynamic simulation packages are available such as Witness and Super Pro Designer. Effort put in at this early stage of the process development will be handsomely rewarded over the lifetime of the facility.

Operability modelling and simulation, which include capacity modelling, enables the designer to

• plan labour (number of operators, operator position, etc.) and simulate operating procedures to ensure satisfactory operations
• demonstrate movements to optimize layouts, eliminate cross-contamination and determine numbers of intermediate containers required
• optimize dispensing points, use of intermediate containers and buffer storage
• optimize utilities and services. The benefits of operability modelling include reduced capital cost and reduced operating cost, resulting from increased efficiency, improved use of labour and reduced inventory.

Early Estimates

To develop the new project concept it is important to have an early realistic appreciation of the magnitude of the required facility in terms of scale and cost.

Senior management must appreciate the likely cost of the final manufacturing facility and have a good understanding of the size of the project to consider the sites where it may be located. In many cases the new process may be accommodated within an existing manufacturing facility on a campaign basis with little need for plant modification.

Larger and more complex processes may involve a significant revamp to an existing facility. Many pharmaceutical companies now have significant capacity throughout their worldwide operations and the requirement for new greenfield project capacity is now less than it has been in recent years. However, there will always be a number of new facilities required if only to replace the ageing nature of existing capacity.

Specific process chemistry, more toxic compounds, specific physical forms and increasing levels of GMP will also add to the requirement. Costs of new facilities or revamps are often preset by early discussions where a rough cost is first mentioned. Often this number is based on little more than a guess or estimate, yet it can often live with the project throughout. An experienced contractor can provide useful early guidance if given a significant database of information. Past project data, when analysed and reported in a consistent manner, provides relatively accurate information from a minimal amount of information. The graph in Figure 3 illustrates one of the many types of correlations that are available. In this example, for a primary active pharmaceutical ingredient (API) batch manufacturing facility, the overall reactor capacity is the prime factor plotted against the total installed cost of the facility.

Figure 3: Process building cost versus reactor capacity.

The scale or the size of a new facility is also an area that can be estimated at an early stage from minimal information. The size of a manufacturing facility is something that has generally required a reasonable amount of design work to be executed before reasonable information has become available. However, the experienced designer can provide very early guidance on the scale of a new facility if it has analysed and correlated a number of previous designs. The analysis requires the definition of different areas of the facility, which must be clearly understood to make use of the relationships generated. In the example illustrated in Figure 4 the relationship between floor area and reactor capacity for differing manufacturing scale can be seen. With a minimum of process knowledge a good estimate can be made of the new plant area requirements.

Figure 4: Relationship between process footprint and reactor capacity.

Given an early appreciation of cost and size of facility the planning and design process may continue to the early stages of conceptual design.

Concept and Scope

Pharmaceutical plant design is often heavily influenced by the user. It is unusual for a client to make use of repeat designs, instead requiring bespoke design solutions. For example, a comparison of a variety of API pharmaceutical pilot plants finds all manner of different plant arrangements and detail for what are essentially the same process equipment configurations. In time, this approach will no doubt diminish as clients become increasingly focussed on minimizing overall project costs and time to build.

As with other industries a greater degree of standard or repeat engineering designs will prevail as manufacturers face stiffer competition in the marketplace.

For the moment, however, bespoke design is still an important factor in determining and fixing the user requirement and, therefore, the scope of the project. Engineering contractors generally have a key role at this stage of the process development in undertaking the conceptual study. At the early stage of a project it is essential that a common understanding of the project is appreciated by all parties. A series of questionnaires and workshops is useful in ensuring that all aspects of the project are fully covered and that all parties fully understand the project scope. The outputs from these workshops must then be captured in an overall plant user requirement specification (URS) and plant design basis documents.

The initial concept study will focus on plant arrangements and aim to provide a workable and efficient layout that satisfies the needs of the user and provides sufficient detail to enable a cost estimate to be developed. All of the high-level philosophy documents should be drafted and agreed at this stage to provide a firm foundation for the ensuing engineering efforts. New ideas and cost saving options should be tabled at this early stage of the project; the value of cost saving ideas considered during the concept study can lead to major savings. The accepted approach is to open up all avenues of discussion during the concept design stage. Once the project moves into front-end engineering the opportunities to rethink will become more and more limited as the momentum of the project picks up. As indicated in the illustration (Figure 5) there is an early project stage where the focus of the project is opened up; beyond concept stage this focus closes down rapidly.

Figure 5: Recognized relationship between cost and risk of change.

Some designers are now implementing a value management approach. A key feature of this approach is the definition of cost-saving objectives early in the project. These objectives are discussed with the specialty engineers and the cost achievement is analysed with the designers when the project cost estimate is ready. The cost objectives should then be reached by a focussed design effort and not as a result of a 'shock' cost-cutting exercise.

This first article has discussed some of the ways that external service providers add value to the early stages of pharmaceutical facility planning and design. Different techniques are required in later stages to deliver the project on time and within cost. These techniques will be discussed in my second article.

David Ainsworth is a principal consultant in Foster Wheeler's pharmaceutical division, UK.

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The Pharmaceutical Manufacturing Plan for Africa

By Dr Janet Byaruhanga

What is it and why accelerate the achievement of its objectives now? The Pharmaceutical Manufacturing Plan for Africa (PMPA) was developed in the framework of then NEPAD (now AUDA-NEPAD) and adopted in 2007. A business plan proposing a package of technical solutions to the challenges confronting the pharmaceutical industry was endorsed in 2012.

The PMPA is designed to catalyse local pharmaceutical production which in turn should contribute to improved public health outcomes through ensuring access, quality, availability, and affordability of the much needed essential products on the one hand and economic benefits through sustainability, competitiveness, and self-reliance of the pharmaceutical industry on the other.

In our continent, we have relied too heavily on imports for about 80 to 100% for our pharmaceuticals and medical consumables and that is not sustainable. During the COVID-19 pandemic, our continent also exposed that we lack capabilities and capacity to manufacture and supply the needed personal protective equipment (PPEs) as well as other essential drugs needed to curb the disease.

There are challenges the industry is confronted with that include the following, and are not limited to: 1) access to affordable financing, 2) access to technology and technical know-how, 3) inadequate human resource capacity, 4) small fragmented markets and poor market intelligence, 5) fragmented and weak regulatory systems, 6) fragmented and poor procurement and supply chain systems, 7) policy incoherencies across trade, industry, health, and finance, 8) poor business to business linkages and collaboration, 9) low investments in research and development as well as intellectual property. No single sector, government department, or organisation on its own can achieve these goals.

Therefore, the PMPA business plan proposes a package of solutions to the critical challenges facing the pharmaceutical industry to be delivered through multisectoral and multistakeholder actions. It is important to note that even with all these numerous challenges, a lot of opportunities exist and continue to be explored. The African Continental Free Trade Area (AfCFTA) for example, addresses a major challenge of small fragmented markets that have for a long time, been a disincentive to investors into African pharmaceutical manufacturing.  This had made African manufacturers to be considered unable to compete with Asian companies due to lack of scale in production because of small domestic or national markets.

The AfCFTA now creates a market of 1.3 billion people today, and 2.2 billion people by 2050. Our manufacturers can now be able to compete through enjoying significant economies of scale and scope. However, to get there, we need deliberate, bold, and thoughtful action.

The Pharmaceutical Manufacturing Plan for Africa will strengthen the procurement and supply chain management system and use pooled procurement as an innovative mechanism to incentivise local manufacturing. The impact of this will be the attraction of leading generic pharmaceutical manufacturers to either build plants locally or to partner with local manufacturers and equip them to produce their products under licensed manufactures or in Joint-Ventures.

Moreover, the huge and fast-growing African pharmaceutical and healthcare market combined with such incentives will attract investments in the sector. The result as we have seen from the examples of Russia, Bangladesh and other countries that deliberately supported the development of LPP, will be an increase in pharmaceutical production-related foreign direct investment, huge investments in training and skills development, accelerated technology transfer agreements, significant job creation directly and through the development of supporting and related industries, strengthening of regulatory systems and finally; positive pressure on our educational systems to create the skills required to run the manufacturing plants or engage in research and development.

In other words, besides job creation, we will truly enter the knowledge economy and will not be left behind in the 4th Industrial Revolution.

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Business Plan for Pharmaceutical Manufacturing Unit.

For pharmaceutical manufacturing unit, we have to consider two laws and regulations.

• It should meet all requirements according to Factory Act .
• It should compile with cGMP regulations

If you want to check list of documentations that are necessary for starting pharma manufacturing company read at out article: How to start pharmaceutical manufacturing Unit?

Different types of unit/s you can start with below procedure (Scope of This Project Report):

• Ethical/Branded Medicines Company
• Generic Medicines Company
• OTC (Over the Counter) Medicines Company
• Distribution and Hospital Supply Medicine Company
• Pharmaceutical Export Company
• Pharmaceutical Import Company
• Derma Products Company

Project Concept:

Area covered under project is

• Location and surroundings
• Land, Building and Premises
• Area Required
• Plant Layout and Design
• Essential Machineries and Equipments
• Man Power Requirement
• Estimated Project Cost
• Labor Safety and Security

Location and Surrounding:

Plant should be situated at location and surrounding that prevents any contamination and mixing of any external substances. Plant should be well connected to road and should easy availability of transportation, courier and cargo. Adequate supply of water and electricity is essential for smooth running.

Environment should be clean and free from air pollution. Proper sewerage system should be connected to plant for drainage of wastage. If possible, plant should be located not far away from market for easy availability of items in need and emergencies. Men force factor should also consider while finalizing location for plant i.e. availability of trained or skilled man power, labour and industrial legislation and cost of living etc.

Manufacturing unit should not be as far, it create labor and staff availability problem. Climate factor also affect selection of location. Extreme climate change like heavy rain, temperature, humidity, earth quake should be considered while selecting location for pharma plant etc.

Land, Building and Premises:

Investment for land and Building may depend at many factors like location, area, state, material used etc. Land and building may be own or rented. At prime location cost of plant may be much higher side where as at backward area, it may be less. If we want to prevent investment of land and premises, we can start with rented premises. Both Rented and Owned premises has its own pro and cons. Here we are not discussing at this matter.

Rented premises may prevent start-up time and cost but rented premises should compile with Drug and Cosmetic Act & Rules. Each section requires minimum area (as prescribed) for proper functioning and easy processing. If possible premises or building without partition is best for new starting. We can make partition accordingly. Need of architect or expert for setting-up premises depends at our experience level. In pharmaceutical, we need to get approval from Drug Department before starting manufacturing of any dosage form.

There is also mention about premise specification for the premises used for manufacturing, packaging, processing, stocking & ware housing, labeling and testing purpose. Premises should be have adequate area for work station, machinery implementation, movement of personnel and material, easy processing of all manufacturing processes carried out in same area. Main purpose of Schedule M is to prevent any contamination and manufacturing of quality products.

Area Required:

Every section needs different space for setting-up manufacturing of that section as per Drug and Cosmetic Act & Rules.

• For External Preparation, minimum of 30 square meter is required for basic installation and 10 square meter area for ancillary.
• For Liquid preparation, minimum of 30 square meters are required for basic installation and 10 square meters for ancillary.
• For Tablet Section, minimum of 60 square meters for basic installation and 20 square meters for ancillary for uncoated tablets.
• For Coating section installation, a minimum of 30 square meters are required and 10 square meters for ancillary
• For Capsule Filling Section, minimum of 25 square meters are required for basic installation and 10 square meters for ancillary area.
• For Powdered Section, minimum of 30 squares meter is required for basic installation and 10 square meters for ancillary.
• For Ophthalmic preparations, minimum of 25 square meters are required for basic installation and 10 square meters for ancillary
• For parenteral preparations, minimum of 150 square meters are required for basic installation and 100 square meters for ancillary

Plant Layout and Design:

Plant layout should be such that it should avoid or minimize the risk of errors and provide easy cleaning and maintenance. Plant layout should prevent cross contamination that result in adverse effect at quality of product and safety of the personnel. Plant layout should be designed that it should be easy to clean, maintain and operate. Design and layout of premises is so that it prevents entry of insects, pests, birds, vermins and rodents in the premises. It should avoid any mix-up or cross contamination of raw materials or in process material. Entry of visitors should be restricted to visitor area.

Clock wise or anti clock wise flow chart concept is best way to avoid any type of contamination and men-material flow. Flow chart of material is so that it should avoid any process delay and cross contamination.

Electricity supply room should be situated outside factory premises to prevent any short circuit and mis happenings. Proper safety procedures like sand baskets, covering of transformer and wires, water outlets etc should be maintained.

Ground Floor: Raw material Storage room, Packaging Material Storage Room, Finished Goods Storage room, dispensing and weighing section, Changing Rooms for staff and workers, visitor room etc is best suitable sections for ground floor. Racks should be used for placing raw materials. Each raw material should be well labeled and testes, under test, rejected, approved raw material should be placed separately.

First Floor: First floor is best suitable for all manufacturing processes.

Essential Machineries and Equipments:

Each section in pharmaceutical manufacturing unit require different type of machinery depend at dosage form in which medicine is required. Detailed list of machinery and equipments you can read at our article “ requirement of machineries and analytical equipments for pharmaceutical Unit  “

Man Power Requirement:

• Minimum of One Manufacturing Chemist
• Minimum of One Analytical Chemist
• Supervisor (As number of required)
• Machine Operators
• Office Staff

Estimated Plant Cost:

Total estimated plant cost depends at capacity of plant and area covered. It is difficult for calculating estimated plant cost. A pharmaceutical manufacturing plant is costlier project and requires number of formalities to be fulfilled for getting approval from drug department. Here we are trying to give find out brief estimated cost for setting-up pharmaceutical manufacturing plant. This estimated is for informational purpose only and can’t be consider accurate due to any change in cost of land, machinery, salary, rent, premises & building etc. Cost of machinery we are considering as per idea of cost we received from few manufacturers. Land/Building/Premises (If owned): Depend at location, here considering 35 lakh of value including building. Rent (If not owned): 20000-40000/- per month (Depend at location). For Liquid Plant: Approximately Small liquid plant cost could be six lakh to 12 lakh.  For Tablet and capsule manufacturing most of equipments will be same except tablet punching machine and capsule filling machine. For powder section, we can also use similar equipments like cone blender, mass mixer etc. Air conditioners and Air compressors will be cost approx. sixty thousand. Blister packing machine is nearby two lakh. Alu-alu machine is costlier one and could cost approx. twelve lakh. Semi automatic Capsule filling machine is nearly ten lakh. Tablet punching machine will also cost approximately five lakh.

Workers Safety and Security:

Labor safety and security is must during manufacturing process. All staff and workers should be dressed accordingly. Workers should have working clothes, industrial boots, gloves, caps, spectacles, mask and others requirements during working. No worker or staff member should be allowed without proper precaution to prevent any contamination and health related issue. Raw materials used in pharmaceutical sector may cause adverse effects at health of workers if it comes in contact with their skin or inhaled by them. All dangerous machineries or equipments should be red marked with warning massage. Rest room and canteen should be situated outside work station. First aids box and medical aids should be available for preventing any emergency. Medical check-up at interval of six months should be conducted.

Hope above information is useful to you, for any suggestion and query mail us at [email protected]

Related Articles:

• Manufacturing Process of Solid Dosage Form i.e. Tablet/Capsules
• Manufacturing Process of Liquid Dosage Form
• Manufacturing Process of Parenteral (Liquid/Dry Injection) Dosage Form
• Manufacturing Process of Ophthalmic/Eye/Ear/Nasal Drop Preparations
• Manufaturing Process of Solid Dosage Form i.e. Powder (Protein powder, Medicated powder etc)
• Manufacturing process of Inhaler/Spray Dosage Form
• Manufacturing process of Surgical/Medical Device
• Requirements and Challenges to start Pharma Manufacturing Unit

12 responses to “Business Plan for Pharmaceutical Manufacturing Unit.”

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We are interested to establish a Pharmaceutical plant in Yemen with pharma formulation , pls interested companies to cooperate and partnership with to start this project, and for further information please contact me on the following, WhatsApp no. +967711971740 Email: [email protected]

I want to establish a small scale, fully -authomated tablet/capsule/liquid gel plant. Can you give me an Estimated cost in US dollars? Please include packaging, testing and quality control details.

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Pharmaceutical Plant Layout

Once you have decided on where to locate your pharmaceutical company, the next important thing you need to do is to plan a suitable layout for your pharmaceutical plant. While designing a pharmaceutical plant, you need to understand and follow the basic regulatory requirements for the construction of a pharmaceutical plant.

According to National Agency for Food and Drug Administration (NAFDAC), your proposed layout and design should aim at minimizing the risk of errors and permit effective cleaning and maintenance in other to avoid cross-contamination, build-up of dust or dirt and in general, any adverse effect on the products.

The best way to achieve this goal is to design the layout in such a way that it follows a logical order corresponding to the steps of the operation.

• 1 What is a pharmaceutical plant layout?
• 2 Features of a good pharmaceutical plant layout
• 3 Advantages of a good pharmaceutical plant layout
• 4 Conclusion
• 5 References

What is a pharmaceutical plant layout?

Pharmaceutical plant layout/ factory layout refers to the allocation of space and the arrangement of machines, furniture and other important administration and necessary services needed in a production process within a factory building in other to perform the various unit operations involved in the manufacturing process of dosage forms in a cost effective manner and with the least amount of handling in processing the product from the receipt of raw material through the distribution of the finished product.

Features of a good pharmaceutical plant layout

A good pharmaceutical plant layout should possess the following characteristics

• There should be adequate floor space for machines installation and utilization
• The machines should be properly arranged to facilitate minimum material handling is necessary for low cost processing.
• The layout should facilitate smooth and continuous flow of production process from one point to another without any form of delay
• It must incorporate adequate health, safety and security features such as first aid box, fire extinguisher, emergency exit and access point
• A good layout should allow effective supervision, coordination and control of the production processes
• There should be room for adjustment and modifications whenever the need arises.

See also:  12 Factors to Consider When Choosing a Pharmaceutical Plant Location

Advantages of a good pharmaceutical plant layout

The advantages of a good pharmaceutical plant layout includes but are not limited to

• Optimum use of available floor space for production operations
• Improved quality of product due to reduced chances of cross contamination
• Efficient arrangement for receipt, transportation, storage, and delivery of raw material and finished goods.
• Low cost of material handling
• Minimized loss due to waste and spoilage
• Conducive working conditions resulting in improved efficiency.
• Increased productivity with reduced risk of human error
• Minimized risk of occupational hazards/ low incidence of occupational hazards
• Minimized cost and efforts in supervision of production processes.
• Provision of control and supervision operations at appropriate points

Planning the layout of a pharmaceutical plant is an important decision as it represents long‐term commitment. It is also a continuous process as there are always chances of making improvements or adjustment to the existing arrangement.

It should be so designed that the functioning of plant would become very efficient by providing optimum relationship among output, floor area and manufacturing process. Although pharmaceutical plant layout differs from plant to plant, the basic principles governing pharmaceutical plant layout are more or less same.

• http://pharmaquest.weebly.com/uploads/9/9/4/2/9942916/pharma_factory_location.pdf
• http://www.nafdac.gov.ng/index.php/guidelines/gmp-gidelines
• Shah B., Nayak B., Jain V. and Shah D. (2012). A Textbook of Pharmaceutical Industrial Management . New Delhi: Elsevier.

12 Factors to Consider When Choosing a Pharmaceutical Plant Location

Factors Influencing Pharmaceutical Plant Layout

January 11, 2024

February 28, 2022

June 14, 2023

January 30, 2024

November 13, 2020

IT IS A INFORMATIVE ARTICLE

a good information can be got from this article

Pl keep it up

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Great article. It is a very helpful blog for everyone. Thank you for sharing with us.

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