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What is a Loan Licence in the Pharmaceutical Industry
A loan licence allows a pharmaceutical company to manufacture drugs using another company's licensed manufacturing facility instead of building its own. The licence holder, known as the loan licensee, does not own the factory but is legally permitted to produce and market drugs under their own brand name through the licensor's premises. This arrangement is regulated under the Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, and is issued by the State Drug Controller of the state where the manufacturing unit is located.
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