Contract Manufacturing For Pharmaceutical Vs. Cosmetic Production
What is contract manufacturing?
Contract manufacturing is a form of outsourcing (outside resourcing). As the name of the term “contract manufacturing” implies, a contract manufacturing company (e.g., pharmaceutical testing laboratories, pharmaceutical contract manufacturing, and cosmetic contract manufacturing companies) creates an agreement (contract) with another business (company A) to complete a planned or existing task. Thus, company A hires the manufacturing company to complete activities that they can’t do in-house or don’t wish to achieve internally. Utilizing the services of a contract manufacturing company can supply a host of benefits, especially to startups or small companies. Nearly all pharmaceuticals have some level of outsourced manufacturing (contract manufacturing) or testing (contract testing) to get a new drug approved by the Food & Drug Administration for patient use.
What are examples of pharmaceutical formulations where the manufacturing is outsourced?
- Metered-dose and dry powder inhalants
- Nasal sprays
- Optics
- Vaginal suppositories
- Topicals
- Rectal suppositories
- Oral liquids (aqueous)
- Liquid-filled capsules
- Oral tablets and powder-filled capsules
- Parenteral products
What are examples of well-known brands that outsource their cosmetic and beauty product manufacturing?
- Maybelline
- Johnson & Johnson
- Estée Lauder
- L’Oréal
What are the benefits of contract manufacturing?
There are a few different reasons to use an outside company to support product development and manufacturing:
#1: Cost savings
Companies save money instantly because they do not have to pay startup costs for a facility, equipment, and technicians needed for product production. Additionally, companies save money on employee hiring, wages/benefits, and training. If hiring a contract manufacturer overseas (such as India), additional cost benefits can be found due to the lower labor cost. As contract manufacturers serve multiple customers and buy in bulk, they can often offer reduced raw material costs. While all of these benefits are obvious for startups and small companies with limited startup capital and resources, large corporations benefit from using contract manufacturing through outsourcing the production of products outside of their core competencies.
#2: Advanced technical skills at your fingertips
Businesses can use the contract manufacturer’s engineers, scientists, regulatory experts, and technicians with years of experience to their advantage. These experts’ skills are necessary for cosmetic production and provide efficient formulation creation, prototypes, and product filling methods.
#3: Instant access to GMP quality facilities & processes
Facilities that are certified for Good Manufacturing Practices (GMP) require ongoing environmental monitoring to maintain certain levels of sterility and excellence. Instant access to GMP quality facilities circumvents the headache of startup facility costs and lengthy certification processes.
#4: Allows outsourcing business to focus on branding depth
With outsourcing manufacturing and other business components that aren’t a company’s expertise, businesses can focus on their core competencies and building their corporate brand. Thus, new companies can focus on depth over breadth.
#5: Gives outsourcing business access to niche internal product knowledge
Many cosmetic brands are founded by celebrities and entrepreneurs who do not have chemistry, biology, or manufacturing backgrounds. Celebrities and entrepreneurs have a product vision but don’t have the expertise to successfully create and market the concept alone. Working with a knowledgeable manufacturer fills that gap. Even for large corporations, contract manufacturing can offer benefits if the niche a corporation is looking to fill can be covered cost-effectively.
#6: Time savings
With a contract manufacturing organization, businesses do not need to hire staff, train technicians, or acquire resources for manufacturing. Instead, contract manufacturing activities can run in parallel with other areas of your product development, testing, and scale-up.
Pharmaceutical manufacturing has the following product manufacturing stages:
- Initial research and development to find drug and prove efficacy
- Small batch manufacture of active pharmaceutical ingredient (API)
- Large batch manufacture of API
- Small batch manufacture of final drug product
- Large batch manufacture of final drug product
- Packaging and labeling for a final drug product (including sterile filling for liquid, gel, and cream formulations)
Cosmetic manufacturing has the following basic product manufacturing stages:
- Initial research and development to create the cosmetic formulation
- Small batch manufacture of cosmetic product
- Large batch manufacture of cosmetic product
- Packaging and labeling for final cosmetic product (reiteration of packaging if necessary)
If formula development isn’t necessary, most of the manufacturing cost will go to getting manufacturing in place to produce large-scale cosmetic batches.
What are the primary differences between cosmetic and pharmaceutical manufacturing?
The success of a pharmaceutical product hinges upon the safety and efficacy of the API. Most of the development and manufacturing challenges for pharmaceutical manufacturing center around the production of pharmaceutical-grade API and incorporation of the API into a drug product at therapeutic doses. While branding and package labeling are essential, minimal time and effort are spent on packaging design for pharmaceutical products. When completing pharmaceutical manufacturing for a new drug, many manufacturing milestones must be reached to consistently manufacture a drug product on a large scale, quickly, and at the lowest cost possible. The first set of processes used to manufacture the first large batch of an API product is often not the most cost-effective or efficient process. However, a set manufacturing process must be chosen for clinical trial use and marketing, as the FDA will only approve drugs manufactured from a proven manufacturing process.
In contrast, the success of a cosmetic product is a combination of efficacy, branding, novelty, and consumer satisfaction. Unlike pharmaceutical products, a cosmetic product has lots of brand competition. Thus, the branding and packaging stages of cosmetic product manufacturing are critical to its overall success in the market. For example, if a business is selling mascara, the style of the application brush selected for product packaging could make all the difference to a consumer. When it comes to cosmetic product manufacturing, manufacturing time and difficulty will depend on cosmetic or beauty product formulation. In some instances, cosmetics and beauty products can piggyback off other products in the market and create a novel twist (e.g., an organic version, vegan version, etc.). Some beauty formulations are simply a color change for the new season. The fewer unknowns and complexities within a cosmetic formula, the faster (and often cheaper) the manufacturing of the base product will be. However, as some cosmetics require specialized packaging (such as applicators, cases, mirrors, etc.), packaging design, packaging manufacturing, and formula filling time are often higher for cosmetic products than pharmaceuticals. For additional details, on pharmaceutical contract manufacturing please see our article HERE.
Summary
Overall, contract manufacturing is a form of outsourcing where a third-party manufacturing company is hired to complete activities that cannot be accomplished internally. Utilizing the services of a contract manufacturing company can supply a host of benefits, especially to startups or small companies. These benefits include cost savings, time savings, access to advanced technical skills outside a company’s expertise, and other benefits like manufacturing GMP quality products. Contract manufacturing needs differ for pharmaceutical and cosmetic products. The success of a pharmaceutical product hinges upon the safety and efficacy of the API. Most of the development and manufacturing challenges for pharmaceutical manufacturing center around the production of pharmaceutical-grade API and incorporation of the API into a drug product at therapeutic doses. In contrast, the success of a cosmetic product relies on a combination of efficacy, branding, novelty, and consumer satisfaction. Thus, most of the development and manufacturing challenges for cosmetics come from formulation development and packaging design. Despite your industry, when looking to engage with a contract manufacturing organization for pharmaceutical or cosmetic production, ensure that the signed master services agreement covers all of your product’s intellectual property, quality, timeframe, formulation development, and packaging needs.
MycoScience is a contract manufacturing organization specializing in sterile syringe and vial filling. MycoScience also offers Preservative Efficacy Testing, Sterilization Validations, Bioburden Testing, Cleaning Validations, Microbial Aerosol Challenge Testing, Accelerated Aging, Microbiology Testing, Cytotoxicity Testing, Bacterial Endotoxin Testing, EO Residual Testing, Package Integrity Testing & Environmental Monitoring services medical devices and allied industries. MycoScience is an ISO 13485 certified facility.
References
Alex Blackstone. Manufacturing Cosmetics- Internal or Outsourced. BlackstoneBeauty Blog. 2019.
Contract Manufacturer. Wikipedia. 2021.
Lorraine Dallmeier. 11-Point Checklist To Outsource Skincare Manufacturing. Formula Botanica.
Michael J. Akers. Sterile Drug Products Formulation, Packaging, Manufacture, and Quality. Drugs and the Pharmaceutical Sciences. Informa Healthcare. 2010.
