How to Start a Pharma Company
in 10 Easy Steps

Introduction

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:

1. These companies show resilience during market downturns, rising in R&D investments to stay competitive & flexible (Grand View Research Report, 2023).
2. 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 how 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!

Step 1: Market Research and Pharmaceutical Business Ideas

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:

1. Understanding market trends and directions.
2. 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.
• Logistics.

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.

Step 3: Regulatory Compliance and Legalities

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.
• Taxes.
• 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.

Step 6: Product Development

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.

Step 7: Clinical Trials and Approval Process

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.

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Step 9: Marketing and Sales

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 Pharmaoffer and schedule a free meeting to take your business to the next level.

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