Starting up a pharmaceutical company is an enormous undertaking, but with a highly effective business plan, it absolutely can be done. In fact, some of the newest successful pharmaceutical startups have just a single founder.
The key to creating an emergent pharmaceutical startup lies in market knowledge and meeting consumer demands, while carefully working within FDA guidelines. New pharmaceutical drugs owe much of their success to the public’s overwhelming demand for fast acting self administered drugs.
Licensing and business formation
Before you can build a pharmaceutical startup, the right business structure needs to be established and officially formed. Many pharmaceutical companies form as limited liability corporations, which helps with both tax sheltering and mitigating legal liability.
After the proper business entity has been formed and a registered agent has been appointed, the next step is ensuring your company is in compliance with all local zoning and licensing laws.
Decide early on whether or not research trials, manufacturing, drug development, or distribution will be taking place in-house or contracted out.
This will allow you to stay in compliance with the law while moving forward, without running the risk of being levied with a heavy fine or another potential stumbling block.
Establishing a brand
Newly established pharmaceutical companies face an uphill battle when it comes to getting their drugs in front of the medical community that will ultimately be prescribing and recommending their products to patients.
Major pharmaceuticals routinely spend a substantial amount of money courting doctors, creating and sending promotional materials and even lobbying politicians to pass laws and legislature that will bolster their bottom lines.
This is why establishing a strong and impactful brand early on can help to level the playing field. What your startup may lack in financial resources can be made up by establishing a pharmaceutical brand with a clear and concise message.
Everything from your logo to your company website needs to appeal to medical professionals, while providing the practical information doctors need to make an informed decision.
Research and development
The lengthiest part in the pharmaceutical company startup process is easily the drug research and development stage. After a promising drug has been identified, your company needs to ascertain whether it can be viably replicated and distributed to consumers.
A considerable amount of research will take place in a laboratory setting, with clinical trials taking place afterward if the initial testing phase is a success.
Any claims that your pharmaceutical company makes needs to be backed with scientific evidence. Additionally, you will need to protect your intellectual property and research the steps needed to patent your company’s medicines.
While you may be able to startup a pharmaceutical company with modest means initially, it is veritably impossible to produce a marketable drug without the financial backing of investors. From crowdfunding to angel investors, there’s no shortage of ways for pharmaceutical companies to get the funding they need to grow effectively.
At the same time, when another entity has a stake in your pharmaceutical company, some of your decision making abilities may be hindered. Alternatively, you may want to look into traditional business funding, but remember that you will be personally liable for all of your pharmaceutical’s business debts.
Meeting FDA regulations
To get FDA approval for prescription drugs, pharmaceutical must go through a long and arduous process. The FDA has made recent improvements to its new drug approval process, due to problems with some of their older drugs like Z-Pak, which were found to be not as safe as once believed.
The new process includes increased transparency and consultations. Once an initial Investigational New Drug application is submitted with the FDA, there’s a minimum 30 day waiting period.
Next, your pharmaceutical company must run a clinical trial which will be observed and noted by representatives of the FDA. If everything goes well, you will be given the green light to produce and distribute your prescription drug to the public.
Believe it or not, but the manufacturing portion might actually prove to be the easiest part of the pharmaceutical startup process. While you might opt to buy your own manufacturing equipment and rent a production space, there are countless reputable drug manufacturing facilities that you can subcontract work out to.
Ultimately, it will be your job to ensure that your prescription drugs are manufactured to code, stay within FDA guidelines and are produced in a sterile environment. Consulting a lawyer around this point is advisable.
There is a lot of work involved in creating a pharmaceutical startup, but your venture could be the catalyst to a major shift in the pharma industry. Innovative new pharmaceuticals have been known to start a ripple effect in the market, continuing outward until the whole world takes notice.
By taking great pains to carefully plan out your approach, learning how the FDA operates, researching the market and protecting your intellectual property, you will be off to a better start than most.