Transfer Pricing for Pharmaceuticals & Life Sciences
Contract manufacturing, royalty structures and marketing intangible (AMP) disputes make pharma one of India's most heavily litigated transfer pricing sectors. We help innovator and generic companies alike stay ahead of it.
Manufacturing, distribution and brand-building all in one value chain
Pharma groups typically combine contract manufacturing, formulation trading, royalty-bearing know-how licences and significant local marketing spend — each with its own transfer pricing exposure, and each frequently examined together during an audit.
Typical structure
An Indian entity manufactures or distributes formulations for a group brand owner, pays royalty for know-how, and incurs local marketing spend that can be recharacterised as building the foreign parent's brand intangible.
Where Transfer Pricing applies in Pharma
Contract Manufacturing
An Indian plant manufacturing APIs or formulations for a foreign group principal on a cost-plus basis.
Distribution & Royalty
Importing finished formulations from a group company while paying royalty for brand or technology use.
AMP / Marketing Intangibles
Local advertising and promotion spend alleged to build marketing intangibles owned by the foreign brand owner.
Clinical Trials & R&D
Cost-contribution arrangements for multi-country clinical development programmes.
API Trading
Cross-border purchase/sale of active pharmaceutical ingredients between group entities.
In-licensing / Out-licensing
Royalty arrangements for licensing molecules or technology in or out of India.
How these transactions are benchmarked
CPM / TNMM
Manufacturing margin benchmarking for contract manufacturers.
RPM
Resale margin analysis for distribution entities importing finished goods.
CUP
Royalty rate benchmarking against comparable pharma licensing agreements.
PSM
Profit split for integrated, jointly-developed R&D or co-marketing arrangements.
Proactive AMP and royalty defence, not reactive fire-fighting
We quantify AMP spend against industry "bright line" benchmarks before an audit raises the question, benchmark royalty rates against genuinely comparable licensing deals, and build a manufacturing margin file that reflects your actual functional and risk profile.
AMP Bright-Line Analysis
Quantify marketing spend exposure ahead of audit.
Royalty Benchmarking
Defensible royalty rates from comparable licence data.
Manufacturing Margin Study
Cost-plus benchmarking for contract manufacturing units.
Litigation Track Record
Experienced in India's most litigated pharma TP issues.
Our Pharma Transfer Pricing services
TP Documentation & 3CEB
Local File and Accountant's Report covering manufacturing, distribution and royalty.
AMP Defence Strategy
Pre-emptive analysis and audit-ready position papers.
Royalty Benchmarking
Industry-specific licence comparables and rate justification.
Audit & Litigation Support
Representation before TPO, DRP, CIT(A) and ITAT for pharma-specific disputes.
Facing an AMP or royalty TP question?
Talk to a specialist before your next assessment.