Managing Quality While Outsourcing - How to avoid the pitfalls of oursourcing - BioPharm International

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Managing Quality While Outsourcing
How to avoid the pitfalls of oursourcing


BioPharm International



Karen Walker (Abgenix, Inc.) and Marc Puich (Tefen, Ltd.)
The benefits of outsourcing manufacturing are well known within the biopharmaceutical industry. Small companies can benefit greatly from working with a CMO by minimizing capital outlays, shortening lead times for bringing capacity online, accessing manufacturing and development expertise, and leveraging project management skills. Larger companies are also using outside capacity to bridge shortfalls in internal capabilities or to off-load their older, lower-margin products, which can free up capacity for newer products. Additionally, CMOs can offer certain types of capacity that the innovator company lacks.

As with any partnership, working with a CMO can be complex. The level of trust and cooperation between both organizations needs to be extremely high due to the sensitive nature of the product technologies and the crucial timing involved with running clinical trials and supplying needy customers. A key aspect to managing this relationship is forming a joint quality culture and establishing strong communication plans at all relevant levels. Building the successful relationship requires formal agreements with key milestones and responsibilities. These agreements include the actual product manufacturing and supply agreement and should also include a quality agreement. The quality agreement solidifies the quality structure and culture and serves as a tool for manageability with respect to quality issues.

Before creating any framework for the quality relationship, both parties involved in the partnership need to understand the extent to which they have developed a quality culture. Creating a quality culture requires focus in three main areas:

  • leadership philosophy
  • quality management processes
  • regulatory and business environment understanding.

Through dialog and initial audits, a company looking to outsource can gain a fairly clear understanding of their outsourcing partner's quality philosophy and evaluate how it might fit with their own. Understanding where there might be gaps in these quality cultures and learning to adapt them to the needs of the partnership is a difficult part of the process. This is where the quality agreement becomes so important. Because of different regulatory interpretations and internal quality systems, the agreed upon language and quality relationship needs to be formalized to assure total understanding of roles and expectations on both sides of the partnership. The joint quality culture, and therefore the elements of the quality agreement, is built on the mutual understanding of the needs of the partnership and requires planning, execution, and continuous review and revision.

Different regulatory agencies have slightly different views on the need for stand-alone quality agreements. FDA does not explicitly define that one is required but references something similar in concept in several guidance documents, including "Cooperative Manufacturing Arrangements for Licensed Biologics"(Draft 1999).

Chapter 7 of the EU GMPs also defines the need for clarity on product control and on how the qualified person releasing the batch can assure compliance with regulations but does not state that a quality agreement is a necessary instrument.

The ICH regulations are the most explicit in defining the need for a stand-alone quality agreement. Section Q7a lists the following requirement:

There should be a written and approved contract or formal agreement between the contract giver and the contract acceptor that defines in detail the GMP responsibilities, including the quality measures, of each party.

The quality agreement is usually developed in conjunction with the overall supply agreement. The supply agreement, a legal document, defines pricing methods, milestones, the workplan, forecasts, and other terms and conditions of the relationship. Some would argue that the quality plan should simply be an addendum to the supply agreement, not necessarily held to the same level of legal scrutiny. The reasoning is that it doesn't define terms of payment or milestones. Others would contend that the quality agreement is contractual, due to its definition of clear roles and responsibilities and its use in reducing ambiguity if challenges arise. Regardless of how it is viewed, having it as part of the negotiation and final agreement is vital to strengthening the ties between partners.

The quality agreement should have several key parts to it. First, it should define the level of cooperation when working with the following quality systems:

  • validation
  • deviations and investigations
  • documentation (review and approval)
  • audits
  • record retention
  • product retention
  • change control
  • specifications
  • testing
  • training.


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