Working with a Contract Manufacturer: Key Considerations - After a strategic evaluation of what activities to outsource, sponsor companies should follow key guidelines for selecting and auditing a pro

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Working with a Contract Manufacturer: Key Considerations
After a strategic evaluation of what activities to outsource, sponsor companies should follow key guidelines for selecting and auditing a provider, and preparing quality agreements.


BioPharm International Supplements


Contractual Agreements

Once a contract manufacturer has been selected, formal agreements must be put in place. In an outsourcing relationship, the sponsor company normally owns the product, including the rights to market and sell it. The contract manufacturer, in turn, agrees to provide the service and have the quality systems in place to deliver the product to the agreed specifications. From a regulatory point of view, however, the sponsor company is ultimately responsible for the quality of the final product.

Therefore, from a business and quality standpoint, one of the most critical elements of outsourcing is the technical and quality (T&Q) agreement. The T&Q agreement is a contractual agreement that delineates the responsibilities of both the contract manufacturer and the sponsor company.

The T&Q agreement can be built into a contract agreement or be an annex to it. Either way, it is important that the T&Q agreement be detailed and comprehensive to avoid any conflicts or misunderstandings. At a minimum, the T&Q agreement should describe in detail the responsibilities related to annual product reviews and reports, sample retention and documentation, deviation and failure investigation handling, complaints and adverse event handling, stability, recalls, field alerts, change control, label copy approval, regulatory contacts, audits and site visits, finished product testing, disposition of materials, validation, use of subcontractors, and specific requirements if handling restricted compounds.6

In terms of its structure, the T&Q agreement can be written like a legal document, with clauses detailing the responsibilities of each organization, or it can be written in a table format. The table format is preferable because it clearly outlines the responsibilities of the each company (CMO and sponsor). This format is easier to reference and reduces confusion, and it is easier for an independent auditor to audit against it.

Some T&Q agreements have two parts: one that specifies the GMP expectations and detailed working methods, and another that contains product-specific details such as manufacturing instructions, specifications (e.g., for materials, components, finished product, stability), acceptable quality levels, test methods, and packaging configurations. The second part can be referred to as the product manual because it contains all the product-specific details required to manufacture that product. Including this product-specific information in a separate section is useful because if the agreement is expanded to include new products, only the product manual section will need to updated; the main body of the agreement will not have to be modified or renegotiated.

A detailed T&Q agreement will prevent future conflicts over roles or responsibilities and endless negotiations, saving both time and money, and result in a productive, well-defined partnership.7

Regulatory Expectations

Not only is a T&Q agreement between companies a good business practice, it is a regulatory expectation, and in some regions, a regulatory requirement. The US Food and Drug Administration does not require that a quality agreement exist between companies, but does expect it. In Europe, it is a regulatory requirement to have such an agreement and it is regulated by Directives 2003/94/EC and 91/412/EEC, and the European Union GMP Guide.6

Ensuring the CMO is Prepared for a Preapproval Inspection

Once the CMO is ready to manufacture the validation batches, the sponsor company should schedule an audit. Although the sponsor company should have already conducted other audits to assess the CMO's systems, this audit will be specifically targeted at the product being manufactured. The audit should review the process from receipt of materials to release testing of the product. Some specific areas that should be included are: material and product specifications; utilities; equipment and process validation; method transfers and validation; training; the batch record review process; the handling of deviations and out-of-specification results; product and material flows; and any potential area of contamination or mix-ups. In a nutshell, the sponsor should ensure the CMO has the quality systems in place to adhere to the T&Q agreement.

Following the audit, the contractor must respond to each deficiency noted in the audit report and provide a corrective actions and preventive actions (CAPA) plan. Only after these corrective actions have been carried out should the contract be approved by the sponsor.


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