Impact of cGMP on Supply Chain

Incorporating regulatory requirements into the product life cycle is crucial.
Jul 01, 2011
Volume 24, Issue 7

Increased globalization, outsourcing, and expansion into nontraditional, or emerging, markets for product research, development, manufacturing, and distribution has put a spotlight on an extended network of supply-chain participants. A growing list of so-called unsafe products, including certain foods, toys, and more recently, active pharmaceutical ingredients and raw materials, originating in China and India has emphasized the need for increased supplier and material qualification and auditing. The focus is on quality control and regulatory compliance, an area of increasing concern for life-sciences companies as well as for the agencies responsible for ensuring the safety and efficacy of medications consumed by a global population.

There is growing discussion regarding the use of cGMP as companies become more global and supply chains become more complex. To ensure compliance, the focus on cGMP processes and procedures needs to take into account all activities and participants engaged in the transformation and distribution of materials as they move from origin to point of final consumption.


US agencies, including FDA, are not alone in their growing concern and awareness of the issues related to product safety and efficacy. Agencies in emerging markets, such as China's State Food and Drug Administration, are also increasing their oversight and requiring cGMP practices for the manufacture of all products that are destined for human consumption. Chinese officials are taking advantage of FDA's technical assistance, provided by the FDA offices established there in 2008, to ensure that their export-related regulations are in compliance with US and European standards, compiling facility audits where necessary.

Despite these remedial actions, there is still much room for improvement, in particular in the chain of custody as materials and components move through an increasing number of contract research organization and contract manufacturing organization facilities. Recognition that the marketing authorization holder, or brand owner, of the product retains responsibility for its products has provided the need for a more collaborative environment across these operations, with increased oversight of activities at outsourced locations. In many cases, however, the logistics component of this supply-chain network is not included in the development of Service Level Agreements between all supply-chain participants, leading to, at times, variations in interpretation of standard operating procedures (SOPs).

Unlike traditional markets, with mature storage and distribution infrastructure in place between key origin and destination points, many emerging markets are challenged with providing logistics resources, in some cases relying on nontraditional equipment and modes of transportation, such as bicycles or horses. Global networks of integrated carriers do not always extend to the point of manufacture and must rely on transportation partners, thereby incurring a high level of variation with regard to material handling and storage facilities. This Achilles heel of the global supply chain, so to speak, should not be ignored. Unless there is stringent specification and compliance in place for product storage, handling, and transportation, the risk of product contamination and cross-contamination is unacceptably high. There are additional risks tied to variations in temperature, humidity, and vibration that must be monitored and controlled.

There is increased concern from FDA and other global regulatory bodies related to supplier qualification and monitoring as well as cold-chain and cool-chain compliance. There are also instances where FDA can issue a Warning Letter to a manufacturer for lack of monitoring and control of suppliers, especially when there is evidence of nonconformance to required procedures and it is shown that the company took no action. Such regulatory oversight is now being enforced across a broader spectrum of the supply chain.


If these factors are ignored, the end user of the product—the patient—can be put at risk. In addition to the impact of compliance violations (i.e., regulatory citations, observations) having a high level of risk across an extended global network increases the likelihood of a supply-chain disruption. The ability to thoroughly investigate a product quality issue is severely compromised if the chain of custody is too variable or not understood by the sponsor company, or manufacturer.

For instance, a stockout can be caused if there is a disruption in the flow of goods to the point of demand. Carriers and forwarders are crucial in ensuring that global trade compliance is adhered to and that there are no delays caused by misinterpretation of documentation or lack of sufficient information. The impact of a stockout due to inability to supply—for either logistics or regulatory compliance reasons—should not be underestimated. In addition to the financial considerations (which can be considerable), reputational risk and market perception have a high price. In certain cases, it is impossible to recover and some brands have suffered as a result.

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