Contract Manufacturing Raises Regulatory Concerns

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An increasing number of warning letters shows that FDA is observing more problems with pharmaceutical contract manufacturing.

FDA officials continue to be alarmed about violative production practices and inadquate quality control at drug outsourcers, as seen in a rise in warning letters and citations to contractors and their pharma clients. Contract manufacturing has gone “from bad to worse,” in the pharmaceutical compliance area, said Donald Ashley, director of the Office of Compliance (OC) in the Center for Drug Evaluation and Research (CDER), at the Enforcement, Litigation and Compliance conference sponsored by the Food & Drug Law Institute (FDLI) in December 2017 in Washington, DC. Ashley noted that FDA has issued approximately five warning letters to contract manufacturing organizations (CMOs) in the past year and to the product “owners” or license holders for drugs made at facilities that fail to meet standards.

A notable warning letter issued in July 2017 to Sage Products, Inc., Ashley noted, cites the product owner for lax oversight of a contractor that produced oral solutions using the same equipment in which it made toxic car washes and waxes.  “Contractors are extensions of the manufacturer,” the letter states, and manufacturers are required to ensure that their drugs are made in accordance with FDA regulations to ensure product safety, identify, strength, quality, and purity. FDA sent a similar letter to the CMO, ChemRite CoPac in Wisconsin, emphasizing its responsibility for the quality of drugs it producers for clients.

Letters to manufacturers citing contractor failures emphasize that the license holder remains ultimately responsible for ensuring that all products meet standards for good manufacturing practices (GMPs).  “You can’t contract around” cGMPs, commented Paula Katz, director of the manufacturing quality and policy staff in OC’s Office of Manufacturing Quality (OMQ). She noted that FDA encourages pharma companies to define expectations and responsibilities upfront in quality agreements with contractors. Even though FDA regulations do not require such agreements, the agency considers clear statements by manufacturers and contractors critical to understanding which party is responsible for rejecting unsuitable products and for responding to complaints.

Continued problems related to contract manufacturing reflect a steady expansion in drug outsourcing arrangements. More contracting with overseas producers and a related increase in FDA inspections of foreign manufacturing facilities, moreover, is uncovering more violative operations. And the rise in “virtual” biopharma operations increases reliance on contractors for manufacturing, as well as research, distribution, and other operations. 


FDA spelled out in a 2016 guidance its recommendations for product owners and contractors to negotiate and agree on contract manufacturing agreements for drugs that define expectations and responsibilities for all parties. The guidance applies to producers of a broad range of drug and biotech products, but not ingredient suppliers and distributors through the supply chain, Katz explained at the FDLI conference. Quality agreements require clear language defining key roles and responsibilities and identify products and services covered. The document should provide points of contact for approving various activities and how disagreements will be resolved. Management of lifecycle changes is important, and agreements should specify what changes implemented by the contractor warrant notification to the product owner and which require prior approval from FDA, Katz added. Contractors and owners need to understand the risks that changes may affect product quality and agree on procedures for conducting validation activities to implement such changes.

In addition to FDA’s guidance, the need for clear agreements on contract manufacturing is cited in multiple quality standards established by the International Council for Harmonization (ICH). These similarly emphasize that the pharmaceutical company is ultimately responsible for ensuring that outsourcers adhere to quality systems, purchase quality materials, and comply with cGMPs.