FDA Urges Greater Focus on Contractor Quality

Published on: 
BioPharm International, BioPharm International-07-01-2013, Volume 26, Issue 7
Pages: 40–45

Increased manufacturer outsourcing requires clear policies and written agreements with CMOs.

The globalization of commercial drug production has increased reliance on vendors for raw materials and finished products, a situation that requires policies and systems to ensure that all parties understand responsibilities for meeting quality standards. FDA seeks to help manufacturers that hold market authorizations to maintain clear and effective relations with contractors through new guidance issued in May 2013 (1). The document encourages the use of written quality agreements (QAs) specifying contractor obligations to follow rules and implement quality processes.

Jill Wechsler

The guidance document is the latest in a series of advisories, legislation, and compliance actions that address regulatory requirements for ensuring production of quality medicines. The FDA Safety & Innovation Act (FDASIA) of 2012 includes a provision (section 711) specifying that cGMPs include the implementation of quality oversight and controls over manufacture of drugs. This requirement applies to materials used in drug manufacturing, as well as finished products. Recent warning letters, moreover, emphasize that a manufacturer is responsible for infractions or noncompliance of its suppliers and vendors. These actions reflect ongoing concerns about lax practices at contract manufacturing organizations (CMOs) that lead to drug shortages and delay approval of new drugs and biologics. Manufacturing difficulties at Lonza and at Boehringer Ingelheim's Ben Venue Laboratories have led to shortages in "essential" medicines. GlaxoSmithKline recently blamed CMO problems for shortages in its treatment for restless leg syndrome. In addition, FDA delayed approval of Allergan's new migraine therapy Levadex (dihydroergotamine) in April because of difficulties producing this inhaled product by Exemplar Pharma.


FDA's guidance, Contract Manufacturing Arrangements for Drugs: Quality Agreements, provides specific strategies for manufacturers to ensure drug quality from third parties. The document maps ways to define and document the responsibilities of all parties involved in commercial production of human and animal drugs, biotechnology products, combination products, and APIs. The Office of Manufacturing and Product Quality (OMPQ) in the Center for Drug Evaluation and Research (CDER) prepared the guidance document in cooperation with staff from the Center for Biologics Evaluation and Research (CBER), the Center for Veterinary Medicine, and the Office of Regulatory Affairs. FDA encourages manufacturers to submit comments on the draft guidance by July 29, 2013, particularly examples of agreements and cases illuminating contracting issues.


FDA regulations don't require specific written agreements between pharmaceutical companies and third-party contractors, unlike the European Union, which mandates formal technical agreements between authorized manufacturers and all suppliers and contractors. FDA instead advises "owners" of a finished product to implement QAs with "contracted facilities" to clarify and document each party's obligations and responsibilities for ensuring compliance with GMPs and other regulations. FDA proposes that a QA stand separate from commercial contracts and specify the products or services involved, effective dates and termination, dispute resolution, and points of contact. A communication plan in the QA should explain processes for disclosing problems, such as how manufacturing deviations should be investigated, documented, and resolved. Change control is an important issue and requires clear procedures for handling new raw materials, establishment locations, manufacturing processes, testing procedures, manufacturing equipment, and other changes.

A main theme is that the owner of a new drug application is ultimately responsible for any failings or shortcomings by contractors. While all parties to a contract must prevent adulteration or misbranding, FDA emphasizes that owners cannot escape responsibility by pointing to vendor failings. Recent FDA warning letters to manufacturers of dietary supplements similarly cite legal precedents for holding the "final distributor" responsible for ensuring that its products comply with GMPs. In an April 26, 2013 warning letter to the owner of Pristine Bay LLC (Vianda) of Cincinnati, Ohio, FDA notes that although the firm may contract out certain manufacturing operations, "it cannot by the same token contract out its ultimate responsibility to ensure that the dietary supplements.....are not adulterated" (2). While such statements are not new, attorneys Paul Hyman and Katie Bond of the lawfirm Hyman, Phelps, & McNamara, in the FDA Law Blog, comment that they are unusual in specifically citing the "Park doctrine" to bolster FDA warnings that a company and its officers might be held liable for acts by a third-party contractor (3).


This new guidance builds on earlier advisory documents from FDA and the International Conference on Harmonization (ICH) that encourage manufacturers to adopt quality management approaches. The ICH Q7 guidance addresses quality issues related to APIs, while the Q9 document recommends risk management in evaluating suppliers and contract manufacturers. Q10 on pharmaceutical quality systems details how quality risk-management approaches can ensure control of outsourced activities. Q10 recognizes that pharmaceutical companies are responsible for ensuring that outsourced activities are under control; it's not enough, the regulators agree, to assume that other parties in the supply chain adhere to global standards and that regular audits of suppliers and routine testing of materials is sufficient to ensure product quality.

FDA also addressed third-party responsibilities in a November 2008 CBER and CDER guidance on establishing cooperative manufacturing arrangements for licensed biologics (4). That guidance describes a range of cooperative arrangements and also notes that the licensed manufacturer is responsible for compliance with product and establishment standards even if it does not own the facilities engaged in significant manufacturing steps. While this guidance focuses on manufacturer agreements with contract manufacturers, additional FDA guidances may address relations with vendors of APIs and other ingredients and contractor auditing, among other issues.

Despite the benefits of a formal quality agreement for a manufacturer to ensure contractors follow standard operating procedures and that final products meet specifications, the negotiating process can be tricky on all sides. A large pharmaceutical company will want multiple CMOs and suppliers to follow its standards and requirements. However, that would require each CMO to contend with diverse procedures and policies from multiple clients. Consequently, many contracts leave it to the CMO to take steps necessary to ensure a quality product, but such lack of specificity can lead to problems if there are deviations or if a batch fails to meet specifications.

In commenting on the draft guidance, FDA would like input from industry on whether QA templates would be helpful, or if further standardization will create only more difficulties. Case studies that illustrate ways to deal with the complexities of contract negotiations would be helpful, said Paula Katz, OMPQ acting branch chief, at last month's PDA/FDA Pharmaceutical Supply Chain Workshop in Bethesda, Maryland.

When FDA inspects a CMO, "both parties will be on the hook" if there's a problem with the drug, said Katz, noting that a QA that spells out ahead of time the responsibilities of each party can help deal with problem situations. Katz acknowledged that there are challenges in negotiating QAs, but that FDA expects manufacturers to have some kind of agreement in place with just about everyone they do business with, even if the document only lays out a minimum level of compliance that the firm expects from the contractor. The bottom line, she said, is for manufacturers to demonstrate how they "have control and oversight" over contractors.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, jwechsler@advanstar.com

Read Jill's blogs at PharmTech.com/wechsler.


1. FDA,

Guidance for Industry, Contract Manufacturing Arrangements for Drugs: Quality Agreements, Draft Guidance

(FDA Silver Spring, Md., May 28, 2013).

2. FDA, Warning letter to Pristine Bay, L.L.C. dba Vianda, dated April 26, 2013, www.fda.gov/ICECI/EnforcementActions/WarningLetters/2013/ucm350469.htm, accessed June 14, 2013.

3. P. Hyman and K. Bond, Fdalawblog.net, May 29, 2013.

4. FDA, Guidance for Industry: Cooperative Manufacturing Arrangements for Licensed Biologics (FDA, Rockville, Md., November 2008).