Managing Quality While Outsourcing

September 1, 2004
Marc Puich

Marc Puich is Partner at Tefen Ltd., 1065 East Hillsdale Boulevard, Suite 112, Foster City, CA 94404, 650.357.1120, ext. 117 Office 415.290-4580 Mobile marc@tefen.com.

,
Karen Walker

BioPharm International, BioPharm International-09-15-2004, Volume 2004 Supplement, Issue 3

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.

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.

Karen Walker (Abgenix, Inc.) and Marc Puich (Tefen, Ltd.)

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.

Defined for each of these should be elements such as: the communication strategy for when events occur, the level of oversight by the innovator, audit frequency and rights, approval rights, access to information systems and documentation, and a clear definition of when issues need to be escalated to the client.

Additionally, the quality agreement should include the communication plan with regulatory authorities. This plan should clarify the specific set of actions (and involvement) of the client during regulatory inspections at the CMO. It should also define the appropriate structure for managing and responding to regulatory commitments.

A final part of the quality agreement should define ownership of regulatory filings and responsibility for notifying regulatory authorities about changes.

The format of a quality agreement can vary. However, one needs to keep in mind that it will be referenced on a regular basis. In many contract manufacturing relationships, certain products may be produced only a few times a year. As a result, the need for a clear and useful document to remind both parties of the process for managing the manufacturing and release of product is critical. There are several design elements that can help the quality agreement achieve this goal:

1. The document should be written in plain language. Not all of the individuals referencing the document will be quality (or legal) experts.

2. It should be able to stand alone as a document. Even if it is included as an addendum to the overall supply agreement, it may be referenced separately. There should be sections that summarize the scope of the document and the general relationship between the parties.

3. It should include flow charts of key business processes, such as release and deviation investigations. These flow charts can visibly show (through color coding or dividing lines) the path and ownership of certain process steps.

4. It should include a section with roles and responsibilities in tabular format. At a glance, parties can easily understand where they fit in the overall process.

5. Areas of joint responsibility are further clarified in accompianing narative text associated with the tabular format.

The quality agreement is one of the most critical aspects of developing a strong relationship between a contract manufacturer and an innovator company. By jointly developing this document, companies will take the first steps to defining a working relationship built on a foundation of communication and negotiation. Although it is not yet a required element by every regulatory agency, the quality agreement should be seen as key to any developing strategic relationship.

Acknowledgements:

  • Stuart Heir, Novartis Pharma AG
  • David Sherwood, Lonza Biologics, UK

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Quality/GMPs