Management of GMP Outsourced ActivitiesThe Role of Technical Agreements / Quality Contracts

Presented by: Karen S GinsburyPCI Pharmaceutical Consulting Israel Ltd

For: IFF, Copenhagen, DenmarkOctober 2011

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Course Objective

• Clarify and ensure that matching expectations exist

• Define who is responsible for what:NO shared responsibilities

• Understand that outsourcing doesn’t mean “no oversight”

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To be covered

• The regulations and guidelines (EU and US) pertaining to contract manufacture and the requirements for technical agreements / quality contracts

• Define and Synchronize expectations for "The Work"• Who is responsible for initiating the contract: sponsor

or contractor• Defining contact persons• Quality Contract template• List of key responsibilities• Key elements of the contract• Contract Review

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Purpose of Contract

• Regulatory requirement• Business necessity• Reduce:

– Costs– Frustration– Confusion

• Increase / improve:– Clarity– Communication– Value for $ (Euro(– Efficiency and benefits

associated with pharmaceutical outsourcing

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Not the Purpose of the Contract

• To replace due diligence• To replace audits• To replace oversight• To negate the need for sponsor / contract

giver oversight of outsourced activities• To negate the need for management review

at the contract giver relating to outsourced activities

• To mitigate all risks associated with contract manufacturing in lieu of other mitigation measures

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Regulation

• EU Chapter 7: Contract Manufacture- under revision – new title “Outsourcing”

• US cGMPs - both the contractor and your company would have responsibility in the event of failure

• Q10 talks about contractors as does ISO 9000requiring “ Contract Review”

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Contract Manufacturing: Legal Framework – Regulations21 CFR • 211.22(a)

The quality control unit shall be responsible for approving or rejecting drug products manufactured, processed, packed, or held under contract by another company

• 21 CFR 211.84Testing and approval or rejection of components, drug product containers, and closures

• 21 CFR Part 200.10Contract manufacturers are an extension of the manufacturer's own facility

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21 CFR 200.10(b)

• The Food and Drug Administration is aware that many manufacturers of pharmaceutical products utilize extramural independent contract facilities, such as testing laboratories, contract packers or labelers, and custom grinders, and regards extramural facilities as an extension of the manufacturer’s own facility

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How FDA Perceives Responsibilities

• Contract manufacturers are responsible for manufacturing product in conformance to CGMP.

• The firm that hires a contract manufacturer may also assume certain specified responsibilities under 211 or elsewhere.

• Sponsors and private-label distributors are also accountable under the statute

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FDA Guidance for Industry: Quality Systems Approach to Pharmaceutical

CGMP Regulations(2006) / Q10?

• “Outsourcing involves hiring a second party under a contract to perform the operational processes that are part of a manufacturer‟s inherent responsibilities.... Quality systems call for contracts (quality agreements) that clearly describe...”– materials or service to be provided– specification-setting responsibilities– communication mechanisms– training, qualifications, and monitoring expected– Harmony with both parties‟ quality standards

i.e., they should not be in conflict11

FDA on Quality Agreements

• Identification of the contract site address, building, and equipment/line, and services/materials to be provided

• Description of the drug, its intended use: all specifications

• Provide for periodic audits to CGMP and contract specifics

• Commitment to share regulatory inspection findings• Procedures for change control• new equipment, facility modifications, change in key

personnel, change in SOPs and test methods• Full disclosure of all errors, deviations, changes, OOS

results, investigations, as well as adverse events that did or might impact drug

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EU – Chapter 7 current

• Current version: contract manufacture and analysis – 2 pages

• Describes need for a quality / technical agreement so nothing new there

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Concept paper on revision 2009:Which types of activities are included

• “GMP inspectors commonly see outsourced activities which if performed normally would be subject to inspection e.g.– Qualification and validation work for new premises– Maintenance and calibration of equipment and premises– Storage and distribution– Artwork generation and print ready material– Assessment and sourcing of starting and packaging materials– QP and other professional services such as GMP audits of

suppliers– Washing and depyrogenation and or sterilisation of packaging

materials used in manufacture.– Hosting of IT functions– Document archiving and storage

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EU Chapter 7 – Nov 2010for comments

• Title: Outsourced Activities• 3.5 pages• The pharmaceutical quality system of the

Contract Giver, including management responsibilities, extends to the control and review of any outsourced activities

• The Contract Giver is ultimately responsible to ensure processes are in place to assure the control of outsourced activities

• These processes should incorporate quality risk management

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EU Chapter 7 – Nov 2010for comments

• The Contract Giver should monitor and review the performance of the contract acceptor and the identification and implementation of any needed improvement

• The Contract Giver should be responsible for reviewing and assessing the records and the results related to the outsourced activities

• He should also ensure that all processed products and materials delivered to him by the Contract Acceptor comply with their specifications or that the products have been released by a Qualified Person

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ICH Q10 on Outsourcing

2.7 Management of Outsourced Activities and Purchased Materials

• The pharmaceutical quality system, including management responsibilities… extends to the control and review of any outsourced activities and quality of purchased materials

• The pharmaceutical company is ultimately responsible to ensure processes are in place to assure the control of outsourced activities and quality of purchased materials

• These processes should incorporate quality risk management and include:

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ICH Q10 on Outsourcing

• Assessing prior to outsourcing or selecting suppliers, the suitability and competence of the other party to carry out the activity(e.g audits, material evaluations, qualification)

• Defining responsibilities and communication processes for quality-related activities of involved parties

• For outsourced activities, this should be included in a written agreement between the contract giver and contract acceptor

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ICH Q10 on Outsourcing

• Monitoring and review of the performance of the contract acceptor or the quality of the material from the provider, and the identification and implementation of any needed improvements

• (Monitoring incoming ingredients and materials to ensure they are from approved sources using the agreed supply chain )

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ISO 9001:2008on Contract Review

• Contract review procedures should make sure that:– Your customer's order is clearly and completely defined. 

When verbal orders are received, make sure that you and your customer agree on what is required -DISCUSS

– You have resolved all differences between the originaltender or proposal and the final contract or sales order

– Your organization is capable of supplying the products ordered by the customer

• Amendments– Develop procedures which specify how customer contracts 

are amended, and which ensure that changes in contracts are communicated throughout the organization

• Records– Develop a record keeping system that you can use to 

document the review of customer orders and contracts.

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The Process of Outsourcing

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1. Identify potential candidates2. Narrow list to 1 / 2 / 3?3. Mail questionnaire?4. Select 2?5. Perform audit / introductory visit

(assess transparency / cooperation)

6. Initiation of contract

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Who does what?

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• Who is responsible for identifying potential candidates?

• Who is responsible for initial contact?

• Audits?• Are these procedures covered by a

company policy / SOP?• Are there records of outcomes

maintained?

Which activities does your company outsource?

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Who is responsible?

• Is there a single, key contact person responsible for the success and oversight of the outsourced activity?

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Defining / Synchronizing Expectations

• Have you defined the scope of what you are going to outsource?

• Does everyone in the company agree?

• In writing, signed off “basis for design”

• Is it periodically reviewed

• Do you report to senior management at Management Review meetings on problems with outsourcing?

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Process Mapping

• Have you mapped out the processes – what about when they become really complex

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Lead Contractor

Manufacture DS and DP

DSCompany A

DPCompany B

Shipping

Formulation, Filtration, Aseptic filling, labelling

Synthesis

QC testing by: All parties

DS QC testing

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2

3

4 5

AExcept Assay

LCPerform Assay

CoA and DS Batch Release by Company A

Company A

DP QC testing

Company BRest

LCAssay

Company ANMR

CoA and QP Batch Release of DP

Company B 6

LCCoordinate

shipping

Sponsor?Process Map: virtual company

What is Risk?

• The likelihood that a particular hazard will occur

• The severity of HARM if that hazard occurs

• The likelihood of detection of that hazard if it occurs

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The goal

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Control Strategy: Definition

• A planned set of controls, derived from current product and process understanding, that assures process performance and product quality

• The controls can include parameters and attributes related to drug substance and drug product materials and components, facility and equipment operating conditions, in-process controls, finished product specifications, and the associated methods and frequency of monitoring and control (ICH Q10)

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Outsourcing Control Strategy

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Factors AffectingOutsourcing Risk

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What needs to be in there?

• Giver:– Overall responsibility for product– Responsibility for Ctx, IMPD / MA / IND /

NDA information and COMMUNICATION of critical issues to the Acceptor

– Auditing and evaluation of contractor– Product release / review of results unless QP

agreement included– Notification of any hazards related to their

materials

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What needs to be in there?

• Acceptor– Will work in accordance with relevant GxP

regulations . need to itemize which are relevant e.g:

• EU• US• Other?

– Accepts that they are open to inspection by regulatory authorities

– Agrees to be transparent regarding regulatory findings?

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What needs to be in there?

• Change control• Deviation and OOS reporting

– Significant? Time frames ?

• List of responsibilities(does it duplicate the actual content of the contract and if so – which takes precedence?)

• Archiving and retained samples

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Contacts

• Who is the key / primary contact for each side

• Limit it (preferably to one person) because of misunderstandings that arise if there are several persons listedcommunication is critical

• What happens if a listed contact leaves – who is responsible at Giver and Acceptor for ensuring contracts get updated / notification – is there a formal method

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Specifications / MMIs / Analytical test methods etc.

• In or out?• What about if they get updated?

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Factors Affecting Risk

• Dosage Form Type– Parenteral and ophthalmic products (sterile products)– Inhalation solutions (sterile products)– Aerosol and dry powder inhalants– Nasal sprays– Vaginal suppositories, ointments and creams– Topicals– Rectal suppositories, ointments and creams– Oral liquids (aqueous)– Oral liquids (non-aqueous)– Oral tablets Liquid- and powder-filled capsules

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Factors Affecting Risk

• Drug Substance Synthesis

• Formulation

• Physical Characterization

• Manufacturing Process

• Packaging System: Container / Closure

• Prior Experience

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What needs to be controlled...

Specifications (YOURS) (THEIRS)

Please provide a brief description of your quality system

Do you have any certifications / FDA / EU / ISO etc. Do you have a registered DMF? #

When was the company founded? Owners?

How many employees: operations, QA / QC

Name and details of contact person (job function)

(special questions for particular product)40

Some Little Details

• Address of contract site

• Agents / brokers: transparency regarding manufacturer

• Do you manufacture / pack / distribute / test etc. from any other site?

• Do you use sub-contractors

• What else do you manufacture

• capacity41

Requirements

1. Need a formal purchase order for each consignment / activity with a copy in the warehouse

2. Need the contractor to appear on a controlled list of approved outsourcers

3. Damaged units where material was exposed or potentially damaged will not be accepted

4. OOS / out of trend / questionable results?5. Formal contract review6. Annual? Contract review / update7. Update key contact(s)

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Define the scope of the Project

• Need to be exceedingly precise• E.g. outsourcing process development and

production:– who will own the developed process?

Your company or the contractor?– If the latter you may be paying royalties forever, so be

aware of this upfront and define in the contract– If the former, the contractor will have to perform

technology transfer…to your companyPUT IT IN THE CONTRACT

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Define the scope of the Project

• Need to be exceedingly precise• Need to discuss the scope with relevant

functions within your company and put out a document agreed and signed by relevant parties

• E.g. outsourcing production onlywho is responsible for technology transfer / process transfer to the contractor?Your R&D? Your production?

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Defining Your Company’s Requirements

• What are you outsourcing:– All aspects of manufacture and control?– Part of the manufacturing process?– Process development and manufacture?– Only manufacture– Analytical methods development?– Bioanalytical methods development?– Toxicity testing– Proof of Concept– Management of Clinical trial from start to finish?

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Define the scope of the Project

• Need to be exceedingly precise• E.g. outsourcing an entire clinical trial from start

to finish does the contract include:– Auditing sites?

• Before, during at end of trial or all of these?– Selection of statistical methods?– Analysis of data?– Auditing of data?– Who decides on the clinical protocol?

• Patient exclusion criteria, inclusion criteria etc?• How much input from your company? Who went to the FDA

pre-IND meeting?!

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Defining the Project

• Takes time

• May require input from consultants

• Particularly for a small start-up company without the necessary input in-house

• If poorly defined will result in failure of the project

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Define the scope of work

• Manufacturing operation

• Calibration / Qualification of HPLC

• Packaging and labelling of clinical trials materials including randomization and blinding

• Integrity testing of HEPA filters

• Sterility testing

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Define applicable GMP regulations and guidances

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FDA : Recent Industry Guidance

• Process validation• ICH Q10 pharmaceutical quality system• Identifiers for solid oral dosage form drugs• Risks for melamine contamination • Testing of glycerin for diethylene glycol• Contract manufacture (under development 2011)FDA view: Help industry be responsible through

the development of standards and best practices

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EU: Currently Being UpdatedEudraLex Vol. 4 GMP for Medicinal Products (EU-GMP)•Part I: Basic Requirements for Medicinal Products

Chapter 1 Quality ManagementChapter 2 PersonnelChapter 3 Premise and EquipmentChapter 4 DocumentationChapter 5 ProductionChapter 6 Quality ControlChapter 7 Contract Manufacture & AnalysisChapter 8 Complaints and Product RecallChapter 9 Self Inspection

Implementation ICH Q9, Q10 principlese.g. Management review, QRM

QbD, Right first time, Contract manufacturing

Dedicated Facilities (incl. Ch5)

CSV

Implementation ICH Q9,Q10 principles

Implementation ICH Q9, Q10 principles

Transfer of analytical methods

Quality Defect contact points & QRM

GDP – expanded from 4 pages to 32!

FDA on: Corporate Responsibility for Outsourcing

• Assure preventive controls • With suppliers and their suppliers• With contractors and subcontractors

• Investigate and act on nonconformities

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You just might want to take a look…

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FDA Concerns

• Transparency between sponsor and contract site regarding drug application commitments is crucial.

• Potential high costs of selecting contract sites based solely on unit dose cost for NDA and ANDA products under FDA’s GMP systems inspection approach.

• How thorough are sponsor audits of contract sites when they can not audit the entire universe of data due to limitations imposed by confidentiality agreements?

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Transparency

• Some sponsors do not provide a copy of the drug application commitments to the contract site that will perform that operation.

• Red Flag for the FDA PAI• How can the contract site assure they are

meeting the drug application commitments if they do not have a copy of them?

• What if the NDA/ANDA sponsor fails to disclose critical drug application information to the contract site?

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FDA will do it if you don’t

• When the contract site does not have a copy of the drug application commitments applicable to their contracted responsibilities, FDA must conduct the GMP audit and also audit the integrity of the drug application information transfer process between the sponsor and the contract site.

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Consider…

• Sponsors: Is it a good business practice to withhold relevant drug application information from your Contract partner? How can you be assured the Contract site understands the drug application commitments if you don’t provide a copy of them?

• Contract Sites:Is it a good business practice to make or test a drug application product without having a copy of the relevant sections of the drug application? How can you be sure you are meeting the drug application commitments?

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Questions for Evaluating a Potential Contractor

• Good FDA GMP track record for consecutive inspections?

• Robust GMP systems?• Quality assurance oversight of operations &

product?• Well controlled raw materials system?• Production system under control?• Facility & equipment well maintained?• Lab is capable of generating scientific, sound test

data?• Packaging & labeling system is well defined and

controlled?

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How Robust can an Audit Be?

• How can you thoroughly audit a GMP system when you can not review all the deviations, investigations or data generated in that system?

• If the Contract site makes a drug product for Client A and Client B comes to do a GMP audit, then Client B can not see Client A’s records.

• What if evidence of a serious GMP system failure is contained in client A’s records, but Client B can’t review that record?

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Use of unapproved material• Personnel in the receiving warehouse & Materials

Management indicated they do things quite differently than what is described in the SOPs. SOP ABC was not followed.

• Warehouse –Don’t actually look at the official Material Specification Sheets in the binder when an order arrives. If the order received matches what’s in the computer, then it’s OK because that’s what Materials Management ordered.

• Materials Management: That raw material was in short supply so we had to switch to another supplier. QA was not notified of this change.

• FDA-483 issued• Would you have identified the issue?s

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Two for One Warning LettersKathleen Culver, FDA June 2010

My FDA Crystal Ball • FDA acknowledges the reality of contract operations in the

drug manufacturing community• FDA has to deal with and manage the complexity contract

operations brings to the FDA evaluation process before and after drug application approval.

• What happens when a commercial drug product produced by a contract firm under the sponsor’s oversight is found to be non-GMP compliant and adulterated/misbranded?

• Aren’t both parties, the sponsor and the contract site, RESPONSIBLE for assuring the drug product is made under GMP control and meets all legal specifications?

• If the contract manufacturing site gets a Warning Letter because the drug product is adulterated or misbranded, shouldn’t the sponsor also be held accountable by FDA?

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Drawing up a Technical Contract

• Define project timelines• If you need an analytical method

developed and validated prior to a clinical trial there is no point in having product manufactured, CRO ready to go with patients lined up and the method development floundering

• MUST have inter-dependent activities aligned

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Drawing up a Contract

• Allow for catastrophes:– The CRO spills all your material– The methods validation fails– Fire at the contract manufacturer

• Define project milestones and when they MUST be achieved

• NAME names: who is responsible for what at your company and at the contractor

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Quality Issues

7.10 A contract should be drawn up between the Contract Giver and the Contract Acceptorspecifying respective responsibilities for manufacture and control of product[could apply equally to CRO, proof of concept, tox, etc.]Technical aspects of the contract should be drawn up by competent persons suitably knowledgeable in pharmaceutical technology, analysis and Good Manufacturing PracticeAll arrangements for manufacture and analysis must be in accordance with the marketing authorisation and agreed by both parties

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Quality Issues - Complaints

• Who is responsible for investigating complaints?• Will the contractor allow your QA person /

consultant access to:– Facility– Personnel– Records

in order to conduct a detailed investigation?• …or will you have to make do with their

abbreviated report saying it is not their responsibility

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Quality Issues

• The contract should permit the Contract Giver to visit the facilities of the Contract

• Acceptor• In the case of contract analysis, the

Contract Acceptor should understand that he is subject to Inspection by the competent Authorities[…and of course for contract manufacture… also CRO’s]

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Quality Issues

• Who makes product release decisions?• What about when a deviation is involved?• How do you know that you have transparency to

allow you to make an informed decision?• Disposition decision may be affected by who

bears the cost of a failed batch…does the contract address that?

• What about laboratories: could use a third party to decide where results differ at giver / acceptorprovided have provision in contract

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When to Audit

• Prior to signing contract?

• Prior to initiation of work?

• During Work – don’t audit – do be on site (and of course annual or periodic audits)

• By mail prior to signing contract?

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Contract Manufacture: Auditing

– Need to audit prior to signing contract, but need a company representative close at hand during all manufacture – needs to be closely controlled at all times

– Need to have access to batch records and analytical results (if they are doing analysis)

– Need a clause in the contract concerning:• Deviations • Changes• from approved manufacturing process and methods,

including reporting deviations relating to operator, machine, materials malfunction

• Complaints may result in audit• Annual audit essential

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Contract Analysis

• What about OOS??

• Your contract lab may claim to be“GLP compliant”

• You need them to be GMP compliant with respect to laboratory regulations

• ISO 17025 does not address out of specification results

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CRO / Toxicology / Other

• Audit by mail prior to signing contract• Particularly for animal studies, choices are quite

limited• Are some very large concerns involved that

become quite lax in their procedures if not carefully audited

• Initiation visit / audit• Ongoing audit during study• If close by, request company rep present during

study performance

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Project Oversight

• Generally have at least two functions involved:– Operations or (for small company may be

CEO) overseeing timelines and meeting milestones

– QA (may be a consultant for a virtual company) overseeing quality issues

• QA cannot perform their part unless the contract requires punctual reporting, especially deviations

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Project Partnering

• Outsourcing involves large amounts of funds• Need to partner the contractor:

– he knows that you are going to put a lot of money into her company (setting up a cell bank can be 1 million dollars) so she wants to accommodate your Q requests

– You know that he is going to help realize your product to market timeline and are happy to invest that money

– Mutually beneficial arrangement

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Quality Issues

• Contract must address QP release

• Who is responsible for:– purchasing materials– Testing and releasing materials– undertaking production and quality controls

including IPC– who has responsibility for sampling and

analysis

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Quality Issues

• Manufacturing, analytical and distribution records, and reference samples should be kept by, or be available to, the Contract Giver

• Any records relevant to assessing the quality of a product in the event of complaints or a suspected defect must be accessible and specified in the defect/recall procedures of the Contract Giver[these are regulatory requirements… what will you do if you didn’t address them in the contract and you have an IP issue with the contractor

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Define contract giver responsibilities

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Define contract acceptor responsibilities

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What about Specifications

• Are they appended

• What about manufacturing instructions

• Test methods

• Packaging instructions

• Clinical trial protocols etc.

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Who is responsible for updating

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Deviations and Changes

• What is “significant?”

• What is “immediate” notification

• OOS – and laboratory error – do you want to be notified?

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What to do about Regulatory Inspections

• Can you be present?• On call?• Notified immediately? Of adverse outcome• Involved in response writing?• Notified of responses?• Involved in ANY response directly involving your

product• Other?• DISCUSS with their QA / regulatory BEFORE initiating

a Technical Service or Master Service Agreement• AND contract giver must notify acceptor if they are to

be inspected because support (rapid) may be needed

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In Conclusion

• The quality of the output is:– Dependent on the contract acceptor– Highly dependent on the contract giver– Requires a lot of work before initiation– Requires a lot of work during the project– Must have face to face meeting before kick-off– Cannot be left to chance

• If the contracted work is to be of value

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In conclusion

• Outsourcing is growing and is global• It is a business necessity and will continue to grow• There are business needs that must be met• There are compliance and quality needs that if not

met will bring down your company• It is a partnership both with the contractor and

within your company• It needs to be managed – but it is not a Quality

Assurance “Responsibility” on a day to day basis

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THANK YOU FOR YOUR ATTENTION

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