FDA Issues Guidance Regarding Contract Manufacturing Quality Agreements

June 9, 2013

By Joseph W. Cormier

FDA recently issued a draft guidance, titled “Contract Manufacturing Arrangements for Drugs: Quality Agreements” (“the Draft Guidance”), detailing its thoughts regarding appropriate quality agreements between product “owners”, which FDA defines as persons who introduce or cause the introduction of a drug into interstate commerce, and “contracted facilities”, which are non-owner entities performing manufacturing operations for the product owner. 

As FDA acknowledges in the Draft Guidance, there is no statutory or regulatory requirement that owners include a quality agreement between themselves and contracted facilities. 

Rather, the FDCA holds owners liable for introducing or causing the introduction into interstate commerce of adulterated or misbranded products.  Last year’s FDA Safety and Innovation Act further clarified that GMPs include a owner’s “implementation of oversight and controls over the manufacture of drugs to ensure quality, including managing the risk of and establishing the safety of raw materials, materials used in the manufacturing of drugs, and finished drug products.” 

As such, industry practice has been to include regulatory compliance and product quality assurance terms, if not in a separate agreement, into master services agreements or services agreements in order to identify the roles and responsibilities of the parties involved. 

Existing FDA guidance already detail how GMP quality management principles apply to contract manufacturing scenarios.  Examples include ICH Q7A, ICH Q9, and ICH Q10 documents.  The Draft Guidance, however, details FDA’s specific thoughts regarding translating these existing concepts into a legally-binding agreement between parties. 

FDA recommends that Quality Agreements should be separate or severable documents from other commercial agreements such as Master Services Agreements or Supply Agreements.  Further, FDA recommends that a Quality Agreement:

  • Clearly document responsibility for GMP activities;  
  • Include a section assigning responsibility for the Quality Unit and a communication plan between the parties and the Quality Unit;
  • Ensure that the Quality Unit has sufficient resources to conduct required product testing and approval;
  • Provide audit authority and responsibility that rests with the owner and indicate procedures for reviewing and approving documentation;
  • Define responsibility for setting raw material specifications; auditing, qualifying, and monitoring suppliers; and conducting sampling and testing of raw materials;
  • Detail procedures for notification and documentation of manufacturing process changes, including, among other things, raw materials, starting materials, establishment locations, testing procedures, manufacturing equipment, shipping methods, and key personnel; and
  • Document the types of changes that require prior approval by the owner and those changes that require only notification. 

Although industry organizations, such as the International Pharmaceutical Excipients Council ("IPEC") and the Active Pharmaceutical Ingredients Committee (APIC) of the European Chemical Industry Council ("CEFIC") have previously issued their own guidance documents on this topic (here and here), we note that FDA’s Draft Guidance is somewhat different in how it presents these concepts.  Whether and to what extent the Draft Guidance changes or merely reinforces industry practice is yet to be seen.

Although FDA likely did not intend to include distributors under the umbrella of “owner” in the Draft Guidance, the breadth of the definition would include such entities.  If FDA intended to include distributors, it is unclear what the Draft Guidance, if finalized in its current form, says about FDCA product guarantees under section 303(c) of the Act.  These guarantees, provided by drug manufacturers to distributors, exempt distributors from the responsibility for distributing adulterated or misbranded products they have received in good faith.  Would a distributor need to execute a quality agreement that would require their auditing of the drug manufacturer’s records and facilities?  This result seems to go too far, and will hopefully be corrected when the Draft Guidance is finalized. 

Comments on the Draft Guidance are due to FDA by mid-July.