On 28 May 2013, FDA issued a draft guidance for the industry, titled Contract Manufacturing Arrangements for Drugs: Quality Agreements. The release of this draft guidance is important because, although it has long been common practice for drug companies to contract with third parties to perform parts of the manufacturing process (such as formulation, analytical testing, packaging, and labeling) or in some cases, to perform all of the manufacturing process, FDA previously had provided only limited guidance on the issues that the agreements establishing these arrangements should address. The newly released agency document provides guidance on defining, establishing, and documenting the responsibilities of each party (or all parties) involved in contract manufacturing of drugs. 

In the draft guidance, FDA recommends that contract facilities and the sponsor/owner of the drug – which FDA refers to as the “Owner” – enter into written Quality Agreements that define and establish the various obligations and responsibilities of each party with respect to quality oversight and controls over the manufacturing of the drug product. FDA recommends that Quality Agreements be separate or severable from the supply agreements to which they relate, noting that, in the event of an inspection, FDA would be interested in reviewing the Quality Agreement but likely would not want to review the supply agreement. Interestingly (and perhaps reflecting a lack of familiarity with commercial relationships), the agency suggests that a Quality Agreement address a number of issues that, in our experience, typically are contained in supply agreements, such as dispute resolution, audit rights, and management of regulatory inspections. 

Although the specifics of each written Quality Agreement will often be different, FDA believes that each agreement should cover all relevant current good manufacturing practice (cGMP) requirements and clearly document the responsible party for each requirement. In addition, FDA states that Quality Agreements should:

  • Identify the types of manufacturing services that will be conducted at each site, and the party responsible for validating, maintaining, and qualifying manufacturing equipment.
  • Identify the party responsible for managing materials, setting specifications for raw materials, and conducting sampling and testing.
  • Identify any product-specific specifications or operations, and the party responsible for these activities.
  • Identify the responsible party for investigating failures, discrepancies, deviations, and out-of-specification results.
  • Specify the procedures for the Owner to review, approve, and maintain documents.
  • Identify quality laboratory operations available for testing drug products.
  • Establish clear roles and responsibilities related to (a) the Owner’s quality audits of the contract manufacturer, and (b) how the parties manage FDA inspections of manufacturing sites.

The draft guidance clearly expresses FDA’s view that the terms of a Quality Agreement do not establish a party’s cGMP obligations; a party is not excused from otherwise applicable cGMP requirements simply because the Agreement does not assign them to the party, or assigns them to the other party. Consistent with this, FDA takes the position that, in addition to holding a contract manufacturer responsible for cGMP violations related to the contract manufacturer’s activities, FDA can also hold the Owner responsible, because the Owner is ultimately responsible for ensuring that its products are manufactured in conformity with the Federal Food, Drug, and Cosmetic Act. 

The draft guidance is available at the following link.