Selecting a contract manufacturer to produce your product is critical in any pharmaceutical/biopharma or medical device company.

Whether you are a small Cell Therapy or Gene Therapy Start-up, a small to mid-size Medical Device company, or a large global Pharmaceutical/Biopharmaceutical or Medical Device firm.

Selecting a contract manufacturer is a strategic decision that is part of your Supply Chain Sourcing Strategy. It is also a decision that can significantly impact the quality and safety of the product(s) you are outsourcing.

You Can’t Outsource Accountability

I have often quoted one of the leaders I worked for many years ago. He was the Global Chief Quality Officer at J&J Consumer.

Whenever the subject of third-party manufacturing, outsourcing of clinical research, or the use of other GxP-related outside services came up, he would always say:

“You can outsource your responsibilities, but you can never outsource your accountability. The details, if not well defined with a third party, can kill us.”

He was right. I have quoted him often throughout my career in the industry and as an executive-level Quality and Compliance Consultant.

Why Companies Outsource Manufacturing

Outsourcing of manufacturing has evolved as our industry has become. Outsourcing the Supply Chain is a strategic choice for many reasons:

• Your firm is a “virtual firm” focused on research and development of a product to treat rare diseases or diseases that are not adequately treated with the current technologies available.
• Your firm has “mature” products with significant generic competition, and outsourcing enables significant cost savings or frees up precious production capacity for new products with unique technology, which gives your firm a competitive advantage.
• Your firm does not have the capability/capacity/technology to produce certain products it wants to manufacture and distribute. The capability/capacity/technology is available outside of your firm; building that capability/capacity/technology is not a strategic fit or is not financially viable for your firm.

These are not all of the reasons, but they represent many of the reasons I see prevalent in the Pharmaceutical/Biopharmaceutical and Medical Device Industries today.

Supplier Qualification: The Devil Is in the Details

Most firms today have well-defined procurement processes that require various assessments of potential third-party manufacturers to evaluate technical capabilities, manufacturing capacity and process capability, and financial stability prior to selection. In addition, there is typically a requirement for a quality and compliance audit or assessment.

Let me share a recent example from a client who shall never be named.

A Real-World Example: Lessons Learned the Hard Way

This firm is a start-up working in the rare disease space, and their entire supply chain is outsourced. They did a good job of selecting their various third parties for compounding, filling, packaging, and labeling. The quality and compliance audits of the third parties were completed in a timely manner and did not reveal any major gaps in GMP compliance.

However…

There is almost always a “however” in an example of a lesson learned the hard way…

The initial quality and compliance audit covered the Quality Management System, facilities and equipment, and laboratories. The audit was conducted in two to three days, which is typical in our industry for supplier audits.

But it did not cover:

• The specific details in the SOPs and associated documentation on the third party’s defect classification and associated AQL(s) for inspections conducted upon receipt (incoming) or during production.
• A deep understanding of what would constitute a “quality event” versus a “deviation”.

The Problem: A Quality Event with Broken Vials

Two years into the relationship, a large batch of compounded and filled products was received by the next third party in the supply chain, responsible for labeling and packaging.

During packaging, a small number of broken vials were observed on the production line. Can you see where this is heading yet?

What Went Wrong?

• A Quality Event was documented, but a full root cause investigation was not conducted.
• Why? Because the Appendices in the Quality Event and Deviation SOPs did not list broken or cracked vials of a sterile product as an event requiring a full root cause investigation.
• Broken and cracked vials were not classified as critical defects during incoming inspection or during production.
• The sampling conducted at incoming was insufficient to detect a critical defect occurring at a low level, below the limits of the sampling plan for a major defect.
• The defect classifications and associated sampling plans were buried in Appendices within SOPs, making them difficult to identify during a short supplier audit.

Was any of this done with malintent by the third-party manufacturer? Absolutely not!

There is no “fault” here. The third-party manufacturer did not intentionally hide anything. The individual conducting the supplier quality qualification audit had two to three days to conduct the audit; the auditor had more than 50 SOPs for the QMS to review, along with a full tour of the facility and laboratories.

The auditor may have been given access to the documentation library to review SOPs. Still, there is a limit to how many SOPs, along with the cross-referenced and associated SOPs and Appendices, can be reviewed in one week before an audit.

The lesson learned here? The devil is in the details!

How Can These Issues Be Prevented?

To prevent these types of issues, consider the following improvements when selecting a contract manufacturer:

• Enhance your third-party selection process. Request additional up-front information from the potential third-party manufacturer. Get into the details. Go beyond the fact that incoming inspection is performed. Understand how various defects are classified. Dive into the details of exactly what a “quality event” and how is differs from a “deviation”. Ask for examples. Expand remote review of documentation prior to the audit to dig into the details.
• Strengthen your Quality Agreement Template. Require the third-party manufacturer to provide clear tables of critical defects and associated AQL tables, for example.
• Increase the number of auditors. More auditors can cover more details, which is critical if the third-party manufacturer restricts access to documents to be reviewed prior to the audit.
• Review FDA 483s and associated EIRs for the potential third-party manufacturer to identify documented compliance gaps.
• Participate in industry initiatives that advance transparency regarding third-party manufacturers’ GMP gaps.

Final Thoughts: The Devil Is in the Details

This is just one example of why it’s essential to dig into the details when qualifying and selecting a contract manufacturer. Outsourcing manufacturing is a critical and strategic decision that can significantly impact your company.

The takeaway? Pay attention to the details. A risk-based approach to qualifying and selecting a contract manufacturer will save you time, money, and stress, but dig into the areas which create risks.

Would you like to discuss selecting a contract manufacturer further? You can reach me using the contact form below! Let’s continue the conversation.