Management of GMP Outsourced Activities The Role of Technical Agreements / Quality Contracts

1. Management of GMP Outsourced ActivitiesThe Role of Technical Agreements / Quality Contracts Presented by: Karen S Ginsbury PCI Pharmaceutical Consulting Israel Ltd For: IFF, Copenhagen, Denmark October 2011

2. 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”

3. 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

5. 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

6. 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

7. 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”

8. 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

9. 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

10. 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

11. 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 standardsi.e., they should not be in conflict

12. 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

13. EU – Chapter 7 current • Current version: contract manufacture and analysis – 2 pages • Describes need for a quality / technical agreement so nothing new there

14. 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

15. 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

16. 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

17. 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:

18. 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

19. 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 )

20. 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.

21. The Process of Outsourcing Identify potential candidates Narrow list to 1 / 2 / 3? Mail questionnaire? Select 2? Perform audit / introductory visit(assess transparency / cooperation) Initiation of contract 21

22. Who does what? • 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? 22

23. Which activities does your company outsource?

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

25. 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?

26. Process Mapping • Have you mapped out the processes – what about when they become really complex

27. Process Map: virtual company Lead Contractor Sponsor? Manufacture DS and DP 1 Synthesis Formulation, Filtration, Aseptic filling, labelling DS Company A DP Company B QC testing by: All parties LC Coordinate shipping DS QC testing DP QC testing 2 5 4 Shipping A Except Assay LC Perform Assay Company A NMR LC Assay Company B Rest CoA and DS Batch Release by Company A CoA and QP Batch Release of DP 3 Company A Company B 6

28. 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

29. The goal

30. 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)

31. Outsourcing Control Strategy Machines Man Safe and Effective Product Materials Methods Other

32. Factors AffectingOutsourcing Risk

33. 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

34. 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?

35. 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

36. 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

37. Specifications / MMIs / Analytical test methods etc. • In or out? • What about if they get updated?

38. 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

39. Factors Affecting Risk • Drug Substance Synthesis • Formulation • Physical Characterization • Manufacturing Process • Packaging System: Container / Closure • Prior Experience

40. What needs to be controlled...

41. 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 • capacity

42. Requirements • Need a formal purchase order for each consignment / activity with a copy in the warehouse • Need the contractor to appear on a controlled list of approved outsourcers • Damaged units where material was exposed or potentially damaged will not be accepted • OOS / out of trend / questionable results? • Formal contract review • Annual? Contract review / update • Update key contact(s)

43. 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

44. 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?

45. 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?

46. 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?!

47. 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

48. 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

49. Define applicable GMP regulations and guidances

50. 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 Industry: are your contractors familiar with these guidances – not enough if you are!