Recent regulatory requirements and several supply-chain breaches involving active pharmaceutical ingredients (APIs) and excipients
have heightened the pharmaceutical industry's awareness of and need to increase supply-chain monitoring and control. One outcome
has been the growing use of quality agreements among drug-ingredient manufacturers (including custom manufacturers), suppliers,
and distributors. Two associations, the Society for Chemical Manufacturers and Affiliates (SOCMA) and the International Pharmaceutical
Excipients Council (IPEC), recently developed quality agreement templates that can be used by industry free of charge to help
ensure supply-chain quality and to meet regulatory expectations.
On the following pages, representatives from both organizations discuss the thought process behind their templates, the content
that should go into the agreements, and the benefits of using such agreements. SOCMA's templates are designed for manufacturers
and users of APIs, and the IPEC templates target suppliers and users of excipients.
Quality Agreements for Manufacturers and Suppliers of Active Pharmaceutical Ingredients, as recommended by SOCMA's Bulk Pharmaceutical
by Brant Zell
Manufacturers of active pharmaceutical ingredients (APIs) are inundated with customers requesting quality agreements to meet
US Food and Drug Administration expectations and requirements. A quality agreement is important for ensuring the integrity
and quality of pharmaceutical intermediates, APIs, and other pharmaceutical ingredients in the supply chain. A quality agreement
is the best way to ensure compliance with the International Conference on Harmonization (ICH) Q7 Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients guideline, which FDA published as guidance for industry in 2001, to meet regulatory expectations on current good manufacturing
practices (CGMPs) and filing requirements (1).
According to ICH Q7, such an agreement should clarify and define what the GMP manufacturing and filing requirements are and
who will be responsible for completing each required activity (1). A quality agreement is a legally binding document that
has to be agreed upon by both parties (i.e., sponsor company and supplier or contract manufacturer) and their quality groups.
The standardized quality agreement approach is crucial for the API manufacturer because it helps to avoid having a different
set of requirements and quality-system processes for each customer. The Bulk Pharmaceutical Task Force (BPTF)*, an association
of manufacturers of APIs, excipients, and API intermediates, and an affiliate of the Society for Chemical Manufacturers and
Affiliates (SOCMA), a US-based trade association representing custom and batch manufacturers, issued two standardized quality
agreement templates for the pharmaceutical industry in May and July of 2010. One template is designed for general API manufacturing
(i.e., an API producer that manufactures its own products and sells them to multiple customers) and the other template is
designed for custom API manufacturing (i.e., a contract manufacturer providing proprietary APIs). This article explains the
background and use of these templates. If used properly, these templates provide regulatory-compliant documents that can be
used by the API producer and its customer.
The general API manufacturing agreement template
To achieve a safe and effective drug supply in a global marketplace, ensuring the quality, purity, and security of, and preventing
contamination of the API is crucial. Suppliers should use a suitable supplier-qualification process with a drug manufacturer
as part of its supplier-approval process. A quality agreement can serve as a key component in this approval process, but the
agreement should not take the place of an audit of the manufacturing facility. Quality agreements between drug and API manufacturers
are used to help both parties understand and define who is responsible for adhering to certain compliance requirements. Without
a quality agreement in place, it is difficult for drug and API manufacturers to meet regulatory requirements and inspectors'
Since the adoption of ICH Q7 and recent industry attention on supply-chain integrity, API manufacturers have been inundated
with requests from customers to have a quality agreement. ICH Q7 requires agreements for all third-party activities, and today,
it is common industry practice for key suppliers to have an executed quality agreement with their drug manufacturers as well.
A quality agreement typically supplements a supply agreement. In the past, GMP issues were included in the supply agreement,
but the quality group was not usually involved in these agreements. This oversight caused a potential situation in which the
requirements listed in the supply agreement were not practical, that is, they could not easily be implemented into the supplier's
quality system, sometimes leading to noncompliance. The best practice is to have both a supply and a quality agreement in
place, with the supply agreement focusing on commercial issues (e.g., the supply template has the requirement to meet specification,
and the quality template covers how to handle nonconforming product), and the quality agreement focusing on GMP and compliance
issues (e.g., manufacturing and filing requirements). The quality agreement should clearly state which party is responsible
for completing each required activity.
Standardizing quality agreements.
If the requirements in quality agreements differ too much between customers or the responsibility of who is doing what constantly
changes, there is a high probability that some required activities may be overlooked and that noncompliance is present. A
standardized agreement alleviates this problem by placing limits on the variability of the agreement's language. A standardized
document also sets the stage for an agreed-to, workable arrangement between the two companies and their quality departments.
Another benefit to having a standardized template is time savings—the API manufacturer does not have to create a new agreement
for each new project.
Without a standardized template, a lot of time is often spent on the review and negotiation process, including the involvement
of both teams' legal departments, which can cause serious delays and high costs. Such time constraints can also place pressure
on both parties to get things completed before the supplier can complete the desired manufacturing. When standardized templates
are used, the legal language and concerns need only be reviewed and amended once, when setting up the standardized template
within the company. The quality system of the supplier can be designed to easily incorporate the final quality agreement.
As a legally-binding document, a standardized quality agreement, should contain the following:
- Scope of work to be performed, including manufacturing locations
- Applicable laws and standards
- Clearly defined responsibilities regarding regulatory and filing requirements, including which party will perform the filings
- Change-control and notification requirements
- Expectations regarding the use of third parties
- Resolution-management procedures should any disagreements arise between the two parties
- Rights of each party (e.g., IP, statement of compliance, client confidentiality)
- Contacts for each party, including the individuals responsible for ensuring compliance to the agreement and any changes to