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SPONSORED ARTICLE REGULATORY Sponsored article Supplier Quality – The New Frontier in Drug Manufacture The globalization of the drug manufacturing industry has caused FDA to become increasingly concerned about supplier quality controls. By Morgan Lewis & Bockius partner Kathleen Sanzo. FDA’s Historical Approach to Supplier Quality For many years, current Good Manufacturing Practices (cGMPs), recognized as broad and general, have provided the backbone of the regulatory structure around the manufacturing of drugs for US distribution. FDA relied on use of the term “current” as the basis for its expectation that industry would upgrade and modernize manufacturing techniques and controls as necessary. This worked relatively well for a number of decades in which the majority of drugs for the US market were made in North America or Europe, where regulatory authorities used similar paradigms for controlling manufacturing. In the last decade, however, the drug manufacturing business has changed significantly in ways that it has not been easy for FDA to manage. The building of Active Pharmaceutical Ingredients (API) manufacturing facilities in emerging markets by established pharma, followed by the complete outsourcing of API, excipients and packaging to third-party suppliers in emerging markets, has caused major strains on FDA resources, and caused sleepless nights among FDA regulators. As a result of this expansion of global outsourcing of active ingredients and pharmaceutical excipients, FDA has become increasingly concerned about supplier quality. Recalls of products due to adulteration of actives and excipients with bacteriological contaminants such as mold and fungus and chemicals such as melamine further heightened the sense of urgency of the need for FDA to upgrade its regulatory requirements for supplier qualification and verification. FDA began to signal there were gaps in supplier controls through a number of consent decrees and Warning Letters issued over the last several years. Since 2010, there have been five consent decrees issued to Ben Venue, Ranbaxy, Genzyme, McNeill, and Deltex that were based on cGMP deficiencies including in connection with materials issues at sites in the US and abroad. Warning Letters issued to a number of pharmaceutical companies between 2011 and 2013, contained references to multiple cGMP deficiencies, including failure to have controls to ensure that materials meet their relevant standards.1 As a result, each of the Warning Letters to these companies requested that they conduct “comprehensive and global” assessments of their cGMPs compliance. The scope of this requirement clearly would include a review of the processes for managing sources for and testing of API and other raw materials as part of the companies’ supply chain management. risk of and establishing the safety of raw materials, materials used in the manufacture of drugs, and finished drug products.” See Pub. Law 112-144 (July 9, 2012). The term cGMP is now statutorily defined to require the oversight of raw materials used in drug products, thus requiring controls for the source of those products. FDA consequently now has a legal basis to require reliable and well-controlled processes relating to drug component suppliers and to take enforcement action for the failure to have these processes. Where Do the cGMP Regulations Address Supplier Controls and Quality? Notwithstanding the new legislation, the current cGMP regulations do not specifically identify “supplier quality” as an element of cGMP. Rather, cGMP regulations require that manufacturers have a quality control unit that has the responsibility and authority to approve or reject all components, containers, closures, in-process materials, packaging, labeling and drug product, as well as to approve or reject any product manufactured, processed, packaged, or held under contract by another party. 21 C.F.R.§ 211.22(a). Thus, manufacturers cannot outsource their responsibility to approve and release drug components and finished pharmaceuticals. In addition, the cGMP regulations require that manufacturers have adequate procedures and inspections/sampling controls to ensure the quality of raw materials. 21 C.F.R. § 211.80. Recently, FDA issued a draft guidance on Quality Agreements for suppliers (May 2013)2 which describes FDA’s current thinking on defining and documenting the responsibilities of parties that are involved in the manufacture of a drug product. FDA Congress Strengthens Legal Authority for FDA Regulation of the Drug Supply Chain Under Section 301 of the Federal Food, Drug, and Cosmetic Act (“FFDCA”) 21 U.S.C. § 331, manufacturers are prohibited from introducing or causing the introduction of adulterated or misbranded drugs into US interstate commerce. A product is adulterated if it is not manufactured, processed, packed, or held pursuant to current cGMPs. See 21 U.S.C. 351(a)(2)(B). However, cGMP statutory provisions did not specifically mention suppliers. To address this gap, in 2012 Congress included a provision concerning supplier controls in the Food and Drug Administration Safety and Innovation Act (FDASIA). Part 711 of FDASIA amends the definition of cGMP in Section 501(a)(2)(B) of the Act specifically to include “the implementation of oversight and controls over the manufacture of drugs to ensure quality, including managing the LMG LIFE SCIENCES 2013 15