strategies and concerns in the sourcing of fda-regulated products, components & services michael...
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Strategies and Concerns in the Sourcing of FDA-RegulatedProducts, Components &
Services
Michael A. Swit, Esq.Law Offices of Michael A. Swit
539 Samuel Ct., Suite 229Encinitas, California 92024
760-815-4762 ♦ 760-454-2979 (fax)[email protected]
FDACounsel.com
BIO 2001
Procurement and Supply Chain ManagementSeminar
Monday, June 25, 2001
San Diego Marriott Hotel and Marina
San Diego, California
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Why Worry About FDA Compliance?
FDA Compliance Can Make or Break a Deal Recent Examples:
Abbott/Alza Merger Guilford/Gliatech Merger
When sourcing you become a “partner” with your vendor -- their problems are yours
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Why Worry...?
FDA mandates you worry about your vendor/partner’s compliance Poor Suppliers May Delay or Void
an Approval Active Pharmaceutical Ingredient (“API”)
Supplier Sponsor’s application will not be approved if
deficiency at API maker
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Why Worry? Poor Suppliers May Delay or Void
an Approval … Active Pharmaceutical Ingredient (“API”)
Supplier …. Special tactics/concerns:
be extremely careful with first-time suppliers
special concern -- if never used before, FDA foreign inspection may delay approval process as well
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Why Worry…?
FDA will make you worry … Poor Suppliers May Delay/Void
Approvals ... Clinical researchers
sponsor’s application may not be approved -- data may be excluded
if discovered post-approval, can lead to formal withdrawal of the approval
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Why Worry?
FDA will make you worry … Poor Suppliers May Delay/Void
Approvals ... Clinical researchers …
Special tactics/concerns area of high interest today due to 1999 gene
therapy death @ U. of Penn. & problems at other major clinical research centers (e.g., Duke, U. of Colo.)
sponsors can not avoid FDA liability via contract -- have to have systems in place to ensure compliance
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Why Worry…?
FDA will make you worry … Poor Suppliers May Delay/Void
Approvals … Contract Manufacturers
must be GMP compliant or FDA approval can be refused
Special tactics/concerns tied directly into your application -- their
changes will trigger a regulatory duty that may require an FDA filing/approval
may be high volume/low margin producers -- pressure on production may lead to errors
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Why Worry…?
FDA will make you worry … Supplier or component
qualification -- Required -- explicitly or implicitly
Drugs -- 21 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.”
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Why Worry?
FDA will make you worry … Supplier or component
qualification -- Required -- explicitly or implicitly …
Devices -- 21 CFR 820.50 “Each manufacturer shall establish and maintain procedures to ensure that all purchased or otherwise received product and services conform to specified requirements.”
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Why Worry…?
FDA will make you worry … Supplier qualification …
Devices -- 21 CFR 820.50(a)(1) -- Evaluation Duty
applies to suppliers, contractors and consultants-- evaluated as to abililty to meet specified requirements
must define the “type and extent of control” over products, services, suppliers, contractors, and consultants”
keep records of acceptable suppliers, contractors & consultants
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Why Worry…? FDA will make you worry …
Supplier qualification … Devices -- 21 CFR 820.50(b) -- Purchasing
Data Duty keep data that “clearly describe or reference the
specified requirements, including quality requirements, for purchased or otherwise received product and services.”
Note: “product” includes components, manufacturing materials, in-process devices, finished devices and returned devices [21 CFR 820.3(r)]
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Why Worry...?
FDA will make you worry … Supplier qualification …
Devices -- 21 CFR 820.50(b) -- Purchasing Data Duty
Documents “shall include, where possible” an agreement requiring a supplier/contractor/consultant to notify the manufacturer of changes “so that the manufacturer may determine whether the changes may affect the quality of a finished device.
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Why Worry...?
FDA will make you worry … Supplier qualification …
Biologics -- 21 CFR 600.12(e) -- Records in “divided” manufacturing
each participating manufacturer shall furnish the “last” manufacturer “all records relating to the manufacturing operations performed by such manufacturer insofar as they concern the safety, purity and potency of the lots of the product involved
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Why Worry?
FDA will make you worry … Supplier qualification --
Biologics -- 21 CFR 600.12(e) -- Records in “divided” manufacturing …
Tactics/concerns if you’re the “last” mfr. -- defining the records needed re “safety,
purity, and potency” -- e.g., does that mean “effectiveness”?
be as specific as possible in the supply agreement
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Why Worry…? FDA will make you worry ...
Receipt of Components -- Procedures Drugs --
21 CFR 211.84 -- Testing and Approval or rejection of components, drug product contaniers, and closures
number to be tested will depend on … “the past quality history of the supplier”
testing can be avoided if:For drug components:
** vendor supplies a Certificate of Analysis showing test results + you do at least one specific identity test** buyer must establishe reliability of supplier’s analyses via “appropriate validation … at appropriate intervals”
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Why Worry…?
FDA will make you worry ... Receipt of Components -- Procedures
Drugs -- testing can be avoided if:
For container/closure systems --** vendor supplies a Certificate of
Testing + does visual ID on the container/closure systems
** buyer establishes reliability of supplier’s testing via “appropriate validation of the supplier’s test results at appropriate intervals”
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Why Worry…? FDA will make you worry ...
Receipt of Components -- Procedures Devices -- 21 CFR 820.80(b) --
must have procedures for accepting incoming product tested, inspected or otherwise verified to meet
specified requirements acceptance or rejection must be documented
nonconforming product -- must notify 3rd party manufacturers -- arguably, there must be an investigation
Tactics/concerns -- having leverage to make the manufacturer do such an investigation
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Why Worry…?
FDA Problems Can Be Hard to Fix FDA statutory and other powers
against violative companies/products may delay or preclude a fix
Inspection -- type will determine impact routine vs. directed short vs. lengthy
Seizure -- can be least intrusive Injunction
consent decrees -- e.g., Abbott litigated orders
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Why Worry…? FDA Problems Can Be Hard to Fix ...
Criminal Prosecution -- The sins of your partner may visit upon you --
The E-Ferol Case does not technically preclude supply, but can be so
disruptive as to undermine the effectiveness of a vendor
Application Integrity Program (AIP) -- [formerly known as the “Alert List” or “Fraud List”
if your supplier is on it, can be a lengthy, very subjective process for getting through
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Why Worry…?
FDA Problems Can Be Hard to Fix ... Regulatory hurdles -- to cure a problem
with an approved product, may require FDA sign-off depending on the nature of
the problem.ExamplesExamples
Active pharmaceutical ingredient maker unable to supply:
Apparent Solution -- get a new one Problem -- will require prior approval by the agency
and additional scientific data to support change Best approach -- have two qualified as early as
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Why Worry…?
Products Liability Examples where a supplier caused the
problem: Tryptophan -- raw material problem E-Ferol -- poor formulation Carbamazapine -- API process change
Securities Liability -- worst case, deal caves; investors (i. e., their lawyers) sue
Economic disruption -- you can’t sell if they don’t sell to you
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Keys to Preventing & Mitigating Problems with FDA-Regulated
Suppliers
Contract Clauses Audits Surveillance between audits Teamwork at the Buyer
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Preventing & Mitigating Problems...
Contract Clauses Buyer’s right to audit vendor (and
vendor’s key suppliers) without notice at any reasonable time during operations vendor to cooperate fully with audit access to records and personnel to be
spelled out
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Preventing & Mitigating Problems …
Contract Clauses … advance notice of changes in
vendor’s processing -- KEY -- so buyer can assess what regulatory action it must take to keep its approval/submission current
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Preventing & Mitigating Problems...
Contract Clauses ... Vendor to cooperate, at no additional
expense, with Buyer’s needs to take action to continue to comply with FDA requirements (e.g., vendor to provide data to support filing of supplements to make changes to approved applications)
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Preventing & Mitigating Problems …
Contract Clauses ... Vendor’s relations with FDA ...
Provide copies of 483’s, EIRs prompt notice to buyer of initiation of
FDA inspections prompt transmission/notice to buyer of
any FDA regulatory correspondence or other regulatory action
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Preventing & Mitigating Problems...
Contract Clauses ... Timely notice of other problems
encountered by vendor in its manufacturing process
timely notice of any adverse reactions or complaints reported to vendor
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Preventing & Mitigating Problems …
Contract Clauses ... Contractually articulated duty to
comply with FDA laws/regulations general specific -- examples
providing certificates of analysis testing to be done
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Preventing & Mitigating Problems...
Contract Clauses ... Recalls -- duty to of vendor to cooperate
with recalls initiated by buyer (if applicable)
representations, warranties, etc. about state of past and present compliance with FDA legal/regulatory reqs.
Indemnification duty from vendor to buyer in event of breach of any FDA-related reps or warranties
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Preventing & Mitigating Problems …
Audits -- the key to compliance
No notice (ideal world?) Conduct like an FDA inspection Audit team --
should be interdisciplinary in training -- Operations, QA, RA, QC
should have an SOP for conducting
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Preventing & Mitigating Problems...
Audits ... Written follow-up -- give them a
“483” essential get substantive replies from vendor
What to stress -- systems specific to your product/service
being provided to you by vendor current FDA “hot buttons”
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Preventing & Mitigating Problems ...
Audits ... Re-audit promptly to confirm
corrections General Documents to review
chronology of interactions with FDA and other regulatory agencies (e.g., EMEA, HPB, if applicable)
all regulatory correspondence/filings between vendor and FDA
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Preventing & Mitigating Problems …
Audits ... General Documents to review …
minutes of meetings/phone calls with FDA company’s FDA’s (get via FOI if vendor doesn’t have)
Tip -- don’t rely just on what the company gives you; seek independent sources of related documents (e.g., under FOI)
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Preventing & Mitigating Problems ...
“Surveillance” between audits -- keeping an eye on your vendors Why?
“Knowlege is Good” (Faber College motto; Animal House, 1978) -- to be in the best position to anticipate problems
To be able to initiate dialogue with vendor as soon as possible after being alerted to a regulatory issue
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Preventing & Mitigating Problems …
“Surveillance” between audits -- keeping an eye on your vendors … How?
Read the trade and general press Keep track of FDA warning letters (subscribe
to FDA e-mail notification services) FOI requests -- direct to FDA or via a third-
party service
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Preventing & Mitigating Problems ...
Teamwork at the Buyer My old General Counsel’s nightmare
-- “here’s the supply contract, we need to sign it today, can you look it over for any legal issues...?”
My reply:“Did you run it by RA, QA, QC?”
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Specific Procurement Problems
Imported Components FDA powers to stop questionable imports is
much greater than for identical problem presented by a domestic manufacturer
Reason -- § 801 of the Federal Food, Drug, and Cosmetic Act gives FDA power to block an import if the product “appears” to be adulterated or misbranded
Action can occur without physical examination Example -- bulk APIs going through the New York
District Office in past half year have all been detained pending proof they are not counterfeit, adulterated or misbranded -- without physical examination.
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Specific Problems ...
Imported Components ... Foreign suppliers are harder to sue
Tryptophan -- Showa Denko allegedly dodged responsibility for medical syndrome due to being off-shore
Sulzer -- foreign parent company allegedly refuses to provide any financial support to its subsidiary (ruptured breast implants)
Unusual events impacting supplies -- FDA will try to work with you; examples Phillips Petroleum Plant explosion -- sole
source for Marlex -- decreased availability of container/closure systems
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Specific Problems ...
Clinical Studies if you’re the sponsor, need deep “down
stream” audit systems and contract controls relative to:
CRO’s Investigators --
don’t forget to check the FDA list of disqualified investigators
IRB’s -- a critical focus today of concerns -- can invalidate data -- PROBLEM -- you may not have a contractual relationship -- insist upon one
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Specific Problems ...
API’s (Active Pharmaceutical Ingredients) many are foreign sourced -- thus less frequently
inspected by FDA -- puts audit onus on you still subject to all FDA rules -- while API makers
technically do not have to meet GMP, there is a fairly stringent ICH guidance
make sure contract has API maker notify you of changes to process, etc. that need to be in the DMF and that FDA has been notified
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Specific Problems ...
Labels/Labeling label errors are prime cause of recalls your printer must have clear, written
procedures on handling of labels, especially if not dedicated to you exclusively
intake controls have to be well-documented, trained and validated
change control procedures -- even for changes not being submitted for FDA approval -- are essential
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Questions?
Call, e-mail, fax or write:
Michael A. Swit, Esq.Law Offices of Michael A. Swit
539 Samuel Ct., Suite 229Encinitas, California 92024
760-815-4762 ♦ 760-454-2979 (fax)[email protected]
http://www.fdacounsel.com
FDACounsel.com