Q&A With the Experts: CDMOs, Quality Agreements, and Shared Responsibilities

Introduction

Q&A With the Experts explores critical topics in quality, regulatory, and manufacturing through direct dialogue with industry leaders and AI-assisted analysis from KeyPedia.

This discussion draws on insights from Dan Barreto and KeyPedia, GKS’s regulatory knowledge engine.
Dan is a leader in strategic operations and GMP consulting for life science firms. He is a former FDA investigator and has held roles at leading pharmaceutical companies like Teva Pharmaceuticals, Sanofi, and Janssen Pharmaceutica, where he gained extensive expertise in global quality systems, regulatory compliance, and CGMP operations.

Questions

Who is responsible for the quality of a product manufactured by a contract manufacturer?

Based on FDA guidance, both the owner of the drug product and the contract manufacturing facility are responsible for the quality of a product. Here's a breakdown of their responsibilities:

• Shared Responsibility: Each party involved in the manufacturing of a drug is responsible for ensuring compliance with Current Good Manufacturing Practices (CGMP) for the specific activities they perform. Drugs not manufactured in compliance with CGMP are considered adulterated.

• Owner's Responsibility: The owner of the product holds the ultimate responsibility for the product's quality. They must ensure that the contract facility complies with all applicable product and establishment standards. This includes having procedures in place to receive information from the contract facility on all deviations, complaints, and adverse events.

• Contract Manufacturer's Responsibility: The contract manufacturer is responsible for complying with CGMP for the operations they are contracted to perform. They cannot shift this responsibility to the owner, even if there is a quality agreement in place. For example, a contract laboratory is responsible for the validity of the testing data it generates.

In summary, while the owner has overall responsibility for the product, the contract manufacturer is also accountable for their specific roles in the manufacturing process. The FDA can hold either or both parties responsible for CGMP violations.

Describe how FDA enforcement actions are typically applied in cases of CGMP violations where responsibility is shared between a drug product owner and a contract manufacturing organization.

1. The Owner's Ultimate Responsibility

The FDA consistently emphasizes that the product owner is ultimately responsible for the quality of their drug products. This responsibility cannot be delegated to a contractor. The owner must ensure that the CMO complies with all applicable standards.

Example:

In a 2019 warning letter to U.S. Continental Marketing, Inc., the FDA cited the firm for failing to establish an adequate quality control unit. The company, which contracted the manufacturing of an ophthalmic drug product, was held responsible for approving the product and ensuring its sterility. The letter highlights that the quality agreement placed the responsibility for approving or rejecting the product squarely on U.S. Continental Marketing.

2. The Contract Manufacturer's Direct Responsibility

The CMO is responsible for complying with CGMP for the specific operations it is contracted to perform. A quality agreement with the product owner does not absolve the CMO of this responsibility.

Example:

In a 2023 warning letter to LXR Biotech, LLC, a contract manufacturer, the FDA cited the firm for failing to test components used in an OTC drug product. The letter makes it clear that the CMO is directly responsible for the manufacturing, processing, packing, and holding of the drug in conformance with CGMP.
Author commentary: The operational execution of the manufacturing process rests with the CMO, while the product owner is responsible for verifying and confirming on a routine basis that the execution of the process is done correctly.

3. Joint Enforcement Actions

In cases where both parties have failed in their responsibilities, the FDA may take action against both the owner and the CMO. The nature of the violations determines the focus of the enforcement.
Author commentary: If one or the other does right while the other does wrong, the impact on product quality and compliance remains relevant. In summary, both parties must be consistently compliant.

Example:

In a 2017 warning letter to Amaros Co., Ltd., a Korean drug manufacturer, the FDA noted the firm's failure to establish a quality control unit and procedures for drug products manufactured under contract by another company. This demonstrates that the FDA expects a firm's quality unit to have oversight of all manufacturing activities, including those that are outsourced.
Author commentary: Oversight does not imply daily involvement, but rather targeted actions such as review of batch production records, approval of investigations and CAPAs, performance of supplier audits, mini management reviews, complaint evaluations, review of FDA inspections, and periodic site visits.

4. The Role of Quality Agreements

While quality agreements are a key part of the owner–CMO relationship, the FDA views them as a tool to delineate responsibilities, not to transfer them. The FDA may review these agreements during inspections to understand the roles and responsibilities of each party.

FDA Guidance:

The FDA’s “Contract Manufacturing Arrangements for Drugs: Quality Agreements” guidance states that a quality agreement should describe the roles and manufacturing activities of both the owner and the contract facility under CGMP. The guidance recommends that quality agreements be separate from commercial contracts and that they clearly define responsibilities for manufacturing activities.
Author commentary: Quality agreements should be written in a way that allows them to be enforced and monitored routinely. In many cases, these agreements are not actively enforced by either party.

5. Common Violations Leading to Enforcement

Several common themes emerge from FDA warning letters involving contract manufacturing:

1. Inadequate Quality Unit: Failure to establish a quality unit with authority to approve or reject all components, in-process materials, and finished products.
2. Failure to Test Components: CMOs often fail to test incoming components for identity, purity, strength, and quality.
3. Inadequate Investigations: Insufficient or incomplete investigations of batch failures or deviations.
4. Lack of Oversight: Product owners failing to review batch records, test results, and deviation reports from their CMOs.

In Conclusion, the FDA’s enforcement approach in contract manufacturing is rooted in the principle of shared responsibility. While the product owner holds ultimate responsibility for the product, the CMO is directly accountable for its manufacturing operations. The FDA will take action against either or both parties when CGMP violations place product quality or patient safety at risk.

Read More / Contact

Read the full LinkedIn post by Dan Barreto here:
CDMOs and Product Owners: Who Is Responsible?

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