Outsourcing in the Pharmaceutical Industry

Outsourcing can be a risky business and oversight of outsourced activities is becoming increasingly difficult with the level of outsourcing that is being performed.

The scope of outsourced activities is broad and can cover every stage of the supply chain including:

• Contract Laboratory testing
• Qualification and Validation activities
• Maintenance and Calibration
• Assessment and Procuring raw materials
• QP batch release activities
• Transportation, Storage and Distribution
• Document Archiving
• Retention of samples
• Investigational Medicinal Products – third parties
• Sales and Marketing
• IT Infrastructure and Admin
• Pharmacovigilance

The regulatory expectations are made quite clear in various sections throughout Eudralex Volume 4. Several examples have been extracted to demonstrate this:

Section 7.8 of Chapter 7 “Outsourced Activities” clearly defines the responsibilities of the Contract Giver and the Contract Acceptor where it states that “The Contract Giver should also ensure either by himself, or based on the confirmation of the Contract Acceptor’s Qualified Person….that all products and materials delivered to him by the Contract Acceptor have been processed in accordance with GMP and the MA”.

Section 7.12 states that “The Contract Acceptor should not introduce any unauthorised changes…that may adversely affect the quality of the activities outsourced by the Contract Giver”.

Section 7.13 continues with “The Contract Acceptor should understand that outsourced activities, including contract analysis, may be subject to inspection by the competent authorities”.

The full chapter on Outsourced Activities is contained at the following link: https://ec.europa.eu/health/sites/health/files/files/eudralex/vol-4/vol4-chap7_2012-06_en.pdf

All arrangements for outsourced activities are required to be performed in accordance with both the regulations and the Marketing Authorisation (MA). It is critical that all Marketing Authorisation Holders (MAH) understand that activities can be delegated and that essentially the MAH acting as the Contract Giver, retains overall responsibility for outsourced activities.

While the action of conducting outsourced activities is not a new phenomenon, the challenge that presents itself is whether the MAH can effectively demonstrate to the regulator that an appropriate oversight programme is in place for outsourced activities.

The supplier onboarding process is the time to articulate your requirements and expectations from the supplier, rather than the supplier qualification phase. This can include quality agreements, change notification requirements, capability expectations, capacity utilization, inspection expectations, validation requirements, and contingency planning above and beyond those in the applicable regulations and standards.

Once onboarded, the ability to apply the same level of oversight to all outsourced activities, is also challenging. The level of oversight applied varies within the industry, and the more widespread the outsources activities are, the more complex the management of the outsourced activities becomes as additional factors are introduced such as importation, batch release and product distribution processes.

One of the most complex elements associated with the management of outsourced activities is having an effective Change Management System in place. Eudralex Vol 4, Chapter 1 Pharmaceutical Quality System, Section 1.4 outlines that “arrangements are in place for the prospective evaluation of planned changes and their approval prior to implementation taking into account regulatory notification and approval where required”.

Due to the fact that the MAH cannot directly observe the activities taking place amongst its suppliers or contract service providers, this generates the potential for deficiencies or failures in its partners’ quality system to go undetected. This re-emphasizes the criticality of the desire for an effective Change Management process to fully understand and have the opportunity to assess the impact of changes to outsourced activities.

Change Management processes allow the organisation to assess if a potential change will impact the goods or services being acquired. Change notification requirements generally include, but are not limited to, the following elements:

• Change in regulatory scope
• Unfavourable regulatory inspections
• Transfer to another registrar or agency in their registration, licensure, certification, or accreditation
• Change in ownership within the supply chain
• Change in the company name or site of manufacture, testing, packaging, etc.
• Change in the composition any raw materials
• Change in the method of producing, processing, testing or release
• Change in subcontractors for producing, processing, or testing
• Change of the manufacture site
• introduction of new products at CMO sites, construction activities at the site or significant changes to personnel.

It is critical that the Contract Giver and Contract Acceptor work closely together, establishing an active and ongoing partnership that values open communication, proactive collaboration and a strong, mutually beneficial relationship. This includes the requirement to establish and document the criteria for quality performance from the outset, as well as identify quality problems and corrective actions on an ongoing basis.

If you would like further information or wish to discuss how PharmaLex can support you with the development or implementation of an effective outsourced activities programme, or an assessment of your existing outsourced activities programme please connect with us at +353 1 846 4742 or contactirl@pharmalex.com.