Transcript Strategies for Sourcing FDA-Regulated Products and Components

Strategies and Concerns in the
Sourcing of FDA-Regulated
Products, Components & Services
Michael A. Swit, Esq.
Law Offices of Michael A. Swit
539 Samuel Ct., Suite 229
Encinitas, California 92024
760-815-4762 ♦ 760-454-2979 (fax)
[email protected]
FDACounsel.com
BIO 2001
Procurement and Supply Chain Management
Seminar
Monday, June 25, 2001
San Diego Marriott Hotel
and Marina
San Diego, California
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Why Worry About FDA
Compliance?
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FDA Compliance Can Make or Break a
Deal
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Recent Examples:
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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...?
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FDA mandates you worry about your
vendor/partner’s compliance
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Poor Suppliers May Delay or Void an
Approval
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Active Pharmaceutical Ingredient (“API”)
Supplier
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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 …
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Active Pharmaceutical Ingredient (“API”)
Supplier ….
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Special tactics/concerns:
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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…?
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FDA will make you worry …
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Poor Suppliers May Delay/Void
Approvals ...
Clinical researchers
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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?
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FDA will make you worry …
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Poor Suppliers May Delay/Void
Approvals ...
Clinical researchers …
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Special tactics/concerns
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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…?
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FDA will make you worry …
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Poor Suppliers May Delay/Void
Approvals …
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Contract Manufacturers
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must be GMP compliant or FDA approval can be
refused
Special tactics/concerns
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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…?
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FDA will make you worry …
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Supplier or component qualification -Required -- explicitly or implicitly
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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?
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FDA will make you worry …
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Supplier or component qualification -Required -- explicitly or implicitly …
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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…?
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FDA will make you worry …
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Supplier qualification …
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Devices -- 21 CFR 820.50(a)(1) -Evaluation Duty
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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…?
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FDA will make you worry …
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Supplier qualification …
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Devices -- 21 CFR 820.50(b) -- Purchasing
Data Duty
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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...?
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FDA will make you worry …
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Supplier qualification …
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Devices -- 21 CFR 820.50(b) -- Purchasing
Data Duty
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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...?
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FDA will make you worry …
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Supplier qualification …
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Biologics -- 21 CFR 600.12(e) -- Records
in “divided” manufacturing
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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?
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FDA will make you worry …
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Supplier qualification -
Biologics -- 21 CFR 600.12(e) -- Records in
“divided” manufacturing …
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Tactics/concerns if you’re the “last” mfr. -
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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…?
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FDA will make you worry ...
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Receipt of Components -- Procedures
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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”
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testing can be avoided if:
For drug components:
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** 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…?
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FDA will make you worry ...
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Receipt of Components -- Procedures
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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…?
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FDA will make you worry ...
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Receipt of Components -- Procedures
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Devices -- 21 CFR 820.80(b) -
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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…?
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FDA Problems Can Be Hard to Fix
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FDA statutory and other powers against
violative companies/products may delay or
preclude a fix
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Inspection -- type will determine impact
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Seizure -- can be least intrusive
Injunction
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routine vs. directed
short vs. lengthy
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consent decrees -- e.g., Abbott
litigated orders
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Why Worry…?
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FDA Problems Can Be Hard to Fix ...
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Criminal Prosecution -
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Application Integrity Program (AIP) -[formerly known as the “Alert List” or
“Fraud List”
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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
if your supplier is on it, can be a lengthy, very
subjective process for getting through
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Why Worry…?
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FDA Problems Can Be Hard to Fix ...
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Regulatory hurdles -- to cure a problem with
an approved product, may require FDA signoff depending on the nature of the problem.
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Examples
Active pharmaceutical ingredient maker unable to
supply:
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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
possible
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Why Worry…?
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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
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Contract Clauses
Audits
Surveillance between audits
Teamwork at the Buyer
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Preventing & Mitigating
Problems...
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Contract Clauses
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Buyer’s right to audit vendor (and vendor’s
key suppliers)
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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 …
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Contract Clauses …
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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...
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Contract Clauses ...
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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 …
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Contract Clauses ...
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Vendor’s relations with FDA ...
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Provide copies of 483’s, EIRs
prompt notice to buyer of initiation of FDA
inspections
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prompt transmission/notice to buyer of any
FDA regulatory correspondence or other
regulatory action
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Preventing & Mitigating
Problems...
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Contract Clauses ...
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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 …
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Contract Clauses ...
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Contractually articulated duty to comply
with FDA laws/regulations
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general
specific -- examples
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providing certificates of analysis
testing to be done
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Preventing & Mitigating
Problems...
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Contract Clauses ...
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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 …
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Audits -- the key to compliance
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No notice (ideal world?)
Conduct like an FDA inspection
Audit team -
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should be interdisciplinary in training -Operations, QA, RA, QC
should have an SOP for conducting
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Preventing & Mitigating
Problems...
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Audits ...
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Written follow-up -- give them a “483”
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essential
get substantive replies from vendor
What to stress -
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systems specific to your product/service being
provided to you by vendor
current FDA “hot buttons”
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Preventing & Mitigating
Problems ...
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Audits ...
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Re-audit promptly to confirm corrections
General Documents to review
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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 …
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Audits ...
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General Documents to review …
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minutes of meetings/phone calls with FDA
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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 ...
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“Surveillance” between audits -keeping an eye on your vendors
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Why?
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“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 …
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“Surveillance” between audits -keeping an eye on your vendors …
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How?
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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 thirdparty service
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Preventing & Mitigating
Problems ...
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Teamwork at the Buyer
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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
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Imported Components
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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 -FDACounsel.com
without physical examination.
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Specific Problems ...
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Imported Components ...
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Foreign suppliers are harder to sue
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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
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source for Marlex -- decreased availability of
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Specific Problems ...
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Clinical Studies
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if you’re the sponsor, need deep “down
stream” audit systems and contract
controls relative to:
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CRO’s
Investigators -
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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
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to be in the DMF and that FDA has been
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Specific Problems ...
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Labels/Labeling
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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 229
Encinitas, California 92024
760-815-4762 ♦ 760-454-2979 (fax)
[email protected]
http://www.fdacounsel.com
FDACounsel.com
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