One of the biggest issues facing the pharmaceutical industry and patients today is quality, integrity and security of the pharmaceutical supply chain, preventing contamination (adulteration) and eliminating counterfeits.
A suitable Supplier Qualification Program has hence to be implemented by each user of purchased APIs (or intermediates). A major element of such a supplier qualification program is the Quality Agreement between the manufacturer of the API/intermediate and the buyer or user of the API/intermediate. It increases transparency and traceability by improving the supply relationship between all parties involved in the manufacturing and distribution of APIs and intermediates.
A Quality Agreement under the scope of this guideline is a legally binding agreement that is mutually negotiated and concluded between (the Quality Departments of) API/intermediate manufacturers and their customers. It is intended to define, in a formalised manner, responsibilities relative to quality tasks to assure the manufacture and supply of safe materials (APIs or intermediates) acceptable for pharmaceutical use.
- A Quality Agreement is based on the quality procedures in place at both the API/intermediate manufacturer and its customer. The Quality Agreement also includes commitments between the parties regarding (a) the provision of information, documents, or samples, and (b) communication and notification rules including contacts. It creates mutual understanding of the quality & regulatory requirements relevant for material supply and both the API/intermediate manufacturer’s and customer’s respective obligations related to quality.
- A Quality Agreement is a major element of an API/intermediate user’s supplier qualification program but, of course, it is not a substitute for the supplier qualification processes, including audits as necessary, and for understanding the supplier processes and capabilities.
- A Quality Agreement should not contain any commercial or liability related terms, which should exclusively be dealt with in a Supply Agreement. This very common view is also shared by the US FDA, as clearly stated in their guidance on Quality Agreements.
Legal Requirements
Quality Agreements have become a common tool in our business and are intensively demanded by the authorities to be implemented. They have increasingly been referred to or described in international guidelines.
Written contracts/agreements defining the responsibilities and communication processes for quality-related activities of the involved parties are mandatory for “contract manufacture” (see EU GMP Guide Part I, chapter 7, and ICH Q7 Guideline, chapter 16) or “outsourced activities” (see ICH Q10 Guideline, chapter 2.7), respectively. In principle, it is the responsibility of the contract giver to request the closure of such a contract/agreement with its contract acceptor(s).
In the United States, Quality Agreements are simply assumed but not necessarily a (legal) requirement. The Food and Drug Administration (FDA) issued its final guidance for industry on Quality Agreements in the pharmaceutical industry (Contract Manufacturing Arrangements for Drugs – Quality Agreements). This guideline covers “manufacturing activities of the parties involved in contract drug manufacturing subject to CGMP”, and it makes reference to ICH Q7, chapter 16.11.
While the FDA guidance document is focused on contract manufacturing, there is no such guideline for requirements of agreements for purchased APIs. In its guide the FDA only encourages “entities that engage in manufacturing related solely to drug distribution to follow the recommendations in this guidance document, as appropriate”.
Furthermore, the FDA states that “Quality Agreements should not cover general business terms and conditions such as confidentiality, pricing or cost issues, delivery terms, or limits on liability or damages”. The agency recommends that “Quality Agreements be separate documents, or at least severable, from commercial contracts such as master services agreements or supply agreements”.
Read also: Vendor Qualification in Pharmaceutical Industry
A Template for Quality Agreements
1. Introduction/Purpose/Scope
- Parties to the agreement
- Products covered by the agreement
- Site(s) involved
- Definitions and abbreviations (optional)
2. General Provisions
- Effective date
- Term of agreement
- Assignment
- Related agreements
- Amendments
- IConfidentiality (optional)
- Resolution of quality disputes (optional)
- Choice of law (optional)
- Survival clause (optional)
3. Quality Responsibilities
- Applicable GMP Standard / Regulatory Compliance
- Regulatory Documents
- Change Control
- Audits
- Authority Inspections
- Data Integrity
- Specifications
- Laboratory Controls
- Product Release
- Stability
- Certificate of Analysis / Conformance
- Certificates, Statements and Declarations
- Product Quality Review
- Retention of Records/Documentation
- Materials
- Qualification / Validation
- Reprocessing / Reworking
- HAPIs
- Sub-contracting
- Packaging
- Labelling
- Storage and Distribution (incl. Supply Chain Traceability)
- Deviations / OOS (incl. Stability)
- Complaints
- Recall
4. Signatories
5. Contacts
6. List of Appendices
7. History / Change Log
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