For Life Science Companies

The 5 "W"s of Quality Agreements
by Arvilla Trag, ASQ Certified Quality Auditor, Midwest Consulting Services, Inc.


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What is a Quality Agreement, and what should be included?

A Quality Agreement is a document that defines both specific quality parameters for a project AND which party is responsible for the execution of those parameters. The level of detail may vary depending on the developmental stage of the project.

Any time a CMO/Contractor is used there should be a Quality Agreement.

Items to address in a Quality Agreement include all aspects of a project that affect the identity, quality, safety, potency, and purity of a product. Additionally, include aspects that may affect the compliance status of either the Contractor or Client. One of the most overlooked sections is the Definitions section - it is critical that everyone knows what is meant by every term used in the Quality Agreement; especially when contracting with non-U.S. parties, terminology can vary widely. Include abbreviations and acronyms, and define documents - one person's batch record is another person's data sheet. Define "subcontracting," and if/when it is acceptable.

What to exclude from a Quality Agreement is also worth mentioning. Certain items that should never appear in a Quality Agreement include:

  • general business terms and conditions,
  • pricing and escalator clauses,
  • forecasting,
  • delivery terms,
  • confidentiality obligations,
  • liability limitations

The above items belong in the Supply Agreement. The Quality Agreement should be a separate document from the Supply Agreement, but may be incorporated by reference. Quality Agreements and Supply Agreements are two very different documents. If they are created as a single document the reviewer list will include many individuals on each side of the fence that have no real reason or time to review issues unrelated to their area of expertise.

Why do you need a Quality Agreement?

A Quality Agreement clarifies exactly what is expected of both parties, and who will be responsible for virtually all aspects of the project. It also identifies specific cost aspects of the project, and may save time and money by doing so.

There are regulatory requirements for Quality Agreements. While not currently required by U.S. GMPs for pharmaceuticals, it is very likely they soon will be. The draft guidance Good Importer Practices (January 2009), requires establishment of a Product Safety Management Program, which includes Quality Agreements. In Cooperative Manufacturing Arrangements for Licensed Biologics (November 2008): "For each contract arrangement, the licensed manufacturer's BLA/supplement should describe ...the responsibilities of each participating entity." Adding a Quality Agreement requirement to 21 CFR 211 would bring U.S. GMPs in line with EU GMPs, and with the ICH guidelines FDA has accepted (see below).

Quality Agreements are required by medical device regulations, 21 CFR §820.50 Purchasing Controls, as well as various quality standards such as ISO.

Chapter 7 of the EU GMPs (7.10 through 7.15 [Contracts]) requires a Quality Agreement to define the responsibilities of the contract giver and contract acceptor - "Contract manufacture and analysis must be correctly defined, agreed and controlled". Chapter 7 also specifies the contract preparation, especially relative to the scope of responsibilities. The EMEA is in the process of adding certain outsourcing activities to Chapter 7 which are not directly linked to contract manufacture or contract analysis, such as

  • Maintenance, qualification and validation activities
  • Storage and transport
  • Label printing
  • Release activities (e.g. by external QPs) and
  • GMP audits by third parties

A draft of the revised Chapter 7 is planned for September 2010 - with the goal to submit it to the European Commission in September 2011.

Quality Agreements are also specified in ICH quality documents. ICH Q7, 16.12, reads "There should be a written and approved contract or formal agreement between a company and its contractors that defines in detail the GMP responsibilities, including the quality measures, of each party."

And in ICH Q10, 2.7, "The pharmaceutical quality system, including the management responsibilities described in this section, extends to the oversight and review of outsourced activities...Responsibilities for quality-related activities of the contract giver and contract acceptor should be specified in a written agreement."

Where are Quality Agreements needed?

There is a misconception that Quality Agreements are only required for the use of CMOs operating in a different regulatory environment. Not so - any outsourcing contract arrangement should have an associated Quality Agreement, including arrangements between different divisions of the same company, regardless of the physical location of any of the parties involved.

When is a Quality Agreement needed?

A formal corporate policy document should clearly indicate the types of vendors and services that will require a Quality Agreement. Any time a CMO/Contractor is used there should be a Quality Agreement. A Quality Agreement should be in place with all vendors of critical materials, and is also recommended for vendors of large quantities, e.g., methyl cellulose for capsules, column resins, etc.

The Quality Agreement should be drafted and mutually accepted by the CMO/Contractor and the Client BEFORE the Supply Agreement, to ensure identification of all fee-for-service items and any capability limitations. Neither party should take ANYTHING for granted.

Who should prepare / review / approve a Quality Agreement?

Quality Agreements should be prepared by both parties' QA functions, with the involvement of relevant operational personnel, such as manufacturing and lab personnel. They should be approved by both parties' QA function and both parties' Operations department. Legal may or may not be involved in the Quality Agreement. Involving the Legal department would make sure it agrees with the Supply Agreement; however, it can delay execution of the Quality Agreement if the legal department wants to add unnecessary legal verbiage that does not belong in the Quality Agreement.

Anyone who needs to know the content of the Quality Agreement in order to do their job should be included in review of the agreement, including Business Development, Project Leader(s), and Legal (to ensure congruence with Supply Agreement).

In summary, Quality Agreements can save a great deal of time and money by preventing misunderstandings between contract givers and contractors, but only if they are timely, thorough, and have input from all affected operational units.

Arvilla L. Trag, RAC holds a B.A. in Biology /Chemistry, is Regulatory Affairs Certified since 1994, and an ASQ Certified Quality Auditor since December 2008. After working on the research bench for six years and then working in Regulatory Affairs and Quality Assurance for various small biotech companies for several years, Ms. Trag formed Midwest Consulting Services, Inc. in 1997, specializing in outsourcing and CMC compliance. In addition to conducting GMP audits and several GLP audits each year, she does GMP training, prepares Quality Agreements, develops Quality Systems for start-ups and virtual companies, and prepares INDs, BLAs and other regulatory submissions. Ms. Trag works with both biotech products and small molecule products, and also combination products. She can be reached at (574) 243-9931 or via email at arvillatrag@comcast.net.





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