It is no surprise to industry professionals, the ongoing trend in medical device manufacturing is the shipping of assembly work to contract manufacturers located outside of the United States, a.k.a., off-shoring. As burden labor rates continue to rise in medical device corridors such as Minneapolis, Boston, and the retooled Silicon Valley (now the Biotech Valley in Dr. D’s opinion), the potential savings associated with manufacturing in places like China, Vietnam, and Costa Rica are just too lucrative to ignore.
However, what happens when the contract manufacturer a device establishment selects for manufacturing support, runs afoul of FDA? In fact, what happens when a contract manufacturer receives a warning letter from our friends at the agency? Can you say adulterated product? My evil twin, Twitch (Jim Twitchell – VP of QA at Avinger) recommended another warning letter for the doctor to read, analyze, and pontificate about. For this week’s guidance, Dr. D will attempt to offer a nice “apercu” (look-it-up) into what steps device establishments can take to protect themselves from partnering with contract manufacturers that are in FDA’s proverbial doghouse. Buyer Beware!
FDA Warning Letter – 01 July 2014
Instead of diving into each of the inspectional observations listed in the warning letter, Dr. D will provide some insight into what expectations are set by FDA in regards to the initial response and the due diligence required by device establishments impacted by the warning letter. That being said, FDA began this warning letter with their coined statement pertaining to adulterated product. You see folks, once product has been identified as adulterated (i.e., not manufacturer in accordance with the requirements delineated within the QSR, the device establishment needs to be prepared to defend its decision for leaving adulterated product on the market.
Additionally, as far as FDA is concerned, everything manufactured since the previous agency inspection can be considered suspect (adulterated). Furthermore, when three of the inspectional observations for a contract manufacturer are related to process validation, environmental controls, and equipment cleaning and maintenance, then it is time to stand-up and take notice. It would be interesting to see what the offending organization’s notified body was seeing during their audits as these observations appear to be significant.
Warning letter excerpt
“This inspection revealed that these devices are adulterated within the meaning of section 501(h) of the Act, 21 U.S.C. § 351(h), in that the methods used in, or the facilities or controls used for, their manufacture, packing, storage, or installation are not in conformity with the current good manufacturing practice requirements of the Quality System regulation found at Title 21, Code of Federal Regulations (CFR), Part 820. We received an undated, unsigned response on March 26, 2014, concerning our investigator’s observations noted on the Form FDA 483 (FDA 483), List of Inspectional Observations, which was issued to your firm. We address this response below, in relation to each of the noted violations. These violations include, but are not limited to, the following.”
Compliance for dummies
With great rewards – rock-bottom burden labor rates – comes great risk. Hopefully, the offending organization has notified each of their customers about the stellar results associated with their recent agency inspection. If not, I can guarantee the readers that FDA can quickly scour the FURLS database and identify device establishments using this contract manufacturer for the manufacture of finished medical devices. A few years ago, the doctor had the pleasure of acting as an independent observer (for one of my clients) for an agency inspection. One of the questions asked by the investigator was: “Are you aware of the warning letter we issued “ABCD Medical” (fictitious name) and are you working with them? Of course this was a loaded question as the agency knew in advance that this was my client’s contract manufacturer.
That being said, it is Dr. Dr. D’s humble opinion, there are the steps device establishments must pursue before climbing into bed with a contract manufacturer. Remember, one product recall (Dr. D’s favorite nasty 6-letter word) and all of the potential cost savings are lost.
Dr. D’s 8-Step Model for managing contract manufacturers will protect organizations from regulatory and statutory issues that can arise while improving the sleep patterns of buyers everywhere. Please keep in mind Dr. D’s model is not all encompassing; however, the salient point is adequate controls need to be in place to select and manage contract manufacturers so your finished medical devices can continue to be safe and effective in their intended uses. By the way, compliance isn’t bad thing either.
Dr. D’s 8-Step Model for Managing Contract Manufacturers
- Due diligence is an important first step. Ensure you actually visit perspective contract manufacturers and ensure a thorough audit is performed as part of the due diligence process. The doctor recommends employing a cross-functional team for the initial visit;
- Order a Dun & Bradstreet Report and carefully read through report with a focus on financials, pending litigation, and the CVs of key individuals;
- Script a meaningful supplier quality agreement that clearly delineates the roles and responsibilities of each the contract manufacturer and the device establishment, i.e., recalls, nonconforming product disposition, CAPA responsibilities, frequency of audits, IP ownership, design changes, process changes, material changes, etc;
- If the supplier “no-change agreement” has not been included in the supplier quality agreement, ensure a stand-alone agreement has been created;
- Pay a visit to FDA’s website and ensure that the contract manufacturer has a current registration. In fact, while visiting www.FDA.gov, take time to look for warning letters and/or other potential enforcement actions. In accordance with 21 CFR. Part 807, contract manufacturers are required to register with the FDA, domestically and OUS;
- Ask for a copy of their previous notified body audit report and obtain a copy of their current ISO certificate. Previously noted major non-conformances, although not major show-stoppers are always a concern;
- Once a purchase order has been placed and the ink has dried on the supplier agreements, the difficult part of managing contract manufacturers begins. Sustaining a long-term relationship takes some work, including annual audits, incoming inspection, and the establishment of supplied-data programs (allowing the contract manufacturer to perform acceptance testing and provide the results); and
- Always have an exit strategy (Dr. D’s supplier prenuptial agreement). If a relationship goes south in a hurry, a break-up clause will prove to be quite valuable when executing contingency planning necessary to move the business.
Remember, FDA expects contract manufacturers to be in compliance with 21 CFR, Part 820, PERIOD! After all, contract manufacturers are considered an extension of device establishments and as such, device establishments cannot unload their regulatory and quality responsibilities as defined under the Act.
For this week’s guidance the doctor will leave the readers with just one takeaway, buyer beware. If your contract manufacturer runs into regulatory trouble, e.g., an FDA warning letter, rest assured the warning letter will have an adverse impact of your organizations. The best defense in protecting your organization against regulatory surprise is to exude adequate controls over your contract manufacturers. In fact, all critical subcontractors and crucial suppliers should be appropriately managed.
In closing, thank you again for joining Dr. D and I hope you find value in the guidance provided. Until the next installment of DG – cheers from Dr. D. and best wishes for continued professional success.
- Code of Federal Regulation. (2013, April) Title 21 Part 820: Quality system regulation. Washington, D.C.: U.S. Government Printing Office.
- Devine, C. (2011). Devine guidance for complying with the FDA’s quality system regulation – 21 CFR, Part 820. Charleston, SC: Amazon.
- Devine, C. (2013). Devine guidance for managing key attributes of a FDA-compliant quality management system – 21 CFR, Part 820 Compliance. Charleston, SC: Amazon.
- FDA’s enforcement page. (2014, August). FDA.gov Website. Retrieved August 31, 2014, from http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm410035.htm.