CONTRACT MANUFACTURING is defined as the manufacture (or partial manufacture) of a product to the order of one person or organization (the contract giver or customer) by another independent person or organization (the contract acceptor or principal manufacturer).

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2. CONTENTS
◊ Introduction
◊ Manufacturing & packaging
outsourcing
◊ Commercial discussions
◊ Confidentiality agreements
◊ Technical agreements
◊ Regulatory aspects
◊ Validation
◊ Deviation & change control
◊ Re-assessment of principal
manufacturer
◊ Contract analysis
CONTENTS
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3.  CONTRACT MANUFACTURING is defined as the manufacture (or partial
manufacture) of a product to the order of one person or organization (the
contract giver or customer) by another independent person or organization
(the contract acceptor or principal manufacturer).
 Reasons why which customer give contract to principal manufacture for
manufacturing his products:
 They may not have sufficient capacity to produce the required volume.
 May not have capability in terms of facility, equipment &/or competence to
produce particular type of product .
LOAN
LICENSE
AUDITING
CONTRACT
MANUFAC
TURING
OUTSOURC
ING
INTRODUCTION
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4. GENERAL GUIDELINES ON MANUFACTURING & ANALYTICAL SERVICES
OUTSOURCING{W.H.O. ,T.G.A.,M.H.R.A.}
1.
• Contract production & analysis must be correctly defined, agreed & controlled in
order to avoid misunderstanding.(scope & role )
2.
• There must be a written contract b/w both (with clear established duties of each
party).
3.
• Each batch of product for sale or issuing the certificate of analysis is released by
authorized person with his full responsibilities is clearly stated in contract.
4.
• Customer should bear the ultimate responsibility for ensuring that the product
specification complies with relevant legal requirements.
5.
• All arrangements for contract manufacturing & analysis should be in accordance
with the marketing authorization for product concerned.
6.
• Contract should permit the customer to audit the facilities of principal
manufacturing.
7.
• In case of the contract analysis the final approval for release must be given by
authorized person.
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5. In this activities following three items must be clearly understood by both
parties.
CONTRACT:
 It is an order placed by one party upon another may be constitute a legally
binding contract.
 The contract could be constructed as having a legal meaning in term of
legally binding document.
 The contract shd be drawn b/w customer & principal manufacturer that
specify all responsibilities related to manufacture & ctrl of product.
 The use of phrase TECHNICAL AGREEMENT may be more acceptable to each
party.
MANUFACTURING & PACKAGING OUTSOURCING
CONTRACT
CONTRACT
GIVER
CONTRACT
ACCEPTOR
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6.  The product specification used by the principal manufacture
comply with relevant legal requirement such as the marketing
authorization & label declarations.
 The product , as manufactured, meet the specification.
 The required quality is maintained during transport, distribution
& storage.
 All aspects of contract arrangements are carried out in
accordance with GMP.
 All work is carried out in premises covered by appropriate
licenses granted by local authorities
 There is continued compliance to the agreement.
 Compliance to regulatory & statutory requirements relating to
warehouse & distribution practices is maintained.
CUSTOMER
PRINCIPAL MANUFACTURER
GENERAL RESPONSIBILITIES
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7. Point that are included in commercial agreement of Commercial /
organizational matters are:
 Exact definition of products & activities that are to be given to the
principal manufacturer.
 Financial responsibilities for supply of starting of packaging material.
 Financial responsibilities for cost of rejection, losses, rework & failure.
 Financial responsibilities for destruction of waste & rejects with
consideration of any environmental aspects.
 Terms & condition for payment.
 The basis of price revision.
 Financial standing of principal manufacturer & customer.
COMMERCIAL DISSCUSSION
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8.  Assurance that the principal manufacturer continuously
complies with good business practices.
 Insurance provision.
 Product liability responsibilities.
 Stock levels to be held by principal manufacturer.
 Planning , forecasting & lead time arrangements.
 The period for which any agreement will run & the
agreements for their termination.
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9.  For the commercial well being of both parties, it is advisable to
enter into legally binding agreements on matters of secrecy or
confidentiality. such agreements serve to provide assurances,
under law, that commercially sensitive information, which is
property of principal manufacturer & not in public domain, is
protected.
 They should contain detailed information on technical
responsibilities & quality matters relevant only to actual
manufacture &/or assembly.
 The principal manufacturer may also need to protect certain
aspects of their customer operation.
 In particularity , confidentiality of other customer’s work on the
principal manufacturer’s site may come into question.
CONFIDENTIALITY AGREEMENTS
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10.  Having established the acceptability of the principal manufacturer, the customer
& him established the exact responsibilities of each party & state these in a
formal agreement signed by representatives of all parties concerned.
GENERAL CONSIDERATION:
 The responsibilities of the “Qualified persons” in the customer`s & the principal
manufacturer`s organization.
 Assurance that the principal manufacturer continuously complies with `good
pharmaceutical practices` & relevant legislation.
 Provision of reasonable access by the customer to the principal manufacturer`s
premises.
 Responsibility for changes or amendments to the technical aspects of the
agreement.
 Arrangements for changes or amendments to the technical aspects of the
agreement.
 Channels of communication.
 Statements of assurance that the principal manufacturer will not undertaken
processes or activities that could jeopardize the quality of the product.
TECHNICAL AGREEMENTS
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11. Finally agreement should be approved & technical responsibilities
accepted by each party concern with agreement, preferably signed
by the person responsible for quality in both organization.
 Purchase &supply of starting materials.
 Sampling , testing & release of starting materials.
 Artwork for the text copy.
 Purchase &supply of packaging materials.
 Sampling , testing & release for use of packaging
materials.
 Bulk manufacture.
 Sampling , testing & release of bulk product.
 Assembly of finished pack.
TECHNICAL AGREEMENT RELATED ISSUES
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12.  Sampling & testing of finished product.
 Control and supply information.
 Control and supply samples
 Finished product release.
 Transport and distribution.
 Safety information.
 Sub-contracting.
 Miscellaneous responsibilities.
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13.  Authorization of manufacture.
 Product authorization.
 Release for sale.
 Customer release for sale.
 Release for sale.
The requirements for the validation of processes are clearly
established in current good manufacturing practices & other
monographs . It is the responsibility of the customer to ensure that
the principal manufacturer has validation any process to satisfy both
the guidelines & the customer`s own internal requirements. These
requirements also apply to the validation of cleaning processes both
prior to & after production.
REGULATORY ASPECTS
VALIDATION
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14. DEVIATIONS :-
Deviation from anything that has been registered or agreed must be
approved by customer before they are undertaken by the principal
manufacturer.
 Materials with a different specification to those stated in marketing
authorization may have to be used where a supplier cease to supply a
particular grade of excepients and no alternative is available.
 The principal manufacturer may have to use other equipment if for
example, existing equipment breaks down or where new equipments is
purchased to improve the process throughput or quality.
 The process may need to be modified to improve the quality of the
finished product by the use of shorter heating time or the use of
different mesh sizes for sieving.
DEVIATION & CHANGE CONTROL
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15. CHANGE CONTROL:-
 Change control needs to be formalized b/w the principal manufacturer &
the customer so that if there are any change in any specification document
and process, the principal manufacturer is made aware of change are then
made to his documents.
 These then go back to the customer for approval so that he has the
assurances that the principal manufacturer has made the change.
 It is useful to record the timing of change and the first batch number of
product to be made after the change.
 Once full scale production has concerned the customer will secure a degree
of confidence in the principal manufacturer's operation with specific
individual.
 These re-assessments should be carried out in same manner as the initial
order & should include checks on areas of weakness identified at the first
assessment & on improvement that were requested at that time.
RE-ASSESMENT OF PRINCIPAL MANUFECTURER
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16. The principal outline in this monograph apply to the analytical work
contracted to the third party. In particular the following need to be
addressed.
 The requirement of GLP.
 The specification & methods authorized in marketing authorization.
 Validation of contract laboratory equipment & methods.
 The method of reporting & certifying the result.
 The reporting of spurious results & their relationship to the sample
being analyzed, the other results obtained & the bulk which has been
sampled.
 Statistical evaluation if appropriate to the data.
CONTRACT ANALYSIS
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