Contract Manufacturing 
Arrangements for Drugs: 
Quality Agreements
  
Guidance for Industry 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
Center for Biologics Evaluation and Research (CBER) 
Center for Veterinary Medicine (CVM) 
 
November 2016 
Pharmaceutical Quality/Manufacturing Standards (CGMP) 
   
Contract Manufacturing 
Arrangements for Drugs:  
Quality Agreements
  
Guidance for Industry 
 
Additional copies are available from: 
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Center for Drug Evaluation and Research 
Food and Drug Administration 
10001 New Hampshire Ave., Hillandale Bldg., 4th Floor 
Silver Spring, MD 20993-0002 
Phone: 855-543-3784 or 301-796-3400; Fax: 301-431-6353 
Email: druginfo@fda.hhs.gov 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm 
and/or 
Office of Communication, Outreach and Development 
Center for Biologics Evaluation and Research 
Food and Drug Administration 
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Silver Spring, MD 20993-0002 
Phone:  800-835-4709 or 240-402-8010 
Email: ocod@fda.hhs.gov 
http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/default.htm 
and/or 
Policy and Regulations Staff, HFV-6  
Center for Veterinary Medicine 
Food and Drug Administration 
7519 Standish Place, Rockville, MD 20855 
http://www.fda.gov/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/default.htm 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
Center for Biologics Evaluation and Research (CBER) 
Center for Veterinary Medicine (CVM) 
 
November 2016 
Pharmaceutical Quality/Manufacturing Standards (CGMP)
  Contains Nonbinding Recommendations 
 
TABLE OF CONTENTS 
 
 
I.  INTRODUCTION............................................................................................................. 1 
II.  DEFINING THE WHO AND WHAT OF CONTRACT MANUFACTURING ........ 2 
III.  RESPONSIBILITIES OF PARTIES INVOLVED IN CONTRACT 
MANUFACTURING ........................................................................................................ 3 
IV.  DOCUMENTING CGMP ACTIVITIES IN QUALITY AGREEMENTS ................. 5 
A.  What Is a Quality Agreement? ..................................................................................................... 6 
B.  Elements of a Quality Agreement ................................................................................................. 6 
1. Manufacturing Activities .................................................................................................................. 7 
2. Change Control Associated With Manufacturing Activities .......................................................... 10 
V.  ILLUSTRATIVE SCENARIOS .................................................................................... 11 
A.  Owners and Contract Facilities Are Both Responsible for CGMP ......................................... 11 
B.  CGMPs Apply to all Contract Facilities, Including Analytical Testing Laboratories........... 12 
C.  Owners and Contract Facilities Perform Change Control Activities ..................................... 13 
VI.  RECOMMENDATIONS ................................................................................................ 13 
   
 
i 
  Contains Nonbinding Recommendations 
 
Contract Manufacturing Arrangements for Drugs: 
 
Quality Agreements
1
Guidance for Industry  
 
 
This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on 
this topic.  It does not establish any rights for any person and is not binding on FDA or the public.  You 
can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.  
To discuss an alternative approach, contact the FDA office responsible for this guidance as listed on the 
title page. 
 
 
 
 
I.  INTRODUCTION 
 
This guidance describes FDAs current thinking on defining, establishing, and documenting 
manufacturing activities of the parties involved in contract drug manufacturing subject to current 
good manufacturing practice (CGMP) requirements.  In particular, we describe how parties 
involved in contract drug manufacturing can use quality agreements to delineate their 
manufacturing activities to ensure compliance with CGMP.   
 
For purposes of this guidance, we use certain terms with the following specific meanings: 
 
  Current Good Manufacturing Practice (CGMP) refers to requirements in the Federal 
Food, Drug, and Cosmetic Act (FD&C Act), section 501(a)(2)(B), for all drugs and 
active pharmaceutical ingredients (APIs).  For finished human and animal drugs, the term 
includes applicable requirements under 21 CFR parts 210 and 211.  For biologics, the 
term includes additional applicable requirements under 21 CFR parts 600-680. 
 
  Commercial manufacturing refers to manufacturing processes that result in a drug or 
drugs intended to be marketed, distributed, or sold.   
 
  Commercial manufacturing does not include research and development activities, 
manufacturing of material for investigational new drug studies (e.g., clinical trials, 
expanded access), or manufacturing of material for veterinary investigational drugs.  
Although this guidance does not explicitly apply to the manufacture of investigational, 
developmental, or clinical trial materials, FDA believes that quality agreements can be 
extremely valuable in delineating the activities of all parties involved in contract research 
and development arrangements.  Many of the principles described in this guidance could 
be applied in pre-commercial stages of the pharmaceutical life cycle. 
                                                 
1 This guidance has been prepared by the Office of Pharmaceutical Quality and the Office of Compliance in the 
Center for Drug Evaluation and Research in cooperation with the Center for Biologics Evaluation and Research, the 
Center for Veterinary Medicine, and the Office of Regulatory Affairs at the Food and Drug Administration. 
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  Contains Nonbinding Recommendations 
 
 
  Manufacturing includes processing, packing, holding, labeling operations, testing, and 
quality unit operations.  
 
  A manufacturer is an entity that engages in CGMP activities, including implementation 
of oversight and controls over the manufacture of drugs to ensure quality.2   
  
  Quality unit is defined as synonymous with the term quality control unit.3 
   
This guidance covers commercial manufacturing of the following categories of drugs:  human 
drugs, veterinary drugs, certain combination products, biological and biotechnology products, 
finished products, APIs, drug substances, in-process materials, and drug constituents of 
combination drug/device products.4  This guidance does not cover the following types of 
products:  Type A medicated articles and medicated feed, medical devices, dietary supplements, 
or human cells, tissues, or cellular or tissue-based products regulated solely under section 361 of 
the Public Health Service Act and 21 CFR part 1271. 
 
In general, FDAs guidance documents do not establish legally enforceable responsibilities.  
Instead, guidances describe the Agencys current thinking on a topic and should be viewed only 
as recommendations, unless specific regulatory or statutory requirements are cited.  The use of 
the word should in Agency guidances means that something is suggested or recommended, but 
not required. 
 
II.  DEFINING THE WHO AND WHAT OF CONTRACT MANUFACTURING 
 
This guidance describes how contract manufacturing operations fit within the larger scheme of 
pharmaceutical quality systems.  It also presents the Agencys current thinking on the roles and 
manufacturing activities of the parties involved in contract manufacturing arrangements.  
Specifically, this guidance addresses the relationship between owners and contract facilities.  For 
purposes of this guidance, we define owners as manufacturers of APIs, drug substances, in-
process materials, finished drug products, including biological products, and combination 
products.  The term owner does not apply to retail pharmacies, drug stores, supermarkets, 
discount warehouse stores, or other retailers who purchase finished drug products to sell over the 
counter as a store brand.  For purposes of this guidance, we define contract facilities as parties 
that perform one or more manufacturing operations on behalf of an owner or owners.5   
 
                                                 
2 See section 501 of the FD&C Act, as amended by the Food and Drug Administration Safety and Innovation Act 
(Public Law 112-144, title VII, section 711).   
3 For quality control unit, see 21 CFR 210.3. 
4 Combination product manufacturers can apply this guidance to their quality agreements because they are subject to 
requirements under 21 CFR part 211 and/or 21 CFR part 820 (see 21 CFR 4.3).  In addition to facilitating 
compliance with requirements under 21 CFR part 211, manufacturers can use quality agreements with contract 
facilities to demonstrate compliance, in part, with 21 CFR 820.50 (purchasing controls) and with 21 CFR 820.80(b) 
(receiving acceptance activities) for combination products. 
5 A contract facility may also be an owner depending on its role (e.g., when the contract facility is using a 
subcontractor).  
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  Contains Nonbinding Recommendations 
 
Drug manufacturing encompasses many discrete operations and activities.  One manufacturer 
may perform all operations and activities or may engage an outside party or parties to perform 
some or all of the operations and activities under contract.  Contract facilities perform a variety 
of manufacturing operations and activities, including but not limited to: 
 
  Formulation 
  Fill and finish 
  Chemical synthesis 
  Cell culture and fermentation, including for biological products 
  Analytical testing and other laboratory services 
  Packaging and labeling  
  Sterilization or terminal sterilization 
 
However, agreements between owners and contract facilities sometimes do not clearly define the 
CGMP-related roles and manufacturing operations and activities of each of the parties.  When all 
parties clearly understand their CGMP-related roles and manufacturing responsibilities, the 
owners who use contract facilities, contract facilities that provide services to owners, and, 
ultimately, patients who take the drugs manufactured under these arrangements may benefit in 
many ways.  Contracting can enhance speed and efficiency, provide technological expertise, and 
expand capacity.  
 
We encourage entities that engage in manufacturing related solely to drug distribution (e.g., 
distributors, brokers, private label distributors, own label distributors) to follow the 
recommendations in this guidance document, as appropriate. Our focus here, however, is on the 
roles and manufacturing activities of the owner and contract facility.    
 
III.  RESPONSIBILITIES OF PARTIES INVOLVED IN CONTRACT 
MANUFACTURING 
 
Each party engaged in the manufacture of a drug is responsible for ensuring compliance with 
CGMP for the manufacturing activities it performs.6  For both owners and contract facilities that 
conduct manufacturing operations, CGMP includes the implementation of oversight and 
controls over the manufacture of drugs to ensure quality, including managing the risk of and 
establishing the safety of raw materials, materials used in the manufacturing of drugs, and 
finished drug products.7  Drugs not manufactured in compliance with CGMP are adulterated.8  
 
The FD&C Act also prohibits any person from introducing or delivering for introduction an 
adulterated or misbranded drug into interstate commerce.9  In addition, it prohibits anyone from 
the doing of any ... act with respect to, a ... drug ... if such act is done while such article is held 
                                                 
6 Section 501(a)(2)(B) of the FD&C Act; 21 CFR parts 210 and 211; and 21 CFR part 600.   
7 Section 501 of the FD&C Act as amended by the Food and Drug Administration Safety and Innovation Act (Public 
Law 112-144, Title VII, section 711). 
8 Section 501(a)(2)(B) of the FD&C Act. 
9 Section 301(a) of the FD&C Act. 
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  Contains Nonbinding Recommendations 
 
for sale ... after shipment in interstate commerce and results in such article being adulterated or 
misbranded.10  
 
FDAs regulations recognize that owners commonly use contract facilities to perform some drug 
manufacturing activities.11  When an owner uses a contract facility, the owners quality unit is 
legally responsible for approving or rejecting drug products manufactured by the contract 
facility, including for final release.12  The regulations require that the quality units 
responsibilities and procedures be in writing and that they be followed.13   
 
Owners can use a comprehensive quality systems model to help ensure compliance with CGMP.  
A comprehensive quality systems model anticipates that many owners will use contract facilities 
and calls for quality agreements between owners and contract facilities.  Quality agreements 
should clearly describe the materials or services to be provided, quality specifications, and 
communication mechanisms between the owner and contract facility.  See guidance for industry 
Quality Systems Approach to Pharmaceutical CGMP Regulations.14 
   
Owners and contract facilities can review FDA guidance documents for recommendations on 
achieving compliance with CGMP.  Various FDA guidance documents describe how quality 
management principles relate to contract manufacturing operations, including some of the roles 
and manufacturing activities of contract manufacturing parties.15  
 
The following three ICH guidances for industry contain relevant and valuable CGMP 
recommendations with respect to contract manufacturing arrangements: 
 
  Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients 
  Q9 Quality Risk Management 
  Q10 Pharmaceutical Quality System 
 
ICH guidance for industry Q7 Good Manufacturing Practice Guidance for Active 
Pharmaceutical Ingredients recommends that owners evaluate contract facilities to ensure that 
contractor sites comply with CGMP for specific operations.16  It also recommends that owners 
have approved written agreements with contractors that define the manufacturing responsibilities 
in detail, including the quality measures, of each party.  The written agreements should also 
define considerations for subcontracting; describe how changes to processes, equipment, 
methods, and specifications will be managed; and permit the owner to audit its contractors 
facilities for compliance with CGMP. 
 
                                                 
10 Section 301(k) of the FD&C Act. 
11 21 CFR 200.10(b) and 211.22(a).   
12 Ibid.  
13 21 CFR 211.22(d).  
14 We update guidances periodically.  To make sure you have the most recent version of a guidance, check the FDA 
Drugs guidance Web page at 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm. 
15 See, e.g., guidance for industry Cooperative Manufacturing Arrangements for Licensed Biologics.   
16 In ICH Q7, the term company is used rather than owner and is used to refer to an API manufacturer.  
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  Contains Nonbinding Recommendations 
 
ICH guidance for industry Q9 Quality Risk Management offers a systematic approach to quality 
risk management as part of an effective quality system.  It discusses quality risk management 
principles such as risk assessment, risk communication, and risk review and provides examples 
of tools that can be used to make effective and efficient risk-based decisions in, for example, 
auditing and arranging quality agreements with contract manufacturers.   
 
ICH guidance for industry Q10 Pharmaceutical Quality System states that, as part of a 
pharmaceutical quality system, the owner is ultimately responsible for ensuring that processes 
are in place to assure the control of outsourced activities and quality of purchased materials.17  
It indicates that these processes should incorporate quality risk management and include the 
following critical activities: 
 
  Assessing the suitability and competence of potential contractors before outsourcing 
operations or selecting material suppliers.  This could be accomplished through audits, 
material evaluations, or other qualification criteria.  
  Defining the manufacturing responsibilities and communication processes for quality-
related activities of the involved parties.  For outsourced activities, these should be in a 
written agreement.  
  Monitoring and reviewing the performance of the contract facility and identifying and 
implementing any needed improvements.  
  Monitoring incoming ingredients and materials to ensure they are from approved sources 
using the agreed-upon supply chain. 
 
FDA encourages parties engaged in contract manufacturing to implement quality management 
practices.  This guidance is intended to build upon the quality risk management principles and 
recommendations outlined above and to illustrate key points in developing and executing quality 
agreements that describe and support contract manufacturing arrangements.  
  
IV.  DOCUMENTING CGMP ACTIVITIES IN QUALITY AGREEMENTS 
 
If an owner employs a contract facility for all or part of the manufacturing (including processing, 
packing, holding, or testing) of a drug or drug product, the owners quality unit is responsible for 
approving or rejecting the contract facilitys product or service.18  The contract facility is also 
required to comply with statutory CGMP and applicable CGMP regulations, including 
requirements for its quality unit.19  CGMP regulations require that quality unit activities and 
procedures be in writing, and that these procedures be followed.20    
 
Implementing a written quality agreement can facilitate compliance with CGMP and, in 
particular, with 21 CFR 211.22(d), which states that quality unit activities and procedures should 
be in writing.  FDA recommends that owners and contract facilities establish a written quality 
agreement to describe their respective CGMP-related roles, responsibilities, and activities in drug 
                                                 
17 In ICH Q10, the term company is used rather than owner. 
18 Section 501(a)(2)(B) of the FD&C Act; 21 CFR 211.22(a). 
19 21 CFR 210.2(b); 21 CFR 211.22(a).  
20 21 CFR 211.22(d).  
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  Contains Nonbinding Recommendations 
 
manufacturing.  It is important to note that quality agreements cannot be used to delegate 
statutory or regulatory responsibilities to comply with CGMP.  The following sections describe 
the Agencys current thinking regarding the documentation of agreed-upon manufacturing 
activities in a quality agreement, as well as the basic elements of a quality agreement. 
 
A.  What Is a Quality Agreement? 
 
A quality agreement is a comprehensive written agreement between parties involved in the 
contract manufacturing of drugs that defines and establishes each partys manufacturing 
activities in terms of how each will comply with CGMP.  In general, the quality agreement 
should clearly state which party  the owner or the contract facility or both  carries out 
specific CGMP activities.  It should cover activities mentioned in section 501(a)(2)(B) of the 
FD&C Act and, as applicable, those in 21 CFR parts 210, 211, 600-680, 820, and 1271, as well 
as all other applicable statutory or regulatory requirements.  Representatives from each partys 
quality unit and other relevant stakeholders should participate actively in the drafting of quality 
agreements.   
 
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.  FDA 
recommends that quality agreements be separate documents, or at least severable, from 
commercial contracts such as master services agreements or supply agreements.  Quality 
agreements may be reviewed during inspections.21  
 
B.  Elements of a Quality Agreement  
 
A quality agreement describes the owners and the contract facilitys roles and manufacturing 
activities under CGMP.  A well-written quality agreement will use clear language.  It will define 
key manufacturing roles and responsibilities.  It will establish expectations for communication, 
providing key contacts for both parties.  It will specify which products and/or services the owner 
expects from the contract facility and who has final approval for various activities.  Most quality 
agreements contain the following sections:  
 
  Purpose/Scope  to cover the nature of the contract manufacturing services to be 
provided 
  Definitions  to ensure that the owner and contract facility agree on precise meaning of 
terms in the quality agreement 
  Resolution of disagreements  to explain how the parties will resolve disagreements 
about product quality issues or other problems 
  Manufacturing activities  to document quality unit and other activities associated with 
manufacturing processes as well as control of changes to manufacturing processes 
  Life cycle of, and revisions to, the quality agreement 
 
The owner may consider including the contract facilitys established processes and procedures as 
part of the quality agreement (for example, by incorporating certain standard operating 
                                                 
21 See section 704 of the FD&C Act.  
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  Contains Nonbinding Recommendations 
 
procedures by reference).  Doing so could reduce the risk of misinterpretation or error during 
manufacturing.  The quality agreement should explain how the contractor will report 
manufacturing deviations to the owner, as well as how deviations will be investigated, 
documented, and resolved in compliance with CGMP.  Quality agreements should state that 
manufacturing services provided by contract facilities (including laboratories) will comply with 
CGMP. 
 
From a CGMP perspective, manufacturing activities are the most important element in a quality 
agreement.  The most critical pieces are quality and change control, as described in the following 
sections. 
 
1.  Manufacturing Activities  
 
Quality agreements may document each partys roles and manufacturing activities with a variety 
of formats  charts, matrices, narratives, or a combination of these.  Regardless of the format, a 
quality agreement should clearly document which party is responsible for specific activities.  No 
party to a quality agreement may delegate any of its responsibilities to comply with CGMP 
through the quality agreement or any other means.  The quality agreement should cover all of the 
activities for ensuring compliance with CGMP.  Depending on the scope of the contract 
manufacturing services to be provided, the quality agreement should indicate whether the owner 
or contract facility (or both) will handle specific activities related to each of the following topics:  
 
a.  Quality unit activities 
 
The section of a quality agreement that addresses each partys quality unit activities should 
define in detail how the parties will work together to ensure that products are manufactured in 
compliance with CGMP.  Note that assigning quality control or other activities to either the 
owner or contract facility in the quality agreement does not relieve either party from compliance 
with applicable CGMP requirements.   
 
In particular, this section of the quality agreement should be clear with respect to product release.  
Contract facilities are responsible for approving or rejecting the product or results of their 
manufacturing operations (e.g., test results, finished dosage forms, or in-process materials).22  In 
addition, owners are responsible for approving or rejecting drugs manufactured by the contract 
facility,23 including for final release.  In all cases, the owner must not introduce or deliver into 
interstate commerce, or cause to be introduced or delivered into interstate commerce, any drugs 
that are adulterated or misbranded.24  
  
Within its quality unit activities, a quality agreement should describe how and when the owner 
and contract facility will communicate with each other, both verbally and in writing.  This 
includes identifying appropriate contact personnel within the owners and contract facilitys 
organization.   
                                                 
22 21 CFR 211.22(a). 
23 Section 501(a)(2)(B) of the FD&C Act; 21 CFR 211.22(a). 
24 See section 301(a) of the FD&C Act. 
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  Contains Nonbinding Recommendations 
 
 
Quality agreements should also cover audits, inspections, and communication of findings.  The 
agreement should allow owners to evaluate and audit contract facilities to ensure CGMP 
compliance for specific operations.  This provision should cover both routine quality audits and 
for-cause audits.  The agreement should also set owner and contract facility expectations 
regarding FDA inspections (pre-approval, routine surveillance, and for-cause) with consideration 
for the nature of the products to be manufactured and/or services to be provided.  It should 
include the parties agreed-upon provisions for communicating inspection observations and 
findings, as well as relevant FDA actions and correspondence.   
 
Because contract facilities often provide services to multiple owners, the quality agreement 
should address when, how, and what information the contractor will report to owners about 
objectionable conditions observed during inspections and audits of the contract facility.   
 
b.  Facilities and equipment  
 
This section of a quality agreement should identify the specific site(s) where the contract facility 
will perform manufacturing operations, including the address of and specific services to be 
provided at each site.  It should indicate which party will be validating processes and qualifying 
and maintaining equipment and applicable systems relevant to the contracted operations.  These 
include information technology and automated control systems, environmental monitoring and 
room classification, utilities, and any other equipment and facilities that must be maintained to 
perform the contracted manufacturing operations in compliance with CGMP.  The agreement 
also should identify which party will approve equipment validation, qualification, and 
maintenance activities.  In addition, it should indicate how the parties will communicate 
information about preventing cross-contamination and maintaining traceability when a contract 
facility processes drugs for multiple owners.  
 
c.  Materials management 
  
This section of a quality agreement should indicate which party will establish specifications for 
components as well as which party will establish processes for auditing, qualifying, and 
monitoring component suppliers.  It should also identify which party will conduct required 
sampling and testing in compliance with CGMP.  This section of the quality agreement should 
address how the parties will ensure appropriate inventory management, including labeling, label 
printing, inventory reconciliation, and product status identification (e.g., quarantine).  The 
agreement should address how the contract facility will prevent mix-ups and cross-
contamination.  FDA does not expect the agreement to contain a complete description of the 
supply chain for each component.  However, the agreement should define responsibility for 
physical control of materials at different points in the manufacturing process.  For example, the 
quality agreement should cover responsibilities for proper conditions for storing and transporting 
or shipping materials.  It should define each partys roles in storage and transport  whether 
from the contract facility back to the owner or to another contract facility for further operations.  
This includes defining activities for monitoring or validating shipping conditions as appropriate.  
 
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  Contains Nonbinding Recommendations 
 
d.  Product-specific considerations  
 
A comprehensive quality agreement may address specific considerations related to individual 
products.  The owner and contract facility might opt to include this information in an appendix, 
or directly in the body of the quality agreement.  In either case, if included, this section of the 
quality agreement should include the parties expectations of each other regarding: 
 
  Product/component specifications 
  Defined manufacturing operations, including batch numbering processes  
  Responsibilities for expiration/retest dating, storage and shipment, and lot disposition 
  Responsibilities for process validation, including design, qualification, and ongoing 
verification and monitoring  
  Provisions to allow owner personnel access to the contract facility when appropriate   
 
The quality agreement also should indicate how owners will transfer knowledge, such as product 
and process development information, to contract facilities to ensure a drug can be manufactured 
in compliance with CGMP, and conversely how contract facilities should share with owners 
product quality information gained throughout the product life cycle.  This applies to knowledge 
about all drugs, including drugs subject to an approved application (e.g., new drug application) 
and nonprescription drug products marketed under an over-the-counter drug monograph.   
 
Owners that hold an approved drug application should be aware of application and approval 
requirements that could affect manufacturing activities.  Both parties to a quality agreement 
should share relevant information to ensure compliance with CGMP and other applicable 
requirements of the FD&C Act.   
 
e.  Laboratory controls  
 
The owner and contract facility should both have access to adequate laboratory facilities for 
testing of their drugs.  A quality agreement will help each party meet this need by defining roles 
and responsibilities for laboratory controls.  We recommend the following elements:    
 
  Procedures delineating controls over sampling and testing samples 
  Protocols and procedures for communicating all laboratory test results conducted by 
contract facilities to the owner for evaluation and consideration in final product 
disposition decisions 
  Procedures to verify that both owner and contract facilities accurately transfer 
development, qualification, and validation methods when an owner uses a contract 
facility for laboratory testing 
  Routine auditing procedures to ensure that a contract facilitys laboratory equipment is 
qualified, calibrated, and maintained in a controlled state in accordance with CGMP 
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  Contains Nonbinding Recommendations 
 
  Designation of responsibility for investigating deviations, discrepancies, failures, out-of-
specification results,25 and out-of-trend results in the laboratory, and for sharing reports 
of such investigations 
 
f.  Documentation 
 
The quality agreement should define expectations between the contract facility and the owner to 
review and approve documents.  It also should describe how changes may be made to standard 
operating procedures, manufacturing records, specifications, laboratory records, validation 
documentation, investigation records, annual reports, and other documents related to products or 
services provided by the contract facility.  The quality agreement should also define owners and 
contract facilities roles in making and maintaining original documents or true copies in 
accordance with CGMP.  It should explain how those records will be made readily available for 
inspection.  
 
The quality agreement also should indicate that electronic records will be stored in accordance 
with CGMP and will be immediately retrievable during the required record-keeping time frames 
established in applicable regulations.  
 
2.  Change Control Associated With Manufacturing Activities 
 
Either an owner or a contract facility may initiate changes to processes, equipment, test methods, 
specifications, and other contractual requirements.  Both parties should discuss changes and 
address them in the quality agreement.  There are some changes that owners should review and 
approve before they are implemented and other changes contractors may implement without 
notifying the owner.  How all changes are managed should be outlined in the agreement, 
including allocation of responsibilities for conducting validation activities as needed before 
implementing changes.  Additionally, both parties should be aware of those changes that need to 
be submitted to FDA in a supplement or annual report.  The owner and contract facility should 
carefully consider and agree on the types of changes to report to each other and to FDA and the 
need for approval from each partys quality unit and FDA, as applicable.  The quality agreement 
should address expectations for reporting and approving changes to the following: 
   
  Components and/or their suppliers  
  Establishment locations 
  Manufacturing processes  
  Products or product types that use the same production line, equipment train, or facility  
  Testing procedures 
  Major manufacturing equipment 
  Shipping methods 
  Lot numbering scheme  
  Container closure systems  
  Tamper evidence features  
                                                 
25 Refer to the guidance for industry Investigating Out-of Specification (OOS) Test Results for Pharmaceutical 
Production. 
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  Contains Nonbinding Recommendations 
 
  Product distribution 
 
Various unexpected events, such as manufacturing deviations, complaints, product recalls, 
adverse event reports, master label changes, field alert reports, and biological product deviation 
reports, may necessitate changes to processes and procedures.  Process improvement projects, 
process capability analyses, and trending reports may also necessitate changes to processes and 
procedures.  The quality agreement should include the owners and contract facilitys 
expectations for reporting and communication in case of unexpected events and related changes. 
 
V.  ILLUSTRATIVE SCENARIOS 
 
The following hypothetical scenarios illustrate common problems in contract manufacturing 
arrangements and depict ways in which both owners and contract facilities can affect product 
quality.  These scenarios also demonstrate FDAs current thinking regarding potential ways to 
resolve problems.  The examples provided are not intended to encompass all drug manufacturing 
problems related to arrangements between owners and contract facilities.  Rather, they provide 
industry and other stakeholders with patterns FDA investigators frequently encounter and 
analyses of the facts within these patterns. 
 
A.  Owners and Contract Facilities Are Both Responsible for CGMP 
 
Case 1:  Facilities and Equipment Maintenance and Upkeep at Contract Facility 
An FDA inspection of a contract facility that manufactures an injectable drug 
product for an owner reveals significant objectionable conditions at the contract 
facility.  Most of the objectionable conditions relate to deficient maintenance of 
facilities and equipment used to manufacture the injectable drug product.  
Equipment is broken.  Pipes are tarnished, and seals are leaking.  In addition, the 
facility design does not adequately prevent contamination.  A quality agreement 
between the contract facility and the owner states that the owner is responsible for 
upgrades and maintenance of the facilities and equipment used to manufacture the 
owners product.  The owner has failed to provide upgrades and perform 
maintenance, and the contract facility continues to manufacture the product under 
non-CGMP conditions with risk of contamination. 
 
Case 2:  Documenting Steps in the Manufacturing Process 
A contract facility is manufacturing a prescription drug product for an owner.  
FDA has approved an application from the owner for this drug.  On inspection, 
FDA observes that the contract facilitys batch records do not accurately reflect 
the actual manufacturing process because the batch records do not document the 
addition of reclaimed powder.  Despite the fact that the batch records are 
inaccurate and are therefore not compliant with CGMP, the contract facility 
claims that its batch records comply with expectations set out in the quality 
agreement with the owner.   
 
In the cases described above, the owners and contract facilities appear to be in violation of 
CGMP.  A quality agreement cannot exempt owners or contract facilities from statutory or 
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  Contains Nonbinding Recommendations 
 
regulatory responsibilities to comply with applicable CGMP, regardless of whether the quality 
agreement specifically discusses those CGMP requirements.  In case 1, the contract facility 
violates CGMP requirements by continuing to manufacture on outdated or poorly designed 
equipment, even though the quality agreement says that the owner is responsible for maintenance 
and upkeep of the equipment.  In case 2, the contract facility violates CGMP by using a batch 
record that does not accurately reflect the manufacturing process, even though the batch record is 
consistent with what was set out in the quality agreement.      
 
At the same time, the owner remains responsible for ensuring its products are made in 
compliance with CGMP even when a quality agreement assigns a particular manufacturing 
activity to the contract facility.  After finding problems at a contract facility, such as the ones 
described in the cases above, FDA might determine that it is appropriate to inspect the owner.  
The owner could also be in violation of CGMP related to its failure to oversee the contract 
facilitys manufacturing activities.  
 
B.  CGMPs Apply to all Contract Facilities, Including Analytical Testing 
Laboratories 
  
Case 3:  Unreliable Data in Laboratory Records and Test Results 
In this scenario, an owner contracts with a facility for analytical testing services.  
The contract facility repeatedly reports passing results in its CGMP records when 
actual analyses indicated failures.  The contract facility also fails to report 
accurate results to the owner, who is the finished drug product manufacturer.  
When FDA inspects the owner, it finds that despite having a written procedure 
requiring a site audit of contract facilities every 2 years, the owner has not audited 
the analytical testing facility. 
 
Case 4:  Contracted Analytical Testing Laboratory and Method Validation 
An owner contracts with a facility to perform stability testing and other analyses 
of its newly approved drug.  FDA approval and a quality agreement with the 
owner require the drug to be manufactured using these processes, which are 
described in the owners new drug application (NDA).  The contract facility uses 
an analytical method contained in the NDA but gets several out-of-specification 
results.  Also, the facilitys duplicate sample analyses occasionally point to 
possible unacceptable variations in drug concentration.  The facility investigates 
the varying results and concludes that the failures are related to the sample 
preparation techniques but does not clearly identify the problem.  Despite this, the 
contract facility continues to use the noncompliant method to test the product.  
When FDA inspects the contract facility, it finds that the facility failed to fully 
investigate the problems and implement corrective actions.  The contract facility 
claims that because it used the owners analytical method as specified in the 
product application, it is not responsible for investigating and implementing 
corrections related to it. 
 
In both of the cases above, FDA might conclude that the contract facilities are responsible for 
violating CGMP applicable to the laboratory activities they perform.  FDA could also conclude 
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  Contains Nonbinding Recommendations 
 
that the owners are responsible for CGMP violations.  Analytical testing laboratories are 
responsible for operating in compliance with CGMP regardless of quality agreements they may 
have with owners.  They must employ adequate controls to ensure that data and test results are 
reliable and maintained in accordance with CGMP requirements.  It is the owners responsibility 
to review this information from the contract facility to decide whether to approve or reject 
product for release and distribution.26 
 
No matter who tests the products, the owners quality units are ultimately responsible for 
ensuring that the products are manufactured in accordance with CGMP.  A quality agreement 
does not change that.  FDA could cite the owners in cases 3 and 4 further for failing to evaluate, 
qualify, audit, and monitor their contract facilities. 
 
C.  Owners and Contract Facilities Perform Change Control Activities 
 
Case 5:  Approving or Rejecting Changes That Affect Product Quality and CGMP 
Compliance 
A contract facility informed the owner about obvious powder segregation issues.  
The contract facility had attempted to correct the problem by making changes to 
the equipment, but then determined that the issues could not be fixed without 
process redesign and component changes.  Under their quality agreement, the 
contract facility could not implement these changes without the owners approval.  
The owner refused to approve the recommended changes, so the contract facility 
continued manufacturing the product using the flawed process and is therefore not 
compliant with CGMP.   
 
Case 5 illustrates the responsibilities of both owners and contract facilities when change control 
issues are in question.  Owners may be reluctant to approve changes recommended by contract 
facilities, even if changes are necessary to continue manufacturing the drug in compliance with 
CGMP.   
 
VI.  RECOMMENDATIONS 
 
Owners and contract facilities can draw on quality management principles to carry out the 
complicated process of contract drug manufacturing by defining, establishing, and documenting 
their activities in drug manufacturing operations, including processing, packing, holding, 
labeling operations, testing, and quality control operations.  Accordingly, FDA recommends that 
owners and contract facilities implement written quality agreements as tools to delineate 
manufacturing activities for ensuring compliance with CGMP. 
                                                 
26 See, for example,  211.22(a), 211.68, 211.180, 211.188, and 211.194(a). 
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