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Outsourcing manufacturing doesn't lift burden of GMP compliance, experts say

By Hank Schultz , 21-Dec-2012

A recent teleseminar put on by the American Herbal Products Association on GMP compliance made it clear that there is still a significant portion of the dietary supplement industry that is confused about who is responsible for what when a marketer hires a contract manufacturer to make its products.  Short answer: The brand holder—the company under whose name the products are sold—is ultimately responsible for everything.

“FDA in a number of inspections has made clear that people who use contract manufacturers are responsible for determining that the contract manufacturer does what is expected and what’s necessary under the regulations.  You don’t just walk away from the responsibility for what’s sold under your label just by contracting out,” said Tony Young, AHPA’s general counsel and one of the presenters.

Record keeping

A big part of that determination is a complete suite of records for every product and every manufacturer. These include master manufacturing records and batch records.  The old saw—if you didn’t write it down, it didn’t happen—still holds true.  If you didn’t write it down yourself, you’d better have a copy from the person who did.

 “It’s a difficult issue because you need fairly immediate access (to records) when you are inspected by FDA.  If you are working out of your home that’s where FDA will come to inspect you if that’s where you list as your place of business,” Young said.

At the very least, the brand holder should have ready access to these records if they are not stored at the address listed as the site of business. Young said having electronic links to records on the manafacturer’s server could be a reasonable workaround, assuming the contract manufacturer has all of the pertinent documents stored this way. 

“It is very important for companies that have large outsourcing networks that might have 10, 20, 100 products under their name to have very good records in place from each vendor,” said Seth Goldenberg, PhD, a former FDA inspector who was another presenter.

Overseas supply risks

Competition among contract manufacturers is fierce and margins are low, so the impetus to control costs is strong.  This could lead many contract manufacturers to source materials overseas, especially from China.  While some contract manufacturers might hold these sourcing arrangements are trade secrets, industry observers say it is important for the brand holders to be able to verify that vendors their contract manufacturer is dealing with have been properly qualified.

This risk can be especially acute in China.  As the market there becomes ever more fully integrated with the global system, new companies come into play seemingly weekly.  Many of these are small and ill-prepared for global regulations, and a number of them deal through trading houses, a system that adds a layer of opacity, said Jeff Crowther, executive director of the Beijing-based US-China Health Products Association.

“In regard to dietary supplement ingredient producers in China, these types of manufacturers are all required to have GMP certification.

 “However, it is my understanding that many of the smaller herbal suppliers may not have yet obtained GMP certifications from China's SFDA or a third party entity. The burden lies with the US importer to verify that their foreign suppliers have adequate preventive controls in place to ensure safety. This is an important aspect of the regulation as many U.S. importers may in fact be buying from Chinese trading companies and not the actual manufacturer,” he said.

 “I've come across many Chinese companies at China-based expos that do their best to pass themselves off as the manufacturer. You really have to do your homework in these cases because some trading companies typically do not have the appropriate certifications in place to satisfy FDA standards for safety,” Crowther said.

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