What is a quality agreement, and what should it include?

1What a quality agreement is.

FDA defines a quality agreement as “a comprehensive written agreement between parties involved in the contract manufacturing of drugs that defines and establishes each party’s manufacturing activities in terms of how each will comply with CGMP”. It should state which party, the owner, the contract facility or both, carries out each CGMP activity.¹ FDA uses “manufacturing” broadly here: processing, packing, holding, labelling, testing and quality unit operations. A contract testing laboratory is a contract facility in the same way as a fill-finish site.¹

FDA’s guidance, Contract Manufacturing Arrangements for Drugs: Quality Agreements, was finalised in November 2016. It covers commercial manufacturing of human and veterinary drugs, biologics, APIs, in-process materials and the drug constituents of combination products. It excludes medical devices and HCT/Ps regulated solely under section 361 of the PHS Act. It does not explicitly apply to clinical trial material, though FDA says quality agreements “can be extremely valuable” there too.¹

The regulation behind it is 21 CFR 211.22. The quality control unit “shall be responsible for approving or rejecting drug products manufactured, processed, packed, or held under contract by another company”, and its responsibilities and procedures “shall be in writing”.² FDA recommends a written quality agreement as a way to meet that.¹

In the EU, Chapter 7 of the GMP guide, in operation since 31 January 2013, says “There must be a written Contract between the Contract Giver and the Contract Acceptor which clearly establishes the duties of each party.”³ ICH Q10 section 2.7 asks for the same: responsibilities and communication processes for outsourced activities should be “included in a written agreement between the contract giver and contract acceptor”.⁴ ICH Q7 section 16.12 applies it to APIs, asking for a written agreement that “defines in detail the GMP responsibilities, including the quality measures, of each party”.⁵

2What it can’t do.

A quality agreement allocates work; it does not move legal responsibility. FDA says “quality agreements cannot be used to delegate statutory or regulatory responsibilities to comply with CGMP.”¹ The contract facility approves or rejects the results of its own operations, and the owner approves or rejects what the contract facility makes, including for final release.¹

FDA’s scenarios show how this plays out. Where an agreement made the owner responsible for maintaining equipment, the contract facility still violated CGMP by continuing to manufacture on outdated or poorly designed equipment. Where an owner’s procedure required an audit of its contract laboratory every two years and the audit never happened, FDA could cite the owner when the laboratory reported false passing results. “No matter who tests the products, the owners’ quality units are ultimately responsible for ensuring that the products are manufactured in accordance with CGMP.”¹

The EU puts the same duty on the contract giver: it is responsible for assessing the contract acceptor’s legality, suitability and competence before outsourcing, and should monitor and review its performance and review the records and results of the outsourced work.³ Its quality system must state how the Qualified Person certifying each batch “exercises his full responsibility”.³

3What the agreement should include.

FDA says most quality agreements have a purpose and scope, definitions, a way to resolve disagreements about product quality, the manufacturing activities, and how the agreement itself is revised. The manufacturing activities matter most, and within them quality and change control.¹ Responsibilities can be set out as charts, matrices, narrative or a mix, and the owner can incorporate the contract facility’s SOPs by reference.¹

For change control, FDA lists the changes the agreement should address: components or their suppliers, site locations, manufacturing processes, other products on the same line or equipment, test procedures, major equipment, shipping methods, lot numbering, container closure systems, tamper-evident features and product distribution.¹ The agreement should also say how the contractor reports deviations to the owner and how they are investigated and resolved.¹

4What it should leave out.

FDA says a quality agreement should not cover business terms such as confidentiality, pricing, delivery terms or limits on liability. It recommends keeping it as a separate document, or at least severable, from a master services or supply agreement, and notes that quality agreements may be reviewed during inspections.¹ Representatives of each party’s quality unit should take an active part in drafting it.¹

5What EU GMP adds.

Chapter 7 names the steps the contract should assign: “knowledge management, technology transfer, supply chain, subcontracting, quality and purchasing of materials, testing and releasing materials, undertaking production and quality controls (including in-process controls, sampling and analysis)”. Its technical aspects should be drawn up by people who know the outsourced activity and GMP.³

It also sets terms the contract acceptor must work within. It should not subcontract without the contract giver’s prior evaluation and approval, nor make unauthorised changes that could adversely affect quality. All records of the outsourced work, including reference samples, are kept by or available to the contract giver, and the contract should permit the contract giver to audit the outsourced activities performed by the acceptor or its mutually agreed subcontractors.³ Suppliers of starting materials are covered too: Chapter 5, section 5.28, asks that production, testing, handling, labelling, packaging, distribution, complaints, recalls and rejection procedures be documented “in a formal quality agreement or specification”.⁶ For APIs, ICH Q7 adds that changes to the process, equipment, test methods or specifications should not be made unless the contract giver is informed and approves them.⁵

6How it runs in Seal.

In Seal, each responsibility in a quality agreement becomes a structured obligation with its accountable party, performer, reviewer, approver, parties to notify, evidence, timing and escalation, resolved against the products, sites, batches, samples, changes and events it governs. The quality agreements blueprint describes how a deviation or change notification then shows which party must act and by when, how a revision assigns open work to the old or new terms explicitly, and how periodic review compares the written responsibilities with actual practice. Manufacturing review, certification, sponsor disposition and shipment authorisation keep their own prerequisites and signatures.

Neil, Seal’s AI agent, can compare a current and a proposed agreement with the responsibility matrix, procedures and supplier scope, and draft a clause-linked comparison and gap list; quality and legal reviewers interpret and approve the agreement. For contract manufacturers, the CDMO blueprint describes client portals on the working records, where the agreement still decides what is shared, with whom and when.