Regulatory Open Forum

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  • 1.  Sub-distributor

    Posted 24-Jul-2020 11:11
    Greetings everyone,

    My company is currently in discussions with a U.S. distributor for our product and they've indicated they'll utilize sub-distributors. While I have experience working with distributors directly, I don't have experience within the scenario of our distributor hiring another distributor to sell our products.

    Is there anything specific I should be asking about the sub-distributor outside of what would be contained within a quality agreement (e.g. QMS, traceability, complaint handling, nonconformances, etc.)?

    Best, Tonia

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    Tonia Bryant
    Director, Quality & Regulatory Affairs
    Cary NC
    United States
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  • 2.  RE: Sub-distributor

    Posted 24-Jul-2020 11:56
    Hi Tonia,

    I have worked with sub distributors.  There is no magic here.  If they aren't "initial importers" they don't even have to be FDA registered.  Which is frankly a little unsettling :). I would ensure the standard distributor agreement things are rock solid - and make sure its clear what, if any, distributor labeling and complaint handling will be.  Depending on the product, double check the warehousing and shipping conditions/abilities as well. If this is a reputable primary distributor - they should have a good process in place already to manage these issues with their (sub) distributors. 

    Jackie


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    Jackie Torfin
    Vice President, Global QA and Regulatory Compliance
    Maple Grove MN
    United States
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  • 3.  RE: Sub-distributor

    Posted 25-Jul-2020 07:27
    It is unclear if the question is about US or OUS distributors. OUS, it is very strict on licensing, and there are Good Distribution Practices regulations or Guidelines they can be and are inspected against.

    There are different  classes of distributors in the US. wholesale, retail, etc. and different regulations on what licenses they need. Most have licenses through states, certainly this is true for pharma because of the  Drug Supply Chain Act.  The large medical device distributors (including  Amazon)  in the US  hold these licenses.  They are registered through state level agencies through  Pharmacy Boards, with Annual or biennial licenses  typically. 

    FDA  just does not have the enforcement mechanisms to license or inspect distributors, other than initial importers.

    There is an industry group for Distributors here in the US. The "AdvaMed" of Distributors, if you will.


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    Ginger Cantor, MBA, RAC
    Founder/Principal Consultant
    Centaur Consulting LLC
    River Falls, Wisconsin 54022 USA
    715-307-1850
    centaurconsultingllc@gmail.com
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  • 4.  RE: Sub-distributor

    Posted 24-Jul-2020 12:00

    There are two things to consider. First your distributor is a service supplier, so you should have controls that satisfy 820.50 and ISO 13485:2016, 7.4. Because your distributor performs an outsourced process, distribution, the controls need to include ISO 13485:2016, 4.1.5 which includes a quality agreement.

    The sub-distributor, as you describe the situation, is not your supplier, they are a service supplier (distribution services) to your distributor. You don't have control over the sub-distributor unless you have included something in your contract with the distributor.

    If you want control over the sub-distributor, then you need to ensure there is language in the contract between your company and the distributor about requirements for any sub-distributors. At a minimum, all requirements that you have for your distributor should flow down to the sub-distributor. You might want to add some other requirements for any sub-distributor that handles your product: you want to know the identity of all sub-distributors, you want approval (or a least right of refusal) for any sub-distributors, you want the right to conduct on-site audits, etc.

    There is an issue with quality agreements. HERESY ALERT

    There is only one place in any device regulations I know of that requires a quality agreement – ISO 13485:2016, 4.1.5. Unfortunately, neither ISO 13485:2016 nor ISO 9000:2015 define a quality agreement or describe the expected contents. There is a discussion in the ISO 13485 Handbook. "Quality agreements can be in various forms including information provided on purchase orders or attachments to purchase orders (e.g., terms and conditions, specifications, drawings, other documented information about quality requirements or roles and responsibilities) or a formal documented separate quality agreement. Quality agreements should be terms that both parties approve and agree to depending on the outsourced activity and the risks of those activities."

    My opinion is that you should never have a separate quality agreement, everything should be in the contract. That satisfies the ISO 13485:2016 requirement for a quality agreement.

    If you want to do more, then consider this is a process, so the appropriate tool is the SIPOC diagram. The supplier is you the manufacturer, the input is the finished good to distribute, the processing is the distributor's storage, handling, and order fulfillment process, the output is order fulfilled, and the customer is you the manufacturer. Using this method, you can get the quality agreement to one meaningful and useful page.



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    Dan O'Leary CQA, CQE
    Swanzey NH
    United States
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  • 5.  RE: Sub-distributor

    Posted 24-Jul-2020 13:16
    I am going to respectfully disagree with Dan on the "never have a separate Quality Agreement" approach.  As long as your Supplier Agreement references the QA Agreement, there is some value to having it separate:
    1.  Without active management, a contract is useless - and often, your business partners do not want Quality staff to have full access to the details of the business agreement (prices, terms, etc).
    2. Quality Agreements are required by ISO 13485, and expected per the preamble to the QSR.  This means they can and will be reviewed by both regulators and others.  It can be very handy to have them in a stand alone document to ensure business agreements stay proprietary. 


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    Jackie Torfin
    Vice President, Global QA and Regulatory Compliance
    Maple Grove MN
    United States
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