Regulatory Open Forum

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  • 1.  Contract manufacturing

    Posted 16-May-2018 07:27
    We have customer who has recently hired new people and there are lots of questions popping up even though we have manufactured a product for them for over 20 years.  They supplies us a part that they manufacturer.  We produce a finished device that incorporates the part they send us.  Their name is on the label.  We ship them the products and they repackage them into individual boxes add their IFU and sell the product.  We do not sell the product to anyone but them.

    The new people are saying that they are a "supplier" to us and not a "customer" of ours.  My intuition says that they are trying to remove themselves from regulatory responsibilities.  However, the product is their design; a Class II device for which they hold the 510(k); we only manufacture Class I E devices under our brand;  and while they manufacturer a component that is permanently contained in the finished device, the device is manufactured by us to their specifications, they individually package for sale to hospitals, and without our manufacturing, the device does not meet it its intended purpose.

    We do issue a PO for the component so that it enters our ERP system correctly, but that is done when we receive a request to issue it and it is at N/C for customer supplied product.

    Any insights as to how to explain to these new people that while they are a supplier, they are the customer of their device for which the defined FDA responsibilities fall on them, not us.  We have this arrangement with several of our contract manufactured parts where we issue a PO for their component that is incorporated in the finished device and this issue has never arisen in over 30 years of contract manufacturing.

    Thank you!

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    D Michelle Williams
    United States
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  • 2.  RE: Contract manufacturing

    Posted 16-May-2018 17:36

    Hi Michelle,

    There were a lot of details of activities back and forth, but my general recommendation would be: If there is confusion about designation and responsibility, to clarify using published definitions, such as those listed below (I have copied some that seem to be relevant to your situation, but you can check the links for a more complete list since you are more familiar with the actual activities and agreements):

    • 21 CFR 820.3 Definitions
      • (o) Manufacturermeans any person who designs, manufactures, fabricates, assembles, or processes a finished device. Manufacturer includes but is not limited to those who perform the functions of contract sterilization, installation, relabeling, remanufacturing, repacking, or specification development, and initial distributors of foreign entities performing these functions.

    https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfCFR/CFRSearch.cfm?fr=820.3

    • Device Registration and Listing – Who Must Register, List and Pay the Fee
      • Manufacturer- Makes by chemical, physical, biological, or other procedures, any article that meets the definition of "device" in Section 201(h) of the Federal Food, Drug, and Cosmetic (FD&C) Act.
      • Contract Manufacturer- Manufactures a finished device to another establishment's specifications.
      • Specification Developer- Develops specifications for a device that is distributed under the establishment's own name but performs no manufacturing. This includes establishments that, in addition to developing specifications, also arrange for the manufacturing of devices labeled with another establishment's name by a contract manufacturer.

    https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPMA/pma.cfm?start_search=1&applicant=&tradename=&productcode=&pmanumber=P120006&supplementnumber=&advisorycommittee=&docketnumber=&supplementtype=&expeditedreview=&center=D&ivdproducts=off&combinationproducts=off&decisiondatefrom=&decisiondateto=05%2F16%2F2018&noticedatefrom=&noticedateto=&znumber=&pagenum=10&sortcolumn=do_desc

    Hopefully these links are useful leads to get you some closure!

    Best,
    Liz



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    Elizabeth Goldstein, RAC
    United States
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  • 3.  RE: Contract manufacturing

    Posted 17-May-2018 09:55

    There are a few things going on here, so I'll try to break them apart.

    There seems to be an underlying assumption that a business partner must be either a supplier or a customer but cannot be both. This is not correct; a business partner could be both.

    The complication is that you don't "buy" the component, it is customer supplied product. In that case, your business partner is not your supplier. The implication is that you do not evaluate your business partner as a supplier, they are not on your approved supplier list, etc.

    You say you ship them a finished device. The term "finished device" has a very specific meaning in QSR as defined in 820.3(l). A finished device does not have to packaged and labeled. In general terms, your business partner is your customer for the finished device and you are their supplier.

    However, in terms of FDA there are specific terms that apply. You are a contract manufacturer (because you make a finished device for another company) and must register and list as a contract manufacturer. Your business partner is a specification developer and must register and list as such.

    The new people have a misunderstanding. They are not a supplier since, in my terms, you do not buy anything from them; the title to the component does not pass you, it is customer supplied property. They are a customer of yours, since they purchase the finished device that you make for them.

     

     

     



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    Dan O'Leary
    Swanzey NH
    United States
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  • 4.  RE: Contract manufacturing

    Posted 17-May-2018 13:35
    Thank you Elizabeth.  We are definitely the Contract Manufacturer.

    Dan, we view our customers that supply CSP as customers and suppliers (because we use PO to place CSP in inventory).  They have a customer file in our ERP that is controlled by Sales and a vendor file that is controlled by Purchasing.  So, I agree an entity can be both.  I was trying to see if there was some opinion out there that was different from mine.  Your point of no change in title is spot-on as we are required to provide inventory levels to our customer who ship us CSP.  I never really thought of it that way.  I appreciate the time you took to respond.

    Thank you both!

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    D Michelle Williams
    United States
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  • 5.  RE: Contract manufacturing

    Posted 17-May-2018 18:05
    A critical part of your question is what are they shipping you.  Is that a medical device?  For example if you were over-molding a PCBA that is 100% capable of functioning with out the overmolding it may be a medical device. The preamble speaks to this see [Page 52609], item 25 in the link below.

    Medical Devices; Current Good Manufacturing Practice (CGMP) Final Rule; Quality System Regulation

    The key text is:

    25. FDA received comments questioning the inclusion of a device that is intended to be sterile, but that is not yet sterile, in the definition of ``finished device.'' A few comments stated that ``capable  of functioning'' is ambiguous, and ``suitable for use'' is not necessary. Another comment requested that the term ``accessory'' be defined. 

    FDA disagrees with the comments, but has amended the definition for clarification. Since the 1978 CGMP regulation was promulgated, FDA has been repeatedly asked whether devices intended to be sold as sterile are considered subject to the CGMP requirements, even though they have not yet been sterilized. The agency had intended the new definition to make explicit the application of the regulation to the manufacture of sterile devices that have yet to be sterilized. Although FDA believes it should be obvious that such devices are subject to CGMP requirements, some manufacturers have taken the position that the regulation does not apply because the device is not ``finished'' or ``suitable for use'' until it has been sterilized. 

    To better clarify its intent, FDA has amended the definition to add that all devices that are capable of functioning, including those devices that could be used even though they are not yet in their final form, are ``finished devices.'' For example, devices that have been manufactured or assembled, and need only to be sterilized, polished, inspected and tested, or packaged or labeled by a purchaser/manufacturer are clearly not components, but are now in a condition in which they could be used, therefore meeting the definition of ``finished device.'' 

    The distinction between ``components'' and ``finished devices'' was not intended to permit manufacturers to manufacture devices without complying with CGMP requirements by claiming that other functions, such as sterilization, incoming inspection (where sold for subsequent minor polishing, sterilization, or packaging), or insertion of software, will take place. The public would not be adequately protected in such cases if a manufacturer could claim that a device was not a ``finished'' device subject to the CGMP regulation because it was not in its ``final'' form.  The phrase ``for commercial distribution'' was deleted from the proposed definition of ``finished device'' because it is not necessary for a device to be in commercial distribution to be considered a finished device. Further, FDA notes that the term ``accessory'' is described in Sec. 807.20(a)(5) (21 CFR 807.20(a)(5)).

    But even if what is being shipped to you is a component, they are a supplier in that capacity.  You take what they provide, process, assemble, or what have you, to convert it into a medical device.  That requires that you register and list with the agency as a Contract Manufacturer.... I believe. But again (see above) is what you ship capable of functioning?

    They then receive it and from what you have stated they re-package it... I believe this makes them a Spec Developer as the owner of the 510(k) and design and re-packager or re-labeler.  I believe this requires that they register and list appropriately.  In that role you are a supplier to them and as such they are your customer.  So we see that they are both a customer and a supplier.  There is also an obligation on them to conduct appropriate supplier management of you to ensure you are building the product appropriately.

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    Rick Muller RAC
    Technical Director
    Aurora CO
    United States
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  • 6.  RE: Contract manufacturing

    Posted 17-May-2018 18:23
    With regards to close quarter customer/partner/supplier relationships, I can provide insight that a recent FDA audit brought to our attention.  If the quality of a widget A used in the manufacturing or assembly of another, newer widget B is the responsibility of the receiver of widget A, then widget A is manufactured by a supplier.  If the quality of the widget A is provided by the manufacturer, under a jointly understood quality agreement, then your partners,  If in the end, the widget B quality is checked by the original widget A manufacturer then they are a customer.

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    Robert Kozic
    Somerset NJ
    United States
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