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American Health
Sciences Institute
Bridging Next Generation Technology and Clinical Practice
Buyer Beware! How to Develop a Practical (and
Compliant) Vendor Qualification Program
A WHITE PAPER PREPARED FOR AHSI BY NANCY CAFMEYER AND JONATHAN M. LEWIS
www.AHS-Institute.com
toll-free: 800-445-6920
Buyer Beware! How to Develop a Practical (and
Compliant) Vendor Qualification Program
By Nancy Cafmeyer and Jonathan M. Lewis Advanced Biomedical Consulting (ABC), LLC
http://www.abcforfda.com
One (1) of the timeless principles of commerce is caveat emptor (latin for, “Let the
Buyer Beware”). Under the principle of caveat emptor, the buyer takes the
responsibility for the condition of the items or quality of the services that he or
she purchases. Prior to the current consumer protection laws, buyers had no
warranties for the goods or services that they purchased. Today, most states
require goods to be of “merchantable or sellable quality”. As this condition is
often next to impossible to define and enforce, buyers are advised to embrace the
principle of caveat emptor prior to “signing on the dotted line”.
While being conscious of the products and services purchased is good practice
for consumers and most businesses, it is a regulatory requirement for
pharmaceutical and biopharmaceutical manufacturers. For these organizations,
the decisions where to purchase raw materials, components, manufacturing and
testing equipment, and even consulting services, need to be well informed (and
documented). The results of making poor purchasing decisions can lead to
situations that impact product quality, regulatory compliance, company profits,
and even the reputation of the company.
This article presents a practical and compliant methodology for pharmaceutical
and biopharmaceutical companies to qualify vendors and hence make well
informed purchasing related decisions.
Vendor Qualification and Quality Systems
The qualification process is defined by the American Society for Quality Control
(ASQC) as, “the process of demonstrating whether an entity is capable of
fulfilling the specified requirement”. Vendor qualification is the process where a
vendor is evaluated to determine if it can provide the necessary goods or services
to the standards that the purchasing company requires.
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
Before discussing the best approach to qualifying different types of vendors, it is
important to first understand the concept of “Quality Systems”. Quality Systems
are defined as “the processes, organizational structure, procedures and resources
that are used to control variables associated with producing a product of
consistent quality and that meets predefined specifications. In simpler words, an
organization’s entire operation is a measure of a product’s quality and not
simply the testing of its finished product.
This article employs the theme that vendor qualification is not solely an auditing
process but rather a quality system in itself for the pharmaceutical or
biopharmaceutical organization.
In order to introduce the quality systems approach to vendor qualification,
consider the following simple analogy. Professional football organizations do not
sign on prospective athletes purely by the athlete’s stated bench press or 40-yard
dash statistics (i.e. final test results). There are several factors that are taken into
consideration. The team management first determines what “specifications” the
team requires for the open position, including, but not limited to, what the team
is willing and able to spend for the position to be filled. Once these “user
requirements” are defined, candidate athletes are identified. After identifying the
top prospect (or prospects) “on paper” a selection is made. However, the process
is far from over at this point! The selected individual (or individuals) is then
physically and mentally evaluated by team doctors to determine his readiness to
play professional football for that specific team. Only open successful fulfillment
of the team’s specific financial, physical, and mental requirements is the player
contracted. However, as many are aware, this one (1) time assessment does not
guarantee consistent performance throughout the player’s contract. Therefore,
the athlete’s performance is regularly assessed to ensure continued ability to
meets the needs of the team. If the professional cannot meet the team’s current
requirements, the he is subjected to performance improvement training and risks
being traded or released.
Similar to the professional football candidate, a potential vendor should be
thoroughly assessed against a company’s requirements, compared to other
candidate vendors, “physically evaluated” once selected (and before a contract is
signed), and reevaluated as required and as defined on a regularly basis. This
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
article presents the “Q.U.E.S.T. Approach” as a simple, effective, and compliant
approach to vendor qualification.
Vendor Qualification – The Q.U.E.S.T. Approach
How does a company qualify a vendor? What approach will give the company
the best probability of an accurate vendor assessment, meet current regulatory
expectations, and still remain practical? One (1) method is by using the
Q.U.E.S.T. Approach (i.e. Question, Understand, Evaluate, Site Audit, and
Track). Refer to Figure 1.
Figure 1: The Q.U.E.S.T. Approach to Vendor Qualification
Question
Understand
Evaluate
Site Audit
Qualified
Vendor
Track
Q = Question Phase – What a Potential Vendor Needs to Supply
The first step in qualifying a vendor is for the pharmaceutical or
biopharmaceutical company to document what are the needs from a vendor of
this type. For example, does the vendor need to sell to pharmaceutical or
biopharmaceutical firms already? Does the vendor have to have a drug master
file (DMF) registered with the Food and Drug Administration (FDA)? Does the
vendor have the current ability to supply the required units, resources, etc.? Of
course, one (1) of the most important questions is, “What is our budget for this
vendor’s products or services?” Especially in the current economic environment,
many hours, days, and weeks are wasted by defining requirements without a
“real” budget number established upfront. Often times, a company’s change
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
control system is a good place to document/capture this information and overall
effort to ensure understanding and commitment by all internal parties involved.
U = Understanding Phase – How Vendors Meet the Requirements
Once the Question Phase is complete, vendors that appear to meet the company’s
requirements are contacted directly to gauge interest in being a new vendor for
the company. The company’s requirements (as defined in the Question Phase)
are then supplied to those interested vendor organizations. It should be
requested that the vendor supply all its administrative information (e.g. key
contacts, location(s), etc.), applicable sales and marketing materials, and most
importantly, documentation that supports its ability to the specified company
requirements (including, but not limited to, pricing). At this time, it should also
be requested that the vendor send a “sample” of the product or service that they
will potentially providing. For example, a lactose supplier should be requested to
supply samples of the lactose that they would offer for sale in addition to the
certificates of analyses (C of As) for the lactose. A bioreactor supplier should
provide pictures of the vessel along with all the vessels specifications. Even a
consulting or contracting organization should provide “samples”. These
organizations should provide sample resumes of resources that would be
involved in the pharmaceutical or biopharmaceutical company’s projects.
At least three (3) vendors should provide the information requested in its
entirety before moving to the next phase in the vendor qualification process.
At this point, it is imperative that each vendor package be thoroughly assessed
for adequacy and completeness and be understood with regards to the vendor’s
ability to meet the company requirements specified.
E = Evaluation Phase – Identification of the Best Potential Vendor
Now that at least three (3) vendors have been identified to meet the company’s
requirements, it is time for vendor evaluation. First, each vendor is assessed
against the company requirements as specified in the Question Phase.
Remember, all of the potential vendors previously identified will be able each
and every requirement specified. Vendors that could not meet the requirements
have already been “weeded out”. This evaluation pertains to how well each
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
vendor meets each requirement when compared to the other short-listed
vendors. The format of this evaluation can be as simple as a table with columns
for the vendor and for the requirements where a simple rating system is applied
to each requirement for each vendor. An example of such a table for the
evaluation of an active pharmaceutical ingredient (API) supplier is in Figure 2.
Figure 2: Example API Vendor Evaluation
Rating
(3 = Excellent, 2 = Good, 1 = Moderate)
Potential Supplier
Requirement 1
Three Positive
References
Provided
Vendor A
Vendor B
Vendor C
1
3
2
Requirement 2
Most Recent FDA
Audit Supplied and
CAPAs Deemed
Acceptable
2
2
2
Requirement 3
Three Independent
Lots of API
Supplied with C of
As and C of A
claims Consistent
w/ Independent
Laboratory Test
Results
3
2
3
Once the ratings are assigned, a simple average can be used to determine the best
overall option. Keep in mind that this is not the final step in the process! The
Evaluation Phase has only identified and documented the best potential vendor.
S = Site Audit Phase – Onsite and Offsite Verifications
The next to last phase in the vendor qualification process involves a site audit of
the potential vendor’s facility. As the cost of an audit is a potentially pricey
activity, the site audit may be performed onsite or offsite depending on the
criticality of the potential vendor type and is limited to the best potential vendor
identified in the Evaluation Phase. Vendor types need to be divided into
“Critical” and “Non-Critical” suppliers. A critical vendor is one (1) who supplies
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
goods or services that directly controls or dictates the quality and integrity of
pharmaceutical and biopharmaceutical products. A non-critical vendor is one (1)
that supplies goods or services that assist and support the quality of these
products. As the interpretation of the definitions of critical and non-critical
suppliers varies among companies, it is imperative that an approved and
controlled company document (or documents) clearly defines which vendor
types are deemed critical and which are deemed as non-critical. Examples of
critical and non-critical vendor types are listed in Figure 3.
Figure 3: Example Vendor Type Criticality Assignment
Vendor Type
Classification
(Critical or Non-Critical)
Label Supplier
Non-Critical
Contract Packager
Critical
Calibration Services Contractor
Non-Critical
Regulatory Consultant
Non-Critical
Pest Control Service
Non-Critical
API Manufacturer
Critical
Inactive Ingredient Supplier
Non-Critical
If the best potential vendor identified in the Evaluation Phase is a potential
critical vendor, it is highly recommended that this vendor be subjected to an
onsite audit with predetermined (i.e. documented and approved) items requiring
onsite verification. The onsite audit procedure should contain clear pass/fail
criteria for the onsite vendor audit. An example portion of a form to be
completed during the onsite verification for a contract packager is in Figure 4.
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
Figure 4: Example Onsite Verification Form – Contract Packaging Facility
Quality
System
Verification
Validation
Have automated
batch processing
systems and other
computer
manufacturing
systems have been
validated for their
intended purpose?
Validation
Does cleaning
validation include
documentation of or
reference to recovery
studies, assessment of
validation of cleaning
methods, visual as
well as rinse and
swabbing methods,
and documentation
as to calculation of
limits?
Validation
Is capacity testing
performed when
qualifying utility
systems such as water
and/or steam
systems?
Verification
Results
(Y/N)?
Acceptable
Results
(Y/N)?
Person
Interviewed
Documentation
Assessed
If the best potential vendor identified in the Evaluation Phase is a potential noncritical vendor, the vendor should be subjected to an offsite audit with its own
predetermined (i.e. documented and approved) audit “checklist” containing
predetermined Pass/Fail criteria for the overall audit. While the verifications may
be similar to that of an onsite audit, the offsite audit relies on verbal discussions,
e-mails and documentation provided by the potential vendor to determine
acceptability of the vendor’s practices/quality systems. An example portion of a
checklist for an offsite audit for a calibration contractor is in Figure 5.
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
Figure 5: Example Offsite Audit Checklist – Calibration Contractor
Quality
System
Verification
Training
Does the company
provide documented
training
to
its
resources performing
calibration and has a
copy of the training
program and actual
training records been
provided?
Training
Does the training
program require that
the
vendor’s
resources inform a
client of instruments
found to be out of
tolerance prior to
recalibration of the
instrument in order
for
timely
and
thorough
client
impact assessments?
Facility and
Equipment
Are
all
vendor
instruments
calibrated to NIST
traceable standards
(or equivalent) that
have
calibration
points that bracket
the client intended
uses?
Verification
Results
(Y/N)?
Acceptable
Results
(Y/N)?
Person
Interviewed
Documentation
Assessed
Based upon the overall score for both onsite and offsite audits, a potential vendor
is either accepted or rejected. If accepted, the vendor is considered qualified. If
rejected, the company can either:
© 2009 ASPE, AHSI – all rights reserved
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Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis
1. Work with the vendor to address the deficiencies and perform a
verification audit at a later date (but prior to using the vendor or
considering the vendor qualified)
-
Or -
2. Select another potential vendor identified during the Evaluation Phase
and subject that vendor to the Site Audit Phase.
T = Track Phase – Monitor and Requalify
Once a vendor is qualified the process does not end. The vendor’s performance
must be monitored on a continuous basis. The monitoring process involves a
review of any problems associated with the good or service supplied by the
vendor. A schedule is determined so that each qualified vendor is re-qualified on
a periodic basis (whether a critical or non-critical vendor type) and in accordance
with the most recent vendor practices. Similar to regulatory authority audits (e.g.
FDA audits), the pharmaceutical or biopharmaceutical company should not only
run through the preapproved audit verification steps, but should also revisit
items that were found to be deficient during previous audits to make sure that
any corrective and preventive actions (CAPAs) commitment to by the vendor
have in fact been implemented satisfactorily. All vendor qualification activities
(i.e. qualification, re-qualification, and disqualification) should be documented in
a vendor information file.
Conclusion
Throughout history, the concept of caveat emptor has been the bane of many
consumers. Even though there have been some protections provided by
legislature, this has not stopped the headaches, the loss of time and the loss of
money from substandard goods or services. Just as an individual consumer has
the responsibility for verifying the quality of goods and services he or she plans
to purchase, pharmaceutical and biopharmaceutical companies are responsible
by regulation as well as through moral obligation to ensure that their vendors
will consistently provide raw materials and components, compliance consulting
services, manufacturing equipment, etc., that yield safe and effective drugs and
other therapeutic products.
© 2009 ASPE, AHSI – all rights reserved
Page 9
Buyer Beware! How to Develop a Practical (and Compliant) Vendor Qualification Program – A white paper prepared for ASPE’s AHSI
Training Division by Jonathan Lewis