Vendor Audit: A Comprehensive Approach to Risk Management

This article describes for Vendor Audits/vendor qualification for Active Pharmaceutical ingredients (APIs), Excipients, Packing Material and evaluation of approved manufacturers of API’s, Excipients & Packing Material.

What is mean by Vendor Qualification ?

Vendor Audit/Qualification

• • QA Head in co-ordination with Supply chain management head shall plan and carry out the vendor qualification/audit wherever applicable to confirm the compliance level of GMP.
  • API, Excipients & Packing material (Primary & Printed Packaging) Vendor audits are mandatory and not a choice for API, Excipients & Packing material (Primary & Printed Packaging) for EU/US market as format of Vendor Questionnaire.
  • API, Excipients & Packing material (Primary & Printed Packaging) Vendor audits are mandatory if Manufacturer / vendor site address changed.

Selection criteria of vendors Audit/Qualification:

For API (Active Pharmaceuticals Ingredients) :

• • • Vendors who are having any of the accreditation from MOH (Ministry of health) such as Member Countries of EU, MHRA, USFDA, ISO & GMP also not more than two consignments rejected and CAPA closed with CAPA closure time frame for same material from last inspection, a minimum of one day vendor audit shall suffice.
    • Vendors who are having any of the accreditation from MOH (Ministry of health) such as Member Countries of EU, MHRA, USFDA, ISO & GMP and there is rejection of more than two consignments from last inspection, a minimum of two days vendor audit is mandatory.
    • Vendor who does not have any of the accreditation from MOH (Ministry of health) such as Member Countries of EU, MHRA, USFDA, ISO & GMP and having WHO, also not more than two consignments rejected and CAPA closed with CAPA closure time frame for same material from last inspection, a minimum of one day vendor audit shall suffice .
    • Vendors who does not have any of the accreditation, there is rejection of more than two consignments from last inspection, a minimum of two days vendor audit is mandatory
    • If Vendor having multiple plants for different products at same site, a minimum of two days vendor audit or two auditors for one day is mandatory.

For Excipients : 

• Vendors who are having any of the accreditation such as ISO & GMP also not more than three consignments rejected and CAPA closed with CAPA closure time frame for same material from last inspection, a minimum of one day vendor audit shall suffice.
• Vendors who are having any of the accreditation such as ISO & GMP and there is rejection of more than three consignments from last inspection, a minimum of two days vendor audit is mandatory.
• Vendor who does not have any of the accreditation, also not more than three consignments rejected and CAPA closed with CAPA closure time frame for same material from last inspection, a minimum of one day vendor audit shall suffice.
• Vendor who does not have any of the accreditation, there is rejection of more than three consignments from last inspection, a minimum of two days vendor audit is mandatory.
• If vendor having multiple plants for different product as same site, minimum of two days vendor audit or two auditors for one day is mandatory.

For Packing material: 

• Formal vendor audit has to be conducted by QA head or designee for the materials used for manufacturing of product for primary packaging and printed packaging materials for EU/US market and as per vendor checklist for packaging material.

• Head – QA or the designated person shall conduct the GMP audit prior to executing the validation batches as per the “Vendor Audit questionnaire”, but not limited to the same.
• During site inspection, auditor shall record the detail of what was checked, done and seen during vendor audit for each check point to ensure full reflection of evaluated site
• Risk assessment for excipients shall be performed. Based on the outcome of the Risk Assessment , the established control strategy shall be reviewed and revised if needed.
• It should be ensured that all the questionnaire is accompanied by, TSE (Transmissible Spongiform Encephalopathy), BSE (Bovine Spongiform Encephalopathy) and GMO (Genetically Modified Organism), Genotoxic, Residual solvent statement, Residue Of Elemental Impurities and Nitrosamine’s Certification as per declaration template  Declaration letter (s) can be deemed accepted in the vendor format.
• After vendor audit, Auditor will prepare audit report based on the ranking of audit observation, classify the observed deficiencies as critical, major and minor or comment. After classification of audit finding, Overall rating shall be finalized as Approved, Conditionally approved or not approved and sent to Manufacturer.
• Wherever compliance report from the vendor is required, the same shall be intimated to the vendor and such report should be received preferably within 30 days from the receipt of audit report.
• For APIs, Excipients & Packing material to be used in the manufacturing of other markets (Non-License products) i.e. markets wherein specific commitments on the particular manufacturer have not been made as a part of filing/registration commitment, the supplier shall be qualified on the basis of evaluation of data of pre-Purchase samples and/or successful evaluation of the supplier GMP questionnaire. Upon receipt of the completed vendor approval questionnaire, Head-QA shall review the questionnaire and based on their overall technical capabilities and quality system.
• After receipt of audit compliance report, auditor in consultation with QA head shall take the decision for approval or rejection on the basis of vendor audit compliance report by entering CAPA evaluation details Satisfactory/require additional clarification in the remarks column of vendor Audit report.
• Vendor shall be considered as Approved if received CAPA compliance report is adequate. QA officer/Executive shall include the approved vendor’s details in list.
• If CAPA compliance report require additional clarification, sent additional clarification details to vendor and ask for it clarification within 30 days through email. After receipt of clarification over sent requirement, if found satisfactory, follow procedure as mentioned for addition of vendor.
• If the compliance report is adequate, the auditor shall classify the site as ‘Approved’ in the vendor audit report and close the same. Further, a Certificate of Approval to be issued to the vendor.
• Approved vendor list to be revised if vendor is added or deleted or change in manufacturing site address, supplier name, supplier address.
• Revised copy of approved vendor list shall be issued to Warehouse, QC & SCM  department.
• If in case the compliance reported is inadequate, the auditor shall classify the site as ‘Not Approved’ in the report. QA shall be temporarily block the vendor as per procedure. However, a follow-up vendor audit may also be planned based on review of the compliance report before taking the final decision on vendor.
• A communication to this effect shall be given to the Purchase Department, Warehouse and Quality Control through email.
• Approved API’s manufacturer shall be re-audited (Not more than six months from the audit due date) based on risk assessment..

Vendor audit frequency:

• • For API – Three years or determined re-inspection frequency
  • For Excipients – Every four years or determined re-inspection frequency as per
  • For Packing Material – Manufacturer shall be re-audited based on risk assessment (Risk assessment rational for determination of audit frequency for packing materials) but no longer than four years.
• A current “Approved Vendor’s List” shall be maintained with Purchase, Warehouse, Quality Control and Quality assurance Departments.
• Validity of GMP certificates shall be maintained in template Validity expired certificates shall be asked from manufacturer and upon receipt, same shall be updated in the format.
• Approved vendor list of the API, Excipients & Packing Material separately approved for “EU/US Market” and for “other market”
• APIs, Excipients & Packing Material from Vendor who are part of the “Approved Vendor list for “EU markets” can be approved for use in manufacturing of finished product for other markets. No deviation or change control for the same is required.
• API, Excipients & Packing material from Vendor who is part of the “Approved Vendor list for other markets” cannot be approved for use in manufacturing of finished product for “EU/US market”.
• If the packaging materials which require machine trials, then the same shall be carried out with the support of the production personnel. A Summary shall be prepared by production and based on the report the decision has to be taken.
• Tertiary packaging materials are out of scope of vendor qualification
• For qualification of trader of materials storing warehouse distributor / Trader / Supplier, transporter and re-packer, follow procedure

Vendor performance review / Vendor Rating Procedure :

• • Vendor Performance shall be continuously monitored and reviewed by every year for raw and packing material
  • Vendor performance shall be monitored with respect to reject consignment, damage consignment, short quantity received etc.,
  • Consider only those vendors who made minimum three supplies during the period of vendor’s rating.
  • Vendor rating calculation shall be done by formula as below

% of performance                   100 x (TNB Received – A)

Passing batches        =    ————————————

(Vendor rating)                                              TNB

Where,

TNB = Total Numbers of batches/Consignment

A       = Nos. of batches Rejected/ Nos. of Consignment. Damage / Nos. of Consign. Short Qty. / Nos. of Consign. for non- availability  of Party COA.

• Based on evaluation acceptance criteria of vendor rating not less than 90% vendor shall be as a continuous approved. If quality score is 70% to 90% vendor shall be requalified and quality score is less than 70%, immediately approval status shall be kept “On HOLD” till the investigation corrective action shall taken. The vendor shall be disqualified till corrective action is verified.
• The triggered re- audit of the approved vendor shall also be based on the following, but not limited to-
  • Continuous two consignment rejection
  • Serious market complaint
  • Frequent delivered material not as per schedule based on the feedback from purchase department.
  • Not meeting with specification
  • Natural disaster
  • Other, if any
• After inspection, If the vendor does not take appropriate CAPA on reason of triggered audit within 45 days, then vendor shall be de-listed from approved vendor list. The approved vendor list shall be amended accordingly.
• Disqualification of vendor shall be in formed to quality control, warehouse and purchase department by quality assurance through approved vendor disqualification intimation Disqualification of vendor shall be informed to respective vendor by purchase or quality assurance department.
• Since items such vendors complied our specification during receipt/inspection/testing, therefore materials in stock shall be used till it exhausted and the batches produced also complied our laid down specification therefore products produced out of such vendor may remain in the market.
• Re-inclusion of disqualified vendors into the approved vendor listing is only permitted upon satisfactory vendor audit.
• An approved current list of “Approved Vendor” shall be available with the Quality Assurance, Quality Control, Purchase, Head QA and Warehouse.
• Vendor document shall be verified and maintained.
• Criteria to evaluate Vendor based on rating and finding of observation like Vendor shall be approved if

Auditor Qualification & Certification :

• • An Auditor shall have minimum Bachelor’s degree in the relevant science / Pharmacy field.
  • An auditor shall have a minimum of 4 Years of experience in the pharmaceutical industry (API or drug product) in the quality management function.
  • An auditor must be trained and assessed in their knowledge and understanding of an in auditing techniques in general. The training and assessment should be fully documented.
  • An auditor shall be trained by qualified auditors on practical aspect of audit of API manufactures and certified by Head QA to conduct independent audit.
  • List of qualified auditor shall be maintained.

Vendor Complaint Procedure :

If any query raised with respect to the product same shall be addressed to the vendor / supplier

List of required documents from the vendor side during vendor Qualification/Audit .

• Vendor Questionnaire (VQ)
• Manufacturing license along with product list
• GMP Certificate with product list current one
• Any other quality certificate like MHRA, USFDA, TGA, ISO
• Organization chart
• Manufacturing process flow chart of the product.
• SOP Index of all department
• List of product manufactured in same line and list of product manufactured within this premises
• Manufacturing equipment list with capacity.
• Quality control instrument list with model number
• MSDS
• Copy of specification and test procedure of magnesium stearate
• Critical process parameters with justification
• Copy of site master file & VMP
• Complete stability summary report for three batches / trend as per ICH
• TSE / BSE free certificate
• Residual solvent declaration
• Latex free certificate
• Freedom from Melamine Contamination
• Freedom form genotoxic impurities
• Freedom from genetic modified material
• Freedom form Plasticizer (DEHP and DINP) contamination.
• Distributor declaration certificate
• Confirmation on metal reagent and metal catalyst
• Site change / Process change information declaration
• Allergen certificate
• Nitrosamine Certificate
• Certificate of Analysis .
• Quality Technical Agreement (after audit compliance)

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