Managing Out-sourcing Risks
5 June 2014
Visiting Professor
University of Sunderland
©Alison Beaney 2014

Managing Out-sourcing Risks
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Some thought-provoking (true) stories
Questions raised
Drivers for out-sourcing
Commonly held beliefs
How can we assure quality and manage risks to patients, NHS, and commercial partners?
©Alison Beaney 2014

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Manufacturer contracted with a well known secure delivery firm to deliver medicines including Controlled Drugs to a wholesaler
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Because the well known secure delivery firm were busy they subcontracted to another firm
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This company subcontracted again to another smaller local firm
Local firm then employed on a temporary 7 day contract, an ex felon who had just been released from prison and who was tagged.
©Alison Beaney 2014

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Parcels found in a local skip
Many parcels opened and the goods stolen for
Christmas. (Lucky he didn’t realise that the unopened packages contained CDs!)
Also lucky that the police were called in and found the parcels
Wholesaler and manufacturer unaware of the problem until the police called them
©Alison Beaney 2014

Questions raised by this story
Manufacturer contracted with a well known secure delivery firm to deliver medicines including CDs to a wholesaler.
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How had the manufacturer assessed the secure delivery firm to deliver its medicines to the wholesaler?
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Was there a specification that the ‘secure’ delivery firm had been assessed against?
©Alison Beaney 2014

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Questions raised by this story
Was there a technical (quality) agreement defining on-going responsibilities of the manufacturer and the delivery firm?
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If so, did this prevent the delivery firm sub-contracting without the prior agreement of the manufacturer?
Was anyone monitoring whether the delivery firm were complying with technical agreement?
©Alison Beaney 2014

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Hospital decides to ‘just buy in’ chemotherapy
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The company they decide to out-sourcing to tells them that it holds an MHRA
Specials manufacturing licence
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No-one audits the company to assess their premises
©Alison Beaney 2014

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Later discovered that this licence is only for pre-packing – not aseptic manufacturing
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Cytotoxic injections for Trust patients are being reconstituted in a laminar flow cabinet in a domestic living room
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Pharmacists give evidence in court about current standards for aseptic preparation and the company is prosecuted
©Alison Beaney 2014

Questions raised by this story
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Did anyone check that the company held the appropriate MHRA licence?
How were the company assessed (if other than by price) ? Was there a specification?
Was there a technical agreement?
Did these require the company to hold an appropriate licence?
Was anyone monitoring whether the company were complying with technical agreement?
©Alison Beaney 2014

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Hospital receives Drug Alert via MHRA cascade for recall of licensed infusion
Hospitals own aseptic unit have used this infusion as diluent to prepare MAB ready-toadminister products for its patients
Preparation of some MAB ready-toadminister products is out-sourced to a commercial company – the manufacturer of the defective infusion fluid batches
©Alison Beaney 2014

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Hospital recall the products they have prepared (at vast expense) and remake with different diluent
Commercial company refuse to recall the products they have prepared (at vast expense) and to remake them with different diluent
Company ‘is sure’ these products are not affected – even though they have used the same batches of diluent as the NHS aseptic unit
©Alison Beaney 2014

Questions raised by this story
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Did the hospital ask about the company’s SOP for recall as part of their ‘up front’ assessment before awarding the contract?
Was there a technical agreement in place between the hospital and the company?
Did this define the responsibilities of each party in the event of a complaint/recall?
Was anyone monitoring whether the company were complying with technical agreement?
©Alison Beaney 2014

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Hospital out-sources preparation of
Demeclocycline HCl Oral Suspension
300mg in 5ml
Manufacturing method of commercial company –open capsules and suspend
90 day shelf life assigned by company
Hospital didn’t question the formula and allocated shelf-life
We didn’t think we needed to send it to QC as it was sourced from a reputable specials manufacturer”
©Alison Beaney 2014

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No data - published or unpublished - to support the formula
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No analysis carried out
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Prepared under a section 10 exemption, not under company’s MHRA licence
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Cost of this product to Trust - £500
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Decision – Rejected!
©Alison Beaney 2014

Questions raised by this story
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Was there a purchasing specification?
Did this require the company to actually manufacture the out-sourced products under their MHRA licence?
Was the company’s policy on formulation and shelf-life assessed before out-sourcing ?
Was there a technical agreement?
Did this require the company to provide evidence of a validated shelf-life?
Did it require the company to carry out analysis and provide a certificate?
©Alison Beaney 2014

Drivers for out-sourcing
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Saving money (often VAT)
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Patient benefit e.g. homecare
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Increasing aseptic capacity
©Alison Beaney 2014

It may be but have you considered the cost of:
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Writing the specification for the out-sourcing?
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Assessing the tenders?
Writing the technical agreement?
Monitoring the technical agreement?
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Assessing the products?
Dispensing the products?
Handling any complaints?
©Alison Beaney 2014

What is the effect on an in-house aseptic unit?
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Are they going to use capacity released to prepare high risk (NPSA red ) injectable medicines?
Or are they just preparing fewer aseptic products?
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Overheads for running an aseptic unit (ventilation, monitoring, maintenance etc) are largely fixed
How will this affect the viability of the unit?
©Alison Beaney 2014

It may be but consider:
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To provide medicines by homecare (and hence avoid VAT) there must be evidence that it is in the patients interest - not just not to their detriment.
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Homecare services e.g. nurse helpline, patient information are very valuable but some homecare may actually be less convenient for patients
NHS commissioners - “Out-sourcing should be the ‘default’ position”!!!
©Alison Beaney 2014

It may do but have you considered :
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What is the capacity of the company you are out-sourcing to?
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Will they out-source the work themselves?
(ironically sometimes to NHS aseptic units!)
Will they ask (or even tell) you if they do?
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What happens if the company you are outsourcing to are taken over or go out of business?
Consider the current homecare situation.
©Alison Beaney 2014

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Chapter 7 to EU GMP recently changed from
“Contract Manufacture and Analysis” to
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“Out-sourced Activities”
Key reason for this change is to emphasise the need to clearly define the responsibilities of both contract giver (CG) and contract acceptor
(CA) in relation to product quality
On-going responsibilities of both parties to be defined in a technical (quality) agreement
(TA) and signed by people working in a
Quality role.
TA isn’t the same as a Service Level
Agreement (SLA)
©Alison Beaney 2014

CG
1. Regulatory Processes
Hold appropriate ‘specials’ manufacturing licence of relevant national authority in order to manufacture products highlighted in contract manufacture agreement. Comply with any and all EU and other local current applicable laws, regulations and guidelines relating to
GMP. CG to be informed of any changes to licence and any pending regulatory action
Ensure pharmacovigilance systems are in place to collect, evaluate and collate information concerning all suspected adverse events / reactions reported to
CG
Report pharmacovigilance events to CA
Ensure competent authorities are notified of all complaints concerning suspected adverse events / reactions / lack of effect according to existing regulations and requirements
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CA
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Remarks
©Alison Beaney 2014

Typical Content of a Technical Agreement for Dispensing and Homecare delivery of an Unlicensed Tablet Product (1)
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Subject and scope of the agreement
Contact names
Product information
Product quality
Dispensing
Premises and vehicles
Storage/ delivery/transport
Audit and inspection
©Alison Beaney 2014

Typical Content of a Technical Agreement for Dispensing and Homecare delivery of an Unlicensed Tablet Product (2)
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Subcontracting
Documentation
Change control
Deviations
Complaints
Recalls and returns
Responsibilities
Approvals
©Alison Beaney 2014

Responsibilities for the supply of XXX tablets to TRUST patients
Patient Care
Ensure the use of homecare services is appropriate for each individual patient
Ensure consent is obtained from the patient to use a homecare service
Ensure the CA registration form is complete
Ensure the medication is clinically appropriate for the patient
Co-ordination of prescriptions to ensure timely supply of product
Ensure the homecare prescription has a professional screen by a specialist pharmacist
Ensure patients receive appropriate medicines counselling and are competent to administer medicines
CG CA
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©Alison Beaney 2014

Recalls/returns
Management of recall
Collection, segregation and logging
Inform prescribers/CG pharmacy of recall
Inform patients of recall (if applicable)
©Alison Beaney 2014
CG
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CA
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Develop a clear project plan with defined realistic timelines bearing in mind resources available to deliver it.
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Develop, in conjunction with clinical colleagues, a detailed specification including service level and quality requirements and a draft TA
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Decide on award criteria, including quality aspects
©Alison Beaney 2014

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Review tender returns and carefully assess information supplied, clarifying if necessary
Perform quality assessments of products and/or services
Audit potential out-sourcing partners and any sub-contractors N.B. snapshot only
Involve key stakeholders in adjudication
Finalise and sign off documentation, including TA, and implement agreement
©Alison Beaney 2014

Managing Out-sourcing Risks
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Monitor the performance of the contractor, including quality KPIs e.g. complaints, recalls
Monitor the quality of the product on receipt whenever possible
N.B. the risks to patients are greater for homecare as NHS purchasers do not see the product.
Play an active role in assessing change proposals i.e. before they are implemented.
©Alison Beaney 2014

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What you could consider as part of the quality assessment of the supplier and manufacturer (if appropriate)
Last MHRA inspection report and
MS licence
Last NHS QA audit report (if applicable)
Quality Manual, Quality Policy and latest organogram
Relevant certificates
Management review SOP and terms of reference for management review meetings
Deviation SOP
Complaints SOP
Error reporting SOP
CAPA SOP
Investigation and root cause analysis SOP
Batch recall tracing SOP
Order receipt SOP
Sampling and testing protocols
Product approval and release SOP
 Audit SOP and audit schedule
Sample of a patient satisfaction survey form
Aseptic preparation SOP
Sample batch manufacturing record
Transfer sanitisation SOP
SOP for temperature monitoring within premises and during delivery
Cold chain certification/validation
SOP for assuring bona fide of suppliers
SOP for anti-counterfeit measures
Site Master File
Validation Master Plan
Recall SOP
Change Control SOP
OOS SOP
©Alison Beaney 2014

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Increasingly complex outsourcing projects requiring more procurement and QA resource
Use of third party providers of services eg. compounding, homecare, nursing
Out-sourcing of increasingly complex medicines eg. biologicals, biosimilars with complex stability profiles
Contracting for more unlicensed medicines with complex governance and legal issues

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Are we doing it for the right reasons?
Long–term patient benefit or short-term NHS financial ‘gain’?
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Are we really releasing capacity to allow NHS aseptic units to take on high risk products from clinical areas? (or just closing units?)
Out-sourcing requires MORE QA support than
‘in-sourcing’
Is the NHS willing to put in sufficient resource to adequately manage the risks?
©Alison Beaney 2014

©Alison Beaney 2014