CMO Selection and Auditing for the Homeopathic Industry

Supply Chain Management for Homeopathy, Part 2 of 4

By Tim Clarot, Industry Consultant


In part one, we introduced the concept of the supply chain as part of a CGMP-compliant pharmaceutical manufacturing and distribution system. As noted, many product owners rely, in whole or in part, on a contract manufacturing organization (CMO). Accordingly, selection of a CMO is one of the most critical and impactful decisions that a product owner will make. The use of a CMO can range from outsourcing a single step in the product supply chain, like repacking or distribution, to a complete turnkey project. It is not uncommon that a CMO will do product development work, ingredient and packaging sourcing and selection, compounding and pack-out. When properly executed, it can be a positive and rewarding experience for both the CMO and owner. If a poor selection is made, at best, it will be a frustrating relationship; at worst it can result in serious regulatory action and to the loss of consumer confidence in the brand. The good news is that there are numerous tools that can be used to manage the relationship.

When considering a CMO, an industry recommendation is a good start. Recognizing that there will still need to be a significant amount of due diligence on your part, having insight from a trusted colleague is extremely beneficial. This is particularly important within the homeopathic industry as it can be a challenge to find a CMO that is capable and willing to manufacture a product to HPCUS standards. FDA recommends that before outsourcing a supply chain activity, the owner should conduct a risk evaluation specific to the activity and/or supplier. Assessing risk and competence of a potential CMO can be accomplished through prequalification questionnaires, material evaluation or an on-site audit. There is no question that the on-site audit is the most effective.

Once you have identified a prospective CMO, the next step is to arrange a site visit. The risk assessment is helpful in determining your initial level of comfort with a potential CMO. A successful approach in auditing a firm is by performing the audit in two-steps. The structure of the first visit can vary from a limited facility tour by one or two owner representatives (must include a member of the owner’s Quality Unit) to a cross-functional meeting. Regardless of the structure used, the objective of this first meeting is to get a sense of the basics—does the CMO have a Quality Unit (QU), overview (actual tour) of the facility, regulatory history and financial stability. This first visit is generally limited to less than one-half a day. Although brief, a lot of information can be obtained in a single visit; in my experience, fewer than 50 percent of facilities make it beyond the first visit.

The second step in the selection process is a full regulatory audit. This is conducted by an independent lead auditor assisted by a member of the owner’s QU. At a minimum, this will require a day and one-half. The audit will follow FDA’s Drug Manufacturing Inspection Compliance Program 7356.002:

  1. Quality Systems
  2. Facilities and Equipment Systems
  3. Materials Systems
  4. Production Systems
  5. Packaging and Labeling Systems
  6. Laboratory Systems

This document, which can be found here, provides a practical template of areas and documents to review to assure a robust quality system at the CMO. It also provides insight into the FDA’s thinking and inspection priorities. Use the second visit to probe areas that were either concerns or not thoroughly resolved during the first facility visit. Two other important areas that should be reviewed in detail are the annual product review (APR) and regulatory compliance. First, the required elements of the APR are listed in the linked document above. FDA requires a lot of information in the APR and based on the number of products the CMO manufactures, creation of the document can be onerous and is often a 483 observation. Second, the facility’s regulatory history is key in the selection process. The actual 483 observation is important but more important is the CMO’s response and follow-up to the noted deficiency. Questions to ask:

  • What was the response to FDA; was it timely and accurate?
  • Did they provide the agency with documents/documentation?
  • Has the commitment actually been completed as stated?

It is during this specific point of the audit process when you will be able to get a good read on the strength of the CMO’s quality unit (QU). Does the QU have the experience, education and empowerment necessary to exercise its authority? Look for signs of organization support:

  • Are other functions in the organization responsive to corrective action(s) and timeline commitments?
  • Does management monitor progress and admonish missed commitments?
  • What format is used to track progress and at what frequency?

In addition to a thorough review of the quality systems, there are three areas in the Facility and Equipment section of the CGMP that require in-depth due diligence—microbes, metal and mix-ups. First, if water is used anywhere in the manufacturing process, its quality must be routinely monitored. Aqueous-based products must utilize a water system that meets USP standards. Water systems are complex and often problematic and it would be easy to devote hundreds of pages to water systems alone. However, the intent of this article is to inform the reader that water purity is fundamental to product quality. It is critical to ensure that the CMO has the knowledge and commitment to maintain and monitor the water system at all points of use. Second, metal contamination can be introduced at multiple points within the product stream--contaminated ingredients, compounding and processing equipment and during product formation. What controls are in place to prevent metal contamination of the finished product? In compounding, are magnets and screens/sifters used; how often are they inspected? What on-line detection system is in place and where is it located in the packaging process? Does it detect ferrous and non-ferrous metals? How often is it challenged and what piece size will it detect? Last, how are packaging mix-ups prevented? As part of the CGMPs there must be a reconciliation of labels and written procedures for the control of packaging materials. However, even with these systems in place, mix-ups do happen. An on-line vision system can provide additional assurance of packaging harmony. If the CMO does not have a vision system, that should not be the sole reason to disqualify; it becomes an area of risk assessment. Do they have a robust system of packaging controls in place and what is the complexity of your product portfolio? While the cost of vision system has continued to decrease over the years, they are still rather expensive. Based on your risk assessment, the vision system is an option that you might not need.

This document is not intended to be the complete guide to CMO quality management but, hopefully, it will provide some insight into supply chain integrity and the due diligence considerations necessary in the CMO selection process.

Author: Tim Clarot is a consultant for Church & Dwight, where he was formerly Senior Vice President of R&D and Product Quality. With 40 years’ experience working directly with federal, state, and local regulators, Tim specializes in the regulatory framework of food (including dietary supplements), medical devices, and drugs (homeopathic and allopathic), both in the United States and internationally. He has also chaired company-sponsored scientific and medical advisory boards. He has served on AAHP’s Legal and Regulatory Committee since 2015 and on the Board of Directors since 2018. He can be reached at