There is a rising tendency within the Life Sciences industry, particularly within pharmaceutical manufacturing, to partner with contract manufacturing organizations (CMOs) to provide a particular segment/niche within their product manufacture and/or project timeline. CMOs can provide specific niche operations, such as active pharmaceutical ingredient (API) manufacture, aseptic processing, and development of biologics, just to name a few. Given the increasing number of CMOs available to pharmaceutical companies, deciding on the right firm for your product or project can be a bit intimidating and conducting a due diligence audit is essential.

At some point during negotiations with potential CMO firms, there is commonly a “due diligence” visit to the CMO facility by all pertinent business groups from the pharmaceutical client organization. Quality Assurance should certainly be part of this initial visit, with the objective to provide a due diligence audit of the CMO facility and operations. Time is generally limited during this visit, usually no longer than one day and sometimes only a half day, which can restrict the ability to conduct an in-depth review of the organization. In following blog, I will highlight various elements to review, when time is limited, to best allow initial conclusions as to the state of regulatory compliance for the potential CMO. This is intended to aid in the selection process of CMOs. Once a selection has been completed, a further in-depth audit of the facility operations should be conducted as a pre-contract GMP audit.

Quality Subsystem

Quality Policy or Manual – the CMO being considered should have a reliable on-sight Quality Assurance group which owns the Quality Policy or Manual. The Quality Policy or Manual should detail the quality strategy for the firm and include an on-going Senior Management review of the Quality program/system. The Quality Policy or Manual should include specific details, or identify specific procedures, for the following subjects:

  • Document controls – covering format, revisions, approvals, distribution, and retention periods.
  • Change control for processes, systems, and documentation.
  • Complaints management, including investigation and response target deadlines.
  • Managing Atypical Events and Deviations, including investigation to the root cause of the event, corrective actions to mitigate the root cause identified, and instructions when investigations do not allow definitive conclusions.
  • Data Integrity – verify that a Data Integrity procedure exists, identifying the need and instructions for maintaining data integrity throughout the CMO’s processes. Inquire about a procedure requiring all personnel be trained on data integrity concepts and requirements (this should be specific instructional training vs. “read and understand” of an SOP). Determine if automated systems all require audit trailing and if audit trails are routinely reviewed, specifically with respect to laboratory analytical review and release of products.
  • Personnel Qualifications/Training – procedure should be in place to cover training requirements for all CMO personnel, including the assignment and tracking of completed training to demonstrate the individual’s qualification to perform their job functions. This can be covered by Job Descriptions and related training needs for the job functions. Determine if the program includes refresher training on GMP requirements on a periodic basis.
  • Internal Auditing/Self Inspection – the strength of an internal auditing program can play a significant role in determining the Quality culture of a CMO. Auditing procedure(s) should detail specifics on scheduling internal audits, management review of audit outcomes, progress and tracking of corrective actions, etc. Look for the use of unannounced Walk-Through Audits covering all operations areas and shifts (as needed). The investigation and identification of trends encountered within the internal auditing program is a very good sign of a strong compliance culture.

Material Controls Subsystem

The primary objective in this area is the receipt, sampling, testing, storage, release, and use of materials within the product manufacturing process. The CMO should have procedures covering details of these activities. These topics can be discussed and observed during a facility tour based on the material flow through the process. An inventory control process or system should be in place to allow identification of all incoming materials and subsequent tracking of the material through the point of use in the manufacturing process. Special attention should be directed at how the firm manages rejected and quarantined materials.

Storage requirements of materials of interest should be identified and the CMO warehousing space verified to meet any such requirements. Seasonal temperature mapping of the warehouse space is generally an expectation, as well as qualification of any cold storage units that may be utilized. The outcome of these activities will assist with selecting the proper locations for any controllers and monitors tracking environmental conditions in the storage space.

Another item to note is a procedure for the evaluation of Suppliers. Does the CMO have a process for the qualification of suppliers and an on-going monitoring of supplier performance? At times, the pharmaceutical client may specify the suppliers for their materials, however, this is an essential need regardless of the resource directing the suppliers needed for the project.

Facility and Equipment Subsystem

Important procedures in this area would include facility housekeeping and pest control, equipment qualification and validation, utilities (i.e. water systems) qualification and validation, instrument calibrations and equipment preventive maintenance, and equipment cleaning procedures and cleaning validation.

Should the project or product require manufacture in a classified space, i.e. ISO 5 for a sterility suite, then associated procedures will also be needed for the qualification of room classifications and the environmental monitoring required to maintain the room classification. Additional procedures will also need to be available instructing personnel as to access and the proper conduct while working in the classified space. Facility layout drawings should also be evident showing the room locations, classifications, air flows, and personnel and material flows through the classified space.

If an in-depth review of these procedures is not possible, directing discussions towards these activities and procedures during the facility tour may assist with determining if the CMO is adept at managing these items/areas.

Production Subsystem

Many times, at the Due Diligence phase, the client’s manufacturing process may still be under development, and specific details as to process requirements have not been fully determined. Procedures for managing the technology transfer of the client’s manufacturing process into the CMO facility should be evident. In addition, a process validation procedure will also be required, although, process validation may be covered in a Master Validation Plan. Established CMOs will generally have a process development or technology transfer group that will provide ownership of these procedures.

Ongoing monitoring of the validated manufacturing process will also be required, generally through an Annual Product Review and Report. This procedure may be part of the Quality subsystem and should be evident during the due diligence review.

Laboratory Subsystem

Important procedures to be considered in this space are: sample tracking process, reagent storage, lab instrument qualification, calibration, and maintenance, use of equipment logbooks, analytical method qualification, validation, and transfer, and managing reference standards.

Data integrity in the laboratory space is also highly important. The requirements noted earlier are a high priority, particularly if the laboratory utilizes an automated data management system (LIMS, etc.).

If the CMO intends to outsource any analytical testing to a third-party laboratory, then associated procedures will need to be present for the selection and monitoring of the outsourced testing, and communication of analytical results to the CMO and pharmaceutical client. A specific procedure for generating and approving a Certificate of Analysis (COA) should be available.

Again, an in-depth verification of these procedures may not be possible with limited time, but a tour through the laboratory area(s) will assist with addressing much of these items.

Packaging Subsystem

As with the Production System, packaging requirements for the product may not be fully determined at the time of the Due Diligence review. There is certainly an expectation that the CMO will provide the client product in some sort of packaged configuration. The following procedures should be evident:

  • Line Clearance – details of clearing the packaging line(s) of previous materials; the use of checklists to identify product holdup areas is helpful.
  • Labeling Control and Reconciliation – sufficient controls must be in place as labels and labeling is brought to the packaging line, and reconciliation is completed following packaging operations.
  • In-Process Controls – procedure should cover inspection processes during the packaging operation, and instruct on what is required when deviations are identified.

This is by no means a comprehensive listing of GMP items to be considered for CMO operations. My intent was to highlight items within six QMS subsystems that may assist with determining if a potential CMO is capable/compliant with regulatory requirements. Given the general time limitations during due diligence reviews, the subsystems have been listed in a priority that has been successful in my previous experience. In all cases, a full GMP audit was completed prior to final contract approval with the CMO.


Is your organization considering outsourcing the manufacture of an existing or new product to a CMO operation?

Do you have questions regarding Due Diligence reviews/audits of potential CMO candidates?

Please give me a call and let’s discuss the potential support that The Catalyst Compliance Group can provide to your project.

As always, any feedback and/or questions regarding this blog are most welcome.


Richard D. Schlabach is a Quality Assurance professional with over 37 years of pharmaceutical industry experience in Quality Assurance, Quality Control, and Validation functions for a wide variety of product categories. Richard’s technical competencies include extensive knowledge of worldwide regulatory requirements; equipment, utility, process, and cleaning validation; specialization in automation validation; compliance auditing and training; and preparation of SOPs and related documentation. He holds Merck certifications as an Automation Auditor, Non-Sterile Product Auditor, Sterile Product Auditor, and API Auditor. He is currently the VP of The Catalyst Group’s QA Division. 

Mr. Schlabach can be reached at the following contact information:

Office: 540.208.7151
Mobile: 540.421.6494
E: rschlabach@catalystcompliancegroup.com