Interesting product idea? Check. Perfect formulation? Check. Great marketing plan? Check. Distribution? Check. Millions of dollars worth of analytical and manufacturing equipment at the ready? Uh…no.

Many companies have everything it takes to market a fabulous natural product—everything except the manufacturing equipment. No machines? No problem, as hundreds of qualified contract manufacturers are ready to step in and lend their expertise to deliver a stellar finished product to market.

Having a choice is a good thing, but it can also be overwhelming to find the perfect match for your job. Before signing on the line, Steve Holtby, president and CEO of Soft Gel Technologies, Inc., Los Angeles, CA, suggests finding out: • Is your company FDA cGMP compliant, and if so, who has certified you? • Can I come today and visit your facility? • Everyone can make a good product when everything goes as planned. What are your procedures to handle unexpected problems such as testing issues, raw material shortages, etc.?

Let’s delve into these issues and highlight some points to keep in mind when working with a contract manufacturer.

Goals for the First DiscussionsBy now, all responsible supplements companies understand that they need to have complete documentation of their manufacturing and analytical processes to be compliant with the U.S. Food and Drug Administration (FDA)’s good manufacturing practices (GMPs), even if these operations don’t happen under their roof. For this reason, it’s critical that companies choose manufacturers that ensure the marketer has GMP-compliant documentation in hand.

“GMP is a focus on quality through the manufacturing process. And since many FDA warning letters come from failing to meet quality standards, this is a critical part of keeping your products on the shelves. Ensuring that the quality department, testing laboratory and operations team work together is the key to an overall quality finished product,” states Laura Willis, director of quality assurance at National Enzyme Company, Forsyth, MO. But, how do you know if you’re selecting a manufacturer that is creating the right paper trail?
We feel if a lab can’t or won’t share 100% of its data, then they might as well be dry-labbing. —Elan M. Sudberg, Alkemist Labs
Shaheen Majeed, marketing director at Sabinsa Corp., East Windsor, NJ, says finding a partner that is both knowledgeable and highly communicative is vital. “At the beginning of the project, the expectations and steps to meet those expectations should be discussed and agreed upon,” he believes. “When all parties know what they are doing and talk it through, the outcome will be more efficient and less likely to include surprises.”

Here’s a checklist of issues to raise in your first meetings with a contractor:1. Check their compliance expertise.Some product marketers have quality assurance (QA) systems firmly in place. “They tell us how to comply with their standards and we indicate whether or not we can meet those standards,” says Petros Loutas, vice president of quality assurance/quality control and regulatory affairs at Bioriginal, Saskatoon, SK, Canada. Other companies have limited internal QA resources, he states, and rely upon the contractor to meet the specs they want on their label.

Regardless of which type of company you operate, look for a manufacturer with good compliance expertise. Majeed adds that if the contractor’s team isn’t well versed in regulatory compliance issues, a consultant should be added to it—or you should find a new partner.

Richard Kaufman, chief operating officer of Paragon Laboratories, Torrance, CA, says such a regulatory compliance expert should be able to tell the product marketers which SOPs pertain to their operations and what documentation they need in their possession during an FDA inspection.

2. Talk about more than product integrity.Holtby makes the point that communications between a manufacturer and the marketer is a two-way street. “It is imperative for a customer to establish clear priorities that meet the company’s needs,” he states, noting that this includes more than just product integrity. “Other factors such as product price, delivery timelines and batch sizes are sometimes more critical,” he states.

3. Review your expectations for product testing.Also, be sure to discuss processes for raw material identity and quality verification as well as finished product testing. “More marketers are now documenting their own requirements for testing protocols,” says Holtby. “A contract manufacturer that communicates with the marketer and is open about their procedures is a huge selling point, as it takes guesswork and liability out of the GMP responsibility equation.”

He adds that his company does its own testing even after the finished product is made, since samples are kept on hand after the expiration date. “We do real-time stability testing on many products,” he states.

Records of this work and all quality control should be meticulously kept. “We maintain complete and detailed batch records for traceability purposes. We ensure that we are GMP compliant, so that we keep our certifications. In fact, some of our customers require us to undergo periodic internal and third-party audits to confirm GMP compliance,” Holtby explains.

4. Ask about emerging testing methods.Raw materials suppliers are not required to follow the same regulations as manufacturers, so be sure there are no surprises with the partner you choose.

According to Holtby, some raw materials distributors do not conduct all identity testing of ingredients, and therefore his firm does it for clients or arranges for it to happen through a third-party lab. “We not only perform standard analysis on finished softgels such as micro- and active-ingredient testing, but we also do extensive testing on raw materials for identity, potency and contaminants where applicable, to assure ourselves and our customers that the ingredients we use are viable,” he states. In contrast, some contract manufacturers just trust the results of whatever is listed on the certificate of analysis without verifying it.

You may also want to ask about their take on emerging testing methods, since opinions are diverse. One such technique is DNA testing, which was thrown into the limelight last year when NY Attorney General Eric Schneiderman used the technique as justification for pulling certain herbal supplements from shelves. The results, he suggested, proved that the supplements did not contain the herbs that the labels indicated they should have. The use of the method in this manner was heavily refuted, since it is an inappropriate identity test for finished herbal products. Some even question its use as the lone testing method on herbal ingredients.

“Unlike human DNA testing, DNA testing of materials such as botanicals can be flawed, as it is a fairly new form of testing in the industry, to which the appropriate standards have yet to be fully developed,” says Tammy Blakemore, general manager at SORA Laboratories, Forsyth, MO.

Others, like Elan M. Sudberg, CEO at Alkemist Labs, Costa Mesa, CA, believe DNA analysis can be a “powerful tool that should be adopted and used, but only alongside other, more-established ID techniques.”

Willis explains why DNA testing should be used in conjunction with other testing for herbs. “Since DNA testing will show the same ID for the leaf, root or even fruit of the botanical, you still may need another identification method to differentiate the plant part as DNA testing cannot be accurate to the species level.”

In addition, the DNA profiles of plant species grown in different regions may come across as inconsistent, though they may be taxonomically and chemically the same, says Willis. Thus, a combination of techniques may be needed. Be sure your lab has the expertise to use and marry up all the appropriate testing methods.

Christian Krueger, founder and CEO of Complete Phytochemical Solutions, Cambridge, WI, explains such testing includes colorimetric assays such as DMAC analysis for the quantification of soluble proanthocyanidins (PACs) or the butanol-HCl assay for quantification of insoluble PAC; high-performance liquid chromatography for the identification and quantification of flavonols, anthocyanins and hydroxycinnamic acids; and mass spectrometry-based technologies such as MALDI-TOF MS for the authentication of specific structural features such as A-type interflavan bonds.

He adds that his company uses a proprietary Polyphenol-Fingerprinting technology that uses an advanced MALDI-TOF technology to “authenticate and standardize bioactive compounds in functional foods and dietary supplements providing data for Certificates of Analysis and labeling claims in compliance with GMPs.”

5. Discuss transparency.Transparency is a buzzword, but that doesn’t cheapen its importance. Sudberg says finished product marketers and contract labs/manufacturers must have full disclosure and full transparency so “all parties will have everything they need to confidently defend themselves when the FDA, or an attorney general, does come knocking.” Don’t accept the minimum amount of information from labs, he advises.
Contract Labs/Manufacturers: Should You Have More than One?

You’ve invested a decent amount of time into identifying your top picks for a contract manufacturing partner. Should you choose your favorite and forget the rest?

Probably not, say experts.

“Both contract labs and manufacturers can’t be experts in everything. Some labs are better at or better known for having expertise and experience in testing certain raw materials. Similarly, some manufacturers are better in manufacturing certain products or certain dosage forms,” says Eugene Ung, CEO of Best Formulations. Therefore, it might make sense to pick a few specialized manufacturers and farm out your projects accordingly.

Adds Steve Holtby, president and CEO of Soft Gel Technologies, Inc., “Many contract labs only handle specific types of tests, but for those they do handle, they are industry leaders. The best lab/manufacturer should be used when possible.” This is even more reason to have a good handle on your manufacturers’ and labs’ strengths and weaknesses.

Elan M. Sudberg, CEO at Alkemist Labs, agrees, adding another good reason why you may want to diversify your partners: to avoid supply disruption in the event of a problem or an acquisition. He states, “With little labs being gobbled up by big labs (two this year alone), if all your ginkgo testing was in one basket, the common post-acquisition re-organization could prove disruptive to your turnaround time, so having at least a few back-up labs is always a great plan.”

Ung also feels that marketers may be able to bounce ideas off several contractors and use more than one as resources.

But Laura Willis, director of quality assurance for National Enzyme Company, points out that some of this collaboration can happen behind the scenes. She says that some ISO 17025 labs work together and pool the expertise of their partner ISO labs to ensure accurate and reliable results. She states, “This common practice allows customers to send all their testing to one lab and still get the most accurate results because many ISO labs were actually used to test the product(s) initially. The customer will receive one certificate of analysis with all the lab’s results reported together.”

Ask your lab if they operate in this manner so that you understand how your testing results are generated.
6. Talk about the possibility of subcontracting.Various contract manufacturers and labs have differing perspectives on the appropriateness of subcontracting out work. For one, Majeed believes that marketers should pick a primary contract manufacturer that has a broad range of capabilities because outsourcing “leads to delays and further need to audit those subcontracted labs to ensure the quality of work.”

Beyond this, experts say there are some appropriate times for outsourcing. John Altenberg, vice president of sales and client services at Vit-Best NutriVon, Tustin, CA, believes that subcontracting may be appropriate if the contract manufacturer does not have testing equipment or experience with certain materials or test methods.

For instance, Majeed says that if the contractor is working on a complex formulation with several ingredients, it may not have expertise in each and every component, and a third-party lab may be a good option.

In agreement is Willis, who states that marketers can check their lab’s or manufacturer’s ISO 17025 scope of accreditation to see what is considered the lab’s expertise. One can assume anything outside this scope is a candidate for outsourcing. “No lab can be the expert on all testing, so sub-contracting to an experienced lab with the particular testing on their scope is a good practice. Since testing should be about getting the most accurate and reliable results possible, not getting all the testing done at one place makes perfect sense,” she believes.

And, manufacturers may not have all the manufacturing equipment necessary for every job. “An example might be a manufacturer that manufactures only tablets and capsules. However, their customer wants a softgel capsule,” says Eugene Ung, CEO of Best Formulations, City of Industry, CA. “Rather than the customer spending the time to find a softgel manufacturer, the customer can rely on their manufacturer to source a good softgel manufacturer for them and take care of the process.”

In addition, Ung makes the point that capacity sometimes doesn’t keep up with demand. So rather than extend lead times, a contract manufacturer may sub-contract out work. But before outsourcing, Altenberg says, “Both parties must agree on the protocol.” Sudberg agrees, and says his company’s policy is to alert clients each time a sample is subcontracted. “They might have audited our lab for ISO 17025 standards but that doesn’t carry over to the subcontract lab, so we make sure to be very transparent,” he explains.

Majeed suggests that several potential outsourcing labs be vetted in advance “so you are not scrambling to meet a deadline.” This vetting process includes ensuring the firm is GMP compliant and verified, and both parties—marketers and contractors—agree and approve on the list of possible subcontractors before the work is performed.

7. Discuss plans for unexpected test results.As part of your discussions with a contract manufacturer, Sudberg says you should ask, “How do you handle discrepancies?”

Blakemore says manufacturers and/or labs should have procedures in place for handling out-of-specification (OOS) results. “This procedure must detail the steps to be taken when investigating OOS results and the criteria QA/QC must follow in determining the validity of analytical testing. The disposition decisions made by QA/QC must be kept to document the justification for acceptance/rejection of any material,” she explains.

Loutas says when root cause analysis is conducted at his company, it is not just designed to investigate the situation and find a solution. It also trains staff to avoid future problems and monitors the effectiveness of the solution. “It is important to validate the corrective action to verify that your solution works. This is accomplished by monitoring trends of OOSs to ensure that corrective actions work and the problems do not happen again,” he believes.

As for what the process looks like, you may learn that “freak out” is not step one. In fact, Krueger says it’s not unusual to see unexpected analytical test results. After all, contract labs and manufacturers deal with a wide range of manufacturing processes that create variability in ingredients and finished products.

In fact, Altenberg says it’s so common to see slightly off results that retesting is only conducted “if results are so far out of ‘normalcy.’”

Others, like Kaufman, suggest an OOS “requires that a thorough investigation take place by qualified individuals in order to determine why the out-of-spec has occurred,” and Majeed says the material should be quarantined until answers are found.

What sorts of culprits could be causing problems? Sometimes, the answer is as simple as a lab error, calibration problem or conflicting methodologies.

“Analytical testing can sometimes show conflicting results due to different methodologies used by the raw material supplier and the finished product manufacturer,” says Majeed. Ung adds that one could even question whether the test method specified on the certificate of analysis is appropriate, “which can be a red flag as to the quality of the raw material vendor.”

Majeed adds, “Communication with your raw material supplier on the analytical methods used for standardization can be really helpful in resolving some of the conflicts. Getting the experts together to talk through the methods and results usually resolves discrepancies.”

This issue of “good communication” is a point raised by several individuals regarding how to proceed with unexpected test results. States Sudberg, “Expectations are almost always that a material will meet specifications, and sometimes that doesn’t happen. There are usually explanations that can be sorted out by asking a few simple questions and if that doesn’t work, get all parties with skin in the game to show their cards… All parties should be transparent during this exchange of information to resolve conflicting results, or you will get nowhere.”

Krueger says that before conducting analytical tests, his firm works with clients to understand their unique processes and products and to anticipate where any trouble areas may come into play. “Our consulting services in addition to contract research/analytic services allows us to build a strong relationship and work together with our clients to address any potential conflicts in results that may result from product complexities,” he explains.
Clearly articulated requests are important to a successful partnership. —Steve Holtby, Soft Gel Technologies, Inc.
Sudberg says that the contract laboratory he runs is always happy to explain and share its test results in detail whether or not there is a discrepancy. Marketers should be suspicious if their contract manufacturer and/or lab hesitates to do so. “We feel if a lab can’t or won’t share 100% of its data, then they might as well be dry-labbing. Test results have to be supportable and capable of being replicated in the exact same way, or they mean nothing,” Sudberg states.

Holtby agrees that information gathering is key for sorting out what could be behind an OOS result. He says that he works with the third-party lab that collected the results to see where potential problems may have originated and sometimes even talks to the vendor about the material in case a minor detail is affecting the analytical test. “In some cases, the end result is that we fail the raw material, and we feel it is important that a company such as ours be comfortable in doing so,” he states.

8. Find out which accreditations they have.Many of the businesses interviewed for this piece felt that having certain accreditations in place was a “must” for being a responsible manufacturer. Holtby believes having certifications through groups like NSF’s Dietary Supplement Certification program and the Natural Products Association (NPA) is important because “auditors for those organizations are the most familiar with the requirements for the industry.”

Kaufman says his facility is not only certified by these two groups, but also UL. Sudberg says you shouldn’t be fooled by anyone who touts a facility or lab that’s certified by FDA. “They will provide a registration number, but think of that as a driver’s license: it doesn’t mean the licensee is a good driver,” he states.

Besides GMPs, companies can also be certified in other important ways, such as organic certification from QAI International or being kosher, halal or gluten-free certified. Holtby says his firm also is certified through NSF’s Athletic Banned Substances program, called GMP for Sport, which means products do not contain ingredients that athletes are screened for during drug testing.

Majeed adds that it’s not good enough to just be certified. “Always ask what the accreditation applies to, because some are not blanket accreditations but are for specific areas which may not apply to your needs,” he feels.

Sudberg is on board with this sentiment, noting “the only meaningful accreditation for labs in our industry is ISO 17025.” This is said to be the most stringent of standards for labs. But, Sudberg says you should ask about the scope of that accreditation. “It’s possible to be ISO 17025 accredited, but for a test that is irrelevant to what you are having done and therefore not applicable.”

9. Schedule a visit.Product marketers shouldn’t hesitate to visit their contract manufacturer and/or lab to see firsthand how the facility operates and if everything is GMP compliant.

Ung says that the audit should be used to cultivate the relationship between the two parties, not to create a “gotcha” moment. “There is no single customer, manufacturer or laboratory that knows it all. Manufacturers and labs can learn from customers and vice versa. So long as the communication is open, continuous improvement can happen on both sides, which we believe is vital to producing quality products,” Ung believes.

WholeFoodsasked experts how marketers can make the most of this experience. Here’s what they had to say: • Visit facilities regularly on a timetable that is “consistent with their buying habits—such as annually, if not more often,” says Holtby. • Make sure all the required testing is being done with the agreed upon methods and that the lab is following good laboratory practices, says Blakemore. Don’t take this for granted as some unscrupulous companies may skimp on this to save money. “If a quotation looks too good to be true, there is probably a reason,” Holtby warns. • Pay attention to the quality control and assurance staff and see how decisions are made during the process. “This is the most essential part of a contract manufacturer,” says Holtby. “If a weak QA/QC presence is observed, the rest of the processes will have the likelihood of being incomplete, not in compliance and just downright bad.” Also, ask about the training and experience of the staff in these units. • Holtby says that customers should not only receive the final certificates of analysis, but also batch records when they conduct audits of the contract manufacturing facility. “The batch records should also include the test results and history for a particular product,” he explains. • Kaufman says visitors should prepare in advance and make a questionnaire or checklist before arriving on site. “During the audit, the auditor should follow a well thought-out checklist to review all pertinent aspects of the operations being audited to see how the contract manufacturer/lab performs,” Kaufman states.

In agreement is Blakemore, who recommends having the manufacturer or lab fill out your questionnaire before visitation day, so that it can be reviewed in person on site and you can zero-in on any questions raised during the preliminary questionnaire.

If you don’t have a qualified auditor on staff, Sudberg suggests hiring a consultant with auditing experience. “I can’t tell you how many times we have been audited by inexperienced auditors simply working off some insufficient checklist they found online. It’s actually disappointing, considering how prepared we are,” he states.

10. Establish a Quality Agreement.A last bit of advice for early-stage conversation comes from Ung, who says that the marketer and contract manufacturer should develop a clear Quality Agreement. “The quality agreement typically clarifies who is responsible for what and acts as a checklist of sorts to ensure all proper documentation has been discussed and assigns responsibility to the appropriate party,” he explains. “A successful business relationship between a product marketer and contract manufacturer can’t be based on assumptions and finger-pointing. It has to be based on understanding and clarity of responsibilities.”

Several manufacturing experts say that the more issues of responsibility can be clarified up front, the easier audits and investigations will be down the road.WF

Published in WholeFoods Magazine October 2016