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10 key questions an own-label distributor should ask itself10 key questions an own-label distributor should ask itself

Own-label distributors must qualify their contract manufacturers by reviewing cGMP-related records, conducting audits and vetting certificates of analysis.

Bruce Elsner

May 28, 2019

5 Min Read
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Companies marketing dietary supplements that contract out some or all their operations often fail to consider how little they know about the operations of those providing the contracted services. That should raise questions, such as “Are the products meeting the company’s requirements for quality?” and “Is the contract service provider in compliance with FDA regulations?” The concern is that the product owner (the company whose name is on the label) may be taking significant risks of interrupted product supply, FDA regulatory action and damaged brand reputation. Fully addressing the answers to the following questions will significantly reduce those risks.

1. Am I an own label distributor?

Answer: Yes, if a company contracts services for manufacturing, packaging, labeling and/or distribution. The terms own label distributor, private label distributor and virtual company are often used interchangeably. 

2. May I decide to use a contract manufacturer or laboratory based solely on its reputation and/or cost?

Answer: No! An own label distributor must first qualify the contract manufacturer. FDA is on record stating that a company cannot contract out its ultimate responsibility to ensure that the dietary supplement “is not adulterated for failure to comply with dietary supplement cGMP [current good manufacturing practice] requirements” (i.e., the Federal Regulation 21 CFR Part 111).

3. What must be done to qualify a contract manufacturer or other contract service provider?

Answer: A company must do the following:

a. Confirm the contract service provider’s registration with FDA as a food facility.

b. Require the contract manufacturer to complete a self-assessment qualification questionnaire initially and then annually.

c. Conduct an on-site facility audit (by the own label distributor or third-party auditor).

d. Qualify the contract manufacturer’s or contract laboratory’s certificate of analysis (CoA) data.

e. Periodically re-qualify the contract manufacturer and the CoA data.

4. Do I need to establish a quality agreement with the contract manufacturer in addition to a business contract?

Answer: This is not a regulatory requirement, but it is strongly recommended to clearly establish the quality unit and cGMP compliance responsibilities of each party. FDA inspectors have begun asking if a quality agreement is in place.

5. May I rely upon the qualified contract manufacturer to establish all required documentation related to the production of my product(s)?

Answer: No! An own label distributor must be:

a. The originator and primary approver of formulations and specifications and labeling for its products, and for any raw material and primary packaging materials that are unique to those products

b. The approver or co-approver of master manufacturing/packaging records (MMRs)

6. May I rely upon the contract manufacturer’s quality unit to be responsible for all approval decisions?

Answer: Provided the contract manufacturer has been qualified and approved specifications are established, own label distributors may delegate all decisions to approve materials for use and products for shipment to itself or to its third-party logistics distributor if being used.

7. Who is responsible for approving/releasing product for final distribution?

Answer: The own label distributor’s quality unit is the only unit authorized to approve every product lot for final distribution, including release from a third-party logistics distributor (if used). These and all other responsibilities of the own label distributor’s quality unit must be described in writing.

8. On what basis must my quality unit approve/release each product lot for distribution?

Answer: The presence and review of the following documents:

a. The contract manufacturer’s CoA documenting the product’s specification has been met (this is necessary, but by itself insufficient)

b. A formal contract manufacturer’s product lot approval document (e.g., batch folder quality assurance (QA) approval checklist [recommended] or equivalent document confirming all required product lot documents were reviewed, and the contract manufacturer’s quality unit’s approval/release decision is documented)

c. The own label distributor’s receipt and inspection report confirming that the product lot was sampled, visually inspected and preferably compared to a product standard

d. Documentation of the own label distributor’s quality unit approval decision

9. What other quality systems must I establish and manage at my headquarters?

Answer: A training program, creation of master formulations and specifications, document change control, managing material reviews and corrective and preventive actions (CAPAs), handling product complaints, reporting serious adverse events, stability studies/expiry dating (if used), maintaining reserve samples and records retention.

10. How should I monitor my contract manufacturers to have confidence and evidence that they are continuing to operate in a qualified status and in compliance with FDA regulations?

Answer: It is highly recommended that own label distributors:

a. Maintain copies of all formulations, specifications, MMRs and a sampling of batch production/packaging records.

b. Conduct periodic on-site audits and maintain records of audit reports and the contract manufacturer’s response concerning audit observations.

c. Maintain records of contract manufacturer qualifications, CoA data qualifications and all re- qualifications.

d. Indicate quality unit’s review of, and agreement with, the above records (those not already bearing the quality unit’s approval) by initialing and dating them.

All responsibilities and requirements must be covered in standard operating procedures (SOPs) that have been approved by the own label distributor’s quality unit. All the above answers involve additional implementation details and may require compliance with other FDA regulations and guidelines.


Bruce D. Elsner is an independent consultant with the EAS Consulting Group LLC in Alexandria, Virginia. His background includes 28 years of technical support and quality assurance roles in three Fortune 250 corporations producing pharmaceuticals and personal care products. For the past 22 years, he has done private and contract consulting helping over the counter (OTC) drug and dietary supplement companies with auditing, cGMP (current good manufacturing practice) training, quality systems improvement and assisting clients respond to FDA enforcement notifications.

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