I. Key Compliance Requirements for Contract Manufacturing
Key Point 1: Contractor Qualification Assessment + Continuous Monitoring Throughout the Entire Lifecycle
(Articles 107 and 109)
Article 107:
Where medical devices are manufactured under a contract manufacturing arrangement, the quality management system (QMS) of the contracting party shall cover the entire lifecycle of the medical device. The QMS of the contracted manufacturer shall cover activities related to the contracted manufacturing operations. Both parties shall establish an effective communication mechanism to ensure the effective integration and operation of their respective quality management systems.
Article 109:
Before entering into contract manufacturing, the contracting party shall conduct an on-site assessment of the contracted manufacturer’s manufacturing capabilities, quality assurance capabilities, and risk management capabilities to confirm that the contracted manufacturer is capable of performing the contracted manufacturing activities and can continuously comply with the applicable requirements. During the contract manufacturing period, the contracting party shall conduct regular on-site audits and assessments of the contracted manufacturer’s QMS. The contracted manufacturer shall accept the contracting party’s audits and supervision and shall promptly implement corrective and preventive actions in response to identified deficiencies.
1.1 Interpretation
- Requirements for the contracting party:
A dedicated contract manufacturing management team should be established, with dedicated personnel responsible for quality, manufacturing processes, and R&D. A QMS covering the entire product lifecycle—from product development, manufacturing, and inspection to post-market activities—should be established. Both parties should also establish a fixed communication and escalation mechanism to ensure that issues are promptly communicated and addressed, avoiding a “contract but do not manage” approach. - Mandatory requirements for the contracted manufacturer:
The contracted manufacturer should establish QMS documentation covering contract manufacturing activities, including corresponding procedures for manufacturing, inspection, traceability, and coordination of adverse event handling. - Implementation at different stages:
- Before cooperation: Do not rely solely on the contractor’s qualification certificates. Conduct an on-site audit to verify its actual manufacturing capabilities, quality assurance capabilities, and risk management practices. In other words, “having the certificate is not enough; actual capability matters.”
- During cooperation: Conduct regular on-site audits and monitor manufacturing deviations, nonconforming products, and implementation of changes, while maintaining complete records of ongoing monitoring activities.
Key Point 2: Complete Technology Transfer + Dual Release Mechanism
(Articles 111 and 113)
Article 111:
The contracting party shall jointly plan and complete manufacturing transfer activities with the contracted manufacturer to ensure the effective transfer of product technical requirements, raw material and manufacturing process requirements, instructions for use, labels, and other relevant information. The contracted manufacturer shall conduct trial production as well as the corresponding verification and validation activities. Trial production shall cover all transferred manufacturing and quality control processes.
Article 113:
The contracting party shall establish procedures for product release to the market, specify release standards and conditions, and review medical device manufacturing records, quality control records, and the contracted manufacturer’s production release documentation. Products may only be released to the market after meeting the applicable standards and conditions and being signed off by an authorized release personnel. Market release shall be completed independently by the contracting party and shall not be delegated to another enterprise.
The contracted manufacturer shall establish production release procedures, specify production release standards and conditions, and review manufacturing and quality control records. Products may only leave the factory after meeting the applicable standards and conditions and being signed off by authorized release personnel.
1.2 Interpretation
- Technology transfer is not simply a “handover.” Both parties must jointly implement the transfer. The following six elements must be transferred completely: ① Product technical requirements
② Raw material quality requirements
③ Key manufacturing process parameters
④ In-process inspection standards (SIP)
⑤ Finished product inspection standards (SOP)
⑥ Instructions for use and label artwork/specimens - Process validation is a mandatory requirement. The dual-release mechanism consists of two indispensable steps: ① Contracted manufacturer: Complete production self-inspection and conduct production release for shipment.
② Contracting party: Review the complete manufacturing and inspection records, obtain the signature of the authorized quality release personnel, and complete market release before the product can enter the market.
Key Point 3: Two-Way Change Control
(Article 112)
Article 112:
The contracting party shall promptly notify the contracted manufacturer of changes to design, procurement, and other relevant matters and supervise implementation of the change requirements. Effective measures shall be taken to ensure timely awareness of any changes made by the contracted manufacturer that may affect product quality, and both parties shall conduct a joint assessment. The contracted manufacturer shall implement the contracting party’s change requirements and provide feedback on proposed changes based on its manufacturing and quality management activities.
1.3 Interpretation
Changes must be managed through two-way coordination. Neither party should independently implement changes without appropriate communication and assessment. The same control logic applies to three scenarios:
- Changes initiated by the contracting party
Such as formulation, design, raw materials, or label updates. The contracting party must notify the contracted manufacturer in writing and supervise process adjustments, validation, and record updates throughout the process. - Changes initiated by the contracted manufacturer
Such as equipment replacement, production line adjustments, or supplier changes. The contracted manufacturer must report the proposed change to the contracting party in writing in advance. Both parties shall conduct a joint risk assessment, and the change may only be implemented after approval. - External regulatory changes
For example, updates to national standards or regulatory policies. Both parties should jointly assess the scope of impact and coordinate updates to relevant documents, manufacturing processes, and inspection standards.
II. Compliance Red Lines That Contract Manufacturers Must Not Cross
Red Line 1: Product Quality Responsibility Cannot Be Transferred by Contract
(Article 108)
Article 108:
The contracting party and contracted manufacturer shall enter into a quality agreement specifying their respective rights, obligations, and responsibilities throughout the manufacturing process. The contracting party shall not transfer to the contracted manufacturer any obligations or responsibilities that it is legally required to undertake.
2.1 Interpretation
- The contracting party remains primarily responsible for product quality and cannot transfer its statutory obligations or responsibilities to the contracted manufacturer through a contract or quality agreement.
- Responsibilities including product quality liability, registration change submissions, annual product summary reports, adverse event monitoring and reporting, product recalls, and cooperation with regulatory inspections remain with the contracting party.
- Even if an agreement states that “the contracted manufacturer shall assume full responsibility for all quality incidents,” such a provision cannot eliminate the contracting party’s statutory responsibilities under the applicable regulations.
Red Line 2: Market Release Authority Cannot Be Delegated
(Article 113)
Article 113:
The contracting party shall establish procedures for product market release, specify release standards and conditions, review manufacturing records, quality control records, and the contracted manufacturer’s production release documents, and ensure that products are released only after meeting the applicable standards and conditions and being signed off by authorized release personnel. Market release shall be completed by the contracting party itself and shall not be delegated to another enterprise.
The contracted manufacturer shall establish production release procedures and may conduct production release after reviewing manufacturing and quality control records and confirming compliance with the applicable standards and conditions.
2.2 Interpretation
- The contracted manufacturer may only perform production release for shipment. Final market release and the authority to sign off on market release must remain with the contracting party’s authorized quality personnel and must not be transferred to the contracted manufacturer.
- Delegating market release authority to the contracted manufacturer constitutes a serious compliance deficiency and may result in requirements for production suspension and corrective action. In serious cases, it may also affect the validity of the product registration certificate.
III. An Easily Overlooked Compliance Blind Spot: Outsourced Processing
Article 115:
Where outsourced processing is involved in product realization, enterprises shall establish procedures for controlling outsourced processing activities and implement appropriate controls to ensure compliance with relevant laws and regulations.
Article 116:
Enterprises shall, at a minimum, manage outsourced processing providers as suppliers and assess their processing capabilities, quality assurance capabilities, risk management capabilities, and other relevant factors. Both parties shall enter into a quality agreement for outsourced processing, specifying the scope of outsourced processing, quality standards or technical requirements, acceptance criteria, respective responsibilities, and requirements concerning relevant processes, verification and validation, release conditions, change control, and communication mechanisms.
3.1 Interpretation
The outsourced processing quality agreement should include at least the following eight core elements:
① Scope of outsourced components and parts
② Mandatory quality standards for components and parts
③ Acceptance criteria for incoming materials
④ Allocation of quality responsibilities between both parties
⑤ Manufacturing process and special process control requirements
⑥ Process verification and validation requirements
⑦ Release criteria for semi-finished products
⑧ Change notification and abnormality communication mechanisms
At the same time, enterprises should establish full inspection or sampling inspection procedures for outsourced incoming materials. They should not rely entirely on self-inspection reports issued by the outsourced processor. Complete inspection records should be retained for each batch of outsourced components.
Key Takeaways: 8 Compliance Rules to Remember
- Product quality responsibilities cannot be transferred; contractual arrangements cannot eliminate statutory obligations.
- Sign a dedicated quality agreement and clearly define the rights, obligations, and responsibilities of both parties.
- Assess and qualify contracted manufacturers and outsourced processors before cooperation and maintain continuous oversight throughout production.
- Complete the full technology transfer and ensure that process validation is implemented in actual production.
- Coordinate and jointly assess changes; no unilateral changes should be implemented.
- Implement a two-level release mechanism; final market release must be performed by the contracting party.
- Establish coordinated mechanisms for reporting and handling adverse events, deviations, and changes.
- Manage outsourced processors within the supplier management system and extend quality controls throughout the entire supply chain.