Title: Auditing Warehouse and Distribution System

Auditor Manual: 012

Prepared by: Date: Supersedes:
Checked by: Date: Date Issued:
Approved by: Date: Review Date:

Audit Training Manual: 012

Auditing Warehouse and

Distribution System

Goals
When you have completed this module, you should be able to:
Perform an audit of warehousing and distribution
Access and understand warehousing and distribution requirements,
including
licensing requirements
Use a range of tools and information, including the contents of this
module and the
Internet, in support of auditing warehousing and distribution
 Understand and apply applicable GMP standards/regulations to an
audit of warehousing
and distribution
Recognize compliance or non-compliance of regulations pertaining to
warehousing
and distribution requirements.

Definitions

FEFO: An inventory management system where the products expired

first are the ones
sold first. Known by the abbreviation “FEFO”, First Expire; First Out.

FIFO: An inventory management system where the products received

first are the ones
sold first or the oldest inventory is the first to be distributed. Known by the
abbreviation
“FIFO”, First In; First Out.

Finished Product: A product, which is packaged and labeled for supply to a

wholesaler,
hospital, pharmacy, doctor or patient. The use of this definition in this
document includes
medicinal products/prescription drugs.

Investigational Medicinal Product: A pharmaceutical form of an active

substance or
placebo being tested or used as a reference in a clinical trial, including already
with a
marketing authorization but use or assembled (formulated or packaged) in a
way different
from the authorized form, or when used for an unauthorized indication or when
used to
gain further information about the authorized form.

Manufacturer: A firm who is engaged in manufacturing, preparing,

propagating,
compounding, processing, packaging, repackaging, or labeling of a prescription
drug.

In EU-regulation the definition is: A manufacturer is the holder of a

Manufacturing
 Authorisation as described in Article 40 of Directive 2001/83/EC.

Medicinal product: (a) Any substance or combination of substances presented

as having
properties for treating or preventing disease in human beings; or (b) Any
substance or
combination of substances which may be used in or administered to human
beings either
with a view to restoring, correcting or modifying physiological functions by
exerting a
pharmacological, immunological or metabolic action, or to making a medical
diagnosis.

Mis-shipment: A shipment of a drug product that is sent to the wrong location.

Prescription drug: Any human drug required by Federal law or regulation to be

dispensed
only by a prescription, including finished dosage forms and active ingredients
subject to
section 503(b) of the Federal Food, Drug, and Cosmetic Act.

Quarantine: The status of starting or packaging materials, intermediate, bulk or

finished
products isolated physically or by other effective means whilst awaiting a
decision on
their release or refusal.

Sample: A unit of a prescription drug/medicinal product that is not intended for

sale but is
intended for physicians.

Stop shipment: A drug shipment that is placed on hold pending investigation.

Wholesale Distributor: Any person or firm engaged in wholesale distribution of

prescription drugs, including, but not limited to, manufacturers; repackers; own-
label
distributors; private-label distributors; jobbers; brokers; warehouses, including
manufacturers’ and distributors’ warehouses, chain drug warehouses, and
wholesale drug
warehouses; independent wholesale drug traders and retail pharmacies that
conduct
wholesale distributions.

In EU-regulation wholesale distribution includes: all activities consisting of

procuring,
 holding, supplying or exporting medicinal products, apart from supplying
medicinal
products to the public. Such activities are carried out with manufacturers or
their
depositories, importers, other wholesale distributors or with pharmacists and
persons
authorized or entitled to supply medicinal products to the public in the Member
State
concerned.

Explanation of Topic
Warehousing and Distribution covers all activities consisting of procuring,
holding,
supplying or exporting medicinal products, apart from supplying medicinal
products to
the public.

Since the drug product may not be under company control during warehousing
and
distribution the distributor is responsible for making sure that no drug gets to an
illegal
market or is compromised/adulterated and sold on the market.

This training module will outline the steps to follow in performing a quality
assurance
(QA) audit of Warehousing and distribution. The auditor should cover several
GMP
Systems and need to be familiar with Good Distribution Practice, GDP as
described in
the reference section. GDP includes requirements on:
Quality System
Personnel
Documentation
Premises
Storage and delivery on Medicinal Products

Personnel
Wholesalers may not have a “Quality Unit/Quality Assurance function” in place
as in
most GMP operations. However a representative should be appointed in each
warehouse
and distribution point and this representative should have defined authority and
 responsibility for ensuring that a quality system is implemented and maintained.
This
may not be a full time job and he or she may have other tasks.

Documentation
The principles for documentation should be as follows. SOPs should be in place
and cover areas
such as
Cleaning and maintenance of the premises,
Pest control
Receipt and checking of the deliveries
Storage, including monitoring and where necessary control of the
storage
conditions
Transportation conditions
Management and control of road/air and sea transportation
 Stock security on site and in transit
 Cross contamination control
Withdrawal of stock from saleable distribution
Records, including records of orders & distribution
Handling of returned and recalled products.
Destruction of material
Complaint handling
Handling of suspected counterfeit products
Management of personnel (including training)
Self inspections

Records should be kept of dispatch and receipt transaction, showing

When it was performed
Name, strength, package size and quantity of the product including
strength
Batch number
Name and address of customer/supplier

As an auditor you need to ensure that records are detailed enough to support the
recall of
any product.

Premises
The general requirement for premises is that they should be suitable and
adequate to
ensure proper storage and distribution of products and any special storage
requirements
 should be met. Thus it is very much the task of the auditor to tour the facilities
and to
review the activities to be able to come to a conclusion if the requirements are
met. One
requirement for example is that receiving and dispatch bays should protect
goods from
the weather. The solution to that requirement may differ very much in different
parts of
the world depending on the climate. Unauthorized entry to the premises must
also be
prevented.

Premises will also differ if the wholesaler applies physical separation of

material of
different status or uses a computerized system e.g. administrative quarantine. If
physical
quarantine is used areas must be clearly segregated and with restricted access. If
administrative quarantine is used the computerized system must be validated.
Recalled
and returned goods should be identified as such and stored in a physically
segregated area
at all times. Special precautions should be taken for the storage of hazardous,
sensitive
and dangerous materials. Narcotic drugs should be stored in compliance with
National
and International regulations on narcotics. Physician samples, registration
samples and
Investigational Medicinal Products should normally be stored apart from other
goods and
under the conditions specified by the manufacturer.

Storage temperature should be monitored with calibrated devices and recorded

at a
defined frequency. The records should be reviewed regularly. Temperature
limits should
be set based upon the requirements of the product being stored. Placement of
measuring
probes should be based on appropriate mapping studies.

There should be a system to manage stock rotation thus ensuring that material
with the
earliest expiry date is used first. Regular and frequent checks to verify that the
system is
operating correctly should be performed.
 Transportation and Distribution
Products should only be distributed to authorized wholesalers or to other units
authorized
to receive/supply product. Products should be distributed in such a way that:
Product identification is maintained.
Products do not contaminate, and are not contaminated by, other
products or
materials.
Adequate precautions are taken against spillage, breakage, theft or
tampering.
Products are secure and not exposed to unacceptable degrees of
heat, cold,
light, moisture or other adverse influences.
Cold chain is maintained if required
Temperature is monitored if required

Returns
Returns should be handled in a way that the following is ensured:
Non-defective finished product, which has been returned, should be
separated
from saleable stock to prevent redistribution until a decision has
been reached
regarding their disposal, or recovery.
Finished product, which has left the care of the wholesaler, should
only be
returned to saleable stock if examination, testing or other
investigations prove
the drug meets appropriate standards and the site is in agreement
Records of returns should be kept.

Controlled Drugs
If the wholesaler/distributor handles controlled drugs, special precautions need
to be in
place to ensure safe storage and transportation of these products. The auditor
needs to
consult and be familiar with the applicable legislation.

Key Parameters in Auditing Warehousing

and Distribution
Prior to the audit
 Find out what prescription drug products/medicinal products are at the
site.
Determine if any products have special storage or handling requirements
including
controlled drugs.
If available, review observations/actions from previous regulatory
inspections
Review observations/actions from previous audits.
Review listed reference materials to assure that you are familiar with the
regulatory
requirements.
Obtain a list of reported product quality complaints.

During the audit

Inspect the facility and equipments:
Tour the facility.
Look for cracks, peeling paint in the ceiling, walls, and floor.
Look for dust and dirt on racking and equipment.
Review housekeeping logs for frequency of cleaning.
Look for a secured quarantine area - administrative quarantine
through a
computerized system may be applied.
Inspect the area used to store returned, outdated and damaged drug
products.
Review pest control program, logs and receipts.
Review preventive maintenance program and logs.
Ensure products are stored in accordance with their labeling.
Ensure prescription drugs/medicinal products are stored apart from
other
products
Ensure controlled drugs, if any are stored as required by legislation
Ensure Investigational Medicinal Products are stored separately
Review temperature/humidity charts, logs.
Ensure probes are positioned to give representative values and as
found during
mapping.
Review calibration program.
Review security system for facility; ensure facility is secure from
unauthorized entry.
Review alarm system and investigations if alarms are activated.
Determine if the facility stores and distributes penicillin or other
sensitizing
 agents and if there are adequate procedures in place to contain
spills and
decontaminate the area.
Determine if the facility stores in-process materials, raw materials or
excipients that are returned to the manufacturer for further
processing.
Determine if the firm has a control system for implementing
changes to
facilities and equipment, which includes reporting major
modifications to
the site.

Review the quality system.

Verify that there is an established and approved Quality
System/Quality
Policy that is endorsed by management.
Determine if there is a representative with defined authority to
implement and
maintain the quality system
Verify that the quality system includes individual(s) with the
authority to
approve or reject procedures, specifications, and process changes
that impact
the quality of the finished products.
 If in the US review all in state and out of state authorized
distributors/wholesale
distributor licenses for the states in which the wholesaler distributes.
Verify that customers are authorized to receive prescription drug
products/medicinal products prior to shipment.
Review disaster recovery plan and testing of plan.
Verify there is a written approved SOP for handling complaints.
Review complaints.
Review the wholesalers role in recalls
Determine if records are detailed enough to permit a recall
Determine if the wholesaler has been involved in recalls and that
they have
been carried out appropriately and in a timely manner
Verify that there is a system to handle deviations and that deviations
are
properly investigated
Verify there is a written approved SOP for change control.
Review documentation of changes that have occurred.
Verify that product quality complaints received with returned goods
are
 forwarded to the site.
Verify that an appropriate system for self inspections have been
implemented

Ensure that personnel have received adequate training.

Verify that there is a documented training program.
Review actual training documentation for specific employees.
Verify that drug screens and criminal background checks were
performed
prior to hiring (US requirement).
Verify that job-specific training is conducted and documented for
employees.
Verify that training is conducted with sufficient frequency to assure
that
employees remain familiar with applicable regulations.
Verify that there are clearly written job descriptions for employees.
Verify that the training program incorporates requirements for
temporary
employees and consultants.
Review list or organization chart of officers, directors, managers and
other
persons in charge, including a description of their duties and a
summary of
their qualification.
Verify annual GMP/GDP training is performed.
Verify that a record with an employee’s name, signature, and initials
written
by the employee, exists.

Review the materials system and ensure that there is adequate

documentation.
Verify that the firm has written approved SOPs/procedures that
include:
o Generation, change control, approval and issuance of SOPs.
o Receipt of prescription drugs/medicinal products.
o Distribution of prescription drugs/medicinal products,
including stop
shipments, mis-shipments, and FIFO.
o Conducting an inventory of prescription drugs/medicinal
products,
including correcting all errors and inaccuracies.
o Returned, outdated, damaged, deteriorated, misbranded or
adulterated
 prescription drugs/medicinal products.
o Storage of prescription drugs/Medicinal Products.
o Recall and/or withdrawal of prescription drugs/medicinal
products from
the marketplace.
o Identifying, recording and reporting losses or thefts of
prescription
drugs/medicinal products.
o Documenting deviations and notifying the site.
o Managing temperature sensitive products.
o Managing penicillins or other sensitizing agent spills.
Review actual inventories performed.
Review actual receiving records.
Verify that there are procedures in place to ensure retention of the
records for
every receipt, distribution or disposition of prescription drug
product/medicinal product
for the required retention time
Review loss/thefts investigations and reports.
Review the returned/damaged drug log and verify that inventory
received
matches inventory sent to a site approved reverse distributor.
Ensure that computer systems used to maintain drug inventory and
distribution records are validated and subject to change control.
Ensure that computer systems are controlled to prevent diversion
and theft of
drug inventory.
 Review the management and control of road , air and sea transportation
Ensure that products are transported in a secure manner Eg Box/hard
sided
vehicles for road transportation.
Ensure that if the authorized distributor/wholesale distributor
distributes
controlled substances, they are following the legal requirements