Marco Benvenuti, Business Manager Life Science Italy, SGS Life Science Services, SGS Sertec, Livorno, Italy

Pharmaceutical Companies in a Changing Landscape

Over the last 20 years, the global landscape for the Pharmaceutical Industry has changed dramatically. Due to higher R&D costs, patent expiry of key blockbuster medicines, combined with the launch of the related generics and increased price pressure from Healthcare Systems, pharmaceutical companies have had to develop creative business solutions, especially in the face of reasonably dry product pipelines and increasing competition for in-licensing.

This global landscape has forced pharmaceutical companies to merge with or acquire other companies in order to better utilise the available investment for R&D. Additionally, these companies have had to reduce the size of their production workforce, keeping only essential plants in operation and monitoring for potential economies of scale in M&A, R&D, and Operations. Consequently, the remaining plants are primarily focused on the launch of new products, maintaining key market presence, and representing the center of excellence for specific technologies (biopharmaceuticals, advanced therapies, new delivery systems, etc). For post-launch and mature products, production is typically outsourced to Contract Manufacturers.

Outsourcing by pharmaceutical companies has dramatically increased over the past two decades, and highly specialized companies have assumed responsibility for activities in the area of auditing, supplier qualification, validation & calibration, and technology transfer — all while they strive to maintain supervision and responsibility over processes. In the face of these pressures, Contract Manufacturers must maintain low overhead and they in turn outsource some of these GMP activities to other specialized service providers.

From a GMP and regulatory point-of-view, these activities are mandatory both for small and large molecule drug producers. The challenge facing many pharmaceutical companies is ensuring that these requirements are being met, whether these activities are performed internally or via outsourcing partners. Among the most important services typically outsourced to these specialized service providers include Validation, Qualification and Calibration activities.

Three Principles: Validation, Qualification and Calibration

Validation, Qualification and Calibration are ongoing activities covering development, operation, and maintenance. Validation is a systematic approach to collecting and analysing sufficient data to give reasonable assurance and documented evidence that a process or an analytical method will, when operated within specified parameters, consistently produce results within predetermined specifications. When this approach is related to a machine or equipment, rather than Validation, this is referred to as Qualification. Qualification is part of, but not limited to, a validation process, which in turn can be divided into Installation Qualification (IQ), Operation Qualification (OQ), or Performance Qualification (PQ).

In performing these activities, many documents describing plans and approaches to analysis are generated. These include Validation Master Plan, Qualification Master Plan, GMP Risk Analysis, Validation Protocol, Test Protocol (including specification), Validation Report, and finally a Summary of Deviations/Issues.

Validation of Computer Systems

Pharmaceutical companies must also take into account validation of their computer systems. Computer System Validation is the discipline that Life Science companies use to ensure every Information Technology application fulfills its intended purpose. Computer System Validation is a key element of the Validation Master Plan of all pharmaceutical plants and is as critical to validation as other such activities.

All documentation typically prepared for equipment must also be applied to computerized systems. Computerized systems manage huge quantities of data, many of which are GMP relevant, and can have a direct impact on product quality. Moreover, these systems are complex and multifunctional, requiring a more in-depth validation approach that must be supported by a strong and methodical Risk Analysis, so as to focus on the validation efforts of critical aspects of the system.

To ensure the proper validation of a computerized system, all phases of design, development, testing, and routine use of the software have to be controlled during its Life Cycle. Stringent quality requirements in GMP-regulated industries require specific controls and procedures throughout the Software Development Life Cycle (SDLC). The activities involved in applying the appropriate controls and procedures throughout the SDLC and for creating the necessary documentation are all components of the technical discipline of Computer System Validation.


Calibration is a necessary component to ensure of the legitimacy of Qualification and Validation, including Computer System Validation. Calibration is a process that demonstrates a particular instrument or device produces results within specified limits, as compared to those produced by a traceable standard over an appropriate range of measurements. Calibration activities must be performed with qualified instruments by an accredited laboratory.

Calibration is of utmost importance in building a solid Quality System Management with experts and well-trained specialists. Additional external support is also requested when refurbishing, upgrading and building departments or plants and when buying new equipment or machines. In this case, service providers can also be contracted to perform and follow, on behalf of pharmaceutical companies, Factory and Site Acceptance Tests (FAT & SAT).

Factory Acceptance Tests (FAT) involves an inspection and includes both static and dynamic testing of systems or major system components to support the qualification of equipment, a machine or a system conducted and documented at the supplier site, before shipping to the plant. Site Acceptance Tests (SAT) is related to FAT and also entails inspection and dynamic testing of systems or major system components to support the qualification of an equipment, a machine or a system. However, in contrast to FAT, this type of testing is conducted and documented at the manufacturing site.

What are Ideal Characteristics of an Outsourcing Partner for Validation, Qualification and Calibration?

Pharmaceutical companies must keep in mind certain considerations when selecting a GMP service provider for Validation, Qualification and Calibration. Companies are typically driven by high quality standards and the need for partners to meet the needs of their challenging requirements. Therefore, the ideal outsourcing partner for Validation, Qualification and Calibration services should:

  • Adopt a strong Quality Management System
  • Provide a staff of qualified and trained technicians and engineers
  • Possess an adequate number of equipment, managed and routinely checked as required by GMP
  • Assure high quality standards, both in technical competencies and in documentation
  • Demonstrate a successful track record and financial stability
  • Be responsive to the customer’s fluctuations in work load in a timely manner and in accordance with client’s requirements Be accredited for Validation, Qualification and Calibration by a recognized authority
  • Have expertise and a thorough understanding and methodology in IT Compliance and Validation in Compliance with 21 CFR part 11.
  • Provide other GMP services and thus able to provide high-quality GMP customer service at maximum convenience.
  • Satisfy the company’s requirements while containing costs.

How can SGS Life Science Services and SGS Sertec Address these Requirements?

Sertec was founded in 1998 through collaboration between experienced professionals from the technical departments of various large pharmaceutical companies and was acquired by SGS Life Science Services in April of 2011. Located in Livorno, in the Tuscany region of Italy, SGS Sertec offers technical assistance and in GMP/GLP activities, supporting pharmaceutical firms with its Validation, Qualification, Calibration and Process & Quality services in accordance with cGMP and standards set by the world’s major regulatory agencies.

SGS Sertec is an accredited laboratory for calibration (ACCREDIA—formerly SIT—part of the European Accreditation (EA) circuit), operating in accordance with the UNI CEI EN ISO / IEC 17025. SGS Sertec is an ISO 9001 qualified laboratory for Chemical and Microbiological tests. This laboratory is fully GMP-compliant and will be inspected by AIFA (Italian Medicines Agency) in early 2014. By combining its GMP and Heath & Safety experience, SGS Sertec is an optimal partner for the resolution of all issues related to Health and Safety as well. Our specialists routinely perform these activities both in-house and onsite at clients’ plants. Furthermore, because SGS Sertec utilizes local personnel, the costs of these services are very competitive while maintaining quality at the highest level.

A significant advantage of the acquisition of Sertec by SGS is inclusion in the SGS Life Science Services network of laboratories. SGS, with 21 laboratories in 15 countries in North America, Europe and Asia, globally supports pharmaceutical companies with technology transfer projects . This makes SGS’ portfolio of services unique in providing the entire range of GMP services. In most cases, SGS is already a qualified partner for the large multinational pharmaceutical companies. This consolidated partnership, together with the existence of currently executed Quality and Supply Agreements, often shortens the timeline for project implementation.

SGS Sertec’s wide-raging service portfolio includes:

  • Chemical and Microbiological Testing
  • Validation, Qualification and Calibration Services
  • Metrology Plan review and preparation
  • Reference instrument calibration in an accredited  laboratory (LAT Center n.200)
  • Management and calibration of production and laboratory instruments
  • Equipment commissioning: Factory and Site Acceptance Tests
  • Computer System Validation (GAMP - 21 CFR part 11 Compliance) support and verification
  • Support for IT Infrastructure Management & IT Networks Qualification
  • Process & Quality Support
  • GxP Risk Assessment & Remediation Plan Management
  • Supplier’s Assessment and Qualification
  • Safety and Environmental Protection Support

What are the Benefits for the Client?

By developing a partnership with SGS Sertec, the client will have a reliable partner for all its outsourcing needs. Because it is not involved in the manufacturing, SGS Sertec is a completely objective service provider.

With its local presence, global coverage, competitive costs, high level of expertise in all GMP areas, knowledge of global and local regulatory guidelines, SGS Sertec provides clients the assurance that SGS Sertec, with the support of SGS Life Science Services, is the preferred choice when outsourcing GMP activities.

Because the client is ultimately responsible for these activities, it is extremely important to choose a trusted partner for outsourcing. Therefore, choosing a strong, experienced, and reliable partner will provide the Quality Assurance and Engineering Managers of the contracting company the certainty that they will be fully compliant with GMP regulations.

In addition, utilizing experienced and efficient external experts as partners enable pharmaceutical companies to realize cost savings by reducing internal overhead to accommodate peak periods.


Pharmaceutical companies have increasingly faced escalating R&D costs, compounded by the expiry of former blockbuster patents and the erosion of margins. They have therefore needed to minimize process complexity and reduce costs, which has often led to the closure of manufacturing plants or their sale to Contract Manufacturers. Concurrently, pharmaceutical companies and contract manufacturers alike have faced a concomitant increase in GMP requests by authorities and audits by contract sponsors.

As a result of these closures, one scenario is the transfer of several types of technology from one plant to another may occur, and/or the establishment of new departments and the purchase of new equipment/machines. The need to keep the company’s internal structure flexible and contain personnel costs leads to pharmaceutical companies outsourcing. However, the supervision and responsibility of GMP activities is ultimately the company’s responsibility. In another scenario, small to medium Contract Manufacturers need to manage work peaks related to technology transfer projects and they do so by outsourcing to reasonably inexpensive, efficient and reliable service providers. The service portfolios of SGS Life Science Services and SGS Sertec make these companies the right partners for both of these potential scenarios.