Establishing an evidence base for GMP compliance costs
GMP compliance involves recurring activities that support the continued operation of a manufacturing facility. Understanding their cost requires a clear description of the work performed and a defensible means of linking that work to the relevant activity or product.
Qualification, environmental monitoring, laboratory testing, maintenance, document review and supplier oversight consume resources in different ways. Some can be associated directly with a batch. Others support a room, system, campaign or manufacturing capability over a period of time.
The first step should be to define the question being answered and the boundaries of the analysis. A management assessment of operating costs may have a different scope from a pricing exercise or a calculation undertaken under a particular contract. The inclusion of a cost needs to be consistent with that scope.
The evidence should then establish what occurred, how often it occurred and which resources were used. Executed records, staff time allocations, laboratory workloads, maintenance work orders, supplier audit files and contractor invoices can each contribute to that assessment.
In my view, the allocation method needs as much attention as the hourly rate. A cost supporting several products cannot automatically be attributed to one product in full. Equally, a necessary shared activity does not cease to have a cost because it cannot be identified on an individual batch record.
The appropriate basis may involve recorded time, equipment use, occupied capacity or another measure that reflects the activity. Its suitability needs to be explained, with assumptions and limitations made visible.
Care is also needed to prevent duplication. Staff time already included in an allocated departmental cost should not be counted again as an additional direct charge. Similar checks are needed where supplier invoices contain several services or reporting periods.
The resulting model should allow another reviewer to follow the calculation from source evidence through the allocation method to the reported amount. Estimates can be useful where records are incomplete, provided they are identified and their basis is stated.
A well-supported analysis makes the relationship between compliance activities, resource consumption and the stated costing purpose transparent.
Background and scope
This post presents an analytical approach to documenting resource use and allocation. It does not prescribe an accounting treatment or determine the recoverability of any particular cost.