Distributed manufacturing: Industry groups weigh in on FDA’s proposed rule
Pharmaceutical industry groups largely support the US Food and Drug Administration’s (FDA) proposed rule on distributed manufacturing but are seeking clarification on how the proposed model would function and specific changes they say would make it easier to implement distributed manufacturing models.
Some of the comments raised questions about how pre-approval inspections, inspection classifications, and contract manufacturing would be treated under the rule.
FDA issued the proposed rule for comment in July 2026. If implemented, it would revise FDA’s regulations to better accommodate distributed manufacturing by enabling the registration of a distributed manufacturing entity (DME) using a hub-and-spoke model to manufacture products across multiple sites, known as distributed manufacturing units (DMUs), to register as a single establishment. Under FDA’s current regulations, each location would need to register separately. (RELATED: FDA proposes rule to ease registration for distributed manufacturers, require foreign API sites to register, Regulatory Focus 10 July 2026)
The rule would also implement a provision of the PREVENT Pandemics Act that requires the registration of foreign manufacturing facilities that manufacture, repackage, relabel, or salvage drugs or active pharmaceutical ingredients (APIs) that are imported into the US, even if those products undergo further manufacturing at another foreign facility before being imported. Currently, such manufacturers are not required to register with FDA. The agency said the change would improve its visibility into the supply chain.
Groups support rule
Three major industry groups, the Pharmaceutical Research and Manufacturers of America (PhRMA), the Association for Accessible Medicines (AAM), and the Biotechnology Innovation Organization (BIO) expressed their support for the rule.
PhRMA said that “we agree with and support the intention of these changes to facilitate greater supply chain transparency, protect patients from adulterated and misbranded drugs, and level the playing field as between foreign and domestic facilities.”
AAM said that it “appreciates the issuance of the Proposed Rule, which offers a streamlined establishment registration framework for certain entities engaged in distributed manufacturing. AAM supports FDA’s consideration of approaches that could reduce duplicative regulatory requirements where multiple manufacturing units function as part of an integrated manufacturing network.”
BIO said that it “generally supports the proposed rule’s goals of streamlining registration for distributed manufacturing establishments and strengthening supply-chain transparency for foreign establishments. BIO believes the rule would be strengthened by additional clarity on several implementation details, to help ensure the framework achieves its intended benefits without imposing unnecessary compliance burden or uncertainty on sponsors and manufacturers.”
The United States Pharmacopeia (USP) also expressed its support for the rule. “FDA's proposal addresses an important visibility gap in the global pharmaceutical supply chain. While FDA generally has information about establishments directly involved in importing medicines into the United States, upstream foreign establishments manufacturing active pharmaceutical ingredients (APIs) and other drug components may not always be captured in FDA registration and listing systems when their products undergo additional manufacturing or processing abroad before entering the U.S. market.”
Distributed vs. multi-site manufacturing
Some commenters asked for clarification about the distinction between distributed manufacturing and multi-site manufacturing.
AAM said that “the Proposed Rule does not sufficiently distinguish ‘distributed manufacturing,’ as contemplated by the new DME provisions, from traditional manufacturing arrangements in which a company manufactures the same product at more than one facility. Pharmaceutical manufacturers commonly maintain more than one approved manufacturing site for the same product … Manufacturers also may maintain multiple approved sites for business-continuity purposes, with one facility serving as the primary manufacturing site and another as a back-up.”
BIO agreed in its comments, stating that the rule should distinguish distributed manufacturing from traditional multi-site manufacturing.
“The proposed rule does not sufficiently differentiate between distributed manufacturing, which is the subject of the new Distributed Manufacturing Establishment (DME) provisions, and what FDA considers traditional manufacturing of a product that occurs at more than one of a company’s facilities. It is not uncommon for a company to have more than one site within its network approved to produce a product, whether for capacity and logistics reasons (e.g., one site producing for one part of the world and another site producing for another) or for business continuity (e.g., a primary manufacturing site and a back-up site).
The generic pharmaceutical company Cipla said that “FDA should distinguish between conventional multi-site manufacturing, contract manufacturing networks, distributed manufacturing under DME/DMU concept otherwise, registration complexity may increase unnecessarily.”
CMO exclusion
Both PhRMA and the Alliance for Regenerative Medicine (ARM) argued that FDA’s exclusion of contract manufacturing organizations (CMOs) from being considered DMUs under the rule.
“If drug manufactures can engage and oversee CMOs under the traditional registration and quality oversight systems, there is no reason they should be prohibited from doing so under the proposed rule, and no reason they should be prohibited from adopting ‘hoteling’ concepts to the extent appropriate and relevant,” PhRMA wrote.
ARM wrote that this stance is a “consequential limitation” which “bears particularly on the cell and gene therapy developers ARM represents, who rarely own manufacturing capacity and contract it instead.”
PAIs, OAIs, and equivalency
PhRMA took issue with the proposed requirements relating to pre-approval inspections (PAIs). The proposed definition of distributed manufacturing establishment specifies that the manufacturing hub and all associated distributed manufacturing units (DMUs) collectively operate under one management structure and are subject to a preapproval inspection.
PhRMA states that “as an initial matter, we note that this requirement for a PAI is inconsistent with FDA’s general risk-based approach to oversight. While PhRMA acknowledges that the inherent risks associated with distributed manufacturing could mean that most DMEs are subject to a PAI, an automatic requirement for a PAI is unnecessary and inconsistent with the Agency’s risk-based approach. For example, as FDA gains more experience with distributed manufacturing, there may be circumstances in which the Agency determines a PAI would not be necessary; however, as drafted, the proposed rule would require FDA to conduct a PAI even in these circumstances.”
BIO raised questions about how an Official Action Indicated (OAI) inspection classification at one DMU would affect the entire DM hub. “BIO recommends that FDA clarify how inspection classifications apply across a DME and confirm that unit-specific accountability, including each DMU’s own location, inspection history, compliance status, and batch-level manufacturing records, is preserved and distinguished from failures that reflect the unified quality system itself,” the group wrote.
Additionally, ARM offered suggestions for how a deviation at one DMU that renders said unit no longer equivalent should be handled. “A deviation at one unit puts the whole DME’s registration, and the marketed status of product made at every other unit, in question, with no stated cure period and no threshold for loss of equivalency,” ARM said. “A single non-conforming unit can interrupt supply to an entire network of treatment sites, including sites that unit does not serve; for patient-specific products that forces a choice between compliance risk and interrupted treatment.”
Instead, ARM suggested that FDA allow registrants to remove or suspend non-equivalent DMUs without affecting the registration and marketing status of the DME and the drugs it manufacturers, while giving manufacturers 30 days to restore equivalency or remove the unit from the DME before the registration is affected.
UPQS details
AAM took issue with the lack of detail on the concept of a UPQS as laid out in the proposed rule.
In the proposed rule, FDA states that “the proposed definition of [distributed manufacturing] hub differentiates the [distributed manufacturing] hub from traditional sites that may have centralized certain quality oversight activities but have not implemented a UPQS. For example, a company may decide to manufacture the same drug using the same processes at several of its existing establishments at various locations and consolidate certain quality responsibilities of several establishments (e.g., complaint coordination, global procedures) at a central site such as company headquarters.”
AAM states that “although that explanation identifies some centralized quality structures that FDA believes may be insufficient, it does not explain what affirmative characteristics are necessary for a system to qualify as a UPQS.”
However, PhRMA wrote that it agrees with FDA’s approach of not defining the term in its regulations, as “the general concept is well understood as the requirements for CGMP oversight between a centralized quality system and a remote DM are fundamentally no different than the current approach of a manufacturer’s oversight of multiple manufacturing facilities, CMOs, and suppliers.”
