How to Select a Canadian Testing Laboratory for Pharmaceutical Drug Development

A pharmaceutical sponsor preparing for a Canadian drug submission needs to select a contract testing laboratory for release testing, stability studies, and method validation. The procurement team has a list of candidates, but the evaluation criteria are unclear. Is ISO 17025 accreditation sufficient? Does the lab need a Drug Establishment Licence? What should the quality agreement cover? Without clear answers to these questions, the selection process defaults to price and turnaround time — criteria that may not reflect the regulatory risk the sponsor is taking on.

This article is for pharmaceutical sponsors, CMOs, and regulatory affairs teams responsible for selecting and qualifying contract testing laboratories in Canada. We outline the criteria that matter for regulatory compliance and inspection readiness, and we provide a structured evaluation framework.

Why Laboratory Selection Is a Regulatory Decision

The choice of a contract testing laboratory is not just a procurement decision — it is a regulatory decision with direct consequences for your drug submission and your GMP compliance posture. Health Canada holds drug sponsors and manufacturers responsible for the quality of testing performed on their behalf, even when that testing is contracted out. If a contract laboratory generates unreliable data, uses unvalidated methods, or has data integrity weaknesses, the consequences fall on the sponsor as well as the laboratory.

Under the Food and Drug Regulations, Part C, Division 2, the quality control function must be independent and must have authority to approve or reject materials and products based on testing results. When testing is contracted out, the sponsor must have sufficient oversight of the contract laboratory to satisfy this requirement. A quality agreement that defines responsibilities, provides for audits, and requires notification of significant quality events is the minimum mechanism for that oversight.

Criterion 1: Drug Establishment Licence (DEL)

For testing activities that fall within the scope of the Food and Drug Regulations — including release testing, stability testing, and method validation for drug submissions — the contract laboratory must hold a Drug Establishment Licence (DEL) issued by Health Canada that covers the relevant activities and drug classes.

The DEL is issued to a specific facility for specific activities. Before engaging a contract laboratory, confirm that:

The laboratory holds a current DEL (not expired or suspended)
The DEL covers the specific testing activities you intend to contract (e.g., physical/chemical testing, microbiological testing, sterility testing)
The DEL covers the drug class of your product (e.g., pharmaceutical, biologic, natural health product)

Health Canada publishes a public database of licensed drug establishments. We recommend verifying DEL status directly through this database rather than relying solely on the laboratory’s representations.

Criterion 2: ISO/IEC 17025 Accreditation

ISO/IEC 17025 is the international standard for the competence of testing and calibration laboratories. Accreditation to ISO/IEC 17025 by a recognized accreditation body — such as the Standards Council of Canada (SCC) or the Canadian Association for Laboratory Accreditation (CALA) — demonstrates that the laboratory has been independently assessed for technical competence and management system effectiveness.

ISO/IEC 17025 accreditation is not the same as GMP compliance, and it does not substitute for a DEL. However, it provides meaningful assurance that the laboratory has documented procedures, qualified personnel, calibrated equipment, and a system for managing measurement uncertainty. For pharmaceutical testing, we recommend requiring both DEL and ISO/IEC 17025 accreditation.

The scope of accreditation matters. Confirm that the specific test methods you intend to use are within the laboratory’s accredited scope. A laboratory may be accredited for some methods but not others, and accreditation for a general technique (e.g., HPLC) does not automatically cover all specific methods using that technique.

Criterion 3: Method Capabilities and Validation Status

Before engaging a contract laboratory, assess whether the laboratory has the specific method capabilities your project requires. Key questions include:

Does the laboratory have validated methods for the analytes and matrices relevant to your product?
If your product requires a proprietary or non-compendial method, can the laboratory perform method transfer and validation?
Does the laboratory have the instrumentation required for your testing needs (e.g., HPLC, LC-MS/MS, ICP-MS, dissolution apparatus, Karl Fischer titration)?
What is the laboratory’s experience with your dosage form and drug class?

For method validation, confirm that the laboratory follows ICH Q2(R1) and that validation reports are available for review. A laboratory that cannot provide validation reports or that has not validated its methods to ICH Q2(R1) standards is not suitable for regulatory submissions.

Criterion 4: Data Integrity Controls

Data integrity is a critical area for pharmaceutical testing laboratories, and Health Canada inspectors assess it closely. Before engaging a contract laboratory, evaluate the laboratory’s data integrity controls:

Are audit trails enabled on all computerized systems (chromatography data systems, balances, spectrophotometers)?
Are audit trails reviewed as part of routine data review?
Does the laboratory use individual login credentials, or are shared credentials in use?
Are raw data files retained and accessible for review?
Does the laboratory have a procedure for handling and investigating data integrity incidents?

A laboratory that cannot demonstrate robust data integrity controls represents a significant regulatory risk. Data integrity findings at a contract laboratory can affect the validity of all results generated at that facility, potentially requiring retesting and delaying submissions.

Criterion 5: Quality System and Audit History

Request documentation of the laboratory’s quality system, including:

Current SOPs for key activities (sample receipt, testing, OOS investigation, change control)
Recent internal audit reports and CAPA records
History of Health Canada inspections and any compliance actions

A laboratory that has a history of significant Health Canada inspection findings — particularly in areas such as data integrity, OOS investigation, or method validation — warrants careful evaluation. Compliance history is a leading indicator of future inspection risk.

We recommend conducting an on-site audit of any contract laboratory before engaging them for regulatory submissions. The audit should cover the areas listed above and should result in a documented audit report with any findings and the laboratory’s responses.

Criterion 6: Quality Agreement

A written quality agreement between the sponsor and the contract laboratory is essential. The quality agreement should define:

Scope of services and specific testing activities
Responsibilities for method validation and transfer
OOS investigation procedures and notification timelines
Change notification requirements (e.g., changes to methods, equipment, personnel)
Data retention and access rights
Audit rights
Confidentiality provisions

The quality agreement should be reviewed and updated whenever the scope of services changes. A quality agreement that does not reflect the current scope of work is not effective as a compliance tool.

Practical Checklist: Contract Laboratory Qualification

Selecting a contract testing laboratory is a decision that affects your regulatory timeline, your submission quality, and your inspection readiness. Requirements may vary depending on the drug class, the testing activities, and the regulatory pathway. We recommend engaging a regulatory consultant to support the laboratory qualification process if your team lacks direct experience with Health Canada’s expectations.

At Androxa, we are a Health Canada-licensed testing laboratory providing analytical, stability, and method validation services for pharmaceutical sponsors and CMOs in Canada. Contact us at testing-lab.ca to discuss your testing needs.