The document discusses risk management for pharmaceutical projects. It begins by outlining the characteristics of the pharmaceutical industry and drug development process. The drug development process takes an average of 10 years and $2.6 billion to develop a new drug. The presentation then covers risk management processes, tools and techniques for identifying, analyzing, and responding to risks in drug development projects. A case study on risk assessment for product development is presented to demonstrate how to evaluate risks and prioritize mitigation actions.

1. Pharma Project Risk Management Essentials
Megha Thakkar PMP®
Project Manager - NDDS
Cipla Ltd.
3rd Annual Pharma Project Management Conference, Mumbai,
India
29 Jun 2015

2. Agenda
• Identify the distinctive characteristics of the pharmaceutical
industry and drug development projects.
• ‘Project risk’ and ‘Project risk management’.
• Risk management processes, approaches, and assisting tools
and techniques
• Case Study
Objective
• The main focus is to develop the risk management process for
drug development projects.
• Risk management tools to be used with the process need to
be identified to enable the implementation of the process
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3. Recent changes
Special characteristics of the pharmaceutical
industry
Pharmaceu
tical
industry
Demand
pattern
Intellectual
property
rights
Regulations
R&D
intensivenes
s
Industry
structure
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4. Drug development process
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From drug discovery through FDA approval, developing a new medicine on
average takes at least 10 years and costs $2.6 billion.* Less than 12% of the
candidate medicines that make it into phase I clinical trials will be approved by
the FDA. Cost of being late 1 billion USD per day
*Source – PhRMA Profile - 2014

5. Drug Development as a Project
• A Project is a temporary endeavor undertaken to create a unique,
product, service, or result.
• Pharmaceutical projects are huge in terms of
– money and time consumed
– human resources required.
– In fact, a drug development project constitutes of managing many
• Sub-projects performed by different line organizations such as the
preclinical studies, clinical studies, process development, and
marketing planning.
• Even most of single studies would be regarded as big projects in
other industries.
• Thus, the drug
• development project could also be viewed as a program
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6. 505(b)(2)
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Regulatory Process 505(b)(1) 505(b)(2) 505(j)
Review Classification/Timeline 9 mos.1 9 mos.1 6-12+ mos.
Examples of Allowed Changes (e.g., from RLD)
New Molecular (Chemical) Entity Yes Yes* No
New Active Moiety Yes Yes* No
New Indication Yes Yes No
New Route of Administration Yes Yes* No*
New Formulation Yes Yes* No*
New Ester, Salt or Other Non-covalent Derivative Yes Yes* No
New Dosage Form or Strength Yes Yes* No*
Combination Product Yes Yes May be
Rx/OTC Switch Yes Yes No
Labeling NA May be No
why is it different “Animal”?

7. What is Project Management?
• The application of knowledge, skills, tools and technique to project
activities to meet project requirements
• Project Management is accomplished through the application and
integration of the processes which are grouped in the 5 process
groups:
– Initiating
– Planning
– Executing
– Monitoring and Controlling
– Closing
• Due to the nature of change, managing project is iterative and goes
through progressive elaboration throughout the project’s lifecycle
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8. Knowledge Areas
• The ten knowledge areas are:
– Project Integration Management
– Project Scope Management
– Project Time Management
– Project Cost Management
– Project Quality Management
– Project Human Resource Management
– Project Communications Management
– Project Procurement Management
– Project Stakeholders Management
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 Project Risk Management

9. Projects and Project management in drug
development
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Characteristic
Projects • Consist of several sub-projects.
• Technical uncertainty: lack of efficacy is the reason for 46% of project
failures.
• Critical importance of scientific knowledge and early detection of
problems.
Project
Management
• Industry has been slow to implement project management practices and
is less mature in this respect.
• Medium-sized companies perform better than bigger ones by having a
stronger project-orientation both organizationally and culturally and by
having senior management more closely involved with project
management.
• Many critical activities are incompressible.
• Regulatory guidelines facilitate project planning.
• Target product profiles.
• Project team develops a strong sense of ownership.
• Project team composed of individuals with narrow Speciality areas.

10. Risks in drug development projects
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Technical risks
Launch risks
Partner/subcontractor/
contractual risks
Regulatory risks
Commercial risks
Resource/personnel
risks
IPR risks
Project management
risks
Clinical
Pharmacology
Formulation
Analytics
Process developmentIndustrialisation
Toxicology
Pharmacokinetics
Scientific advances
Competitors Markets and
marketing
Scientific
recommendations
Availability Knowledge

11. Risk management – Not a Management
Gimmick
• Helps to avoid any big disaster
• Enhances revenues by saving additional expenses
• Provides mental satisfaction
• Ensures the successful completion of project
• Gives competitive edge over others
• Increases the sense of responsibility and accountability
• Helps to explore new opportunities
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12. DEVELOPING A COMPREHENSIVE
RISK ASSESSMENT
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13. Terminology
• Threat
• Vulnerability
• Accident
• Risk
• Consequences
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The goal is not to be understood.
It is to not be misunderstood.

14. Risk
• Future Effect
• Combination of Severity and Likelihood
• Undesirable (Insurance Co. view)
• A risk assessment attempts to discover the entire range of
threats and vulnerabilities – their confluence – looking for
• “what can go wrong.”
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15. How do we assess?
• 3 steps to the Assessment process
– Identification
• What might go wrong?
• Must clearly define the risk in question
– Analysis
• What is the likelihood?
• How bad would it be?
– Evaluation
• What are the levels of risk criteria?
• Defined in advance
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16. Risk Assessment
• A systematic process for organizing information to support a
risk decision that is made within a risk management process.
• The process consists of the identification of hazards and the
analysis and evaluation of risks associated with exposure to
those hazards.
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17. Risk Management
• “Risk management is the process of measuring or assessing
risk and then developing strategies to manage the risk. These
strategies can involve the transference of risk to another
party, risk avoidance or mitigation, and channel risk sharing.
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18. Risk Management - Responses
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Type of Response Method of Dealing with Uncertainty
Convert risk to Opportunity
Avoid Plan to avoid specified sources of uncertainty
Modify objectives Reduce or raise performance targets, change trade-offs b/w multiple
objectives
Transfer Partnership
Share Partnership
Prevent Change the probability of occurrence
Mitigate Modify the impact of a source of uncertainty
Contingency Plans Set aside resources to provide a reactive ability to cope
Keep options open Delay choices and commitment, choose versatile options
Monitor Collect and update data about probabilities of occurrence, anticipated
impacts, and additional risks
Accept Accept risk exposure, but do nothing about it
Remain unaware Ignore the possibility of risk exposure, take no action to identify or
manage risk
Difficulties

19. Risk Control
• Risk control includes decision making to reduce and/or accept
risks.
– The purpose of risk control is to reduce the risk to an acceptable
level.
– The amount of effort used for risk control should be
proportional to the significance of the risk.
– The user shall use different processes for understanding the
optimal level of risk control including cost-benefit analysis.
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20. Risk Reduction
• By the implementation of risk reduction measures,
– new risks may be introduced into the system
– the significance of other existing risks might be increased.
– Hence, it might be appropriate to revisit the risk assessment to
identify and evaluate any possible change in risk.
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21. Risk Acceptance
• Risk acceptance is a decision to accept risk.
– Risk acceptance can be a formal decision to accept the residual
risk or it can be a passive decision in which residual risks are not
specified.
– This acceptable level will depend on many parameters and
should be decided on a case-by-case basis.
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22. Risk Review
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Risk management
plan
Risk identification
Risk assessment
Risk response
planning
Monitoring and
control

23. Tools and Techniques for Risk Review
• Ishikawa Model
• SCORE model
• Failure Mode Effects Analysis (FMEA)
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24. Ishikawa Model
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25. Failure Mode Effects Analysis (FMEA)
• FMEA is a prevention tool used to assess, manage, and reduce
risk associated with failure or potential failure of products,
processes, services, and other systems.
• A quantitative characterization of failures is then undertaken
•
• This is comprised of the assignment of probabilities to three
factors - the likelihood of occurrence, the likelihood of
detection of failures and the severity of a failure.
• As part of this assessment each characteristic is assigned a
value. These values are then multiplied with the resultant risk
priority number (RPN).
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26. Occurrence
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RANKING CRITERIA
1
Remote probability of failure. One occurrence every one to three years or one
occurrence in one million events.
2
Low probability of failure. One occurrence every six months to one year or one
occurrence in 10000 events
3
Moderate probability of failure. One occurrence every three months or three
occurrences in 1000 events
4
High probability of failure. One occurrence per week or a probability of 5
occurrences in 100 events
5 Very High probability of failure

27. Severity
• Severity (S) refers to an assessment of the seriousness of a
failure as it affects the end user.
• A higher severity rating may be assigned to process steps that
involved manual operations or interventions as compared to
done by automatic machine The higher rating is necessary
because of quality failure or introduction of contamination
during these steps will result in a higher risk to the product
safety and the end-user.
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28. Severity
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RANKING CRITERIA
1 Product quality is not affected
2
Very Low severity. A lesser deviation from the requirements which calls for
moderate action (i.e. higher frequency of tests of the final products, additional
tests, etc.)
3
Low severity. A deviation from the requirements which calls for strong action (i.e.
quarantining of a batch, product recall, OOS-Situation etc.)
4 High severity. Affect to the patient in some way.
5 Very High severity. Threat to the life of patient

29. Detection
• Detection (D) refers to the ability to detect the failure mode
for contamination risk prior to the customer receiving the
finished product.
• The rating scale for determining the detection level is shown
in Table
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30. Detection
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RANKING CRITERIA
1
Assured detection of failure mode. The defect is obvious or there is 100%
automatic inspection with regular calibration and preventive maintenance of the
inspection equipment
2
Chances of Detection are high. An effective Statistical Process Control (SPC)
program is in place
3
Detection possibility is moderate. Some SPC is used in process and the product is
final inspected off-line
4
Difficult to detect .Product or failure is accepted on the basis of no defectives in a
sample
5 The failure is not inspected or the failure is not detectable

31. Risk Score
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Risk Priority Number = O x S x D
Where O =
Occurrence
S = Severity
D =
Detection
Risk priority number evaluates the overall risk.
Helps to identify focus area to help improve overall system reliability

32. Steps of FMEA
• Step 1： Review of the process (Process mapping)
• Step 2： Determine failure mode
• Step 3： Determine potential risk of the failure modes
• Step 4： Evaluate severity of the risks (S)
• Step 5： Evaluate probability of the failure modes (P)
• Step 6： Evaluate the detection of the failure modes and/or
risks (D)
• Step 7： Calculate Risk Priority Numbers (RPN)
• Step 8： Prioritize the failure modes need to be mitigated
• Step 9： Decide elimination and/ or avoidance of the failure
modes
• Step 10： Re-calculate the RPNs after mitigation
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33. Risk Matrix – Probability Impact Matrix
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Low
Medium
High
Severity
Probability
High
Low
Medium
Risk Class ONE
Risk Class TWO
Risk Class THREE

34. Risk Matrix – Risk Classification
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THREE
TWO
ONE
Detection
RiskClassification
High
Low
Medium
HIGH priority
MEDIUM priority
LOW priority

35. Risk evaluation - Risk Severity / Probability
Classification
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5. Frequent X1 X4 X4 X5 X5
4. Probable X1 X3 X4 X4 X5
3. Occasional X1 X2 X3 X4 X4
2. Remote X1 X2 X2 X3 X4
1. Improbable X1 X1 X1 X1 X1
RATING 1 - None 2 - Negligible 3 - Marginal 4 - Critical 5 - Catastrophic
ProbabilityClassification
Risk Severity

36. Risk Severity+Probability Vs Detection
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X5 X1 X4 X4 X5 X5
X4 X1 X3 X4 X4 X5
X3 X1 X2 X3 X4 X4
X2 X1 X2 X2 X3 X4
X1 X1 X1 X1 X1 X1
RATING 1 - Assured 2 - High 3 - Moderate 4 - Difficult
5 - Not
detectable
RiskSeverity+Probability
Detection

37. Risk Management – Action plan
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Level of Risk Category Action
No risk
X1 No action reqd.
Small risk
X2 Training
Moderate Risk
X3
Cost effective / selective
controls
Unacceptable Risk
X4
Control irrespective of cost
involved
Severe
X5
Immediate change of process
design/ Control required

38. CASE STUDY
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39. Risk Assessment – Product Development
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Sr.
no.
Risk
Occurrence
O
Severity
S
Detection
D
Risk
priority
#
OxSxD
Category Risk Mitigation Plan
1 API unavailability 1 3 1 3 X3
Alternate Vendor
Development
2
API Supplier
doesn’t qualify
regulatory
requirement
1 2 1 2 X2 Dossier review
3
Product
Development
1 5 1 5 X5 Two different approaches
4
Packaging Material
Failuer
1 3 1 3 X3 Two different approaches
5
Pre-clinical Study
failuer
1 4 1 8 X4
Two different formulations
to be given for Pre-Clinical
6
Commercilization
Mfg. Site
availability
1 5 1 5 X5
Identifiation of Mfg. site
immediately once
Formulation approach is
finalized

40. Risks involved in NDDS and Platform
technologies
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Risks Risk involved Risk Mitigation
Technical risks • Development More
Time consuming
• Less experience
• POC to be developed
first
Industrilization • It is difficult at times
due to new technology.
Lead time of such
specialized machines
can be anywhere
between 14 to 24
months. With high cost
• Identification of
requirement to be done
right in the beginning.
Changes in regulatory
requirement
• Dynamic environment • Regular and close
analysis is required
Market acceptance • It can be either boom
the market or get
doomed.
• Shared risks

41. kotak.megha@gmail.com