project risk management
DESCRIPTION
An integrative view of how risk management can be effectively utilized by project managers in drug development and commercialization.TRANSCRIPT
Finding Opportunities for Fully Integrated Risk Management in
Biopharmaceutical Projects
John Franc, BS, MBA, PMP
J. Franc, Slide 2
Key Concepts
• Find and develop opportunities for key stakeholder buy-in
• Plan and execute within the right scope for the project
• Build links with operations and commercialization
• Identify and communicate the success of project risk management
• Upside opportunities• Assuring flawless execution
J. Franc, Slide 3
Agenda
• R&D Project risk management
• Manufacturing risk management
• Commercial / brand risk management
• Measuring value
J. Franc, Slide 4
Typical Large Pharma Project Management Model
• R&D-based project governance • Strong matrix organization• Cross-functional team and subteam structure with divisional
representation• PP&M roles and challenges
Objective project governance (are risks being addressed?) Integration
• Separate divisional systems / planning functions
J. Franc, Slide 5
Guideposts for Effective Project Risk Management
• Be sure you have identified the right risks Summarize the project objective (launch date(s), desired
indication(s), sustainable drug product launch inventory) Use the appropriate tools (Risk Breakdown Structure, Probability x
Impact matrix, Schedule Risk assessment)
• Align the team, line management and governance committee on impact to the project
• Focus everyone on managing / being proactive against the identified risks
• Monitor progress made against those risks
J. Franc, Slide 6
General Project Risk Management Process
Initiate Project Risk Management Process
Step1 . Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Step 2. Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
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Step 3. Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Step 4. Risk Review
Risk Review
Plan found Acceptable
Further assessment required
J. Franc, Slide 7
Sample Project Objective
• Launch <product> by <date> in US, <date> in EU for <indication>, with potential for <upside indication>, and to build sufficient launch inventories to enable this
J. Franc, Slide 8
Scope Considerations
• Stage of drug development
• Business unit performance measuresR&D - Timeline ExecutionManufacturing - Cost, Supply chain performance,
Product and Process QualitySales & Marketing - Brand & launch optimization
J. Franc, Slide 9
R&D Project Risk Management
• Pre-decision point planning: Project manager deliverable for mid-to-late stage projects
Phase 3 Approval/Launch
File NDA/MAA
RegulatoryMilestones
Decision Points
T – 1 mo
T – 1 mo
Ris
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T – 6 mo
Prep for Decision
Prep for Decision
Prep for Decision
Monitor, Control to Filing
Phase 2
Filing Target Reality
Phase 1b/2a
Initial topline data
J. Franc, Slide 10
R&D Project Risk Management Example
• Step 1. Risk Assessment: Identification• Example: New-to-company manufacturing process. Different EMEA
vs FDA comparator requirements Identify threats to approval/launch
Initiate Project Risk Management Process
Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
k M
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gem
ent
Too
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Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Risk Review
Risk Review
Plan found Acceptable
Further assessment required
J. Franc, Slide 11
R&D Project Risk Management Example
• Step 1. Risk Assessment: Assess threats to approval and launch by probability and impact
Probability Very High 5 5 10 20 40 80
High 4 4 8 16 32 64Moderate 3 3 6 12 24 48
Low 2 2 4 8 16 32Very Low 1 1 2 4 8 16
1 2 4 8 16Impact Very Low Low Moderate High Very High
P x I Risk Prioritization Matrix
EU requires additonal
comparator study
Insufficient specialized product marketing personnel
by launch
Ambiguous Phase 3 efficacy results
0
0.2
0.4
0.6
0.8
1
0 4 8 12 16 20 24
Impact
Pro
bab
ility
Avoid / Mitigate (include in base plan)
Accept
1Very Low
2Low
HighModerate
Very High
Contingency
Unable to transfer experience/knowledge of critical process parameters to commercial scale
Example: New to company manufacturing process. Different EMEA vs FDA comparator requirements
J. Franc, Slide 12
R&D Project Risk Management Example
• Step 2. Risk Control: Response plans and Expected Effectiveness
After R
esponse
Before
Res
ponse
0
10
20
30
40
50
60
70
Hire specialized product marketing sales force
Conduct additonal comparator study for EU
Contract to experienced 3rd party manufacturer
Conduct additional sub-population analyses
What more can be done to reduce the risk? Are new risks introduced by the identified
response plans?
Example: New to company manufacturing process . Different EMEA vs FDA comparator requirements
J. Franc, Slide 13
Integrating R&D and Manufacturing Risk Management
Phase 3 Approval/
Launch
File NDA/MAA
RegulatoryMilestones
Decision Points
T – 1 mo
T – 1 mo
R&
D R
isk
M
an
ag
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en
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lan
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T – 6 mo
Prep for Decision
Prep for Decision
Prep for Decision
Monitor, Control to Filing
Phase 2
Filing Target Reality
Phase 1b/2a
Initial topline data
Ma
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Monitor, Control to Launch
J. Franc, Slide 14
Manufacturing Risk Management Example
• Step 1. Risk Assessment: Identification Identify threats to API, DP process approval/launch
Initiate Project Risk Management Process
Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
k M
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gem
ent
Too
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Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Risk Review
Risk Review
Plan found Acceptable
Further assessment required
Manufacturing WBS Category
Short Description of Threat
Engineering Band 4 containment needed
Tech TransferNo experience/knowledge of critical process parameters to commercial scale
Facilities Planned finishing plant shutdown in early 2006Planning Long lead item intermediatesPlanning Validation coincides with height of hurricane season
J. Franc, Slide 15
Manufacturing Risk Management Example
• Steps 1 and 2: Risk Assessment and Risk Control Account for threats to process approval/launch in the plan using schedule
risk analysis
Manufacturing WBS Category
Short Description of ThreatApproach for accounting for in
plan
Engineering Band 4 containment neededAccount for construction completion uncertainty in schedule
Tech TransferNo experience/knowledge of critical process parameters to commercial scale
Include milestones for identifying CPP and steps for testing ability to mitigate when beyond normal operating conditions
Facilities Planned finishing plant shutdown in early 2006Account for shutdown in schedule; competition for plant time after re-opens
Planning Long lead item intermediatesHighlight to mgmt when risk authorization needed to purchase
Planning Validation coincides with height of hurricane season
Account for increased likelihood of failed batches in worst case estimate for completion of campaign
J. Franc, Slide 16
Manufacturing Risk Management Example
• Steps 1 and 2: Risk Assessment and Risk Control Monte Carlo sensitivity analysis to identify activities on which to focus mitigation
Date: 3/1/2005 4:26:50 PMSamples: 1000Unique ID: 20Name: Launch
Completion Std Deviation: 2.66 mons95% Confidence Interval: 0.16 monsEach bar represents 1 mon
Completion Date
Fre
qu
en
cy
Cu
mu
lativ
e P
rob
ab
ility
2/27/088/19/07 11/7/08
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16 Completion Probability Table
Prob ProbDate Date0.05 10/24/070.10 11/20/070.15 12/7/070.20 12/21/070.25 1/1/080.30 1/11/080.35 1/25/080.40 2/4/080.45 2/14/080.50 2/25/08
0.55 3/5/080.60 3/14/080.65 3/26/080.70 4/4/080.75 4/18/080.80 5/2/080.85 5/20/080.90 6/6/080.95 7/11/081.00 11/7/08
J. Franc, Slide 17
Manufacturing Risk Management Example
• Steps 3 and 4: Risk Communication and Review Manufacturing governance committee endorses
Short Description of ThreatApproach for accounting for in
planManufacturing
Governance Action
Band 4 containment neededAccount for construction completion uncertainty in schedule
Acknowledged and accounted for
No experience/knowledge of critical process parameters to commercial scale
Include milestones for identifying CPP and steps for testing ability to mitigate when beyond normal operating conditions
Acknowledged and further clarity around
contingency plans (including equipment to be used) requested
Planned finishing plant shutdown in early 2006Account for shutdown in schedule; competition for plant time after re-opens
Accelerate construction of 2nd
finishing plant
Long lead item intermediatesHighlight to mgmt when risk authorization needed to purchase
Approved
Validation coincides with height of hurricane season
Account for increased likelihood of failed batches in worst case estimate for completion of campaign
Acknowledged and accounted for
Initiate Project Risk Management Process
Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
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gem
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Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Risk Review
Risk Review
Plan found Acceptable
Further assessment required
J. Franc, Slide 18
Integrating Commercialization or Brand Risk Management
• Focus: Value proposition driven
Phase 3 Approval/Launch
File NDA/MAA
RegulatoryMilestones
Decision Points
T – 1 mo
T – 1 mo
T – 6 mo
Prep for Decision
Prep for Decision
Prep for Decision
Monitor, Control to Filing
Phase 2
Filing Target Reality
Phase 1b/2a
Initial topline data
Monitor, Control to Launch
Refined Brand Risk
Management
Monitor, Control to Launch
Early Draft Brand Plans
Bra
nd
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J. Franc, Slide 19
Brand Risk Management
• Adapt tools to brand / marketing format• P x I matrix as a bubble chart• Assess threats and opportunities against a
meaningful threshold for impact (20% or $100M topline global sales in any year)
• Initiate risk response planning well before launch
J. Franc, Slide 20
Brand Risk Management Example
• Step 1. Risk Assessment: Identification and assessment• Example: Novel medicine for hepatitis B with significant market
potential in south east Asia
Initiate Project Risk Management Process
Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
k M
ana
gem
ent
Too
ls
Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Risk Review
Risk Review
Plan found Acceptable
Further assessment required
Identify threats and
opportunities to global approval and launch plan
What more can be done to reduce the risk? Enhance the opportunities?
Which opportunities become threats to other areas?
Short Description of Risk ProbabilityRisk
ExposureEarliest risk
to occur
Patent enforced in major emerging market
Low$$$
2H07
Able to increase treatment rate in major emerging market
Moderate$$$
2H08
Secure exempt status for import duty required by key SE Asian country
Low
$$
2H06
No IP protection in major emerging market
High($$$$$)
2H07
Treatment rates do not increase as planned in US
Low($$$)
1Q06
Opp
ortu
nitie
sT
hrea
ts
J. Franc, Slide 21
Brand Risk Management Example
• Steps 2-4: Risk Controls, Communication and Review• Risk Review
Marketing endorses Manufacturing governance committee reviews and requests
additional plan review
Initiate Project Risk Management Process
Risk Assessment
Risk Identification
Risk Analysis
Risk Assessment
Risk Control
Risk Reduction Plan
Risk Response Expected Effectiveness
Ris
k M
ana
gem
ent
Too
ls
Risk Communication
Risk Communication
Output: Results of the Project Risk Management Process
Risk Review
Risk Review
Plan found Acceptable
Further assessment required
Short Description of Risk ProbabilityRisk
ExposureEarliest risk
to occurMarketing
Governance ActionManufacturing
Governance Action
Patent enforced in major emerging market
Low
$$$
2H07 Establish dialogue with patent office and develop claims (endorsed)
Prepare contingency plan for major manufacturing expansion
Able to increase treatment rate in major emerging market
Moderate
$$$
2H08 Accelerate regulatory and marketing staffing plan (endorsed)
Prepare contingency plan for major manufacturing expansion
Secure exempt status for import duty required by key SE Asian country
Low
$$
2H06 Negotiate for duty exempt status in government budget process
Complete plans for investment in SE Asian manufacturing
No IP protection in major emerging market
High($$$$$)
2H07 Same as for opportunity
Same as for opportunity
Treatment rates do not increase as planned in US
Low($$$)
1Q06 Same as for opportunity
Same as for opportunity
J. Franc, Slide 22
Example: Risk Management Maturity by Function
• Carefully consider and account for when integrating across functions
Unawareness
Buy-in
Ownership
Awareness
Understanding
Self-concern
Tryout
Adoption
Institutionalization
Internalization
Time
Sales& Marketing
Phase I/IIa
Phase IIIR&D
Manufacturing
PP&M
J. Franc, Slide 23
Managing to See Value
For Pharmaceuticals
Timeline (patent life maximized)Quality (products, processes)Safety (highest business impact)
Value Were risks avoided?
Predicted?
Impact Was the output used to set expectations
and manage risk?
Scope Did participants feel time was well spent?
Was the plan improved?
A long-term proposition
J. Franc, Slide 24
Beating the Odds: What Can Happen When Risks Are Owned and Managed
15 16 1710 11 12 13 18 19 20 21
Phase III Start to Filing (months)
14 22 23 24
Initial Proposed Timeline
Risks Identified:•Study X dbase lock (20 – 30 – 60d)
•Additional time needed to understand data (4-8 wks)
•Additional time needed to review and finalize with partner
Schedule Risk Assessment 10% 50% 90%
Team Risk Mitigation Actions•Team spent additional $$ to achieve dbase close-out in 20d
•Conducted sub-group analyses in parallel w/ topline results
•Time window limit posed for comments
Actual Performance
Governance ActionResources mobilized
5% Likely? Ok, but we’ll show them how it’s
done!
J. Franc, Slide 25
Key Concepts
• Find and develop opportunities for key stakeholder buy-in
• Plan and execute within the right scope for the project
• Build links with operations and commercialization
• Identify and communicate the success of project risk management
• Upside opportunities• Assuring flawless execution
J. Franc, Slide 26
• Questions?