ARETE-ZOE, LLC 17/12/2015

Registered address: 1334 E Chandler Blvd 5 A-19, Phoenix 85048 Arizona, USA T: +1-480-409-0778 | +42(0) 605 280 148 | Skype: arete-zoe | veronikav@arete-zoe.com | Website| SlideShare

RISK, ISSUE & OPPORTUNITYMANAGEMENT IN DRUG DEVELOPMENT

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CONTENT

7/12/2015

• RISK MANAGEMENT PROCESS• Assumptions and Ground Rules• Aligning Risk Management • Risk Management Board / Risk Working Group

• RISK MANAGEMENT• Risk Planning • Risk Identification – methodologies, categories • Risk Analysis and reporting – Risk register, Risk matrix • Risk Handling – Accept, Avoid, Transfer, Mitigate, Burn down• Risk Monitoring

• RELATION TO OTHER RISK MANAGEMENT TOOLS• ISSUE MANAGEMENT • OPPORTUNITY MANAGEMENT • MANAGEMENT OF CROSS-PROGRAM RISKS

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RISK MANAGEMENT PROCESS

7/12/2015

Risk Identification

Risk Planning

Risk Analysis

Risk Handling

Risk Monitoring

RISKS are future events or conditions that may have a negative effect on achieving program objectives for cost, schedule, and performance.

Risks are defined by the probability of an undesired event or condition and the consequences, impact, or severity of the undesired event, were it to occur.

ISSUES are events or conditions with negative effect that have occurred (such as realized risks) or are certain to occur in the future that should be addressed.

OPPORTUNITIES are potential future benefits to the program’s cost, schedule, and/or performance baseline, usually achieved through reallocation of resources.

Successful risk management should be implemented early in the project life cycle: Identify risks Make informed decisions Define handling strategies

… before the risks become issues.

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I. ESTABLISHING AN EFFECTIVE PROCESS

7/12/2015

• Assumptions and Ground Rules• Aligning Sponsor’s and Vendor’s processes• Risk Management Board & Risk Working Group • Risk Management Plan • Selecting a Risk Management Tool • Risk Management Roles, Responsibilities, and Relationships

Programs to address risk management between organizations• The process for how the program plans to manage risks.• How risk management processes are integrated with the contractor(s) processes.• How the program identifies and analyzes risks.• How the program plans, implements (including funding), and tracks risk handling activities.• Key roles and responsibilities from working groups, IPTs, RWGs, and RMBs up to the PM.

SYSTEMS ENGENEERING MANAGEMENT PLAN (SEMP)

Sponsor Investigator

SYSTEMS ENGENEERING PLAN (SEP)

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ALIGNING RISK MANAGEMENT

7/12/2015

SPONSOR INVESTIGATOR IRB/EC REGULATORVENDORs

SUB-CONTRACTORs

CMO

CRO

CONTRACTORs

HOSPITAL MANAGEMENT

CONTRACTORs

RESEARCH PHYSICIANS

SUB-CONTRACTORs

ADJUDICATION COMMITTEE

Proactive risk management requires disparate RM processes divided among multiple participants and stakeholders to be tiered and closely coordinated to ensure intrinsic product safety which goes beyond mere compliance with regulations.

HOSPITAL IRB

CENTRAL IRB

MONITORS

PHARM. REVIEWER

MEDICAL REVIEWER

COMMITTEE

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RISK WORKING GROUP

7/12/2015

• Risk Management Planning • Risk Identification • Risk Identification Methodologies • Risk Categories • Risk Statement

• Evaluation of Candidate Risks• Risk Analysis

• Consequence • Likelihood

• Risk Reporting Matrix• Risk Register • Risk Handling

• Acceptance - Avoidance - Transfer - Mitigation • Risk Burn-Down

• Risk Monitoring

Risk Identification

Risk Planning

Risk Analysis

Risk Handling

Risk Monitoring

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ROLES, RESPONSIBILITIES, RELATIONSHIPS

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EXECUTIVE LEVEL

MANAGEMENT LEVEL

WORKING LEVEL

Milestone Decision Authority

Program Executive Officer

Program ManagerProgram Risk Management Board

IPT Risk Management BoardRisk Working GroupRisk Manager

Integrated Product TeamSub-Integrated Product TeamWorking Group

Risk Owner Team Members

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RISK IDENTIFICATION

7/12/2015

Risk Identification

Risk Planning

Risk Analysis

Risk Handling

Risk Monitoring

• Examining the program to determine risk events and associated cause(s) that may have negative cost, schedule, and/or performance impacts.

Understand underlying root cause(s) • All personnel is encouraged to identify candidate

risks. Limiting risk identification to managers can result in risks being missed.

• Risk identification is conducted continuously

PROGRAM RISK REGISTER

RISK STATEMENT• Potential event • Associated consequences• Contributing circumstance/Cause Ability of the program to meet cost,

schedule, and performance objectives. • Single approach preferred for consistency. • “if (risk) – then (outcome-consequence)”

EVALUATIONApproved Rejected,Deferred Management action Engineering process item

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RISK CATEGORIES

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TECHNICAL • May prevent the end item from meeting performance expectations. • Technical risks can be internally or externally generated• Requirements • Technology • Engineering • Integration • Test • Manufacturing,• Quality • Logistics • System security • Training.

PROGRAMMATIC• Generally within PM control • Program estimates • Program planning • Program execution • Communications • Contract structure • Schedule

BUSINESS (EXTERNAL)• Originate outside the program • Not within PM control • Program dependencies• Resources • Priorities• Regulations/Laws• Stakeholders • Market • Customer• Weather

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RISK ANALYSIS

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Risk Identification

Risk Planning

Risk Analysis

Risk Handling

Risk Monitoring Quantify cost, schedule, and performance impacts

– RDT&E costs– Procurement costs– O&S costs– Performance thresholds– Schedule thresholds

Assess the likelihood of the risk being realizedConduct analysis periodically

CONSEQUENCE LIKELIHOODLevel 5 Near Certainty 80-99%

Level 4 Highly likely 60-80%

Level 3 Likely 40-60%

Level 2 Low likelihood 20-40%

Level 1 Not likely 1-20%

The assessment should capture the greatest anticipated impact in any area as if the risk were fully realized, that is, without further risk reduction or handling opportunities.

Level 1

Level 2

Level 3

Level 4

Level 5LIKE

LIHO

OD

1 2 3 4 5 CONSEQUENCE

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RISK HANDLING

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Risk Identification

Risk Planning

Risk Analysis

Risk Handling

Risk Monitoring Risk handling strategy includes handling options or their

combinations and the specific implementation approach. Acceptance | Avoidance | Transfer | Mitigation BURN DOWN

Elevate the risk to the appropriate tier? Cross-program risks included?

ACCEPTANCE Continuous monitoring necessary to ensure the accepted consequences do not change for the

worse. Identify resources and

schedule needed should the risk be realized.

AVOIDANCE TRANSFER MITIGATION BURN DOWNElimination of the source of the risk by choosing a lower risk solution and by circumventing risks that are not critical to

program cost, schedule, and/or performance.

Reassigning the risk responsibility to another

entity, program, or department. Transfer does not eliminate all

responsibility . Risks must be monitored for

potential consequences.

Actively reduce risk to an acceptable level. Action to reduce the likelihood, or consequence of a risk to an acceptable level in

order to minimize potential program

impacts.

Burn-down plan consists of time-phased handling activities that allow the

program to plan to reduce all high,

moderate, and selected low risks to an

acceptable level or to closure.

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RM RELATION TO OTHER TOOLS

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Program management tools • Work Breakdown Structure (WBS)• Integrated Master Plans (IMP)• Integrated Master Schedules (IMS)• Earned Value Management (EVM)

Systems engineering tool• Technical Performance Measures and

Metrics (TPMs)

Program Requirements Program Constraints

identify and monitor potential risks and progress to plan.

balance program requirements and constraints against cost, schedule, or performance risks.

RISKSCost

SchedulePerformance

INTE

GRAT

ION

OF

TOO

LS

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ISSUE MANAGEMENT

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ISSUE MANAGEMENT BOARD Proper focus on both issues and risks Attention on current problems shall not

overtake risks and opportunities. Assign owner to each issue

Defined and structured issue management process to ensure issues are identified, analyzed, handled, and monitored to retirement. Effective strategy is developed for

resolving critical and high-priority issues and the strategy has been properly vetted

Quantify issue urgency to prioritize resolution, and document plans of action and milestones (POA&M).

Identified issues should be updated periodically until resolved and reviewed

ISSUE REPORTING MATRIX

Issue Identification

Issue Planning

Issue Analysis

Issue Handling

Issue Monitoring

Unlike opportunities and risks, no evaluation of issue likelihood is necessary as the probability = 1.

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ISSUE MANAGEMENT

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Through issue management, the program identifies and addresses events or conditions that have already occurred, are occurring, or are certain to occur in the future and have a potential negative impact on the program.

SJS/TEN ADVERSE DRUG REACTIONS: RISK OR ISSUE?

STEVEN JOHNSON SYNDROME / TOXIC EPIDERMAL NECROLYSIS

• Adverse drug reactions (ADRs) are among leading causes of death in hospitalized patients

• ADRs account for 0.3 to 7 % of all hospital admissions • Severity varies from mild rashes to severe reactions such

as Stevens-Johnson syndrome (SJS). • 5-8%of hospitalized patient develop serious a ADR.

Risk management applies resources to lessen the likelihood and/or the consequence of a future event of less than certain probability.

Issue management applies resources to address and resolve the consequences associated with a past, present, or certain future event.

Programs also should assess whether issues may create additional potential risks (e.g. product liability lawsuits), and evaluate them accordingly.

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ISSUE HANDLING

7/12/2015

Issue Identification

Issue Planning

Issue Analysis

Issue Handling

Issue Monitoring• Handling (or corrective action) plans should be developed

and documented for high and moderate issues • ISSUE TRACKING REGISTER • Evaluate the handling options in terms of cost, schedule,

performance, and residual risk, and select the best option (or hybrid of options) consistent with circumstances.

Accept – Accept consequence of the issue based on cost/schedule/performance business case analysis.

Avoid – Eliminate the consequence of the event or condition by taking an alternate path (changing a requirement, specification, design, or procedure)

Transfer – Reassign or reallocate responsibility from one program or department to another

Mitigate – Implement a strategy to reduce the consequences and residual risk or minimize impact.

A chosen implementation approach results in handling strategy RMB/IMB approves resources for implementation and handling plan activities

ISSUE REPORTING MATRIX

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OPPORTUNITY MANAGEMENT

7/12/2015

Opportunities are potential future benefits to the program’s cost, schedule, and/or performance baseline, usually achieved through reallocation of resources. Risk and opportunity management support Better Buying Power initiatives to achieve “should-cost” as well as “will-cost” objectives.

Risk M

anag

emen

t

Opportunity Management

Risk Management enables meeting “Will Cost” and “Should Cost”

Opportunity Management enables meeting “Should Cost”

Baseline

CostIssuePerformance Thresholds

Opportunities Help Deliver Should-Cost Objectives

Risk Handling Activities

Opportunity Handling Activities

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MANAGEMENT OF CROSS-PROGRAM RISK

7/12/2015

INFORMATION EXCHANGES: Tiered, regular schedule of meetings with external programs and associated contractorsProgram team meetings, risk review boards, Program Management Reviews, executive meetings (etc.)• Synchronization of program schedule , results of

SRAs, and technical, business & programmatic risks. • The meetings should track performance to plan,

deviations from plans, integration, and review of risks, issues, and opportunities.

• To maintain visibility traditional interdependency chart can depict program health and challenges.

• Activities required due to interdependencies should be identified early enough so that necessary resources can be secured.

Multicentric clinical trialTechnical, business, and programmatic risks to cost, schedule and performance of a drug candidate identified too late in the process of drug development causes uncoordinated actions within disparately pursued projects and ultimately adversely affect overall success of the program.