Supply Chain

Working to understand the risks a project may endure along with the cost associated is critical in every project management plan. Understanding potential risks based on the project type, resources needed, timeline and budget still leaves gaps that creates uncertainty for actually predicating the outcome of the project. There is not a true way to predict when and where a project risk will occur but designing a plan to properly address and manage those risks will increase confidence while eliminating the element of surprise.

risks and determine the likelihood and consequence of that risk occurring during the project. The

The process of developing a drug and getting it on the market is extremely expensive. Studies have shown that the cost can range from 161 million to over 2 billion dollars. The Tufts center for drug development found that getting a drug from its initial state to pharmacy shelves cost an astounding 2.5 billion dollars in 2014. This is significantly higher than the 800 million cost associated with bringing new drugs to the market in 2003. These figures are so high in part because they take into account the opportunity cost of investing money in drugs while it could have been invested elsewhere. Another portion of the cost is also due to the failure of drugs. The probability of a pioneer drug advancing past the clinical studies is around 8%. So in order to be profitable, large companies have to invest their time and resources in more than one drug at a time. For every drug they put on the market there are several that took up resources but ultimately did not make it. In addition to the cost, the whole process can take from 10 to 15 years.

Identify a minimum of 10 project risks and when each will occur in the project life cycle, and then determine their impact and probability of occurrence.

1. Cost: The drug development is a lengthy and an expensive process. It will aid in the predevelopment process to identify future demand and to identify if it is a worthwhile venture. The future of a company could depend on the success or failure of a new drug in the market.

How do factors, such as research and development, contribute to the high cost of medication?

Planning risk management process is important to ensure that the degree type, and visibility of the risk management commensurate with both the risks and the importance of the project to the organization (Project Management Institute, 2008). Risk will be identified within the initiation phase of the project, to ensure the impact is minimal and ensure enough time to plan risk mitigation strategies. The project manager and project team are responsible for ensuring risk are actively identified, analyzed, and consistently managed throughout the life cycle of the project. The following processes outlined below will be implemented for this project:

Identifying risks will involve the entire project team and will include an evaluation of all factors including the project management plan. Careful consideration to the project deliverables will be given when analyzing the risks. Analysis of possible risks have been prioritized by calculating the risk numerically from 1-10, from less likely to likely to occur and minor impact to severe impact to project success, respectively. A numerical rating is applied to the values of occurrence, outcome, and detection and then calculated to a risk priority number (RPN) to assess the risk to the project.

Big pharma claims that the reasons for this are the high cost of drug development. That claim is not apparently true according to researchers from Brigham and Women’s Hospital in Boston:

k. In capital budgeting, risk can be measured from three perspectives. What are those three measures of a project’s risk?

Identify and assess the project operating risks: 3.1 Analyze the pre-completion risks 3.2 Analyze the post-completion risks 3.3 Analyze the sovereign risks, including, macro-economic, political and legal risks

In recent years, the pharmaceutical drug industry as a whole has faced declining research and development productivity, a rapidly changing healthcare landscape and a lot competition from generic drugs resulting in lower growth and profit margins. Typically, Genentech’s drug development project life cycle focused on clinical trial management and the outcomes of those trials. Now however, the company is looking at more holistic approaches to improve processes of bringing new products to the pharmaceutical market that can accelerate product development while lowering operational costs for Genentech. This is challenging for Genentech because of the complex value chain and business processes required in this highly regulated

In order to decide on the R&D portfolio, an objective quantitative analysis might not be suitable considering the high levels of uncertainities and consequently the risks involved in pharmaceutical research projects. It is important to have a qualitative analysis of the situation as a whole that includes Vertex’s own financial position, strategic implications, a quantitative analysis of its Portfolios with realistic estimations and a risk analysis of the portfolios.

“It’s amazing how much difference there is in the way proposals are presented at two different firms,” said John Woods to his assistant, Pete Madsen, as he pointed to the stack of capital investment proposals piled on his desk. “We sure have our work cut out for us, Pete. I need you to collect some data for me as soon as possible. ”

The pharmaceuticalceutical industry has advanced since the early 1900 but continues to face challenges of development, cost of research/development, testing, FDA approval, marketing, distribution and access; however it has played a major role in the health welfare of patients. Due to the advancement in the pharmaceutical industry there has been a 40 percent of the 2 year gain achieved in life expectancy, however the discovery phase requires thousands of scientist, engineers and physicians to research the disease, its components, develop the medicine and carefully/methodically to establish the benefits and risks (Williams & Torrens, 2008). However, during the 1990 the USA was leading in pharmaceutical R&D due to the teams of engineers, biologist, chemists and physicists that spend long hours determining how to mass produce a medicine and studying the side effects to discover an unacceptable side effects (Williams & Torrens, 2008). The process of development of new pharmaceutical once cost $2 billion in 1980 grew to $18 billion by 1997 and only 5 out of 5,000 compounds make it to human clinical trials (Ely, Simki & Thomas, 2003). Furthermore, in 2007 pharmaceutical companies spent $33 billion (a 7% increase over the previous year) and the average time from research to treatment approved by FDA can take 10-15 years (Williams & Torrens, 2008). FDA requires the pharmaceutical to follow elaborate procedures (preclinical safety assessment, preapproval of safety assessment in