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1. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 5, Issue 7, July (2014), pp. 44-50
© IAEME: http://www.iaeme.com/IJM.asp
Journal Impact Factor (2014): 7.2230 (Calculated by GISI)
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44
IJM
© I A E M E
A PERSPECTIVE OF RISK ASSESSMENT FOR PRODUCT
DEVELOPMENTS IN BIOTECHNOLOGY AND PHARMACEUTICAL
PRODUCTS
Samaraj S. Thiyagarajan, PMP
Austin, Texas, USA- 78749
ABSTRACT
This paper provides an insight on risk assessment, which is a component of risk management.
Risk assessment is an essential process during the product developments phase of biotechnological
and pharmaceutical products. Risk management is an iterative process. It starts from project scoping
and completesupon projectfinish. Basically, risk are categorized as known risks and unknown risks.
Risk assessment is the first stage of the risk management followed by risk evaluation, and developing
a risk management strategy to monitor and mitigate risks. Ideally in any project scenario, risks will
be high during the project initiation phase and reduce as project enters into later stages. This paper
discusses the process of risk assessment for each phase of the developmental stage of new products.
In summary, for successful execution of projects, product development needs adequate risk
assessment strategy.
Keywords: New Product Development, Risk Assessment, Biotechnology, Pharmaceutical.
INTRODUCTION
New product introductions are the life line of any business. A successful business model will
spread its roots only when new products are commercialized and sustained without any failures. The
long term competitiveness of a business relies on the company’s new product development
capabilities (SC Wheelwright, KB Clark, 1992). Any new product commercialization process
involves numerous risks. It is imperative to understand the project risks and its management, past
research indicates there is only six out ten products were successful after commercialization (Garry,
1997). Each new product introduction has its own unique sets of risks. New product launches are
resource intensive and has prolonged timelines, especially, in the pharmaceutical and biotech
industry. This consequently translates into high development costs, which involves facility,
instruments, machinery, and miscellaneous (Kahn, 2002).

2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
45
Developing a risk management involves planning, and developing quality standards, and
quality mission of the organization. Systems and practices that guides the project team to make a
clear and consistent decisions and communications for the management (FDA, 2004). An important
aspect in any product life cycle is product design. Developing a design based on QbD approach will
significantly reduce the risk. Risk management entails a comprehensive understanding of product
design to manufacturing, reaching the customer and use by the customer. Many factors that can
influence the safety, and efficacy of a product. An efficient project team will need to characterize the
aspects of the product in every angle. It is critical to have a risk management plan that is tailored to
the particular project.
In a product development and transfer, with so many tasks and deliverables need to occur
coherently, the project team need to have significant emphasis on identifying, assessing, and
evaluating the risks at every stage. A solid risk management plan will help the team to anticipate
issues, and proactively address them. It helps the team to have a smooth execution to reach the
designated goal of efficient and successful product development. The objective of this paper is to
provide a detail risk management process for commercializing new biotechnology and
pharmaceutical products. Based on the risk assessment, the project team will then need to draft a
detail mitigation strategy, which itself is a separate process. The team needs to establish several high
level categories for risk identification. Each identified risk will then need to be categorized as project
risk, or a particular event associated in a given phase of the project.
PROJECT SCOPE
A crucial phase of any project is the project scoping. Successful scoping includes
understanding the risks. Critical risks include but not limited to the following aspects: Project team at
certain times may not clearly define the goals of the proposed project, which may be from inadequate
scope development that results in conflicting agendas (Atkinson et.al, 2006). Failure to translate the
customer/user requirements and product requirements to the scope of the project often lead to
product failures. Often project teams falls short of drafting a complete and fully vetted business plan,
also called as aggregated project plan (SC Wheelwright, KB Clark, 1992). In several instances,
oversight of management in terms project scope and project execution lead to issues in the project.
Failure of the team to clearly identify in scope/out of scope of the project to achieve its indented
purpose.A project team can group these risks as project risks.
STAKEHOLDER
Stakeholder identification and understanding their needs is required for successful project
execution and completion. The concept of stakeholder management is intended to devise methods to
manage a group of decision makers or parties that may positively or negatively impact the project or
impacted by the project. Their relationships are crucial to success of product launch (R. Edward
Freeman and John McVea). Significant issues arise when stakeholders and their needs were not
correctly identified. Team need to identify risks associated with the following aspects. If the project
team failed to identify all the stakeholders during the project scoping, it will result in project facing
significant delays or scope creep.
Once stakeholders are identified project team needs to identify the stakeholder’s interest and
their influence on the new product development project. Failure to identify interest and influence can
be as damaging as other risks. Risks could also be failure to identify the hidden needs of both
internal and external stakeholders. This had resulted in offsetting the project timeline due unplanned
works that needs to be performed. Disconnect between the stakeholders and project team poses
significant risk. Regulatory agencies like FDA, USDA and other international organizations will

3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
have a significant influence, failure to understand their requirementswill be costly and challenging
for the projects. Stakeholder concepts were evolved and their influence had recently been embedded
in the management thinking (Ronald K, 1997).
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The team needs to identify and assess these risks as project risk, and they are characterized in
the decision to commercialize phase. It is essential to look for any gaps in the risk assessment section
and reassess the risks to make surethe team is covering this critical risk.
PRODUCT REQUIREMENTS
In order to achieve successful commercialization, the team needs to undergo an extensive risk
assessment and management regardingproduct requirements. The requirements for considering the
needs of product specification based on the information that has been understood from the customers
and key stakeholders (Alison McKay, et, al, 2001) Sometime combing the risk assessment for voice
of the customer and the product requirements together is crucial. In many instance products had
failed at the hands of the customers. The fundamental reason for this is incomplete understanding the
of product requirements based on the customer requirements. Risk of incomplete coordination of
customer requirements to product requirements will be one of the failure mode. Also, trying to
address many facets of customer requirement, some of the NPI had issues in executing transfer to
manufacturing for this type of products. Failure to address safety and handling requirements.
Another crucial document that is invariably used is Product requirement document, and failure to
capture all the requirements in the PRD. Most pharmaceutical products require connecting product
requirements to traceability matrix. A great way to effectively eliminate any issues that were
discussed above and managing an efficient product development is QFD – Quality Functional
Deployment (Kurt Matzlera, et.al, 1998). These risks are both categorized as project and product
risks. Close attention to these risks is warranted because they may have a significant effect on the
manufacturing.
PILOT STUDIES
In any product development, irrespective of industry, risks were basically identified by
developing prototypes. Another critical phase in the commercialization process involves conducting
pilot studies. Since pilot studies are used to develop, and characterize the product, and to establish
adequate design controls.These are essentially grouped under product risks. The pilot study helps to
identify the risks on the following:
Specification Development: In any new product development, specification development is a
significant task (FDA, guidance). It is important to assess risks extensively on this process.
Several projects failed to achieve its long term goal due to inadequate and inappropriate
specifications. Project team uses several approachto assess if there is any risks associated with
specification developed pilot studies are setup Risks were identified from the pilot studies, DOE,
guard branding, and design space studies.Design of Experiments – a great tool for understanding
and mitigating any specifications based risks. This is done by analyzing the interaction between
critical factors such as chemicals, mixing, pH, solubility, and their impact on the specification.
Certain risks also need to be analyzed for tolerance of certain impurities from raw materials on
the specification.The proposed specification may not address customer requirements. This is a
significant risk that leads to numerous customer complaints.Some new product development
process lacks the analytical method/quality control method development. Even the developed
method may not be optimized for addressing calling good vs. bad lots.

4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
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Raw Material requirements: Raw material characterizations are crucial for developing
specifications and consistent product performance. This is a critical process, any issues arises in
this may results in product recalls and compliance issues. Risks were identified on the quality of
the raw materials. (One common supplier’s claim is that the raw materials are 99% pure. The risk
of combination effect of 1% impurities from five or six raw materials used to make a product.
More prevalent risk is failure to detect substandard materials during incoming inspection (Trivedi
et al, 2011). More frequent product failures comes from risk involving contamination including
microbial, chemical and other materials. Recently several nations have imposed ban on certain
materials and team need to assess the risks if those materials will be part of the product and how
it may impact the marketing in those countries. Assessment need to be made for stability of the
raw materials, and handling and storage of raw materials.
Process Development: Based on pilot studies, risks assessment for process development is done.
The project team assesses the risks through process characterization, design verification and
validation. Identified risks includetranslating the product requirements to process requirements.
The risk assessment should include whether the developed process will consistently produce the
products with all requirements and specifications. Assessing the risks of not understanding the
flow requirements in operations/ manufacturing. Risks need to be assessed onconverting from
pilot build to full scale build using the developed process. A critical failure of products during
manufacturing is developed process not able to withstand minor variations in raw material,
operator, equipment, etc. The project team has to assess the risks involving long term and short
term process capabilities (CPK).
Analytical/Quality control Method development: Once a manufacturing process was designed,
team identifies appropriate quality sampling and testing method. More emphasis for developing
testing at adequate steps along the process, and establishing the final release criteria are
mandatory. Project team requires assessing the risk involving failure of the developed test
method to take into consideration of any variation in equipment, and operator to operator.Risks
from either excessive testing, or too few testing. Product performance risk from method not
characterized adequately, resulting in frequent failures in the manufacturing.Risk of failure of the
testing process that cannot identify good vs. bad lots. This type of risk is always ranked high
because this may lead to a flawed product passing the test and being shipped to the customer,
failing at the customer’s hand. Alternatively, test may incorrectly classify a good lot as a bad, and
disposition to scrap, resulting in revenue loss.
Design Verification and Validation: Once the pilot lots are completed and process identified, a
plan is created to verify and validate the design and the design controls established. Risk
assessments performed during the 3P process as well. Design FMEA will be conducted. Some
common risks that team may identify are: Failure of the validation to provide any conclusive
results.Risk of failure of the validation studies.
Design Controls: With FDA giving more emphasis on having adequate design controls in new
product development ((FDA, guidance).Based on the pilot lots, and validation, assessing risks
related to design control are more critical. The whole process of risk assessment and chances for
improvement are done through conducting the 3P process. Risks need to be identified from
inadequate or not so robust design controls in the process. Risks may arise from product liability
from inadequate design controls.

5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
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Design FMEA: The final stage of the risk assessment is to combine all previously identified
risks and entered them in the risk register (Susan. P. et.al, 2003), project team need to conduct an
extensive design FMEA to understand the failure mode of each identified risks and its impact on
the products performance, safety and efficacy. Ranking need to be based on the severity,
occurrence and detection of risks. RPN calculated and risks need to be prioritized based on the
several factors including RPN number, threat to success of the project and for the upstream
manufacturing. (Figure 1).

6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 7, July (2014), pp. 44-50 © IAEME
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CONCLUSIONS
Risk assessment is an integral part of any project; especially, more crucial during the product
development stage in a new product commercialization process. Several product development
projects that do not have adequate risk assessment process had undergone numerous distress in the
aspects of overrunning project cost, delayed project schedule, and increased quality issues down the
road in the manufacturing process. In a biotech/pharmaceutical environment, planning suitable
process for risk assessment is important, considering the longer period of development phase.
Performing risk assessment during the upfront phase will significantly reduce the project cost. For
any project manager, knowing the known risks and planning contingency response for unknown risks
put him as well as the project at better position for success.
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