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An Introduction to Risk Management

Michael D. Kaufer, MBA, MSCGMP Solutions, Inc.

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Learning Objectives

ICH Q9 What are the basics of Risk? Risk Tools Principles of Risk Management

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Learning Objective #1

ICH Q9

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What is ICH Q9?

Developed by the Expert Working Group of ICH for Technical Requirements for Registration of Pharmaceuticals for Human Use

Endorsed by the ICH Steering Committee, Nov. 2005.

Issued as a Guidance document June 2006. Also represents the FDA's current thinking on a topic. Doesn’t create or confer any rights for or on any

company and does not bind FDA or a company. Alternative approaches are acceptable, if the approach

satisfies the requirements of the applicable statutes and regulations.

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Why Q9?

Risk management practices are inadequate. Effective quality risk management can:

Control potential quality issues Improve decision making Facilitate better and more informed decisions Provide regulators with greater assurance of a

company’s ability to deal with potential risks

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Risk & the perception of Risk

Risk Management is the systematic use of available information to identify hazards and to estimate the risk.

Different stakeholders perceive risk differently Company Medical Community Individual physicians Who else?

Risk = Probability of harm * Severity of harm * Exposure

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Figure 1.1: Stakeholders

ThePatient

The FirmThe MedicalCommunity

FDA

HealthcareIndustry

The Firm’s Partners& Investors

PatientAdvocacy Grps.

Society

Patient’s Family

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Why Q9, continued

Q9 uses a life-cycle approach What is a product life cycle?

Administration of a drug product always entails some risk

Manufacturing a drug product always entails some risk FDA expects firms to manage the risks associated

with manufacturing Product quality should be maintained throughout

the product life cycle

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Figure 1.2: Drug Product Lifecycle

Phase of FDASubmissions

Phase ofDevelopment

Time Required(Years)

Early research& preclinical

ChemicalSynthesis

PreclinicalTesting &

Pharmacology

Toxicology

5.8 7.4

Phase IClinical

Phase IIClinical

Phase IIIClinical

Supplementaryreporting &

review

1.5

Approval

Supplementalreporting

Phase III(continued)

Phase IVPost-

marketing

NDASubmission

IND Filing30-day wait

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ICH Q9, continued

Q9 proposes that firms use a “Systematic Approach” consisting of: Formalized policies, procedures, tools & models Support from senior management

What does this entail? CPGM 7356.002 Compliance Program – Drug

Manufacturing Inspections http://www.fda.gov/cder/dmpq/compliance_guide.htm

RMP should be used daily for decision-making!

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Figure 1.3: Typical Risk Management Process

Initiate Quality RMP

Risk ID

RiskAnalysis

RiskEvaluation

RiskReduction

RiskAcceptance

Result of Quality RMP

ReviewEvents

Acceptable orUnacceptable

RiskAssessment

Risk Control

Risk Review

Risk CommunicationRisk Management Tools

Unacceptable

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Figure 1.4: FDA’s Approach

Sept. ’04 - Risk-based Method for Prioritizing CGMP Inspections

FDA convened a panel of experts

Brainstorming sessions identified 70 potential risk factors!

Site Risk Potential

Product Process Facility

IntrinsicFactors

1997-2003

RecallHistory

ProcessRisk

Factors

ProcessControls

History ofViolations

InspectionHistory

Est.Production

Output

Type ofEstablish-

ment

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Learning Objective #2

What are the basics of Risk?

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What is Risk?

Potential loss Outcomes that make us worse-off Outcomes that are not as good as some other outcome

Chance Likelihood, potential, etc. Probabilistic or Qualitative

Exposure How much of the risk am I exposed to? There’s no exposure, if you don’t take the product! FDA is

concerned about patients’ exposure! Severity

What’s going to happen, if the risk materializes?

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Risk & Perceptionof Risk

Risk = Probability of harm * Severity of harm This is the definition given in many standards Ignores the exposure factor

Different stakeholders perceive risk differently, i.e., view exposure differently Legal Department Finance Purchasing Manufacturing Packaging QA/QC Project Management

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Risk Determinants

Control Information Time

Lack of control

Lack of timeLack of information

Figure 1.5: Basic Risk Determinants

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Risk Determinants, cont.

Lack of control Natural environment Socio-cultural environment Political environment Competitive environment Internal environment Actions of individuals

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Risk Determinants, cont.

Lack of information In a business environment, what do we need

information about?

Lack of time to: Identify sources of information Gather information Analyze information Evaluate

Current operations Planned operations

Formulate information into meaningful controls

Can we “create” time?

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Classifying Risk, cont.

Further classification: Pure (insurable) risk Business risk Project risk Operational risk Technical risk Political risk

Life Sciences industry is concerned with these!

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Adjusting Risk, continued

Adjusting risks: (1) actions that modify the chances of the undesired event

occurring or the overall loss if the event does occur Stolen car Burglary Life sciences?

(2) actions that modify the distribution of consequences Carpooling or using public transit Keeping valuables in a safe deposit box Life sciences?

(3) actions that neither reduce the chance of an event or the associated loss

Buying insurance

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Learning Objective #3

Risk Tools

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Risk Models

“Academic” models and studies: MacCrimmon & Wehrung, 1986 Finkel & Golding, 1994 Davies, 1996 Haimes, 1998 Konisky, 1999 Morgan, 2002 Ayub, 2003

Industry standards ISO 14971:2007(E) Medical Devices – Application of risk

management GAMP 4/5 ICH Q9

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Tools for Risk Management

Cause-&-Effect Analysis

Brainstorming Decision Trees Process Mapping /

Flowcharts

QFD FTA FMEA

FMECA

HACCP

Matrices?

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Figure 1.6: Cause-and-Effect Diagram for the elements of process validation

Vessel #1

Approved APIs

Approved Excipients

Approved PKG & LBLQC

Pharm Eningeering

Operations

Validation Policies

Validation SOPs

Validation Approach

Manufacturing

Packaging

Surfaces

Air

Controlled Access In Process

Release

Stability

Water

Vessel #2

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Figure 1.7: Brainstorming how do we clean equipment & facilities?

AutomatedSystem

(Not in-place)

SIP System

Manually

CIP System

Combinationof methods

How do weclean it?

No productresidue

No detergentresidue

No micro-organisms

No dye orflavor

residues

What are the criteriafor clean?

RISK:CLEANING

VALIDATION

Equipment

Facilities

Handtools

IMTE

What needs tobe cleaned? Supppliers

QA

QC Labs

Operations

Who is involved?(Functionally)

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Figure 1.8: Decision Tree - do I look for another job or start-up my own firm?

YEAR 1 YEAR 2 YEAR 3

$150K/year

$135K/year

Sign with theStart-up?

Look foranother job?

?

Stay with Start-up or leave?

$138K/year

$150K/year

$150K/year+110K cash

?

Partners agreeto buy-back?

?

$142K/year

$150K/year

$150K/year+220K cash

?

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S tart/E n d P roces s

P roces s S u b rou tin es

D ecis ion P oin t

P roces s A ltern ate P roces s

M an u al O p eration

P roces s

D elay

D ecis ionP oin t

O ff-p ag e P roces s

S tart/E n d P roces s

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Figure 1.9Basic Flowchart Shapes

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Table 1.1 Example of a Matrix(using risk rankings or weightings)

Criteria Factors-to-be-considered Points No. of APIs Score

I. Type of product being developed or transferred

A. Non-sterile solutions 1 1 2 ≥3

 

B. Non-sterile suspensions 2 1 2 ≥3

 

C. Semi-solids 3 1 2 ≥3

 

D. Solid dosage (tablets) 4 1 2 ≥3

 

E. Solid dosage (capsules) 5 1 2 ≥3

 

F. Solid dosage (lozenges) 6 1 2 ≥3

 

G. Drug coated patches 7 1 2 ≥3

 

H. Terminally sterilized products 8 1 2 ≥3

 

I. Injectable drug (aseptically produced) 9 1 2 ≥3

 

J. Injectable drug (aseptically produced and lyophilized) 10 1 2 ≥3

 

K. Implantable device with drug component(s) 11 1 2 ≥3

 

Criteria Factors-to-be-considered Points Weight Score

II. Non-API-related changes to components & composition

A. Changes are those that are unlikely to have any detectable impact on formulation quality and performance.

1Multiply by score from Section I

 

B. Changes are those that could have a significant impact on formulation quality and performance.

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C. Changes are those that are likely to have a significant impact on formulation quality and performance.

3  

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The Problems with Tools

Relevant examples Medical Device Industry Healthcare Industry

Not everyone knows how to use them Facilitators? SOPs?

Must be adapted to the industry Some are too complex (now) Some have simplified nomenclature

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Table No. 1.2: Failure Severity Rating

Effect Severity Rating

Criteria

No effect 1 Failure would have no effect on the customer

Slight effect 2 Customer is dissatisfied; still uses product

Moderate effect 4 Customer complains

Significant effect 6 Customer declines further use

Major effect 8 Adverse event

Extreme effect 10 Serious adverse event

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Table No. 1.4: Failure Occurrence Rating

Occurrence Rating Failure Rate

Criteria

Remote 1 1 in 10,000 Process deviation very unlikely

Very slight 2 1 in 4,000 Very few process deviations

Slight 3 1 in 2,000 Few process deviations

Low 4 1 in 400 Occasional process deviation

Medium 5 1 in 80 Moderate number of process deviations

Moderately high 6 1 in 20 Frequent process deviations

High 7 1 in 10 High number of process deviations

Very high 8 1 in 5 Very high number of process deviations

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Table No. 1.5: Detection Rating (for failure modes)

Detection Ability

Rating Criteria for Controls in Place

Almost certain 1 Detection is certain; validated on-line PAT controls

Very high 2 Detection is likely; heavy use of inspection between & during process steps (with some automation)

High 3 Detection is very likely; validated lab methods

Moderately high 4 Moderate likelihood of detection; heavy use of inspection during process steps

Medium 5 Medium likelihood of detection; heavy use of inspection between process steps

Low 6 Low likelihood of detection; low usage of inspection and testing; inspections & tests are not optimal

Slight 7 Controls being concurrently validated

Very slight 8 Controls are experimental

Remote 9 Controls not aligned to critical quality attributes

Impossible 10 No controls in place

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Learning Objective #4

Principles of Risk Management

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Principles of Risk Management

1. Risk management is a process that occurs throughout a product’s lifecycle Risks change as the product moves through the

life cycle Our level of understanding progresses along a

learning curve The level of control we can achieve varies with

technology Who is privy to risk communication changes

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Principles of RiskManagement, cont.

2. Safety-by-design is the preferred option for managing risks Is the design inherently safe?

Preclinical studies Clinical studies

Protective measures built into the manufacturing process Manufacturing Packaging

Protective measures built-into the product Can this be done with drug products? Is labeling information all we can do?

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Principles of RiskManagement, cont.

3. Risk management models & tools must be modified to account for: The patients’ conditions The dosage form Maturity of the firm’s RMS

Can I use RM tools without a RM model?

Maturity of the firm’s QMS Can I use a RMS without a QMS?

The firm’s culture

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Principles of RiskManagement, cont.

4. Risk management is an iterative process. How often does it need to be done?

Annual Product Review? Change? Deviation Investigations? Project basis? sNDA?

How often it is done dictates what part of the organization does it, and the resources available.

Knowledge is transferable from one product to another

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Principles of RiskManagement, cont.

5. Top management commitment is critical for effective risk management Without adequate resources, RM is ineffective

RM requires the involvement of trained individuals Each company’s top management must also

establish a policy on how “acceptable” risks will be determined

Can this be done “universally”? RM is a new and evolving process requiring

periodic review & improvement

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Principles of RiskManagement, cont.

Policies and procedures document the 5 essential questions: Who What When Where How

Training records

What about the output from risk management activities? Where does that get documented? Annual Product Reports? Deviation Investigations? IQ//OQ/PQ? Other?

6. Risk management activities must be documented.

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Thank you!Thank you!Questions?Questions?

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Cambridge: Productivity Press, 1990, p. 27. Berry, Ira R. and Nash, Robert A., eds., Pharmaceutical Process Validation, 2nd ed., Marcel Dekker:

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September 2006. FDA, Risk-Based Method for Prioritizing CGMP Inspections of Pharmaceutical Manufacturing Sites –

A Risk Ranking Model, GPO, September 2004. Frame, J. Davidson, Managing Risk in Organizations A Guide for Managers, Josey-Bass: San

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p. 2. MacCrimmon, Kenneth R. and Wehrung, Donald A., Taking Risks the Management of Uncertainty,

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