Risks of project implementation in pharmaceutical industry

Abstract

The risk profile of pharmaceutical industry has considerably changed in the past few years and the majority of companies are not optimized to tackle the new rapidly emerging challenges, which is desperately needed to support these changing market conditions (Hein 2013: 2). A firm encounters risks from various factors in varying degrees and the challenges in each project differ, which creates wide and dynamic environment for project risk management. A project life cycle can be divided into four (4) phases; Initiation, Planning, Implementation and Closure stage (Project Management Institute 2004: 40). Each phase has its typical risk factors, which are related to its opportunity factors. These uncertainties share a lot of similar aspects, however due to the characteristics of pharmaceutical industry a general guideline is difficult if not impossible to generate. Therefore a broad set of managerial tools is needed in order to mitigate the emerging project risks, as well as to enable the potential benefits behind these risks. The theoretical framework of this study includes extensive notions from traditional risk management, project risk management, project life cycle management and pharmaceutical project risk management.

The purpose of this study is two-fold: to reveal methods and management techniques to enable an extensive outlook of challenges faced in the project implementation phase, and to examine to which degree pharmaceutical companies have acknowledged an integrated solution as a part of project risk management. One meaningful and holistic approach to today’s current challenges within the pharmaceutical industry is to focus on project lifecycle management (Chauhan & Khan 2013: 631; Hein 2013: 2) as most prior studies in the field pharmaceutical life cycle are diffused and have mainly concentrated on R&D and planning or closing phases (i.e. patent expiration), consequently leaving the implementation and control stages with little emphasis. Furthermore a great share of previous research has focused on risk management and risk mitigation, and only few recent studies have noticed the positive side of these challenges. Typically when a risk occurs the main concern is to minimize its damage and make sure it will not occur again. More thorough and systematic approach can lead to beneficial conclusions. The overall change in the pharmaceutical industry should be viewed more as an extensive business transformation and not as a departmental project (Hein 2013: 5) and therefore pharmaceutical life cycle management should merge the implementation stage more thoroughly to an overall solution.