Complexity of project management in the pharmaceutical industry Page 1 of 7

Complexity of project
management in the
pharmaceutical industry
Related Content
CONFERENCE PAPER ǀ Complexity ǀ 2014

Pattanaik, Asima
ARTICLE ǀ Complexity , PMO , Portfolio
Management , Program Management ǀ
How to cite this article: 2018

Pattanaik, A. (2014). Complexity of project management in the pharmaceutical industry. Project Management Journal
Paper presented at PMI® Global Congress 2014—EMEA, Dubai, United Arab Emirates.
Newtown Square, PA: Project Management Institute.
Evolutionary
Governance for
Mega-Event
Projects (MEPs)
By Li, Yongkui | Lu, Yujie | Ma,
Evonik Corporation Birmingham Laboratories
Liang | Kwak, Young-Hoon ǀ A
mega-event is an open
Abstract socioeconomic system
characterized by massive
Driving a product to the market safely, quickly, and cheaply is the best way for a
budget demands and multiple
pharmaceutical (pharma) firm to be successful. Pharmaceutical companies
types of subprojects and their
encounter enormous challenges during the long product-development process.
complex interrelationships.
Today's fast-paced competition requires efficiency in all aspects of business. The
Although a mega-event is an
identification of risks at the right stage and an effective mitigation plan are key opportunity…
factors for success, both financially and technically. The complex drug-
development process from lab to launch includes management of several business
ARTICLE ǀ Change Management , Risk
processes, such as technical development using quality by design, regulatory Management , Complexity ǀ 2018
strategy, clinical studies, and supply chain. These processes are affected not only Project Management Journal
by many circumstantial factors but also by each other. The inherent uncertainties
during the evolution of any of these processes require constant change in plans. If
Dealing with
the risks associated with the uncertainties are not managed in a timely and Uncertainty and
effective manner, the complexity of the situation increases dramatically and it Ambiguity in a
subsequently becomes cost prohibitive for the developing industries to move Complex Project
forward. Although project management has been known to drive industrial
By Aubry, Monique | Boulay-
success through effective risk management in other industries, it has only been
Bolduc, Madeleine | Richer,
introduced to the pharma industry in the last decade and is continuously evolving.
Marie-Claire | Lavoie-Tremblay,
This article identifies challenges in project management in the pharma industry. Mélanie ǀ In 2008, the Quebec
The analysis of critical factors, such as the roles of project managers and government approved a
stakeholders, team communication, and key business processes, helps to identify CAD$2.3 billion budget to build
strategies for addressing these challenges. This process can help put pharma a modern academic healthcare
companies on the road to success in launching a quality product that can improve facility that would provide
quality of life. state-of-the-art, highly
specialized healthcare services
Introduction to the…

ARTICLE ǀ Complexity ǀ 2018

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Complexity of project management in the pharmaceutical industry Page 2 of 7
The cost of global healthcare is increasing exponentially irrespective of growth in Project Management Journal
the consumer price index. It is projected that the estimated healthcare cost of Research Focuses,
seven trillion US dollars in 2011 will be doubled in the next decade. Currently, the
Trends, and Major
cost of developing a single drug is over one billion US dollars compared to 138
million US dollars in 1975 (International Federation of Pharmaceutical
Findings on Project
Manufacturers & Associations, 2012). The increase in aging populations with Complexity
chronic conditions, the monopoly by healthcare providers, and the development By Bolzan de Rezende, Leandro |
of newer innovative and complex therapeutics are major contributors to the Blackwell, Paul | Pessanha
higher healthcare costs. Gonçalves, Marcio Denys ǀ This
article analyzes the project
It is well established that a research-based pharmaceutical industry is the main
complexity research field using
source of all modern pharmaceutical products. Innovative medicines can help in
bibliometric analysis. The field
controlling healthcare costs. For every 24 US dollars spent on new medicines for
evolved in three waves (prior to
cardiovascular diseases, 89 US dollars were saved in hospitalization and other 1985, between 1990 and 2004,
healthcare costs (Lichtenberg, 2008). In one example, the cost of surgeries and after 2005) from several…
associated with peptic ulcers has been reduced from approximately 17,000 US
dollars to less than 1,000 US dollars because of innovative treatment using
ARTICLE ǀ Risk Management ,
antibiotics (US Department of Health and Human Services, 1998). This is not only Complexity , Strategy ǀ 2018

less costly but also improves patients’ quality of life with a non-invasive PM Network
treatment pathway. Global healthcare demands that the pharma industry develop
medicines that save and improve the lives of millions of people at a lower cost.
Steeling for Growth
The pharmaceutical industry also has its own obstacles to profitability. Higher
By Fister Gale, Sarah ǀ India's
“first to market” competition in developing generic drugs, more stringent
steel producers face a problem.
regulatory requirements, and increasing research and development (R&D) costs
The country's national
for innovative new drugs force the industry to restructure the strategies to reduce
government wants to create
the internal costs. In general, it takes 10 to 15 years and researching
new cities from scratch,
approximately 10,000 molecules to launch one new product to the market. The develop a new industrial
activities during this period need coordination between many internal functional corridor and expand the
groups, such as R&D, regulatory, legal, finance, supply chain, sales, and marketing, country's freight rail network.…
as well as external partners. The efficiency in coordination between different
functional groups is crucial.
ARTICLE ǀ Innovation , Complexity ǀ 2018

The regulatory policies and compliances in developing a new drug are changing PM Network
and becoming tighter, impacting product development, manufacturing, and
Financial Frenemies
registration strategies. The wait time to obtain authorization for a product launch
has increased, affecting the economics of drug development. The pharma industry
is under pressure to accelerate the drug-development stage to compensate for the By Parsi, Novid ǀ Established
longer wait for regulatory approval. With access to many innovative ideas, financial services organizations
companies often try to develop many products in parallel. In this case, are launching fintech
management often encounters hurdles in focusing on any single product. As the innovation projects—and
pharma industry learns the importance of focusing on a single product while deciding to work directly with
developing multiple products in parallel, the use of project management competitors.
strategies is becoming more and more popular. Inherent risks in every stage of the
science of developing a new product need to be managed effectively. The
integration of risk management into product development is the key to reducing
time and cost. As the level of information increases with multiple possible
scenarios during the life cycle of product development, the decision-making
process becomes more complex. In other industries, project management takes
greater responsibility in managing risks and implementing the risk-mitigation plan.
The pharma industry began taking advantage of this approach in the last two
decades. The concepts of project management and best practices in project
management continue to evolve in the pharma industry.

Uncertainty in the Pharmaceutical Industry

Quickly translating basic research findings into meaningful therapeutics is a
multifaceted process. It requires a continuously evolving, knowledge-based
ecosystem utilizing user feedback to improve. Use of human factors,

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Complexity of project management in the pharmaceutical industry Page 3 of 7
measurement by instruments, and statistical analysis contribute to obtaining new
information in scientific discovery. However, inaccuracy lies within each of these
components. Scientists design experiments based on assumptions to obtain data
that verify models and theories. Often, these assumptions are based on limited
historical knowledge. As new information becomes available, the assumption
changes, and this impacts the original hypothesis. Although instruments are used
in quantitative analysis, the functionality of the instruments is uncertain,
contributing to inconclusive results.

The Complexity of Project Management

Project management becomes more complex due to known risks (known-
unknown) and unknown risks (unknown-unknown). Lack of effective risk
management can result in turbulence (chaos) in the project that can be
incontrollable. The use of available techniques, such as Program Evaluation and
Review Technique (PERT) and Gantt charts, helps in identifying risks and
developing a mitigation and contingency plan, which is beneficial in managing the
known or foreseeable risks.

Project management encounters greater challenges at the occurrence of

unknown-unknown or unforeseeable risks. Managing the newfound risks adds
agility and branches to the decision tree during the project execution. These risks
make contingency planning more difficult with lack of known decision tree
branches at the planning stage. The management of these risks requires an
approach developed specifically for the project. For example, team flexibility,
developing a new technical plan, and greater communication for buy-in by the key
stakeholders need to be considered.

Challenges in Project Management in the

Pharmaceutical Industry
In the pharma industry, with added uncertainties from the process of scientific
research, project management becomes more challenging. Project management in
the pharmaceutical industry involves:

Scope management
Project planning, execution, and monitoring
Timeline and budget planning and management
Stakeholder management
Management of regulatory and compliance strategies
Environmental safety
Risk management
Team management

Challenges underlie each of these aspects of project management. The

interdependencies between these elements make it even more complex. While
the developed product may be effective for the intended use, it may require
hazardous chemicals and ingredients in the production process. Any deviation
from safety plans can create long delays in the project timeline.

While changes are inevitable, it is natural that the stakeholders may internally or
externally resist implementing a change. Creating an environment that embraces
change is key in managing the stakeholders. The project manager should
continually evolve his or her style of approach in managing the stakeholders.
Improving soft skills for effective communication is as important as improving
listening skills. A policy of “no surprises” and open communication is beneficial in
preventing the delivery of erroneous information.

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Recently, more industries are moving toward matrix organization. In a matrix
organization, there are four key players of project management: project manager,
functional managers, upper management, and project team members.

Exhibit 1: Components of Project Management in Matrix Organization

While each of these components has its own role and responsibilities,
interdependencies become inevitable. The project managers are challenged in
keeping this interrelationship viable to benefit the project. In addition, project
managers in the pharmaceutical industry encounter challenges in:

Resource limitation
Cross-functional team management
Institution processes
Cultural differences
Customer management

With pressures to cut costs, resource limitation is a major concern in project

execution. A limited pool of resources with desired technical expertise makes it
even more difficult to execute the work plan and meet the timeline. At the
product-development stage, engaging the cross-functional teams becomes a
challenging task for the project manager. Often the team members also work on
multiple projects. The team members’ skills in prioritizing, realizing the
importance of the tasks, and effective communication become crucial to the
productivity of the matrix organization. Lack of communication between team
members, and between team members and their functional managers, can create
a chaotic situation within a project.

As businesses face continuous changes in customer needs and in regulatory,

quality, and safety requirements, updating the business processes becomes an
exhausting task to accomplish. Often, project managers fall in a challenging
situation working with outdated processes. Upper management's support in
establishing clear business processes will help the project manager and project
team in accomplishing the project goal.

Managing cultural differences within the team, within the host businesses, and on
the customer side is a challenge that the project manager encounters regularly.
Customer management adds another layer of challenges in managing projects
that involve intercompany collaboration and contract manufacturing
organizations (CMOs). Ineffective management of the customer needs can yield
scope creeps, increasing the project budget and causing delays. Establishing the

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Complexity of project management in the pharmaceutical industry Page 5 of 7
customer expectation in alignment with the scope early in the process helps in
satisfying the customers. Project management acts as the face for the host
company to the customer and vice versa. This puts project management in a
difficult situation when the customer expectation does not match the promises
the host company offered as per the agreement. Working with the customer to
develop of a clear scope definition in the early stages of the project is the desired
approach to prevent any confusion.

Critical Success Factors

How does one measure project success? While it is clear that a project is
successful if it delivers on time and within the budget, projects that do not meet
these criteria do not automatically fall into the unsuccessful category. The lessons
learned through a discontinued project can create larger opportunities for the
businesses and make a greater impact on business profitability in the long term.
Therefore, two components of project success, technical and business, should be
evaluated while developing metrics of project success.

Now the question is: what are the critical factors that impact project success? As
discussed previously, the roles of the project manager and stakeholders, team
communication, and business processes have a great impact on making the
project successful:

Exhibit 2: Key Components of Project Success

Role of Project Manager:

While project managers are focused on making the project successful, they also
need to be aware of the organization's strategic goals to understand where their
projects fit into the company's portfolio. With a higher degree of uncertainty,
often projects become more complex and require certain resources with short
notice. Having a plan to manage such instances is critical. Project managers need
to work closely with other project managers in the business to understand the
interdependencies within the project, understand resource conflicts, and take
action accordingly. The project manager needs to monitor and manage the impact

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Complexity of project management in the pharmaceutical industry Page 6 of 7
of the changes on the risks. In today's environment, to keep up with market need,
the changes become a norm in businesses. While it is one of the major
responsibilities of a project manager to minimize the changes, especially in the
project scope, a project manager must embrace and take advantage of changes in
other steps in order to make the project successful. Project managers play a major
role in facilitating several lines of communication in managing projects
successfully. Continuously educating the team as well as the functional managers
can become a daunting task for the project manager. In addition, making team
members aware of their roles and responsibilities, and creating a RACI
(responsible, accountable, consulted, and informed) during the planning stage, will
prevent the confusion in the later stages. Keeping the team more enthusiastic and
making them feel the importance of their contribution is another strategy that the
project manager may want to consider.

Role of Stakeholders:
In addition to the project manager, other key stakeholders, such as team
members, sponsors, functional managers, and customers, are pivotal and play
significant roles in making a project successful. In contract research organizations,
any changes in business decisions at the customer side may result in
discontinuation of the projects. It is just as important that the technical team
remain accountable for the technical success of the project as it is that the
sponsors uphold their commitment to provide financial support and other
resources.

Team Communication:
Cross-functional team communication and collaboration are two of the most
important factors in minimizing risks in projects where the information from one
functional group impacts the progress of another functional group. Proactive
communication should be encouraged at every level to prevent any confusion and
unnecessary rework.

Business Processes:
The integration of business processes into the execution of projects is inevitable.
In the pharma industry, the business process is impacted not only by internal
organizational changes but also by many external factors, such as changes in
regulatory, quality, and safety requirements. Failure to update the business
processes in a timely fashion will impact project success. A change in regulatory
requirements at a late stage of the product development may prompt rework or
additional steps. Similarly, a change in environmental safety requirements may
require additional time and funding to take appropriate measures to prevent
unwanted exposures. Internal organizational changes are frequently instituted to
make businesses more productive, efficient, and cost-effective. The cascading
effects of internal organizational changes have a great impact on the project
success. Keeping up with internal organizational changes and updating the
business processes accordingly takes time. Transition time and lack of appropriate
communication by the upper management may create confusion at the project
level. Open communication and strong support by the upper management are
greatly desirable in moving a project forward.

Conclusion
The team members, project managers, and upper management share
responsibilities in creating an environment conducive to project success. Support
from senior leaders in providing the resources and desired talents in a timely
fashion is crucial in executing a project successfully. A program-management

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Complexity of project management in the pharmaceutical industry Page 7 of 7
practice that clearly defines the objective, roles and responsibilities, and
accountability, as well as embraces open communication, contributes a great deal
to the project. Adding flexibility and incorporating branches to the decision tree at
key stages of project execution result in a competitive advantage. Proactive
measures by the project manager to mitigate risks and create a culture of
effective communication among stakeholders and team members are valuable
factors in achieving project success.

International Federation of Pharmaceutical Manufacturers & Associations

(IFPMA). (2012). The Pharmaceutical Industry and Global Health: Facts and
Figures 2012 Retrieved on 01 March 2014 from http://ifpma.org
Lichtenberg, Frank R. (2008). Have Newer Cardiovascular Drugs Reduced
Hospitalization? Evidence From Longitudinal Country-Level Data on 20 OECD
Countries, 1995-2003. Retrieved on 01 March 2014 from
http://www.nber.org/papers/w14008

US Department of Health and Human Services (HHS), Centers for Disease Control
and Prevention (CDC), Division of Bacterial Diseases (DBD). (1998). Heliobacter
pylori and Peptic Ulcer Disease. Retrieved on 01 March 2014 from
http://www.cdc.gov/ulcer

This material has been reproduced with the permission of the copyright owner.
Unauthorized reproduction of this material is strictly prohibited. For permission to
reproduce this material, please contact PMI or any listed author.

© 2014, Asima Pattanaik, PhD, PMP

Originally published as a part of the 2014 PMI Global Congress Proceedings –
Dubai, UAE

© 2018 Project Management Institute, Inc. USA

15/02/2018