The grave quality issues related to the willful adulteration of Heparin by a key API supplier for Baxter, the Melamine adulteration of baby formula for the world market, and the recent drug import restrictions on Ranbaxy in India have raised serious concerns about the viability of China and India to consistently compete in the U.S. and European markets. Even as organizations acknowledge the seriousness of these issues, they continue to look closely at setting up operations outside the U.S. (ex-U.S.). The decision to pursue an operation ex-U.S. raises challenges above and beyond those of building a normal commercial operation. Because facilities require significant capital investment well in advance of proof of clinical efficacy, they typically represent one of the largest capital commitments an organization will ever make. Understanding the complete risk management landscape is essential to being successful with an ex-U.S. strategy. While it cannot be argued that emerging markets offer lower capital investment and potentially faster project completion times with lower overall operating costs, they also bring the portent of heightened program risk and complexity in complying with the rapidly evolving regulatory oversight and governance standards between the U.S. and the rest of the world.

INTEGRATING RISK MANAGEMENT
The decision to establish a manufacturing operation outside the U.S. will be the output of a thoughtful strategic planning process. From the start, it is critical to expand the strategic risk assessment exercise to address harmonization challenges. The ICH has laid out a basic framework for risk management in its Q8 guidance. In a previous article, I defined a basic Facility Strategic Planning Model:

1. Identify Strategic Business Objectives
2. Establish a One- and Five-year Tactical Plan
3. Consider Program Specific Planning
4. Determine Measurement and Feedback Against Objectives

Adding harmonization risk to each of these steps escalates the need for a clear strategy and plan at the outset. SuchMany who have made this move will also highlight the fact that, despite the uniform governance defined with the EMEA, an operation must still comply with country-specific regulatory and commercial requirements. These challenges increase many times over with expansion to emerging markets such as China or India where the regulatory and strategic considerations are still evolving. The transient nature of these key considerations must be considered at the outset of any facility design intended to meet the requirements of multiple markets. The key document for capturing the final design commitments is the Basis of Design (BOD).