November 12, 2020

How Maryland Smith Is Helping the FDA Think About Drug Manufacturing and Risk

Pandemic-era disruptions underscored a troubling reality in the pharmaceutical industry – an outsized reliance on foreign manufacturers for the raw ingredients for drugs sold in the United States.

It’s a situation that exposes Americans to numerous risks – operational, financial, geopolitical and environmental. As concerns mount about those risks, the Food and Drug Administration’s Center for Drug Evaluation and Research (CDER), Office of Pharmaceutical Quality (OPQ) is looking to the University of Maryland’s Robert H. Smith School of Business for help with answers.

The FDA recently awarded a research project, under a cooperative agreement grant, to Maryland Smith’s Clifford Rossi to research the risks to industry and government of returning pharmaceutical manufacturing to the United States. In his research, Rossi will examine advanced manufacturing as a pathway to incentivize domestic drug manufacturing and will explore various frameworks for enterprise risk management.

Additionally, FDA will pilot a structure, developed by Rossi and his research team, that would bring enterprise risk management concepts into the FDA’s CDER.

The hope, Rossi says, is that the research will help the FDA and industry experts better understand the relative risks and economics associated with increasing the manufacturing presence of pharmaceutical manufacturing in the United States.

According to the FDA, over half of the facilities that currently make finished dosage forms for U.S. pharmaceuticals are located in other countries.

Returning pharmaceutical manufacturing to the United States requires a close examination of the technical and nontechnical risks, says Rossi, an executive-in-residence and professor of the practice. He says he hopes the insights gained from his research will help manufacturers and the FDA more fully understand the financial, regulatory, strategic, environmental, and operational risks involved with reshoring drug manufacturing.

“Assessing and mitigating risks in an effective and proactive manner are key to increasing the success of an entity facing new stresses to its organization,” Rossi says. “However, organizations need the proper framework to ensure risks can be identified, prioritized and mitigated. That’s what this project aims to do.”

Rossi is an expert in risk and spent 25 years in banking and in government before coming to academia. In the financial crisis of 2008-2009, he was chief risk officer for Citigroup's Consumer Lending Division, overseeing the risk of the bank’s $300 billion secured consumer asset portfolio

The FDA awarded a research grant to Rossi, through the University of Maryland’s Center of Excellence in Regulatory Science and Innovation (CERSI), an FDA-funded grant between the University of Maryland College Park and the University of Maryland Baltimore campuses.

The grant comes as the FDA and the pharmaceutical industry come under increased pressure from Congress and the White House to consider advanced technologies as a path to improving the flexibility and reliability of drug manufacturing.

FDA Statement: This project is supported by the Food and Drug Administration (FDA) of the U.S. Department of Health and Human Services (HHS) as part of a financial assistance award [U01FD005946] totaling $285,000 with 100% funded by FDA/HHS. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by FDA/HHS, or the U.S. Government.

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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