2013 Palisade Risk Conference Series - Three stops coming up in November: Paris, Milan and Las Vegas

We have three cities left to go in our 2013 Risk Conference Series - Paris, Milan and Las Vegas! We have spanned the globe and stopped in 11 cities in the past 7 months. Last week at our Moscow Risk Conference we were able to present our latest versions of @RISK and the DecisionTools Suite programs which have been completely translated into Russian. According to Craig Ferri, Palisade's EMEA & India Director, "The speakers were of very high standard, and attendees were excited about the software and looking forward to being able to download the presentations. It was a great success and we look forward to new partnerships in Russia."

2013 Palisade Risk ConferenceThe Moscow conference, as well as the others in the 2013 Palisade Risk Conference Series, are beneficial for both novice and experienced users of our risk and decision analysis products. If you are a new user and unfamiliar with @RISK and the DecisionTools Suite, we invite you to see why 93% of the Global Fortune 100 are using Palisade products to make better decisions. If you are an existing user, this is your opportunity to network and be exposed to some useful hints and tips to get more out of our software.

In general, Palisade software enables clients to be more confident in the decisions that they make, in a wide variety of industries and applications. Clients use Palisade software in industries ranging from oil & gas, mining, and finance, through to utilities, insurance, and banking, along with government, manufacturing, and logistics. So, if one of your responsibilities is to create or base decisions on a credit risk analysis, financial risk analysis, or maybe a pharmaceutical risk assessment, or if you are looking to improve your project risk management strategies, we invite you to join us in one of the following cities to learn how other people utilize our software.

Palisade Conférence régionale sur le risque
Paris - 12 novembre
Voir le programme - Inscription

Palisade Regional Risk Conference Milan
Milan - November 14th
View Schedule - Register Now

Palisade Regional Risk Conference Las Vegas
Las Vegas - November 20th-21st *
View Schedule - Register Now

* 2-day event with 4 tracks for each day.


Previous 2013 Palisade Risk Conferences

An advantage of our software being available in 8 different languages is the Palisade's ability to provide risk analysis services throughout the world. The following is a list of the cities Palisade Risk Conferences were held this year. If you missed us in a city near you, be sure to look for us in 2014!


See also: Palisade Global Risk Conferences Advance Best Practices in Risk Management


Money-saving Meds: Researchers Use Pharmaceutical Risk Assessment to Determine New Drug's Cost-Cutting Benefits

In the April issue of the International Journal of Nephrology and Renovascular Disease, researchers from  the DaVita Clinical Research in Minneapolis, MN used Palisade's @RISK software to develop a cost-offset model that cuts costs for end-stage renal disease treatment using an innovative pharmacological treatment.
Currently, about 400,000 end-stage renal disease (ESRD) patients in the US undergo dialysis three or more times per week. The costs for these treatments are staggering—with 85% of patients relying on Medicare as the primary payer, the estimated amount spent on their care is $29 billion.
One of the major portions of this cost come from metabolic maintenance medications--the kidney is responsible for both regulating phosphorus levels and red blood cell production. But dialysis is unable to mimic these particular behaviors of a healthy kidney—thus, ESRD patients can suffer from significant anemia, as well as bone and mineral deregulation, resulting in calcium being deposited in arteries instead of bone, with associated increases in clinical events such as fractures and cardiovascular and cerebrovascular events. Thus, patients must use oral phosphate binders to decrease their serum phosphorus levels, and receive regular injections of epoetin alfa (an erythropoiesis-stimulating agent [ESA]) to stimulate red blood cell production, as well as intravenous (IV) iron. All told, oral and injectable medications account for more than half of outpatient dialysis expenses.
An experimental oral phosphate binder, ferric citrate, has been found to both manage serum phosphate levels and increase measures of iron and iron storage in the blood, indicating that this single drug may have multiple benefits: treatment as an oral phosphate binder medication and iron source in ESRD patients with anemia. Thus the authors of the study developed a budget impact model estimating the monthly cost associated with the use of ferric citrate in the treatment of hyperphosphatemia with the added benefit of treating iron deficiency associated with ESRD anemia, versus the cost of other currently available phosphate binders. The model was constructed from the perspective of a US managed care plan.
Monte Carlo simulations were used to address the high uncertainty of the cost-offset model parameters using @RISK. The simulation showed that for each patient with ESRD, a managed care organization, such as Medicare, will likely save between US$104 and US$184 (90% confidence interval) per month with ferric citrate use. These savings translated into a monthly savings of between US$52,164 and US$92,186 (90% confidence interval) per 500 ESRD patients when ferric citrate was compared to other conventional phosphate binders (Figure 2). The monthly model input variables were projected out to determine annual cost estimates. An additional Monte Carlo simulation demonstrated (at 90% probability) that a provider serving 500 dialysis patients could save between US$626,000 and US$1,106,000 annually with the use of ferric citrate.
With the help of @RISK, the researchers were able to prove that this promising new drug could help reduce expenses for a health care system that's desperate for cost reductions.
Read the original study here.

Long Odds, Big Payout

A recent chat with Palisade customer Vertex Pharmaceuticals reinforced something I learned a few years ago when I was working with a biotechnology start-up: the development of a new drug begins with a bright idea and then enters a long, dark tunnel of uncertainty and risk.  The odds that the idea will ever emerge in the marketplace are very long, 10 to 1, and the costs of development are gi-normous--from $60 to $100 million to get a new drug even as far as phase 2 clinical trials.  But then. . . .the payout can also be gi-normous.
At every step in the development process, pharmaceutical risk assessment is crucial to a development company's viability.  The company has a pool of drug "candidates" in its so-called "pipeline," the pathway that leads a candidate from preclinical development through phases 1,2, and 3 of clinical trials and, with much luck and funding, into the market.  At each stage, the pharmaceutical risk management process must weigh the probabilities and potential benefits of a drug reaching the market, factor into that calculation the optimal timing of investment in development, and decide whether and when to invest in further development.  
It's a big, broad playing field for risk, and the game goes on for a long time.  By necessity, the people who create the risk analysis models for pharmaceutical development have brought specialized sophistication to such analytical techniques as Monte Carlo simulation, sensitivity analysis, and decision trees. There are lessons from the pharmaceutical industry for you if, in your game, you want to play at all, you're in it for the long haul.     

Monte Carlo's Place in Bioscience

The increasing number of mentions of Monte Carlo simulation in the popular press usually refer to its use in the realm of finance--for such applications as determining value-at-risk, reserve estimation, and credit risk management--because this is where quantitative analysis hits us directly in the pocketbook and where the technique is relatively easy to explain.  But there is a parallel upturn of coverage in the realm of medicine, particularly in pharmaceutical risk management, that is mostly taking place out of the public eye. 
This coverage appears in specialized periodicals--such as Genetic Engineering -- their online counterparts, and in the offerings of online aggregators targeting in audiences in medicine, public health, and the pharmaceutical industry.  These articles deal with statistical analyses that are not so easy to explain-- pharmaceutical risk assessment in drug trials, diagnostic probabilities in new treatment regimes, risk analysis of public health hazards--and only a limited number of readers can understand them.

I mention this parallel stream of publishing because of the sheer number of medical, pharmaceutical and biotechnology studies that rely on Monte Carlo simulation. The steady rise in the number of Google alerts I receive is pretty clear evidence that the technique has escaped corporate headquarters and is deeply entrenched in the biosciences, going to work on life-and-death issues. 


New Approaches to Risk and Decision Analysis

Risk analysis and decision-making tools are relevant to most organisations, in most industries around the world.  This is demonstrated by the speaker line-up at this year's European User Conference, an event at which we believe it is important to bring together customers from a wide range of market sectors.

We are holding 'New Approaches to Risk and Decision Analysis' at the Institute of Directors in central London on 14th and 15th April 2010.  As with previous years, the programme aims to provide everyone attending with practical advice to enhance the decision-making capabilities of their organisation.  Customer presentations, which offer insight into a wide variety of  business applications of risk and decision analysis, include:
  • CapGemini: Faldo's folly or Monty's Carlo – The Ryder Cup and Monte Carlo simulation
  • DTU Transport: New approaches to transport project assessment; reference scenario forecasting and quantitative risk analysis
  • Georg-August University Research: Benefits from weather derivatives in agriculture: a portfolio optimisation using RISKOptimizer
  • Graz University of Technology: Calculation of construction costs for building projects – application of the Monte Carlo method
  • Halcrow: Risk-based water distribution rehabilitation planning – impact modelling and estimation
  • Pricewaterhouse Coopers: PricewaterhouseCoopers and Palisade: an overview
  • Noven: Use of Monte Carlo simulations for risk management in pharmaceuticals
  • SLR Consulting: Risk sharing in waste management projects - @RISK and sensitivity analysis
  • Statoil: Put more science into cost risk analysis
  • Unilever: Succeeding in DecisionTools Suite 5 rollout – Unilever's story
We will also look at the recently-launched language versions of @RISK and DecisionTools Suite, which are now available in French, German, Spanish, Portuguese and Japanese.  Software training sessions will provide delegates with practical knowledge to ensure they can optimise their use of the tools and implement business best practise and methodologies.

With over 100 delegates from around the world attending, the event is also a good opportunity to network and knowledge-share with risk professionals from around the world.

» Complete programme schedule, more information on each presentation,
   and registration details


The Discouraging But Enticing Scenario of Clinical Trials

One of the most expensive passages in the long road that a new drug must take to reach the marketplace is the series of mandatory clinical trials.  This past summer a "life-sciences advisory company,"  Value of Insight Consulting, based in Fort Lauderdale, Florida, provided a close look at the factors that make clinical trials so expensive--and so risky.

"Optimizing Global Clinical Trials," by Todd Clark, reports on the details of a complex model built with Monte Carlo software that was intended to help a pharmaceutical developer working out product strategy for clinical trials.  The company's goal was to choose a country from which to launch trials for a specific drug for a specific kind of cancer.  Because the primary factor in locating clinical trials is probable patient enrollment, the report provides country-by-country risk assessments for 54 factors ranging from epidemiological data to satisfaction with existing cancer therapies.
For myself, having no idea how clinic trials are organized, Clark's report is eye-opening.  It gives a very clear picture of the constraints under which pharmaceutical development takes place and of the huge budgets behind the process--which helps to justify the high costs of drugs.  Risk analysis should have a very happy home in this industry because the value-at-risk is very high and the probabilities are pretty sorry.  As Clark reports, “On average, drug sponsors can spend over 13 years studying the benefits and risks of a new compound, and several hundred millions of dollars completing these studies before seeking FDA’s approval. About 1 out of every 10,000 chemical compounds initially tested for their potential as 
new medicines is found safe and effective. . . ."
Amazingly enough in light of all this, Clark reports that the number of clinical trials is growing. It doesn't take any statistical analysis to derive from this last fact that when a drug makes it to market and makes it  big there, the return on investment is a whopper.  

The Trials of Trials

In my last blog I mentioned there has been a dramatic upswing in the use of risk analysis and Monte Carlo software in clinical trials for new drugs.  A new unpublished paper by Todd Clark of VOI Consulting makes clear some of the reasons more people in the pharmaceutical industry are turning to operational risk software to guide them in setting up trials.   
First of all, a clinical trial is probably not one trial but a process involving a series of trials, each of which takes a number of years and millions of dollars to complete.  This process takes place before the company even presents the drug to the FDA for approval.  Then, as the U.S. Government Accountability Office, points out, the FDA eventually approves only 1 in 10,000 compounds a safe and effective.  No wonder--again according to the GAO--"the number of new drugs being produced has generally declined while research and development expenses have been steadily increasing."
Although there are enormous profits to be made if a drug developed for a large number of patients is approved, there are great sums of money to be lost and many tricky decisions to be evaluated along the way to successful product strategies.  As Clark points out, even the planning of a single clinical trial is itself fraught with uncertainty: How many subjects?  What kind of subjects?  What kinds of physicians?  Where to hold the trials?  And the answer to each of these questions is in turn a balancing out of numerous variables.
So there's plenty of risk to go around.  But potentially plenty of reward.  Just made for risk assessment with Monte Carlo.