In the mid 1990s, a biopharmaceutical classification system was developed for oral immediate release drug products (the BCS). The BCS classification grid for oral drugs was developed based on in vitro biorelevant drug molecular and product properties. Formulators gain an understanding of CMC product development challenges and opportunities simply based on the location of the drug substance within the BCS grid. Discovery chemists use the grid attributes to fine tune the properties of new chemical entities. Also, based on the specific BCS classification, biowaivers may or may not be granted and the IVIVC potential of an oral immediate release product can be assessed. In 2018, the Product Quality Research Institute (PQRI) agreed to sponsor an effort to support the development of a classification system for inhaled medicines (an iBCS). The goal of this effort is to develop a physiologically-based drug classification system based on biorelevant drug and product attributes for pulmonary drugs. Such a system would provide a common set of tools to aid pulmonary drug development efforts and, as with the oral BCS, would identify CMC-based product development technical risks. Ultimately the longer-term goal of the development effort is to use the classification system to support bioequivalence assessments of inhaled medicines. However, there are multiple and distinct challenges associated with the development of such a classification approach for inhaled medicines. Inhaled drugs are deposited within the lung where they are typically designed to treat diseases of the lung. Pulmonary drug deposition and dose are influenced by the inhalation device, the aerodynamic particle size and distribution, fluid mechanics, and the way the patient interacts with the drug delivery device. A major challenge is that we do not have the ability to measure local drug concentrations in the lung for these locally acting compounds. There are also fewer pulmonary drugs than oral drugs; therefore, there are fewer drugs to classify, making it more difficult to validate the classification approach. What follows is a description of the iBCS development approach and the design framework as well as a description of the modeling studies being used to set the grid boundaries.