Project Portfolio Management: A Powerful Strategic Weapon in Pharmaceutical Drug Development

Abstract

International pharma market dynamics increasingly require that pharmaceutical companies add value to their organizations at all levels. In this respect, strategic research and development (R&D) portfolio management constitutes an extremely important tool to increase overall R&D project value. Unfortunately, the implications of this tool are very often seriously underestimated. Overall perspectives and methodologies of portfolio management have been changing. Qualitative ranking systems have been replaced by quantitative methods, and the discussion about the dimensions of value is largely over. Today, time, cost, technical uncertainty, and commercial prospects form the basis of most methodologies. There is more value yet to be gained through the use of these tools, however, over and above the simple application of standardized quantitative methodologies.

This paper describes ways of adding considerable value to R&D organizations through state-of-the-art project portfolio management by using additional parameters. Through the use of the tools and methods described, it is proposed that more valuable information can be made available to allow organizations to make better decisions regarding project expansion, redirection, or termination. Through this approach, there is a greater likelihood that overall business strategies can be fulfilled, budgets controlled, and personnel resources focused. Periodic R&D portfolio reviews provide a routine process for assessment of progress, priority adjustment, and “reality checks,” that is, application of competitive intelligence, reassessment of market dynamics, R&D findings, business strategic position/direction, and so forth. This routine process also allows for infusion of new ideas, change in strategic direction, and assessment of new alternatives, as well as identification of new potential business opportunities.