Project portfolio planning in the pharmaceutical industry -- strategic objectives and quantitative optimization

TL;DR

This paper presents an optimization approach for pharmaceutical project portfolio planning, balancing revenue targets, budget constraints, and strategic objectives to enhance growth and manage product lifecycle challenges.

Contribution

It introduces a quantitative optimization method for selecting and managing projects in pharmaceutical portfolios considering strategic and financial constraints.

Findings

Optimized project inflow improves revenue stability.

Method aligns project selection with strategic objectives.

Supports decision-making under budget and revenue constraints.

Abstract

Many pharmaceutical companies face concerns with the maintenance of desired revenue levels. Sales forecasts for the current portfolio of products and projects may indicate a decline in revenue as the marketed products approach patent expiry. To counteract the potential downturn in revenue, and to establish revenue growth, an in-flow of new projects into the development phases is required. In this article, we devise an approach with which the in-flow of new projects could be optimized, while adhering to the objectives and constraints set on revenue targets, budget limitations and strategic considerations on the composition of the company's portfolio.