Value-driven project and portfolio management in the pharmaceutical industry: Drug discovery versus drug development – Commonalities and differences in portfolio management practice

Abstract

The concept of portfolio management has been widely used in the pharmaceutical industry. It is used to evaluate the commercial value and the risk structure of development projects. The final goal is to select a portfolio of projects that addresses the strategic objectives of the organisation optimally and that leads to the highest overall portfolio value. Companies now start to apply the portfolio management concept on their research portfolios. Although the basic principle remains the same, the methodology applied has to be adapted to the greater uncertainty that early research projects carry. Commonalities and differences of the portfolio management process in research and development are described and recommendations are given how to harmonise the two different approaches.