Case study – creating a portfolio management decision support tool for a medium-sized pharmaceutical company

Abstract

This case study chapter provides a detailed review of the creation of a portfolio decision tool for a pharmaceutical company based on the East Coast of America. The firm was transitioning from being almost wholly focused on early research to building significant capability to take drugs further down the development process and into the market. Operating a portfolio that included multiple stages of development and with rapidly increasing overall numbers of potential drug products required a step change in portfolio management sophistication and competence. The case study described in this chapter demonstrates many aspects of the implementation of theory discussed earlier in sections one and two. In particular, the chapter emphasises the centrality of understanding the company’s strategic objectives and translating these into decision criteria to ensure portfolio management effectively delivers on strategic objectives. The chapter starts with a review of the drug research and development process to orientate the reader to the context for the portfolio tool. It then goes on to describe the process used to develop the tool and finishes with a description of the tool itself. The primary aim of this case study is to present the work undertaken to design and implement a portfolio management decision support tool that brings significant competitive advantage to the pharmaceutical company.