Eight Strategies for Portfolio Optimization in Pharma

In our latest article, we developed eight different project portfolio optimization strategies to account for varying risk appetites, budget constraints, and strategic priorities. These strategies help decision-makers explore multiple perspectives rather than relying on a single optimal solution.

The strategies are structured around two main strategic focuses:

1️⃣ Ensuring Revenue Targets (>X)

-- Achieve a mean revenue target while minimizing total cost

-- Ensure a minimum yearly revenue threshold while minimizing total cost

-- Optimize for mean revenue, while ensuring peak yearly spend doesn’t exceed budget

-- Secure a minimum yearly revenue, while keeping yearly spend within budget

2️⃣ Keeping Investment Cost Within Budget (<Y)

-- Maximize total revenue while keeping the mean cost within budget

-- Maximize revenue while keeping yearly cost within budget

-- Focus on steady revenue while containing mean cost

-- Keep revenue stable while ensuring peak yearly spend never exceeds budget

Exploring multiple strategies highlights the trade-offs between cost and revenue, showing how portfolio balance evolves under different constraints. Comparing outcomes across these strategies provides insights into the dynamics of a pharmaceutical portfolio and helps decision-makers understand how different priorities affect the long-term pipeline.

Instead of multi-objective optimization, which in this case indeed would be a black box, our structured approach keeps the decision-making process transparent. Rather than producing a single result, it provides a framework for strategic judgment, allowing for a clearer view of portfolio risks and opportunities.

📖 Read the full article here