New Approach to Project Portfolio Management for New Drug Development

OVERVIEW: Regulatory harmonization, driven by the ICH regulatory committee founded in 1991, established an infrastructure for pharmaceutical firms to make global use of their clinical test data for registering new drugs in Japan, the USA, and the European Union (EU). This deregulation forces pharmaceutical firms to face stiff competition in the world market. Therefore, it is important to be able to efficiently manage individual projects to maximize the expected profits within a tolerable risk limit. It is also essential to balance the profits and risks of their project portfolio because of the many other scheduled projects in it. Hitachi has applied a risk budgeting concept to manage the assets of pension funds. This financial management concept/ technique is a scientific solution to portfolio management, because it enables fund managers to control the financial risks at the portfolio and individual asset levels to maximize profits. The concept of risk budgeting has an excellent potential for application to managing the project portfolios of pharmaceutical firms. Hitachi provides comprehensive solutions to pharmaceutical clients with its new-drug-development project-management solutions/new-drug-development management-support system and project portfolio management techniques developed through advanced financial research. Osamu Kubo Junko Ito Yusuke Kawai Yasuhiro Kobayashi