The process of turning a promising chemical compound into a safe and effective drug is both expensive and risky. Effective strategic planning is vital to ensure that investment in staff and equipment is used productively and that an acceptable output of products can be maintained. But methods of planning in common use do not deal satisfactorily with the uncertainties. This paper sets out an analysis of the process and describes the use of a simple model to establish a strategic plan. The model allows the output, resource efficiency and robustness of a plan to be examined. Important conclusions about the relative distribution of resources between different activities are drawn and the effects of possible changes in regulatory requirements are explored.

Despite the popular view that pharmaceutical research is a random process, and by inference unplannable, the long‐term survival and development of a pharmaceutical company must be based on a steady flow of new products with a full understanding by management of the relationships between research expenditure and the likely revenues they will produce. In this paper is developed a model of the R&D function which uses probabilistic assumptions to compute the expected stream of revenues from a portfolio of projects involving the major development routes from which pharmaceutical products usually arise. The model is based on expected values of market and technical research performance and hence gives expected or indicated sales in the future as output.

Within the financial and technical objectives of pharmaceutical R & 0, an important sub-goal is the maintenance of a long-term balance between the different activities of research. Such a balance provides stability and, by ensuring a high utilization of research man-power, offers a higher output from a given level of investment. This paper describes the development and use of a simple technique to assist in attaining this balance. The performance of a strategic plan, in both the long-and short-term, is assessed, and the scope for corrective action to deal with deviations from the plan is explored. The flexibility and robustness of suitable strategic plans are demonstrated by the use of simulation. R E F E R E N C E S Cox, J. S. G., Millane, B. V. & Styles, A. E. J. (1975) 'A planning model of pharmaceutical research and development', R & D Management, VoI. 5, Epton, S. R. (1972) T h e underestimation of project duration: an explanation in terms of a time horizon'