I think pharmaceutical portfolio reviews should begin with the work a product asks the organisation to remember. A presentation may use little production time and still require distinct planning, records, testing arrangements and customer communication. These demands accumulate across a range that has grown through years of individually reasonable decisions. The result is a claim on scarce attention that a product-margin report may allocate only approximately. A CEO who sees the portfolio solely as revenue and unit cost can therefore miss why an apparently modest product group occupies so much operating discussion.
This is not an argument for removing low-volume medicines by default. A small presentation can serve a meaningful customer need, and its operating burden may be justified. Nor should a general-management review make clinical assumptions that belong with qualified specialists. My concern is the quality of the enterprise decision. We need to understand both the work required to support a product and the obligations that would arise if we changed it. Without those accounts, operations may argue from inconvenience while commercial teams argue from continuity, and neither has enough evidence to resolve the choice responsibly.
At Nerukawa, a studied group of lower-volume presentations generated 9% of revenue but 28% of scheduled changeovers. That comparison made the issue visible, but it did not establish the answer. Some changes were operationally straightforward; others involved established hospital purchasing arrangements and more complex transitions. We examined twenty-three variants individually. Seven entered a managed discontinuation process, five continued with revised planning and eleven remained unchanged. The result was less dramatic than the first proposal. It was also better connected to what the organisation could support and what customers would need to understand.
Count the work between batches
The hidden work is not limited to changeovers. A variant may create a separate forecasting pattern, a rarely used packaging configuration or a documentation requirement that only a few people know well. Low frequency can make this work harder, because familiarity fades between runs. Problems then appear as isolated exceptions rather than as a recurring cost of the portfolio's design. I ask teams to describe the work through actual examples and time demands. A vague complexity score can become another number nobody trusts; a record of repeated activity gives colleagues something concrete to examine together.
Quality and technical teams should enter the review before a preferred list is announced. Otherwise, the commercial case is presented as substantially decided and specialist input becomes a late obstacle. I want the initial options to reflect the questions that could change the recommendation. Which products require linked decisions? What evidence would support a modification? Which obligations continue during the transition? Some answers may be incomplete at first. Recording that uncertainty is more useful than ranking every item with false precision and discovering later that the highest-ranked action cannot proceed in its proposed form.
Understand the obligation before ranking the product
Commercial leaders have an equally important role in describing customer dependence accurately. A product's sales figure does not explain how difficult a change may be for the organisations that obtain it. Longstanding arrangements can include practical expectations that are poorly recorded inside the manufacturer. The review should identify the relevant communication and transition responsibilities through the appropriate channels. It should not assume that a lower-volume item is easily replaceable or that the manufacturer can advise individual patients about alternatives. Those boundaries keep the executive decision focused on matters the company can competently assess and manage.
There is a financial discipline to retaining complexity as well as reducing it. If the company decides that a presentation should remain, it should fund the work needed to support that choice. It is unfair to celebrate portfolio breadth commercially while asking operations to absorb its consequences within an unchanged capacity assumption. Retention may require a different schedule, additional expertise or revised economics. Those costs should be visible in the decision. A product retained for a sound reason can still become a poorly managed obligation if the supporting work is left implicit after the review ends.
Make the transition part of the decision
The case for simplification also needs honest transition economics. In our programme, the seven discontinuations took twenty months and incurred approximately ¥95 million of transition cost. The associated annual revenue had been about ¥310 million. The studied group's changeovers fell by 17%, but that result arrived after inventory, communication and specialist work. Reporting only the eventual operating reduction would have concealed the path required to obtain it. Directors need to see the timing and obligations, especially when the business case assumes that capacity will become available quickly for another product or investment.
An objection I hear is that this level of examination makes portfolio decisions too slow. Companies cannot conduct an elaborate study of every minor item whenever the market changes. I agree that the process should be proportionate. A preliminary screen can identify where complexity, customer dependence or material uncertainty warrants deeper work. What I resist is using speed as a reason to substitute one crude measure for another. A concise review that names the decisive evidence can be more effective than a lengthy scoring exercise whose assumptions remain hidden beneath the final ranking.
The CEO should also recognise the emotional history of a range. A product may represent a team's successful launch, a customer relationship built over years or a site capability colleagues are proud to maintain. These associations do not decide the commercial case, but ignoring them can make a reasonable change harder to execute. I try to distinguish respect for the work already done from the decision about future obligations. Colleagues deserve a clear explanation of why the company is changing its commitment, and what the transition requires, rather than a suggestion that the earlier effort was pointless.
I would reconsider a simplification proposal if the expected release of attention could not be demonstrated or if the transition burden outweighed the benefit. Sometimes the better answer is to improve planning around a stable range. In other cases, the product remains sensible but the company should stop adding new variations without accounting for their continuing work. The review should therefore influence future approval as well as existing products. A range will regain complexity quickly if new commitments enter through a simpler decision process than the one required to retire them later.
Portfolio stewardship means choosing which obligations the organisation will continue to carry and making those choices operationally credible. The useful outcome is not the smallest range or the highest average margin. It is a range whose purpose, support requirements and transition decisions can be explained. For a pharmaceutical CEO, attention is part of capacity: the ability of capable people to remember, investigate and manage the details on which dependable operations rely. A product decision should account for that resource before the next expansion assumes it is available without limit.