Product portfolio analysis in pharma MCQs With Answer

Introduction

Product portfolio analysis in pharma helps B.Pharm students understand how companies evaluate and manage a mix of medicines across therapeutic segments, product life cycles, and markets. This topic covers portfolio mapping, the BCG matrix, GE‑McKinsey grids, lifecycle management, pipeline prioritization, revenue and margin analysis, risk assessment, regulatory impact, and strategic choices such as diversification, licensing or rationalization. Learning these concepts builds skills in market share interpretation, forecasting, product prioritization and optimizing R&D investment. Practical familiarity with metrics like growth rate, relative market share, profitability and contribution margin is essential for evidence‑based decision making. Now let’s test your knowledge with 30 MCQs on this topic.

Q1. What is the primary purpose of product portfolio analysis in the pharmaceutical industry?

• To determine the chemical structure of new drugs
• To prioritize products and allocate resources across drugs and therapeutic areas
• To replace clinical trials with market surveys
• To set retail prices for all medicines uniformly

Correct Answer: To prioritize products and allocate resources across drugs and therapeutic areas

Q2. In the BCG matrix, which quadrant represents products with high market share and high market growth?

• Dogs
• Question Marks
• Stars
• Cow

Correct Answer: Stars

Q3. Which metric is commonly used as the horizontal axis in a BCG matrix?

• Relative market share
• Regulatory approval time
• Number of patents
• Manufacturing cost per unit

Correct Answer: Relative market share

Q4. What does a “Dog” indicate in a BCG portfolio for a pharmaceutical product?

• High growth, high share product needing heavy investment
• Low market share in a low-growth market, candidate for divestment or harvest
• New product with uncertain future
• Market leader with stable cash flows

Correct Answer: Low market share in a low-growth market, candidate for divestment or harvest

Q5. Which portfolio tool explicitly integrates industry attractiveness and business strength for prioritization?

• SWOT analysis
• GE‑McKinsey matrix
• PESTEL analysis
• Five Forces model

Correct Answer: GE‑McKinsey matrix

Q6. In pharma portfolio planning, what is “portfolio rationalization”?

• Adding more SKUs regardless of performance
• Reducing or discontinuing low-value products to optimize resources
• Moving all products to over‑the‑counter distribution
• Increasing promotional spend for all brands

Correct Answer: Reducing or discontinuing low-value products to optimize resources

Q7. Which factor most directly affects a drug’s placement in lifecycle-based portfolio decisions?

• Color of packaging
• Stage of product life cycle (introduction, growth, maturity, decline)
• Number of competing manufacturers in unrelated markets
• CEO’s personal preference

Correct Answer: Stage of product life cycle (introduction, growth, maturity, decline)

Q8. During the launch phase of a pharmaceutical product, which strategy is usually prioritized?

• Cost cutting and rapid divestment
• Heavy investment in R&D for other products
• Market development, registration, and physician awareness
• Ceasing promotional activities

Correct Answer: Market development, registration, and physician awareness

Q9. What is a key limitation of using only the BCG matrix for pharma portfolio decisions?

• It requires complex statistical software
• It ignores regulatory environment, therapeutic value and R&D pipeline complexity
• It automatically predicts clinical trial outcomes
• It mandates divestment of all low-share products

Correct Answer: It ignores regulatory environment, therapeutic value and R&D pipeline complexity

Q10. Which analytical input helps assess commercial risk for a pharmaceutical product?

• Annual rainfall statistics
• Patent expiry date and generic entry timing
• Employee headcount in manufacturing unrelated divisions
• Number of international trade shows attended

Correct Answer: Patent expiry date and generic entry timing

Q11. In portfolio optimization, what does “portfolio balance” aim to achieve?

• Concentrating all resources on one blockbuster only
• Mixing short‑term cash generators and long‑term growth assets to manage risk and returns
• Eliminating all early‑stage projects
• Investing exclusively in non‑pharma ventures

Correct Answer: Mixing short‑term cash generators and long‑term growth assets to manage risk and returns

Q12. Which metric would best measure a product’s contribution to overall company profitability?

• Contribution margin (sales minus variable costs)
• Number of clinical trials conducted
• Volume of brochure distribution
• Time spent in management meetings

Correct Answer: Contribution margin (sales minus variable costs)

Q13. For pipeline prioritization, which financial tool helps compare long‑term project value?

• Net present value (NPV)
• Daily inventory count
• Number of generic competitors
• Color of the product logo

Correct Answer: Net present value (NPV)

Q14. What is “cannibalization” in pharmaceutical portfolio strategy?

• When a new product reduces sales of an existing product from the same company
• When a competitor copies packaging
• When supply chain delays cause shortages
• When patents are extended indefinitely

Correct Answer: When a new product reduces sales of an existing product from the same company

Q15. Which aspect is crucial when mapping products by therapeutic area in a portfolio?

• Therapeutic need, prevalence, unmet need and reimbursement dynamics
• CEO’s alma mater
• Number of vending machines at company HQ
• Shape of tablets only

Correct Answer: Therapeutic need, prevalence, unmet need and reimbursement dynamics

Q16. What strategic action is often taken for “Cash Cow” products?

• Invest heavily to increase market growth
• Harvest for steady cash flow while minimizing new investment
• Immediately discontinue and divest
• Reposition to an unrelated therapeutic area

Correct Answer: Harvest for steady cash flow while minimizing new investment

Q17. How does regulatory uncertainty influence portfolio decisions?

• It has no impact on strategic choices
• It increases project risk, possibly delaying launch or changing prioritization
• It always accelerates product launch
• It reduces the need for clinical data

Correct Answer: It increases project risk, possibly delaying launch or changing prioritization

Q18. Which KPI helps identify over‑reliance on a single product in company revenue?

• Revenue concentration (percentage of revenue from top product)
• Number of suppliers
• Average email response time
• Number of colors used in marketing

Correct Answer: Revenue concentration (percentage of revenue from top product)

Q19. Which decision is suitable for a mature product with declining sales and low R&D needs?

• Intensive R&D to create a new active ingredient
• Cost optimization, lifecycle extension strategies or controlled harvest
• Immediate global relaunch without analysis
• Move manufacturing to a different therapeutic area

Correct Answer: Cost optimization, lifecycle extension strategies or controlled harvest

Q20. Why is therapeutic value assessment important in portfolio prioritization?

• It determines clinical relevance, reimbursement potential and ethical prioritization
• It reduces manufacturing capacity
• It increases the number of patents automatically
• It decides pill color schemes

Correct Answer: It determines clinical relevance, reimbursement potential and ethical prioritization

Q21. What role does competitive landscape analysis play in portfolio mapping?

• No role; decisions should ignore competitors
• It informs market share potential, pricing pressure and differentiation needs
• It only affects manufacturing tolerances
• It ensures automatic regulatory approval

Correct Answer: It informs market share potential, pricing pressure and differentiation needs

Q22. For orphan drugs with small patient populations, what portfolio perspective is most relevant?

• High unmet need, premium pricing and specialized regulatory incentives
• Ignore them due to small market size
• They require identical commercialization as mass market generics
• They should always be divested

Correct Answer: High unmet need, premium pricing and specialized regulatory incentives

Q23. What is the main benefit of segmenting a pharmaceutical portfolio by market geography?

• Identical demand across all regions
• Identifying region‑specific demand, pricing, reimbursement and regulatory barriers
• Reducing clinical trial requirements
• Eliminating need for local registration

Correct Answer: Identifying region‑specific demand, pricing, reimbursement and regulatory barriers

Q24. Which investment decision is typical for a “Question Mark” product in pharma?

• Assess strategic fit and decide whether to invest heavily or exit
• Automatically harvest immediately
• Divest to a competitor without evaluation
• Transfer it to over‑the‑counter sales

Correct Answer: Assess strategic fit and decide whether to invest heavily or exit

Q25. How can lifecycle management extend the commercial life of a drug?

• By developing new formulations, indications, dosing regimens or fixed‑dose combinations
• By stopping all marketing activities
• By ignoring quality control
• By reducing clinical evidence requirements

Correct Answer: By developing new formulations, indications, dosing regimens or fixed‑dose combinations

Q26. Which analysis helps determine whether to in‑license, out‑license or develop internally?

• Make versus buy (or in‑licensing vs. out‑licensing) strategic analysis
• Office location analysis
• Uniform packaging analysis
• Employee satisfaction survey only

Correct Answer: Make versus buy (or in‑licensing vs. out‑licensing) strategic analysis

Q27. What is a common quantitative indicator of future market attractiveness?

• Projected compound annual growth rate (CAGR) of the therapeutic market
• Number of colors in the logo
• Length of the marketing brochure
• Number of meeting rooms in HQ

Correct Answer: Projected compound annual growth rate (CAGR) of the therapeutic market

Q28. How should cannibalization be managed when launching a follow‑on product?

• Ignore it and expect no impact
• Model incremental sales, adjust pricing and position to minimize negative effects
• Immediately withdraw the older product before launch
• Double the price of both products

Correct Answer: Model incremental sales, adjust pricing and position to minimize negative effects

Q29. Which non‑financial criterion is vital for prioritizing R&D projects in pharma portfolios?

• Scientific validity and unmet medical need
• Number of press releases planned
• Floor space available in marketing
• Color of the research lab walls

Correct Answer: Scientific validity and unmet medical need

Q30. What is a practical first step when conducting a portfolio review in a pharmaceutical company?

• Immediately cut the largest R&D program
• Collect and validate performance data (sales, margins, growth, pipeline status and regulatory risk)
• Change the corporate logo
• Hire more sales reps without analysis

Correct Answer: Collect and validate performance data (sales, margins, growth, pipeline status and regulatory risk)

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