In today’s competitive markets, pharmaceutical companies face unprecedented barriers to market access and reimbursement approvals. Generics, bio-similars, and government debt around the world are forcing that companies and teams to think in new ways to reach agreement with public and private health care payers.
Movius Consulting and CBI have worked for years with not only pharmaceutical leaders and teams, but with key stakeholders and groups like the World Health Organization. We understand the challenges that companies face – both external and internal – as they bring new drugs to market. And we excel at helping them to implement a Mutual Gains Approach to negotiation, even in difficult conditions. This approach – developed by leaders at the Harvard Program on Negotiation and CBI – is grounded in careful and realistic negotiation analysis and on value-creating moves that can unlock successful outcomes.
We have partnered on some projects with PriceSpective, LLC to provide clients with an even broader range of expertise. In other cases we have provided tailored training and coaching to teams who are seeking to better understand their counterparts’ needs and to generate options and packages that all parties can accept.
We’ve learned four critical lessons from helping companies to prepare for market access negotiations:
- There is a substantial competitive benefit to teams that recognize negotiation as a core business capability. Such organizations have invested in not only training, but in online courses, tailored tools, cross-functional preparation processes, and balanced incentive structures.
- Being in a “positional” regulatory environment does not, and should not, prevent the adoption of a mutual gains approach. Although communication is often limited by national and regional laws and regulation, there are ample opportunities to engage payers and other external stakeholders in conversations away from the table. Such conversations can uncover critical information and help unlock new deal structures.
- It has never been more important to think outside the box. Market access challenges will only increase in coming years. Old pricing models and assumptions are no longer valid, and it is time to move away from quant models as useful predictors. The key to market access in challenging climates is to tailor arguments and proposals to meet the key interests of payers, while meeting the interests of the company.
- Internal negotiations are often more difficult than external ones. It is not enough to set aspirational target prices and hope that teams will achieve them, or come close. Defining acceptable outcome parameters in view of likely no-deal alternatives; prioritizing interests across functions and geographies; achieving approval for at least two possible packages; these necessary steps to reaching agreement often longer than they should, hamstringing teams at the local level who are ready to close the deal. Negotiators must have the courage and perspicacity early in the preparation process to clarify the interests and decision rights of leaders across functions, so that unpleasant fights or surprises ar eless likely later in the process.