Sometimes pharma companies and their partners need to expand “the whole menu, not just the pie” in market access negotiations. This is one of several transformative negotiation strategies described by my Vantage Partners colleagues Jonathan Hughes and Danny Ertel in the July/August 2020 Harvard Business Review. I invite you to consider the following example of this not uncommon conundrum.
Early research and payer engagement indicated that a large biopharma likely would need to deeply discount its new therapy to even get on formulary in a highly competitive chronic care therapy area. Therapies with similar efficacy and safety profiles already were well established with payers and providers. But instead of haggling with payers over the discount level, the biopharma opted to reimagine the payer’s problem.
Negotiators considered the full scope of need — from patient ID, diagnosis, prescription, administration of the therapy, and tracking and monitoring progress over time. The biopharma then engaged payers to explore gaps and opportunities across this full treatment lifecycle, identifying several ways they could provide value to payers beyond the therapy itself. These value-adding elements allowed the biopharma to broaden the scope of engagement with several large payers, creating more value for themselves, payers, and patients, while preserving their target price.
Executing this strategy hinged upon broad early engagement with traditional and nontraditional stakeholders to find gaps and opportunities and build a shared understanding of the potential benefits of working together in a new and broader way. “What’s Your Negotiation Strategy?” discusses how skilled negotiators “expand the menu” and rethink their approach to high-stakes, highly challenging negotiations. Enjoy a complimentary copy of this or any of our previous HBR articles, courtesy of Vantage.