Negotiation training in the pharma industry

In the last decade, the process of taking pharmaceutical products to market has changed. In our work with sales and market access professionals, we see a need for more sophisticated methods for training their negotiation skills as well as their ability to prepare for meetings with healthcare system representatives.

Earlier this year, we were invited to run a negotiation workshop at an event hosted by The Danish Pharmaceutical Society. We shared the stage with two top experts from each side of the negotiation table:

• Sophie Cooper, Scientific Advisor at the National Institute for Health and Care Excellence (NICE)
• Tim Slee, Corporate Vice President of Global Patient Access at Novo Nordisk

Our contribution was to bring together key points from both perspectives and, in a playful way, have the participants explore nuances in how the two sides choose and frame their arguments. In short, we designed a negotiation exercise that had the participants step into the shoes of, respectively, a representative of a pharmaceutical company and a healthcare system.

In this article, we summarise a few of our takeaways from the event and reflect on how to accommodate the need for training new negotiation skills in a changing pharmaceutical industry.

THAT WAS THEN, THIS IS NOW

In the past, if a pharmaceutical company was able to demonstrate the superior safety and efficacy of a new drug through clinical trials, they could, with this evidence alone, justify charging a premium price. If the new drug was also able to address an unmet need, they were well on their way to having their next blockbuster, whether this would be Victoza^® or Viagra^®.

However, todays healthcare systems are under economic pressure and scrutiny, which affects the documentation needed from pharma companies. Healthcare systems are forced to take a more rigid approach when they negotiate drug prices and reimbursement. This is because today’s healthcare budgets must accommodate growing populations, larger segments of elderly citizens as well as a new range of lifestyle diseases, and budget holders need to find ways to lower their cost base without compromising too much on patient outcomes.

THE ASSESSMENT GAME

Healthcare systems manage the costs of new drugs through different types of healthcare technology assessment. Assessment methods vary across countries, and even across regions within the same country. For some healthcare systems, clinical efficacy is still the most important factor. For others, sophisticated health-economic models are put to use. In the UK, NICE assesses new drugs by calculating the difference between the cost of a new treatment and the cost of the current standard treatment. This is then seen in relation to the difference between how much the two treatments prolong patients’ lives and how much they improve their quality of life. In short, NICE asks the question: “Does the value of health gain justify the additional resources required for the new treatment compared to the current treatment?”.

When we design training activities for market access professionals, we often create exercises that sharpen their ability to identify which type of payer there are dealing with, i.e. “Which institution is funding this type of healthcare, and by which criteria does this institution evaluate our product?”. Building on this, professionals need to practice the process of choosing value arguments appropriate to different types of payers. Also, in the training of sales representatives, it makes sense to help them reflect on how local payers influence prescriber behaviour, e.g. through cost limits or financial incentive schemes.

FROM PREMIUM TO PARTNERSHIPS

If we take NICE as an example, their calculation method categorises some drugs as cost-effective while others are rejected. As pharmaceutical companies try to avoid rejection, they enter into early dialogues with NICE. This is critical in order to find out which evidence and arguments they need to present to get their products on the market. These dialogues have a significant impact on the design of the clinical trial programme. Thus, relationships between the pharmaceuticals companies and healthcare authorities becomes more about partnerships and less about gatekeeping.

In NICE’s calculation, some drugs are not seen as cost-effective nor are they flat out rejected. These drugs fall in between and may be able to get a positive recommendation if there is another strong case for their endorsement. Such a case could be a guaranteed certainty of outcomes. A new drug may in itself be more expensive than an existing drug, but if it provides better outcomes, it may help healthcare systems save costs in a more holistic perspective, because it reduces relapses or hospitalisations. However, payers may not be willing to take this risk, because improved outcomes in clinical trials do not guarantee improved outcomes in real life. In order to make such guarantees, pharmaceutical companies venture into innovative, risk-sharing partnerships with payers. In some cases, healthcare systems only pay when the treatment works according to an agreed standard.

In our design of training sessions for market access professionals, we see an increasing need for education on innovative partnerships. As part of the curriculum, participants need to see the company’s portfolio of contracting options and understand which options they can use in different situations. They may need to relate this to payer profiles as well as an assessment of opportunities in the market.

FROM SLOW TO FAST-PACED TRAINING

We design negotiation exercises for both market access professionals and sales representatives. There are many ways to train negotiation skills, and the key to choosing the right method is having clearly defined learning objectives. For instance, when the training focuses on a specific drug, learning objectives are typically tied to different steps in the launch process.

In the earlier pre-launch stages, the focus is most often on identifying payer archetypes, structuring value arguments and discussing strategic partnership opportunities. For this, we use slow-paced contemplative processes in which participants assess different payer cases. The exercises are typically about anticipating questions and objections and identifying arguments to counter these. If we train seasoned experts, they are to provide the arguments themselves, or we can have them actively look for evidence in real-life documents (e.g. objections handlers, value dossiers) and reflect on how different types of data support different value arguments. If we train less-experienced professionals, we provide prewritten arguments that they use to build dialogue flows.

Close to the launch of a drug or post-launch, participants will typically need to prepare for face-to-face meetings. We often combine preparatory exercises, such as choosing and anticipating arguments, with roleplaying exercises in which the participants work to master intense fast-paced argumentation as well as non-verbal communication. We add observation and reflection exercises, so the participants have the opportunity to give each other feedback. In many cases, there is no one right answer, and learning points are made when professionals share observations and assumptions.

The two types of exercises, slow and fast, work well in combination. The participants get the embodied experience of how an otherwise stressful interaction with a sceptical stakeholder will be more successful when there are well-prepared.

LOOKING TOWARDS THE FUTURE

The process of selling pharmaceutical products has become more complex, and new partnership models will add yet another layer of complexity. If a new drug fails to provide the desired real-life outcomes, this may be due to patient behaviour. If a patient fails to adhere to a treatment and lifestyle regimen, who is then to be held accountable? And how can we even know the cause of failure?

The answer to the latter lies in the increasing number of digital services. Many newer medical devices are supported by an online component that lets patients share data about injection frequency and dosing with their physicians. A growing number of apps, such as mySugr, help patients track health-related behaviour. It is not difficult to imagine future scenarios where patients, in order to get access to new innovative drugs, must consent to various levels of surveillance. Also, it is not difficult to imagine a future where patients are held economically accountable for their treatment adherence by insurance companies or other payers.

From a training perspective, this calls not only for an understanding of payers and partnerships, but also for an understanding of monitoring technologies and regulation (such as GDPR). As a consequence, learning objectives are broadened to include an understanding of the interplay of systems. A good way to address this in a training session is through the use of simulation games. Games let the participants experiment with various strategies. They experience outcomes in a safe environment, and they see connections in a simplified, yet realistic way. You can read more about using games and simulations in this article.

Of course, learning objectives like these go beyond the market access and sales functions, and organisations can benefit greatly from extending related training activities to cross-functional teams. This may entail a restructuring of some corporate training programmes, but truth be told, if we want to prepare organisations for a future of truly cross-functional challenges, cross-functional collaboration starts in the training session.