A new study has claimed that pharmaceutical executives striking deals worth millions of pounds are often “ill-prepared”, which can sometimes lead to “disappointing results”.
The Scotwork study, which is the world’s most comprehensive study into pharmaceutical negotiations, evaluated the tactics of over 1,100 pharma executives in some of the world’s largest organisations, of which over one in three regularly struck deals worth more than £1 million.
Delving further in to the findings, the report found that just a quarter (26%) of negotiators in pharmaceuticals always “strengthen relationships” when negotiating; a similar amount (27%) always create long term value for their businesses.
Further, 28% of executives never or only occasionally had a fallback plan for if things went wrong, and a “worrying” one in ten mostly or always plan to concede no ground whatsoever during a trade.
Finally, the study revealed that 49% of pharmaceuticals executives in negotiating positions do not always know what the best outcome of a negotiation would be in the first place.
Richard Savage, director of Scotwork UK, said: “The pharmaceutical sector faces its own set of challenges and it is not uncommon for negotiating behaviour to adversely impact relationships and outcomes. Whether it is lost revenue, missed opportunities or damaged relationships, getting negotiating wrong hurts a business like little else.
“Price has become a major issue as the role of the clinician in the buying cycle changes. Negotiating is the most neglected professional skill in the pharmaceutical industry. The most common mistake is to pursue as much of what you can – typically money – in exchange for nothing. If companies fail to see the value of exchange, of trade, they are missing out in ways that far exceed pounds and pence.”
The findings come at a time when the pharmaceutical industry is using methods to compete at ever-decreasing price points, as the industry switches from clinician-led sales processes to procurement-led ones.