We’re BACCCK! Negotiating in the Pharmaceutical Industry!

Sorry about the long stretch since our last update…we have been on the road conducting research with some of our favorite clients – pharmaceutical companies! The prevailing opinion among the reps that we ride along with at the start of the day is that “We don’t negotiate! We’re not allowed to negotiate!” While we at SNI understand the FDArules and PhRMA guidelines (and the reasons they exist), we also know that negotiation is a process, not an event. Wenever recommend using the “traditional” negotiating techniques like quid pro quo (“I’ll buy you lunch when you start writing more _____!”), but we do recognize that other negotiation habits such as preparation, probing and proposing are vital tools for any sales professional.

There have been many recent changes in the pharmaceutical industry that make the use of effective negotiation skills even more relevant in today’s business marketplace for the pharma rep. Three changes that we have studied closely in our recent research are:

Recent restructuring makes the “feet on the street” approach antiquated and ineffective.

With thousands of pharma reps being laid off in recent months, most pharma companies are moving away from the “reach and frequency” model of sending one rep after another to keep the name of their product and the short clinical message in front of their target physicians. One reason is that there simply aren’t enough reps left to call on a doctor 2 or 3 times a week with the same message. Another reason is that pharma companies are hearing the cries of their customers….the physicians. In a managed care environment, doctors maximize their profitability by seeing as many patients as possible every day. The mere presence of a rep is an interruption to this business reality, and many practices are limiting access to the reps in order to keep patient “traffic” moving along. Doctors told SNI in recent interviews that one effective rep has a greater impact on their writing habits than having 2 or 3 reps repeating the same message over and over again.

Resources are limited and reps must capture value (market share, volume, etc) for value delivered.

With PhRMA guidelines abolishing the practice of delivering office supplies, personal hygiene supplies, and other product-branded materials to their customers, reps have to be even more creative about how they remind doctors of their products benefits after they leave the office. Many pharma companies are also limiting their samples and educational materials in an effort to contain expenses and manage their inventories more effectively. By using proven negotiation techniques, reps can leverage their resources to drive business in the most efficient and profitable way without offending the PhRMA guidelines (or, more importantly, the physicians and their staff!)

Mergers and acquisitions provide an opportunity to develop a shared, more effective sales approach.

Recently, mergers between former competitors (Merck and Schering-Plough, Wyeth and Pfizer, et al) have created an opportunity for these companies to come together and develop a shared sales model and culture. The benefit is that the reps will be learning a new approach together, saving the stress (and the accompanying sales “dip”) that goes along with abandoning old methods while adopting those of the other company. By jumping into a new model together, merged companies can tap into the strengths of both sides and start anew with a shared, collaborative model for effective sales. At SNI, we believe that the adoption of negotiation-based selling will prevent the sales lag while giving the reps new tools and techniques for moving forward in a more efficient, value-based sales culture.

Usually, by the end of a day on the road with a pharma rep, they acknowledge that they do negotiate…on just about every call! Whether it is for access, information, or when allocating their own limited resources. Our proven methodology has helped reps do more than just detail doctors – by building credibility, value and trust via effective negotiating…these reps have a clear advantage in an ever-changing marketplace.

In upcoming entries, we will share some of the specific findings from our 6-week immersion into the pharma world and provide some new ways for today’s pharmaceutical rep to maximize the opportunities that the “new world” provides.

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