Dealing with pharmaceutical delays

By on / Business Negotiations, Daily

The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Teflex Products is a five-party, multi-issue negotiation among representatives of a pharmaceutical company, a medical drug manufacturer, and three consumer organizations over the delayed release of a new drug.

SCENARIO:

Midland Pharmaceutical Company has developed Renaid, a breakthrough drug that moderates kidney damage due to high blood pressure. In order to make Renaid profitable and effective, a product called Teflex (recently patented by Teflex Products) must be added to allow for a timed-release in the body. Teflex Products and Midland have made a deal giving Midland rights to purchase Teflex, but Teflex Products is ten months late in delivering the first order of Teflex to Midland. This has angered and inconvenienced Midland since Midland has already announced Renaid’s availability to the public. The public is outraged at the delay of the drug due to an apparent monetary dispute between two pharmaceutical companies.

Only Teflex Products knows the real reason for the delay. In response to Midland’s first order last year, Teflex Products produced a $2.5 million batch of Teflex. Before Teflex Products could deliver the batch to Midland, it received a letter from a disgruntled former mixing room employee, alleging that the Teflex batch had been improperly mixed. Teflex Products has been unable to verify the former employee’s allegations. If the allegations are true, then some Renaid consumers could die, and Teflex Products would be sued and likely go out of business. However, if Teflex Products reveals the possibility of improper mixing to Midland, then Midland might walk away from the whole deal — causing terrible cash flow, investment, and public relations problems, and possibly causing Teflex Products to go out of business anyway.

The National Science Institute has called a meeting to discuss the Renaid situation. Attending will be the President of Midland Pharmaceutical and his attorney, the chief scientist at Teflex, a representative of the Hypertension Association of America, a representative of Consumer Rights Now! and a representative from the National Consumer Health Council.

MAJOR LESSONS:

  • This simulation teaches about the basic mutual gains strategy for dealing with an angry public.
  • Inventing options before committing to them is critical to achieving mutually beneficial outcomes. Unfettered “brainstorming” often yields creative and surprising solutions.
  • Preparation is a major theme of this exercise. Issues to consider in preparation include: What is your BATNA? What is theirs? What are their major interests likely to be? What are yours? What do their choices look like now? How, realistically, could we change these? How do we make it as easy as possible for them to do what we want, and hard for them to do otherwise? How do we best communicate all of this? What yesable propositions do we have for them?
  • Parties that reveal their true interests do not necessarily do better than those who remain silent or bluff. This game illustrates the advantages and disadvantages of revealing all of one’s concerns. Outside interests can add considerable pressure to the parties. Outcomes will depend on the balance between competitive and cooperative behavior chosen by the parties.
  • One of the parties in this case has good reasons not to tell the truth. How they handle this provides an excellent opportunity to discuss the ethics of misrepresentation.

ADDITIONAL NOTES:

This simulation is part of the curriculum for the book, Dealing with an Angry Public.

MECHANICS:

The participants will have 20-30 minutes to prepare for the meeting. The consumer representatives may caucus separately. The main meeting will not last more than 40 minutes. Discussion of the meetings should take about 30-60 minutes.

TEACHING MATERIALS:

For all parties:

  • General instructions

Role specific:

  • Confidential instructions for the
  • Chief Scientist at Teflex
  • Lawyer for Midland Pharmaceutical Company
  • President of Midland Pharmaceutical Company
  • Representative for Consumer Rights Now!
  • Representative for Hypertension Association of America
  • Representative for National Consumers Health Council

Teacher’s Package:

  • All of the above
  • Teaching note

KEYWORDS/THEMES: agenda control; angry publics; authority; BATNA; bluffing; caucusing; competition v. cooperation; consensus building; indemnity-consumer negotiation; information exchange; joint gain; lying; multi-party negotiation; options generating; pharmaceutical negotiation; preparation

To purchase a copy of the role simulation, click here.

Related Posts

Comments

Leave a Reply