Pharma talks

By on / Business Negotiations, Daily

The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises.  The following role simulation is a three-party, multi-issue contract negotiation among representatives for an HMO and two pharmaceutical companies over the purchase of a new antidepressant drug.

SCENARIO: Hopkins HMO is the largest independent managed health care organization in the region. PharmaCare, Inc., a newly-formed pharmaceutical company, has just introduced “Profelice”, the first commercially-approved antidepressant treatment of its type. Profelice is expected to replace Prozac and Zoloft due to increased efficacy and reduced side effects.

The Managed Care Representative for PharmaCare and the Pharmacy Director for Hopkins HMO have held several preliminary meetings over a contract for Profelice, but have made no commitments. The key issues to be negotiated include market share target tiers for Hopkins HMO, the discount pricing schedule for Profelice, marketing support, Profelice’s formulary status, and the length of the agreement. Now, the PharmaCare Managed Care Rep and the Hopkins HMO Pharmacy Director are meeting with PharmaCare’s Contract and Pricing Manager to try to finalize the agreement. The Contract and Pricing Manager has final approval over all PharmaCare contracts. The simulation is arranged so that the Managed Care Rep will meet with each of the other two parties individually, and with both of them simultaneously if desired.

MAJOR LESSONS:

  • How perceptions of power can affect an agreement
  • The importance of understanding interests to developing a mutually beneficial agreement
  • The process of creating and claiming value
  • The effect of the relationship on the agreement and vice-versa

TEACHER’S PACKAGE INCLUDES: Participant materials; matrix of possible agreements for debriefing

To purchase this role simulation, click here.

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  • “The simulation is arranged so that the Managed Care Rep will meet with each of the other two parties individually, and with both of them simultaneously if desired.” Good i dea

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