Articles

Stick or twist: The top 5 challenges in payer negotiations and how to prepare for them

August 24, 2022

Introduction

Payer negotiations can be the most challenging situations that market access teams encounter in the product launch pathway. Failing to nail the negotiation process can result in a suboptimal price, restricted patient access for the product and limited commercial success. This article will set out the five key challenges in payer negotiations and highlight how our training solutions can support market access teams to be optimally prepared.

The 5 key challenges facing manufacturers

Payer negotiations require commercial and/or market access teams (the ‘negotiators’) to be able to act astutely to justify the desired price for the product. A payer’s remit is to procure medical interventions that offer the best value for money, to ensure that their limited budgets can be used most efficiently to improve the health of their populations. The onus is therefore on pharmaceutical companies’ negotiators to effectively demonstrate the value of their products. In our experience, there are five key challenges negotiators often face whilst preparing for and conducting payer negotiations:

  • Not knowing the expected payer and clinical objections, especially related to country-specific priorities. Negotiators can be blindsided by unexpected perceptions of their product, throwing off even a solid negotiating strategy
  • Not having the right expertise in the room to answer payer questions or make decisions effectively, weakening the negotiating position of the manufacturer and creating fractured decision-making
  • Not being able to address payer concerns effectively (e.g. lack of content and/or structure in answering payer questions), undermining the confidence of the negotiating team.
  • Knowing what payer questions need to be answered, and what can be left alone. Sometimes knowing what should not be said is as powerful as knowing what should be said!
  • Lacking a fall-back strategy: not having plan B, C, D etc in place if plan A fails. Developing strategies on the fly increases the risk of ending up with an unsatisfactory outcome

The importance of not being idle

Payer negotiations require team members to prepare effectively, think flexibly and act decisively. The need to practice these skills, and learn from mistakes in a collaborative environment, makes training workshops an invaluable part of a team’s preparation. These workshops offer active learning scenarios for negotiation teams to challenge each other and hone their preparation.

Our training workshops allow manufacturers to:

  • Understand how to build the right cross-functional negotiating team to tackle any unexpected obstacles
  • Prepare and rehearse negotiations using a mock meeting to practise primary and fall-back strategies
  • Access the opinions of ex-payers to make negotiation training as realistic as possible
  • Engage with all negotiating team members to understand the most effective way to address payer questions and objections
  • Receive recommendations to improve negotiation style and delivery

Conclusion

The key challenges for payer negotiations revolve not only around preparation, but also execution; poor preparation often leads to poor execution. The best way to prepare for challenging negotiations is active learning in an environment that mirrors the scenario the negotiating team will find themselves in.

Remap Consulting are experts in conducting training workshops to sharpen up the negotiating skills of market access and pricing departments to achieve commercial targets. Get in touch with us to organise a short call to discuss your specific training needs.

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