Uncovering Interests Other than Price in Market Access Negotiations

Market access negotiations are complex. Depending on the product and competitive context, payers may focus on various issues including payment terms, volume rebates, registries, restrictions, etc. and in virtually any access negotiation, push back on price is inevitable. One of the most common challenges negotiators face is payers focusing solely on price, making it difficult to discuss the actual value on the table. Price-focused discussions become particularly difficult when dealing with budget-conscious payers, dis-cussing high-cost therapies, or introducing a new product into an already crowded therapy area. It is easy to default to an adversarial mindset and haggle over give-and-take compromises, or even worse, to simply give a significant dis-count in the hopes it creates a better “working relationship” with the payer. This rarely results in an agreement that both parties are fully satisfied with, often results in giving away value, and can create a dynamic where payers expect we will always discount more if they push enough.

It doesn’t have to be this way, though. While most payer organizations care about price, rarely is price their sole concern. Pivoting the discussion to include payer (and health system) interests beyond price is essential to protecting the value of your therapy. The following steps will help you to change the course of the conversation, successfully moving away from positional bargaining while uncovering additional interests.

Understand the negotiation environment
Assess the payer and healthcare landscape before you begin any negotiation.

The first step to understanding your customer’s non-price interests is taking the time to thoroughly prepare. If you are thinking only about price yourself, you can be sure that will remain the focus of your negotiations! Try some (or all) of the following information gathering methods to ensure you have a robust picture of the negotiation environment well in advance of your first interaction with the payer.

• Take the time to consider the payer’s broader set of interests, which likely includes not only price but also total cost of care and patient unmet need.
• Think through the challenges in the therapy area, and how that might inform their attitude toward your product. How might the solution you are providing help them reduce total cost?  Reduce hospitalization?  Help patients live more independent lives?  Give providers new tools to address patient needs?  And, in the right situation, help payers by increasing competition in a therapy area over time?
• Consider what concerns your cross-functional colleagues may have heard from this payer in the past.
• Explore and understand (to your best ability) how competitors in the same therapy area have approached their negotiations. Have their agreements focused on creating value beyond price reductions? Your team may be able to gather market intelligence on this, and your marketing and medical colleagues may have insights on how competitors have broadened their value story (or, that they have not). Some common elements to consider include stability of supply, volume-based terms, outcomes-based agreements, beyond-the-pill solutions, registries, and patient awareness programs.
• Additional information might be gleaned from conversations with key opinion leaders, specialists, and patient advocacy groups in your health system. Their concerns often intersect with the payer’s interests, giving you useful information about the potential sources of value you might leverage in your negotiation (not to mention potential allies who can advocate for the value of your therapy).

Armed with this research about what the payer might find valuable, you can begin to build your plan for the negotiation itself.

• What questions will you ask the payer?
• Are there any creative options you might discuss?
• What options could you imagine putting forward?

Negotiators who are well prepared and equipped with knowledge of the payer and their health system are better able to discuss and create value for their payers, as well as strengthen the working relationship, without making unnecessary price concessions.

Confirm and uncover non-price interests

Skillfully dig under positions around price and shift the discussion to underlying interests

After you have prepared thoroughly for your negotiation, you must skillfully ensure your discussion with the payer seeks to satisfy a broader set of their core interests, not just price. You have a great deal of control over how this discussion develops, more than you might think: our experience, and research we have published, shows that the vast majority of negotiators choose their approach to negotiation as a response to their counterpart’s action, not based on what they believe will actually create the most value. Thus, if you seek to create a more open and value-oriented discussion, your chances of success are higher than you may think. Figure out what is important to the payer and be sure to introduce those broader value concepts early in your negotiation.

Even when you skillfully set the right tone for a meeting, you will face payers who lock into price early on in a conversation. When they begin to push on price, it is easy to be pulled into the ‘haggle’ and negotiate a discount to close the deal or just to maintain the relationship. Rather than giving in to this temptation, when a payer refuses to discuss value and continues to focus on price, there are a few methods you might employ.

Use inquiry to test their interests

Ask a question relating to the ideas you uncovered in your preparation. For example, you could ask:

“I understand you are worried about the potential budget impact of our therapy. Would an annual cap or a tiered discount model help with this concern?”

“Given the safety concerns present with the standard of care, do you see value in our enhanced safety results, even if the economic impact is not fully defined?”

Often, in response you will hear a non-price interest that you can use to change the direction of your discussion.

Use effective questions to return to your key value messages

“I hear you are concerned about budget impact and want a lower price. We think the population for this indication has significant unmet need and generates a great deal of cost - would it be helpful to share our budget impact model showing how limited the cost impact would be relative to the patient benefits?”

“To what degree is total cost of care for the patient population a primary concern?”

This is an example of shifting the conversation from potentially arbitrary price concessions to cost impact and patient benefits based on legitimate standards.

Don’t fight their position and instead look behind it for their underlying interests

“Could you tell me a bit more about why you are looking for 15% price discount? Do you have competing therapy area priorities?  Are you looking for ways to reduce total cost of care? Or do you just feel our price isn’t supported by value?”

In this example, you would learn to what degree the payer is concerned about total cost of care. Assuming it is an interest, you can then explore ways to meet it by demonstrating enhanced efficacy cost-effectiveness, and perhaps even cost-savings (even at a higher price).

Model the behavior you want to see by sharing your interests

You might highlight the unique ways you and the payer can work together to improve the standard of care, express the importance and value of your relationship with the payer, share your aim to innovate together, and so on.

Develop and skillfully introduce options that meet both parties’ interests

Propose possible options for agreement and invite criticism in order to learn more about their interests

Once you’ve uncovered some interests, take the next step by proposing some ways to meet those interests (and focus on approaches other than offering a discount!)  The most skillful negotiators are able to take the interests they have heard, combine this information with potential offers identified during preparation, and generate some possible options that your counterpart can react to. Focus option generation on ways to satisfy interests, not stated positions around price.

Remember to explore many options with the payers. Instead of making a proposal and asking for agreement, for each option you propose invite criticism by asking:

“What would be wrong with this option?”

“Is something like this interesting to you?”

You will elicit responses that are an expression of interests, effectively moving the discussion away from positions (and price!). As you learn more, you will be able to craft even more options to meet your payer’s interests and possibly explore ways to co-create value.

Share data that supports your value story

Share metrics/data with your payer to demonstrate the value of options you propose

After generating options to meet both your payer’s interests and your own, you must work to sort among the options and describe how they satisfy a broad range of interests. Rather than making decisions based on which side can force the other to comply, focus discussion of options around standards of legitimacy. Common standards of legitimacy might include cost effectiveness modeling, ICER analysis, budget impact calculations, competitor pricing, unmet need assessment, safety data, or the views of key opinion leaders. Each of these sources of legitimacy can be used to persuade others that the options you’ve identified not only meet their interests well, but are also fair and reasonable.

Using external criteria not only helps show the payer how you are able to meet their interests other than price, but also helps produce durable agreements and enhances the working relationship. As you use standards of legitimacy to evaluate options, consider using data in the following ways:

As a sword

In your preparation, search for a range of standards that might be applied to possible options for agreement, especially those that may persuade the other side that there is value in your offering that can meet interests other than price. As you introduce options, start with the most favorable criteria that you would be willing to put before an impartial arbitrator.

As a shield

Do not yield to pressure, only to principle. If the other side applies illegitimate pressure to force you into price reductions and you give in, you reward their bullying and encourage them to repeat it. If, however, you respond to arguments based on objective standards, you demonstrate to them that focusing on legitimacy works, and encourages them to continue its use.

While this advice has helped our clients across a number of health systems and therapy areas, it is important to remember that every payer has a unique set of interests based on the healthcare landscape, their internal relationships, etc. You must push yourself to prepare thoroughly for each key negotiation, hone your skills in discussing these non-price interests with your payers, and work to put forward options that meet non-price interests.

For more on our  experience in this area, visit our Market Access page.