Negotiating A Stronger Clinical Trial Agreement and Budget. Tips and tricks to improve your negotiation skills with sponsors

Transcription

1 Negotiating A Stronger Clinical Trial Agreement and Budget Tips and tricks to improve your negotiation skills with sponsors By

2 Forte Research Systems Software to fit your clinical research needs Cloud-based clinical trial management software for investigator sites and research groups. Includes: Visit management Financial management Site operational tools Real-time reporting And more! Comprehensive software package for academic medical centers and health care systems. Includes: CTMS EDC Billing compliance Biospecimen management And more! Hosted electronic data capture system for CROs, sponsors, and medical device companies. Includes: Sophisticated forms designer Query management Electronic signatures Audit trail And more! Learn more about Allegro Learn more about OnCore Learn more about Overture 2

3 Introduction Negotiating. For some, the mere thought sends a shiver down their spine. It is not a skill that comes naturally to most people. If you re lucky enough to excel at negotiating, then you re one of the few and this book will be a good refresher. For everyone else, we hope to provide some guidance to help you negotiate stronger clinical trial agreements (CTAs). While this book is certainly not intended to teach you everything there is to the art of negotiation, it does supply you with basic principles every good negotiator must know, and discusses how to apply those when it comes to negotiating with sponsors. Landing a good deal with sponsors will: Ensure you re able to conduct the trial within budget. Strengthen your relationship with the sponsor. Reveal your site s strengths and weaknesses, which can allow you to grow and improve Boost your confidence for future contract negotiations i

4 Chapter 1:...5 The Art of Negotiation Table of Contents Chapter 2:...14 Negotiating Clinical Trial Agreements Chapter 3:...21 Using a CTMS to Increase Negotiating Power

5 Chapter 1: The Art of Negotiation There s a reason that so much has been written on the art of negotiation. It truly is just that an art. Many people work on it for years. Fortunately, negotiating is also a skill that can be learned. Once learned, it can become a valuable asset in the clinical research setting, as well as your personal life. The following pages cover some basic principles to this art. 5

6 Chapter 1: The Art of Negotiation Basic Principles There are certainly more points you could discuss about negotiating, but this section serves to provide you with a foundation. While most of these may seem like common sense, it is important to point out how challenging it can be to stick to your guns when in the heat of negotiation. If you find yourself in this situation, you may want to refer back to this chapter. It is important to not let emotion drive your negotiations. This chapter will examine the following components: Preparation Leverage Offer Outcomes Qualities of a good negotiator: Planning skills Ability to think clearly under stress Communication skills Product/industry knowledge Personal integrity 6

7 Chapter 1: The Art of Negotiation Preparation Is Key Good negotiators gain an advantage by designing an action plan before ever entering into negotiations. Adequate preparation can mean the difference between success and failure. To increase your success rate, consider the following: What information do you need to make informed decisions? Where and how can you gather this information? What are the right questions to ask and when? What is your ultimate goal or desired outcome? Additionally, it is advantageous to prepare back up options or alternatives if your negotiations should reach an impasse or you re presented with an unfavorable counter-offer. By being fully prepared, you can avoid the possibility of making quick, instinctive decisions, which will almost always land you in a less than ideal outcome. Rather, ensure your preparations encourage smart, strategic decisions that can get you the results you desire. 7

8 Chapter 1: The Art of Negotiation Leverage Leverage: [lev-er-ij] noun The power or ability to act or to influence people, events, decisions, etc.; the ability to influence the other side to move closer to one s negotiating position. Since whoever has the most leverage tends to win, it is important to know what you can provide for leverage. By highlighting your strengths and knowing your unique value proposition, you will be able to communicate your needs more confidently and increase the likelihood of getting what you ask for. Positive Leverage Positive leverage is a negotiator s ability to provide things that his opponent wants. In the case of clinical research, it s not just your ability to conduct the study, but to conduct it well. Negative Leverage Negative leverage is a negotiator s ability to make his opponent suffer. An example here would be, If you don t agree to these terms, we will never do business with you again. While the above example of negative leverage may be extreme, you can see how you d want to avoid using negative leverage of any kind, as it can put a strain on relationships. Often, this negative leverage is the result of emotional negotiations, which is discussed further on the next page. Unique Value Proposition (UVP): Often used in sales and marketing, the UVP is the primary reason someone should do business with you instead of the competition. 8

9 Chapter 1: The Art of Negotiation Presenting an Offer A great offer is one that makes it difficult for the other party to say no. While drafting your offer, consider how hard or easy it may be to say no to. A too good to say no offer is rarely the first offer though, so keep these tips in mind while communicating your subsequent offers. Check your ego and emotions at the door. It s all too easy to take things personally, especially when you are so close to your work. Don t make the mistake of confusing yourself with the offer. Keep the discussion results-oriented. Keep the focus on results and what would make for the best deal for both parties. Stick to the facts for the most productive conversations. Go high on your first offer. Negotiations are meant to be a compromise. If you don t start high, you will have less room to negotiate. Though this mainly applies to financial aspects, it can (and should) include all components of the agreement. Avoid I Statements. Pay attention to how you approach a conversation. I want... creates a very different feeling than we should address this... 9

10 Chapter 1: The Art of Negotiation Presenting an Offer Put your concerns on the table. If you don t understand something or have concerns, don t be afraid to ask. Often, the other party will be able to address these concerns and clarify any questions. If they can t, then perhaps it is a legitimate concern that you will need to take into consideration. Or, perhaps this would be an opportunity to let the concern work for you in a counter-offer. Get it in writing. Perhaps the cardinal rule of negotiations is to make sure all your offers are in writing. Track your communications so you can easily refer back to them should questions arise later during the negotiation, or even after a deal has been made. Protect your reputation. Regardless of the outcome, both parties will form opinions about how the other dealt with the process. Reputation is important for future business. Be trustworthy and honest. Above all, be optimistic and confident. If you don t believe in your offer, you can t hardly expect your opponent to. Being confident can make you more believable and likeable, and optimism can go a long way as well. Just be sure this confidence doesn t affect your ego (which you should have already checked at the door). Confidence is key. When you are confident in yourself and confident in your requests, you have more negotiating power.»» n Katie Richter, Director, Strategic Site Operations & Compliance, PharmaSeek Financial Services 10

11 Chapter 1: The Art of Negotiation Possible Outcomes Each time you negotiate anything it will end in one of three ways: Win-Win Win-Lose Lose-Lose The ideal outcome in every negotiation is obviously a win-win, where both parties are happy with their side of the deal and having achieved their goals. Three tips to increase your chance of a win-win outcome are discussed on the next page. Win-Lose In this situation, both sides attempt to win by focusing solely on what they need and want versus compromising with what the other side also needs and wants. Ultimately, one side falls short of their desired target. Lose-Lose This can result in one of two scenarios: both parties fall short of their desired target, or no deal is struck. 11

12 Chapter 1: The Art of Negotiation Achieving a Win-Win 1. Avoid narrowing things to only one issue. By doing so, there s often only one winner. For example, when negotiating price, don t focus on that alone. Rather, address other factors that can also provide value such as quality or additional resources. 2. Realize that the other party doesn t share the same needs and wants as you. By mistakenly thinking the other party s goals are the same as yours, you create an attitude that the other party s gain is your loss. This can make it extremely difficult to achieve a win-win. Recognize that each party has different goals they re aiming to achieve. It is equally important, however, not to lose sight of this during negotiations, as the process itself can often alter your perceptions. 3. Don t assume you know the other party s needs and wants. Your assumptions may be incorrect, which would make it difficult to successfully negotiate anything. And, if you don t know what they want, you are unable to present an offer that would appeal to their needs. Find out the other party s needs and you take steps closer to a win-win. 12

13 Chapter 1: The Art of Negotiation Lessons Learned At the end of every negotiation, it is important to reflect back on the process and ask yourself a few questions: Did you get what you wanted? What could you have done differently? Are there areas of the process you need to work on? By assessing the outcome, you give yourself the opportunity to refine your approach and techniques for your next negotiation. Keep in mind that expertise comes from knowledge and repetition. As the saying goes, Practice makes perfect. And, while you may never be 100% comfortable with negotiating, you can certainly work your way towards perfecting it. Practice Makes Perfect! 13

14 Chapter 2: Negotiating Clinical Trial Agreements Taking these principles into account let s now see how they can apply to your clinical trial negotiation process. Remember that almost everything is negotiable. Also, don t agree to something that will cause you to lose money, strain your resources, act unethically, or potentially damage your reputation. 14

15 Chapter 2: Negotiating Clinical Trial Agreements Preparing Your Negotiation The preparation stage is critical to the success of your negotiation. With proper prep, you will be able to increase the strength of your leverage. Keep the following in mind while you re preparing for your next deal. Ask the sponsor for the trial history. Specifically, you may want to focus on recruitment. For example, how long has recruitment been underway and how many patients have already been enrolled? What has been the screen failure rate? By learning how other sites have been faring, you ll have a better idea of how challenging it may be for your site. The more challenging the protocol, the more leverage you may be able to use in the negotiation. Familiarize yourself with the protocol. Similar to the first point, will it be difficult to enroll due to strict inclusion/exclusion criteria? Also, what are the procedures required? Will you need to invest extra resources to complete these procedures or reach the enrollment goal? TIP: Negotiate for more negotiation time. If under the pressure of a deadline, a quick negotiation can lead to hasty decisions resulting in an unfavorable outcome. 15

16 Chapter 2: Negotiating Clinical Trial Agreements Preparing Your Negotiation Gather documentation. What hard proof do you have that can strengthen your leverage? Do you have metrics of your past performance? Have you conducted similar studies with great success? The more documentation you can have to back up your position, the stronger your case can be for your offer. It is difficult to ask for something if you don t have the evidence to back it up. Prepare a list of frequently asked questions. These are separate from the questions you may have for the sponsor. You should also have a list of questions you think the sponsor might ask of you. From negotiating previous agreements, you ve most likely heard the same questions over and over. Write these questions down and prepare a clear, concise answer so that you will have a strong response when the question arises. Ensure all definitions are understood by all parties involved. What you consider an enrolled subject may differ from what a sponsor considers an enrolled subject. Likewise, you may have differing ideas on aspects like what a dropped patient is, or what protocol completion means. After all your preparation, be sure to write down any questions you may still have so you don t forget to ask them. 16

17 Chapter 2: Negotiating Clinical Trial Agreements Increasing Your Leverage Based on the preparation you have done, you should have enough to build a strong case for your offer your leverage. If you are able to back this up with proof, it can potentially lead to a more productive negotiation, sparing everyone unnessecary time going back and forth and most likely, a few frustrations. It is important to highlight your strengths. Do you have a large patient pool? Do you have high success rates? Is your site able to perform difficult or advanced procedures? Is your location geographically ideal for the study? Is your staff able to effectively demonstrate their knowledge and expertise? Consider what other things would make a sponsor want to work specifically with your site and use this as your leverage. Leverage what you can, but be prepared to back it up with evidence.»» n Katie Richter, Director, Strategic Site Operations & Compliance, PharmaSeek Financial Services 17

18 Chapter 2: Negotiating Clinical Trial Agreements Creating Your Offer As discussed earlier, you need to be confident and optimistic while presenting your offer. There are a whole host of other adjectives that you could list as well though: pleasant, firm, patient, tactful... the list goes on. The main point here being, be professional and stay focused on the issues at hand. Don t be afraid to go bold on the first offer. This can t be stressed enough. You ll never get what you don t ask for, so take a chance and go high with your first offer. Leave yourself plenty of room to negotiate. Don t forget other terms of the agreement. While budget and payment schedules will be your primary focus, don t overlook other key terms in the agreement such as study close out and data archiving. Make sure you are in alignment. While these items may not be negotiable, depending on the complexity of their requirements, you may be able to amp up your counteroffer in other areas. 18

19 Chapter 2: Negotiating Clinical Trial Agreements Creating Your Offer Do propose counter-offers. If the sponsor is unwilling to budge in one area, perhaps they can be more flexible in another. Do your best to trade one element for another, so you come to a closer compromise. Often you have to give a little, to get a little. Do document everything. Yes, everything. s, phone calls, past offers, who s been involved in the communications, etc. TIP: Always include the right to renegotiate the contract, should the protocol be amended, unanticipated costs arise, or the trial will last longer than a year. 19

20 Chapter 2: Negotiating Clinical Trial Agreements Reaching Your Outcome In the end, you need to do what is best for your site. Hopefully you land in a win-win scenario and acquire a new trial. However, you must also know when to walk away and just say no. Make sure you know what your absolute bottom line is before ever starting the negotiation. Ultimately, if it s not a good fit, don t force it. Doing so could end up costing you undue time and resources, while straining relationships. If you do decline a study, be sure to clearly communicate the reason why with the sponsor. You don t want to close the door on the possibility of future trials with that sponsor. Additionally, your honesty can only strengthen your relationship with them. You gotta know when to hold em, know when to fold em. ~ Kenny Rodgers 20

21 Chapter 2: Negotiating Clinical Trial Agreements Dealing with Pushback Sponsors often have a reputation of being sharks, out for the win-lose outcome not necessarily because they want the site to lose, but because (as defined in a win-lose outcome), the one on the winning side is usually solely concerned with their needs and wants. It can be difficult for them to see things from the site s perspective, which makes it challenging to negotiate. Therefore, you re likely to experience a lot of pushback. Consider these tips when you reach an impasse or if your negotiations start to stray from your initial strategy. Call the Sponsor. In today s digital age, so many deals are reached without ever meeting someone face-to-face, and in some cases, without even talking over the phone. Messages are not always clear and can easily be misinterpreted over . By calling, you have the advantage of verbally explaining your offer and can also gauge their reaction to it a little easier. This will hopefully give you a better idea if they are firm in their offer, or if there may be more flexibility still. Escalate your concerns to a manager. If you are not getting the answers you need from the gatekeeper, or your primary contact, don t be afraid to ask to speak with the project manager or whoever is overseeing the protocol. Don t take everything they say at face value. Their job is the same as yours to get the best deal for their company.»» n Katie Richter, Director, Strategic Site Operations & Compliance, PharmaSeek Financial Services 21

22 Chapter 3: Using a CTMS to Increase Negotiating Power A clinical trial management system (CTMS) can provide many advantages for sites seeking to negotiate a better CTA and study budget. By helping with aspects like preparation and documentation, sites can have a stronger offer. And, in addition to the specific functionality within the system, sites that utilize a CTMS may be more appealing to sponsors something perhaps you could use to your advantage during negotiations. 22

23 Chapter 3: Using a CTMS to Increase Negotiating Power Budget Preparation When referring to contract negotiations, the bulk of the terms will ultimately come down to budget since you need to make sure that conducting the trial is financially feasible. With sites wanting as high of a budget as possible, and sponsors wanting as low as possible, it can make for some challenging conversations. Sites should create an initial target budget for the protocol early in the negotiation to ensure that costs will be covered by the sponsor s budget. In most cases, unfortunately, they won t. If they did, there would probably be little left to negotiate. This budget should be inclusive of all costs, including (but, of course, not limited to): PI fees Procedural fees Administrative fees Overhead 23

24 Chapter 3: Using a CTMS to Increase Negotiating Power Budget Preparation A CTMS allows sites to accurately budget their anticipated costs for a protocol. With a comprehensive budget, you can easily view the costs per subject, per visit, or total, so you will know how much you need to ask for from the sponsor. If the sponsor doesn t agree with your proposed budget, you can use your budget in the CTMS to help justify your costs. Additionally, since a CTMS can automatically calculate your overhead, or cost of doing business, you are able to fully understand your site s true costs. Learn more about the financial management capabilities of a CTMS. If your site accepts the trial, you can then apply this negotiation budget to the actual study budget, edit any amounts that may have been renegotiated, and start managing your cash flow for the protocol all in the same system. Download the ebook, Managing Your Site s Financials with a CTMS 24

25 Chapter 3: Using a CTMS to Increase Negotiating Power Documentation When in the preparation stages, a CTMS can become your best friend. In addition to calculating your budget, you can quickly and easily run reports on all the activities at your site especially important when showing the sponsor proof of your past success. In particular, sponsors may be interested in: Number of prior studies Have you done a lot of studies? Similar studies? New to research? Past enrollment performance How many times have you previously met your enrollment goal? How long has it taken to reach that goal? Did it take longer than the time allotted? Available patient pool Do you have a robust patient database? How many potential subjects could you contact for the study right now? Expertise of your staff How much experience does the PI have with the indication? Does the staff have any specialized training? These metrics and more could be readily available with a CTMS, making your preparations much quicker, and hopefully making your negotiations go smoother as well. 25

26 Conclusion Negotiating your way through clinical trial agreements can be a challenging task. By being fully prepared, remaining professional, and staying focused on the end result, you set yourself up for a better outcome. To accomplish all this, consider the advantages that using a clinical trial management system can provide. To learn more about the specialized systems provided by Forte Research Systems, please visit Have questions? We would love to hear from you! Forte offers additional educational resources to help you pursue clinical research excellence. View our additional resources today! 26

27 Resources Special thanks to Katie Richter, Director, Strategic Site Operations & Compliance, PharmaSeek Financial Services for her contributions to this publication. Forte Research Systems (2013). Managing Your Site s Financials with a CTMS. Retrieved from managing-site-financials?resource. Goudreau, Jenna (2012, October 8). The Secret Art of Negotiating: Take Your Ego Off The Table. Forbes.com. Retrieved August 9, 2013 from Kaleikini, Michael (2010, June 1). What skills make for a good negotiator? [Blog Post]. Retrieved August 8, 2013 from www. entrepreneur.com. Parke, Jeff (2013, April 1). Negotiating Effective Clinical Trial Agreements and Study Budgets with Research Sites. Applied Clinical Trials Online. Retrieved August 7, 2013 from Richter, Katie (2013, January 15). 10 Tips for Better Budget Negotiations. Webinar presentation for Forte s Educational Webinar Series. Sanibel, Michael (2009, August 24). The Art of Negotiating. Enterpreneur.com. Retrieved August 8, 2013 from com. Stark, Peter Barron (2000). Negotiating Win/Win Deals. NegotiatingGuide.com. Retreived August 9, 2013 from negotiatingguide.com/negotiation/negotiatingwinwinarticle.htm. 27

28 Copyright 2014 Forte Research Systems, Inc. Forte Research Systems 1200 John Q. Hammons Drive, Suite 300 Madison, WI (608)