Negotiation and Conflict Resolution Report - Module Assignment

This report examines negotiation and conflict resolution within the pharmaceutical industry, addressing key aspects such as the selection and training of negotiators, pre-negotiation processes, and post-negotiation review mechanisms. The report delves into the challenges faced by pharmaceutical companies, including price pressures and competition from generic drugs. It explores the importance of effective negotiation skills, detailing training programs and the significance of preparing for negotiations, including defining goals and needs, utilizing term sheets, and constructing full agreements that cover assets, compensation, control, and dispute resolution. The report further discusses the significance of post-negotiation evaluation, offering checklists and strategies for improvement. Finally, it provides practical examples, demonstrating how negotiation strategies can be enhanced through careful planning, thorough research, and a focus on achieving optimal outcomes, supported by case studies and real-world applications within the pharmaceutical sector.

Running head: NEGOTIATION AND CONFLICT RESOLUTION
NEGOTIATION AND CONFLICT RESOLUTION
Name of the Student:
Name of the University:
Author note:

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Question 1
The pharmaceutical industry recently has been experiencing varied challenges in the past
decades, including expiring patients on several blockbuster drugs, a rise in competition from
generic drugs along with a pressure to lessen prices from the financially strapped governments.
Governments who have previously compensated companies for clinically approved drugs having
been emphasizing significantly to reduce prices (Alostad, Steinke and Schafheutle 2018).
Pharmaceutical negotiations tend to occur in an extensively multi-faceted regulatory context,
whereby technological, policy, regulations, economic along with political agenda collide with
each other. However according to Zubair, Ahmad and Ahmed (2014), in such a multi-
stakeholder environment, pharmaceutical companies tend to become highly aware of the need to
efficiently prepare more systemically for negotiations. Pharmaceutical companies fundamentally
choose their pharmaceutical licensing professionals who seek to enhance their negotiation
performance in order to deliver improved value and further alleviate risk.
Pharmaceutical companies reveal that successfully negotiating skills necessitates practice
in real negotiations. Four vital interactive sessions are primarily included in the programme of
training negotiators as example of the type of negotiation situation which can emerge in Pharma
or Biotech licensing. Furthermore, course participants will further be briefed in order to assume
roles as Licensing Executives in pharmaceutical companies who are involved in critical
negotiations on licences for drug delivery technologies (Alostad, Steinke and Schafheutle 2018).
Furthermore, these pharmaceutical companies are engaged in internal negotiations in order to
prepare term sheet proposals for regional as well as global product licences. Negotiation with
third parties for regional or global licences for the clinical development, manufacture as well as
marketing of finished pharmaceutical products whereby forms of payments, milestones will be

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negotiated as well as valuation splits will be determined (Geesi et al. 2018). The exercises for the
training course primarily will include opening contracts along with negotiations with third party
agencies, working with workplace peers as well as working with counterparts in order to resolve
mutual problems and team negotiations with third parties on comprehensive term sheets.
However according to Zubair, Ahmad and Ahmed (2014), the result of negotiation exercises will
be enumerated to facilitate participants can target progress in their individualistic personal
development as a proficient negotiator.
Gleeson et al. (2015) have noted that any training sessions after 3-6 hours per month has
failed to make significant differences in sales results of any pharmaceutical companies. Thus
companies must give and receive feedbacks has always been sensitive and challenging. Upward
coaching provided to negotiators possessing ‘challenger skill’ requires being distinct about their
feedback and strategizing plans in advance with specific examples. Negotiators with challenger
skills in pharmaceutical sectors require certain competencies in comparison to subordinates who
might not essentially have attained at the early stage in their professional career (Abrol, Prajapati
and Singh 2017). Negotiators further in this field need to develop the sense of safety in order to
offer upward training along with a structured approach. However, Zubair, Ahmad and Ahmed
(2014) have stated that Training & Development and HR can facilitate in building techniques as
well as a culture where it is endorsed. Furthermore, according to Abrol, Prajapati and Singh
(2017), it is quality not quantity that is identified as the most important outcome. Thus
compelling negotiators to spend time in field on ‘training course’ may not generate anticipated
results. However, the success of the training session programme in general must be evaluated. It
has been noted by Dafny, Ody and Schmitt (2016) that as with any negotiating training
intervention, it is not usually easy to evaluate the rate of success of the intervention.

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Pharmaceutical companies in Bahrain namely Waelpharmacy, Bahrain Pharma should focus at
both qualitative as well as quantitative measures wherever feasible. However, qualitative
evaluations of Pharmaceutical companies primarily involve written feedback concerning the way
trainer or employee perceives these training sessions (Waelpharmacy.com 2018). In addition to
this, if pharmaceutical organizations seek to reveal revenue on investment, then they should
focus on evaluating outputs such as sales or production alongside developments in individual
competency ratings where feasible. Alostad, Steinke and Schafheutle (2018) have revealed that
pharmaceutical companies have been relentlessly being forced and challenged to ensure revenue
on the substantial investment that the company had generated.
Question 2
Zubair, Ahmad and Ahmed (2014) have noted that successfully attaining most effective
outcomes depends greatly on preparing efficiently in advance of the negotiation process. This
process further involves in having distinct goals for the deal, arranging pharmaceutical
companies’ documentation for accessing easily by potential partners and further considering that
non-financial terms are as crucial as financial ones.
Strategies to Execute before any negotiation process

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Source: Created by author
Getting ready- The most vital step Pharmaceutical companies must undertake while preparing
for a deal depends on distinctly stating the objective for the deal. Dafny, Ody and Schmitt (2016)
have noted that the goal requirement is highly essential as negotiating deals tends to progress
forward as a watermark that signifies way the negotiation process is developing and whether it
will be staying on track and continues to the resolution that accomplishes most efficiently with
the goal of the company. However, Abrol, Prajapati and Singh 2017) have claimed that the
company must ensure that the whole team not only supposes on the goal statement but can state
it distinctively.
Defining Wants and Needs- The next step of the process must ensure that the company define
its wants and requirements for the negotiation. It has been revealed that needs pertaining to
Pharma companies needs have the tendency to vary from deal to deal as an evaluation of whether
the business associate is professional enough to cooperate and share strategies or whether they
constitute credibility with investors or whether the company is aiming to efficiently retain co-
promote rights of Bahrain (Gleeson et al. 2015). Furthermore, Dafny, Ody and Schmitt (2016)
noted by author that when a potential partner typically initiates the due diligence procedure,
these associates not only intends to understand the asset of the company in greater details but
rather aims to attempting to evaluate accuracy of the data. Thus the most efficient way to present
information about negotiation process is in a comprehensive virtual data room (Maréchal and
Thöni 2018). However, a contemporary virtual data room is preferably suited for the due
diligence requirements of bio-pharmaceutical companies that engages partnering or licensing or
other application which necessitates secure sharing of documents with other Pharma agencies.
Being proficiently equipped for the due diligence process before the negotiation process is

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important to deal success. Thus Dafny, Ody and Schmitt (2016) have noted that having virtual
data up and prepared raises the level of deal momentum and increases potential of the company.
Term Sheets- As per reports by Morris (2017), Pharma companies previously used to apply term
sheets which defined a collective understanding of the negotiation shapes in easy to take hold of
terms. However Chandra, Prabahar and Rao (2015) emphasized that Pharma firms must keep in
consideration not to focus on pricing at this stage. Once both the parties are successfully aligned
on these primary determinants other particular factors such as financial, regulation, control along
with disputes resolutions can be incrementally added.
Negotiating Tips
Source: (Tully 2016)
Full Agreement- Once the development of term sheet through wide-ranging iterations it is
become highly evident to prepare the draft for full agreement. The full agreement or negotiation
deal will be exceptional and will primarily seek four major categories: the Asset, Compensation,
Control and Diligence as well as Conflicts and Termination (Chandra, Prabahar and Rao 2015).

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 The Asset (Scope and Exclusivity) - The scope or dimension of the agreement typically
involves licensed products, particular compounds along with derivatives. Further to this,
as per the study conducted by Maréchal and Thöni (2018) patents as well as patent
applications have propensity to be included. However, Pharma organizations must ensure
peculiarity of the patent applications.
 Sublicensing- This factor however can be defined as a complex domain to successfully
navigate as it often necessitates a renegotiation of a prior enterprise license (Dafny, Ody
and Schmitt 2016). Typically business enterprises put significant restrictions on
sublicenses, however pharmaceutical companies demand sublicenses to resourcefully
develop a compound for growing or advertising in another territory or to seek
considerable amount of investment trails (Maréchal and Thöni 2018). However,
sublicensing share typically declines with time along with the partners’ comparative
contribution to the asset value is larger.
 Compensation- However at this stage according to Chandra, Prabahar and Rao (2015),
negotiating cost might appear to be one of the highly demanding determinants of the
negotiation procedure. But in practicality such negotiation process has the tendency to
perform in less complex manner in relation to many of the other areas which the full
agreement seeks to focus. Meanwhile Feigenbaum (2015) has witnessed different ways to
get remunerated for companies’ asset that involves upfront payments, profit sharing and
wages based on development of sales milestones, royalty revenues along with a
combination of these.
 Control and Diligence- Studies conducted by Tully (2016) have stated that major
diligence requirements of Pharma business firms in Bahrain such as Waelpharmacy,

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Bahrain Pharma in full agreement must be distinct, purposeful, detailed as well as
reportable. However, it is essential for organizations to note that few diligent
requirements of these companies incorporate a time-frame for the growth of the
compound against developmental processes whereby time frame are identified to be
mutual in corporate Pharma licenses (Maréchal and Thöni 2018).
 Disputes and Termination- It is important to note that while outlining the strategy
process several negotiation deals will be terminated as its fundamental that full agreement
essentially specifies factors to remove and under what factors and contexts (Abrol,
Prajapati and Singh 2017).
Question 3
Alostad, Steinke and Schafheutle (2018) have revealed that global pharmaceutical
companies comprise any official negotiation planning mechanisms which enhanced the parallel
deficit of development in the arena of negotiation training. Any organization of Pharma domain
can easily access evidence-based as well as lucrative training solutions through post negotiation
review procedure can easily avail any evidence-based approach. Thus the value of process is
distinct however in implementing this form of extensive strategies, pharmaceutical companies
must not lose the focus that comprehensive behavioural abilities persist to be important for those
members of the negotiator or sales team on the negotiating front line (Zubair, Ahmad and Ahmed
2014).
Pharma companies must perform post-negotiation evaluation with the following Evaluation
Checklist to facilitate them re-evaluate their negotiating behaviour-
1. Was the company’s pre-negotiation research satisfactorily systematic? Did the company
fully recognize its own side’s value system?

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2. Did the company circumspectly verify its own side’s bottom line? Did the company aim
to position itself in the conflicting side and try to assess their bottom line? (Morris 2017)
3. Did the company practise an upright opportunity offer that rationally clarify the
foundation for the position the company is taking?
4. Did the company’s pre-bargaining prognostications confirm accuracy? If not, what
caused miscalculations in the Pharma company? (Chandra, Prabahar and Rao 2015)
5. What particular negotiation techniques have been implemented by the company to
advance its position? Did the opponent Pharma Company recognize the diverse
negotiating techniques it has used? If so, how did the company endeavours to reduce
their impact? In addition to what other strategies might the company has used to advance
its position?
Question 4
Chandra, Prabahar and Rao (2015) have observed that price discounts for patented
pharmaceuticals recently is common among the financial developed countries such as the United
States and UK. However the routine use of such form of pricing has been considerably recent in
some centres but an established policy in others. Being engaged to a renowned pharmaceutical
company in Bahrain confidential discounts have been more widespread and multifaceted for
pharmaceutical firms rather than primary care pharmaceuticals (Feigenbaum 2015). Abbott being
a multinational company implements a unique strategy of negotiation process in sales to gather
greater level of profits (Dafny, Ody and Schmitt 2016). The initial step executed by Abbott is
Price- Although the prices of Pharma products is not widely known to customers but can be
well-equipped by suppliers and distributors. Thus it is highly essential for sales negotiators to
drive buyers away from the original price and sell them value.

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Delivery Time- For the Pharma company delivery timing can act as a critical challenge when
buyer is purchasing or making any agreement. As majority of goods belonging to pharmaceutical
industry have an expiration date, on time delivery with strict time frames plays a crucial role for
Abbott. Furthermore, sales negotiators of Abbott tend to set up a negotiable platform with its
supplier base as because of their wide recognition for on-time successful delivery (Dafny, Ody
and Schmitt 2016).
Payments/Credit- The increasing rate of lending, negotiation on payment terms has emerged as
one of the most vital ways whereby customers can set up a negotiation platform, various Pharma
companies have been facing challenges in negotiating for certain products which have huge
demands medical samples, pharmaceuticals and temperature-sensitive products (Maréchal and
Thöni 2018). Thus sales negotiators of Abbott tend to negotiate with the buyers who are ready to
finance highest rate and then base the negotiations on the price of products.
Through these steps of negotiation process, negotiators try to create win-win scenario
which helps the success rate of the company to increase and further develop greater number of
loyalty as well as referrals for the sales negotiators.

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References
Abrol, D., Prajapati, P. and Singh, N., 2017. Globalization of the Indian pharmaceutical industry:
implications for innovation. Institutions and Economies, pp.327-365.
Alostad, A.H., Steinke, D.T. and Schafheutle, E.I., 2018. International comparison of five herbal
medicine registration systems to inform regulation development: United Kingdom, Germany,
United States of America, United Arab Emirates and Kingdom of Bahrain. Pharmaceutical
medicine, 32(1), pp.39-49.
Bahrain-pharma.com 2018. Welcome to Bahrain Pharma - Home. [online] Bahrain-pharma.com.
Available at: http://www.bahrain-pharma.com/ [Accessed 15 Nov. 2018].
Chandra, K., Prabahar, A. and Rao, N., 2015. A breif analysis of regulatory structure and
approval process of pharmaceuticals in GCC. World J Pharm Pharm Sci, 4(7), pp.1596-611.
Dafny, L.S., Ody, C.J. and Schmitt, M.A., 2016. Undermining value-based purchasing—lessons
from the pharmaceutical industry. New England Journal of Medicine, 375(21), pp.2013-2015.
Drozdoff, V. and Fairbairn, D., 2015. Licensing biotech intellectual property in university–
industry partnerships. Cold Spring Harbor perspectives in medicine, p.a021014.
Feigenbaum, A., 2015. Riot Control Agents: The Case for Regulation. SUR-Int'l J. on Hum
Rts., 22, p.101.
Geesi, M.H.T., Bakht, M.S.A., Anwar, F., Khamis, E.H. and Gilani, M.A., 2018. Volatiles
composition, physicochemical properties, kinetic study and antioxidant potential of endemic
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Gleeson, D., Neuwelt, P., Monasterio, E. and Lopert, R., 2015. How the transnational
pharmaceutical industry pursues its interests through International Trade and Investment
agreements: a case study of the Trans Pacific Partnership.

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Maréchal, M.A. and Thöni, C., 2018. Hidden persuaders: do small gifts lubricate business
negotiations?. Management Science.
Morris, E.M., 2017. Much Ado about the TPP's Effect on Pharmaceuticals. SMU Sci. & Tech. L.
Rev., 20, p.135.
Tully, S.R., 2016. Free Trade Agreements with the United States: 8 Lessons for Prospective
Parties from Australia’s Experience. British Journal of American Legal Studies, 5(2), pp.395-
418.
Waelpharmacy.com. 2018. About Us | Wael Pharmacy. [online] Available at:
http://waelpharmacy.com/about-us/ [Accessed 15 Nov. 2018].
Zubair, M., Ahmad, N. and Ahmed, R., 2014. Key factors to promote knowledge sharing in
Karachi pharmaceutical industry.