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Negotiating skills can be applied to clinical trial agreements, budgets, and more for effective and fair contracts.
For each clinical trial, a clinical trial agreement (CTA) and budget are negotiated between the investigator and the sponsoring company so that the costs of carrying out the trial are reimbursed. Negotiation is a part of everyday life, especially in clinical trials. Many professionals and lawyers spend hours daily negotiating. However, few people have ever formally learned the strategies and techniques of effective negotiations, and even fewer still have mastered them. This article is aimed to share some lessons learned throughout my career as a clinical trial contract negotiator and team lead. The lessons learned have come from my own contract negotiation experiences in a variety of situations, as well as research on the most up-to-date negotiation theories and techniques.
It is important to understand the guiding principles that permeate the entire negotiation process. Some of these principles include:
Let us say you are at your desk on a Monday morning following a long holiday weekend and you are overwhelmed by your to do list and your inbox, and wondering if this year's merit raise will in any way reflect your true value to the company. So, as you sit at your computer and start to dig out of the unrelenting number of messages, Jane, a contracts manager from a large academic university, calls and asks if you have a few minutes to chat about some outstanding budget items that need to be ironed out before the contract can be executed and the site initiation visit (SIV) can be scheduled. Knowing the value of this site and of the principal investigator (PI), who is a key opinion leader (KOL), you ultimately agree to take her call and walk through the budget issues. Since you're mostly up to speed with the current issues and intended to call Jane later in the day anyhow, you tell Jane that you are fine to chat now. You just ask Jane to hang on for a minute or two while you pull up the last revisions of the budget. While you dig up the necessary information Jane asks some innocuous questions to keep the conversation flowing. Once you find what you need, you jump right into the negotiations.
Figure 1. Seven key principles to contract/budget negotiation.
Twenty minutes later after Jane has rejected most of your counteroffers in your revised budget, you ultimately agree on the major deal points. Jane then suggests that she take the revised draft that you both agreed to and finalize it on her end and send it back over for signatures. Remembering your overflowing inbox and the multiple items that need to be addressed before noon, you readily agree to let Jane clean up the document and send it back to your attention.
A few days later, despite some misgivings, the contract is finalized and the deal is inked. You know it is not a great deal as you have basically offered the site the maximum amounts allowed for the study, but after discussing with your project manager you realize this is a better agreement than no agreement at all, especially since the PI is a KOL in this study.
So, you then might sit back and ask yourself what happened here? You, like hundreds of other contract negotiators, made a major error when you agreed to speak with Jane before you had strategically prepared yourself for the final leg of the negotiations. Most individuals negotiate instinctively or intuitively. That is a natural course of negotiation. It can also be devastating. In this instance, Jane, a very experienced contract and budget negotiator had a significant advantage. Not only did she set the tone of the conversation, but she likely put her negotiation knowledge to work before ever picking up the phone to call you, by strategically determining:
Now contrast this with your situation. Were you thinking strategically about the negotiations that Monday morning? It is unlikely that you were.
What tends to be the most universally ignored but most effective negotiation tool? Being prepared. The more you prepare yourself for a negotiation, especially a complex and highly stressful one, the better you will do. Most people fail to properly prepare themselves. We often have the best intentions, but we often find ourselves diving right into the negotiation without adequately exploring the many avenues down which negotiations may proceed. Adequate preparation will not only make a difference, it will be the difference between success and failure. Negotiation research unmistakably demonstrates the concrete value of preparation. Yet, many individuals still inadequately and ineffectively prepare.
When is Escalation Necessary?
As a contract and budget negotiator, it is our required processes as well as our responsibility to comprehensively analyze every substantive element of a contract and engage in consistent due diligence to ensure that we do not miss a substantive point during the negotiations. We should never short change the process element of the negotiations. To consistently get what we need in a negotiation, we must marry the substance to the process. Adequate preparation—on both substance and process—is essential to success.
What is Legal Responsible For?
We should always protect our reputation during the negotiation phase. This may seem simple, straightforward, and even common sense, but many negotiators often do not protect their reputation and apply different negotiation tactics and ethics during a negotiation. Justifications are all around us..."everyone lies in negotiations," some will say. Or, "it's just a white lie." But here is the bottom line, even the most competent and professional negotiators involve a certain amount of "salesmanship." In fact, a significant dynamic in many negotiations involves one party attempting to convince the other party that their bottom line is different than what it is in reality. Or that they have more leverage than is actually the case. Or they try avoiding answering certain questions or revealing strategically important information. However, at the end of the day, with an agreement or no agreement, everyone will leave the negotiations with an impression of whether their counterparts dealt with them in a professional and honest fashion. If you gain a reputation as an honest and trustworthy negotiator you will be more likely to get what you want down the road. If not, you will lose credibility, fewer opportunities will come your way, and fewer negotiations will conclude with you reaching your goals. Reputation is vitally important when trying to establish effective negotiation relationships.
Key Things to Remember
The best way to be ethical in your negotiations is to use negotiation tactics that are not morally objectionable to you, and don't bluff, mislead, be vague or ambiguous in your statements. By ensuring that you have sufficient factual information, you can provide sites with legal rationales for any objections to their requests. It's also helpful to not give into the difficulties of other people. If they are rude, do not respond in kind. Always be professional and let the site know you are aware of and understand their frustrations.
As with any skill, becoming an effective negotiator takes time, effort, understanding, and relentless practice. Always remember that some negotiations will require split-second decisions and leave little room for error if you inadvertently spill critical information. The more you apply these strategies in your daily negotiations, the more effective you will be. Below are some of most important strategic tactics you can possess in order to become an effective negotiator.
How to gather information. Ask questions and get as much relevant information as possible throughout the negotiation process. Open ended "why" questions are best for obtaining information on interests. Innocuous questions keep the other side off guard and usually lead the other side to help you rather than compete with you in the negotiation. Questions can also be used as a non-confrontational way of making a point. A question may even lead the other side to adopt your unexpressed point of view as their own
Leave your ego at the door. Be sincere—be the "nice guy." This will allow people to open up to you, and information will flow smoothly from party-to-party. Always open up an e-mail message to your site with a "hello," "hi," or a "Dear xxx". This establishes sincerity while still being professional.
Establish trust with the site. If you make commitments with the site, ensure that you keep them. If you tell the site you will get back to them in 24 hours, make sure you get back to them within that time, if not sooner.
Know when to stop talking and listen. Do not interrupt and pay attention. Know when to defer judgment.
Employ solid lines of communication with your site—build rapport and establish a lasting working relationship. Communication is critical to a good negotiation. Always ask questions and keep all lines of communication opened with the sponsor and the study site. After all, without lines of communication there can be no negotiation.
Maximize your leverage. Use timelines/deadlines/enrollment goals. Inform the site up front that changes to the CTA and budget templates are typically not acceptable as this could lead to a phenomenon called "template drift." Template drift will inevitably create undue restrictions on both the sponsor and CRO and will also jeopardize the integrity of the entire agreement. Once this happens, things could take an ugly turn and will certainly drag out the negotiation process. Thus, consistency is the best practice when negotiating an agreement.
In CTAs there are several key factors: necessity, desire, competition, and time. These factors usually come along with the contract negotiations; they are intrinsic. Leverage is indeed a negotiating tactic—when developed and used appropriately it can be of great advantage to you. Leverage can indeed lead to quicker execution of CTAs.
Be prepared. Come to the negotiation organized and knowledgeable about the issues at hand. Try to familiarize yourself with the protocol and the contract and budget templates prior to opening up any discussions. Ensure that you know the sponsor's management plan. Create a list of frequently asked questions so you will be prepared if the same items come up with other negotiations. Keep e-mails and approvals readily available if there is a discrepancy between what you and the site had thought was finalized during the negotiations. Be mindful of the process and customer expectations. We need to provide quality deliverables. Make sure all definitions in the contract and/or budget are clear and understood the same way by yourself, the study site, and the sponsor. What exactly does an "enrolled subject" mean? What is an "evaluable" record? How do you define a "dropped" patient? When is a protocol "completed?" What constitutes a "screened" patient? A "randomized" subject? You should have operational definitions of any such terms and those definitions should appear in your contract. Make sure you read the clinical trial agreement.
Control the agenda. Provide written agenda that details goals for the negotiation and what needs to be accomplished and when—set deadlines—keep important timelines in mind (i.e., SIV's, first patient in). Prioritize and analyze the issues. When first contacting the site, set the tone of the negotiations. Let the site know that responses are required within a certain timeframe. Inform the site that certain documents, such as budget and CTA comments need to be submitted by a named date. Professionally control the environment. Discuss up front what the most efficient mean of communication will be for the site (i.e., e-mail, phone). This information will inevitably speed up the process and help meet expected timelines.
Be proactive in your negotiations. Assess the short- and long-term impact of the negotiations. Ensure that you have a decent negotiation tactic in place, which will ultimately help you achieve your goals and help you achieve your required metrics.
Have a plan in place to deal with impasses. Know when to put aside contentious issues, and revisit it later, after you have gained momentum by agreeing on minor issues. Know when to "move up the chain." Sometimes you might not have the authority to agree to certain terms. Thus, you must know when to properly escalate terms to your legal team. This is particularly effective in situations involving larger academic sites with seemingly inflexible policies. If you have to escalate a specific request to the sponsor or legal for review, you must obtain the justification/rationale behind the site's request. Best practice is to get this in writing (for documentation purposes) and to obtain as much info as possible. Sometimes it is a good practice to ask for web links that can direct you to a website that lists a site's general policies regarding CTA/budget negotiations. This information gathering will streamline the negotiation process.
Always actively explore alternatives that will expedite your negotiations. Ensure that you have a fair and efficient way to resolve disputes in a timely manner. Always explore options. There are usually a number of workable solutions to the problematic issues that arise. Finding out what those solutions are may take a little work, and, even though a solution may be workable, it will not necessarily be palatable to everyone. Nevertheless, a good negotiator knows that once they get an understanding of the whys and wherefores of each party's "positions," more often than not, there will be several options for bridging the gap, solving the problem, or resolving the issue in an expeditious manner. Good negotiators care about being "fair," but they are also assertive about their goals. They push the other party to find the best solutions, not just the simplest compromises.
Understanding negotiation strategies is one thing, but personalizing them so they work for you in various situations is another. Effective negotiations require that you understand how you personally come across and how you interact with others' negotiation styles. And you must learn when and where to open up with more information, in what situations to talk openly about your leverage, and where to simply hint at it. In order to be an effective and reputable negotiator it is essential that you learn how to apply the above negotiation tactics in various circumstances.
Jeff Parke is Associate Site Start-Up Team Lead, Regulatory and Start-Up at Quintiles, 4820 Emperor Blvd., Durham, NC, e-mail: email@example.com.