Aligning Contracting with Product Goals

ClientA mid-sized pharmaceutical company with a large contracting organization not confident that its activities were bearing fruit.
Company ObjectivesThe client was concerned that their approaches to contracting with payers might not be correct, in terms of gaining the most value from contracting and assuring that the contracts were aligned with the goals and strategies of each product.
Project DescriptionMME first evaluated each of the contracts for the client’s lead products, comparing contract terms and costs with the outcomes achieved. We discovered that most of the contracts were not performing in terms of achieving their desired goals. Moreover, there was ample evidence to show that the contracts themselves were in conflict with the product strategy, as outlined by the brand team. Rather than growing the market, which was the stated goal of the brand team – the contracts were actually restricting the market, but delivering high share. The result was that competitors, feeling squeezed out of the market, were beginning to offer deep discounts to payers and coupons to patients. These actions would reduce the value of the market greatly.
Project OutcomeWorking with the brand and contracting teams, MME developed a new set of contracting principles and guidelines which helped the brand team to achieve its goals of market growth and avert a potential disaster by ensuring competitors would not retaliate in a way that hurt the overall market.