In 2006, David Lax and James Sebenius published a landmark book in negotiation literature: “3D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals.”
The central idea of the book? Most people, when negotiating, tend to think about interpersonal skills and tactical strategies to influence our counterpart to achieve the objectives of both sides. By focusing on everything that happens “at the table,” we pay less attention to two other key dimensions: deal design and setup.
Twenty years after its publication, the relevance of its implications remains current, especially in complex multiparty negotiations, such as those related to the healthcare sector. A highly unique industry where the customer or user (patient) is not the one who chooses the product, but rather the prescribing physician does, while the one who pays is yet another actor, the payer. This generates a swarm of interests and priorities that often hinder access to the best solution for each patient.
But let’s return for a moment to the 3D Negotiation book: typical examples of the first interpersonal dimension would be active listening, persuasion techniques, assertiveness, emotion management, trust building, handling difficult tactics, objections, etc. Books like Never Split the Difference by Chris Voss or the classic Getting to Yes by Fisher and Ury would be examples of this first dimension of negotiation: everything that happens at the table while we negotiate.
In the pharmaceutical industry, typical objection handlers would be the clearest example of this almost intuitive dimension of negotiation. Both facing the HCP from the clinical-scientific perspective, and toward the payer from variables related to cost-effectiveness analysis and health technology assessment.
Let’s now move to the second dimension of negotiation: deal design. This is the analytical and rigorous challenge of building ad hoc solutions that truly generate concrete and measurable value for the parties in question. What are the optimal conditions for the agreement? How should the deal be structured to generate measurable and sustainable benefits over time? Should it be a phased agreement, with contingencies and risk-sharing clauses? A value-based agreement focused on concrete outputs? Is the payer more focused on protecting the budget and avoiding prescription escalation than on ensuring ROI at the cost-effectiveness level? Can the price be linked to patient adherence to treatments?
Creativity and analytical thinking to design an agreement tailored to each payer would be the keys in this dimension. Having irrefutable models at the cost-effectiveness level is not enough; the challenge is to achieve proposals that are approvable in the eyes of the payer, not ours. Hence that brilliant aphorism from the diplomatic world: “Negotiation is the art of letting the other party have your way.” Howard Raiffa is probably the historical reference for this dimension in negotiation literature.
Finally, we have the third dimension: setup. Excellent interpersonal negotiation skills (level 1), combined with an impeccable agreement on paper (level 2), are of no use if it then remains stranded in the limbo of indecision due to resistance from uninvolved actors or power dynamics that generate “other priorities” on the other side. Three-dimensional negotiators work on defining the scope (whom this negotiation involves and what their interests and relationships are) and the sequence of the negotiation (whom to involve and in what order).
Typically, for a high-cost medication to be incorporated, systemic work is necessary where the medical community exerts pressure both from associations and from prescribers to incorporate a new treatment, combined with the influence of patient associations, public agencies, etc. We often see in laboratories, sales or promotion teams working disconnected from access and Public Affairs teams, generating an atomization of negotiations that works against access. Orchestrating the timing of negotiations so that everything connects with everything is extremely challenging.
To conclude, the three dimensions of negotiation are intrinsically linked: it is not possible to work on one independently. Because to weave a high-value agreement for each payer (dimension 2), it is first necessary to know in depth the interests and needs of each party (dimension 1). Otherwise, we will go with the same value proposition to all payers. On the other hand, it is impossible to define an ideal work sequence (dimension 3) without knowing the draft of the agreement being pursued.
We often say that the healthcare system is completely fragmented and this works against access to high-value solutions for the patient. Therefore, building these systemic conditions becomes a complex but necessary task. The 3D Negotiation model offers us a vital playbook in this regard.