A new book opens a candid and timely conversation about the global challenge of negotiating drug prices.
In the high-stakes world of healthcare, price and reimbursement (P&R) negotiations are where access to treatment is often decided, with significant consequences for both public health and financial sustainability. But with public trust in pharmaceutical companies under strain and healthcare budgets tightening, the system faces growing pressure.
In Pharma, Prices and Power: Reshaping Pharmaceutical Pricing Negotiations for a Healthier Future, INSEAD Professor of Management Practice Horacio Falcão explores the need for a shift in how these negotiations are conducted.
Drawing on Value Negotiation theory, global case studies and practical experience, the book – written together with Rodrigo Gouveia and Hervé Lamarque – analyses the dynamics between pharmaceutical companies, governments and healthcare providers. It offers a framework for approaching P&R negotiations in a more value-oriented, transparent and sustainable way.
The book first provides a comprehensive overview of the pharmaceutical landscape, charting the industry’s controversies and challenges and comparing healthcare models from around the world. It then examines how structures, incentives and historical developments shape drug pricing negotiations by not only influencing pricing outcomes but also whether negotiations lead to cooperation or conflict.
“We argue that healthcare negotiations involve a delicate balance between competing priorities such as access and innovation, equity and efficiency and public and private interests,” says Falcão, who created the Value Negotiation system and has over 25 years of experience teaching and researching negotiation sciences. “Rather than advocating for a single ideal system, we call for adaptability and reform in how stakeholders negotiate. The goal is to move away from power-based interactions and toward process design that supports better outcomes.”
While the authors address unethical pricing and lobbying tactics by some pharmaceutical firms, they make it clear that the problem is broader. Systemic inefficiencies, uncoordinated regulations and political pressures also play a major role. Instead of focusing on villains and heroes, the book shows how outdated systems and entrenched power dynamics have pushed both governments and pharmaceutical companies into suboptimal negotiation practices.
The book goes beyond diagnosis and offers a path forward. Based on insights from real-world P&R negotiations, it presents practical strategies for both sides of the table, and for those who design negotiation processes. These include preparing more strategically, focusing on long-term relationships, tailoring proposals to create value for all parties, using legitimacy instead of power to claim value and knowing when persuasion is more effective than confrontation.
“While especially relevant for policymakers, healthcare leaders, pharmaceutical executives and negotiation professionals, it will also speak to anyone who has ever wondered why drug prices are so high,” Falcão says. “We conclude by calling for a better way forward – one that enhances both public health and shared prosperity through more thoughtful and inclusive negotiation.”
Pharma, Prices and Power: Reshaping Pharmaceutical Pricing Negotiations for a Healthier Future is currently available for purchase.
