This is part 1 of our series written by legal consultant Beth R. Jacobson, PLLC, entitled “The Biggest Mistakes You Can Make When Negotiating a Consulting Arrangement with A Pharma/Biotech Company.
Some physicians feel that they can negotiate the business and legal points of a consulting relationship for themselves without the help of a seasoned professional skilled in the art of negotiation and law. However, often times it is difficult for physicians to negotiate on their own behalf with a prospective employer since they don’t want to be seen as difficult and most don’t know exactly what to ask for. In addition, most doctors are hard pressed for time and find the back and forth of negotiation very stressful. Many physicians who are placed in the position of negotiating with companies will simply sign whatever is offered to them and do little if any negotiating. There shouldn’t be animosity, but rather fair and upfront business negotiation, whereby the physician can get the best deal possible and a “win-win” arrangement is reached with the employer. This is clearly the best outcome for everyone.
In the following sections you will find an illustration of the biggest mistakes a doctor can make when entering into a consulting relationship with a pharma/biotech company. This scenario examines the pitfalls and what you should do about them if you find yourself in the same situation.
Scenario: A doctor is approached by a publicly traded pharmaceutical company about doing consulting work for the company to help get its drug approved by the FDA. While the doctor likes the prospect of intellectually getting the experience of being on the “business” side of things and seeing a drug get approved through the FDA, he also feels compelled to do other things outside of his practice to earn additional money given recent insurance cutbacks. The management of the company offers a one page agreement to the doctor in which it states that the doctor will receive $2,000 per month for consulting work required by the doctor to get the drug approved. The only other provision in the agreement is that the doctor will keep all information confidential. The negotiator for the pharmaceutical company explains that they like to do their agreements simply and they don’t like to get too detailed. He says that this way no one needs to get lawyers involved and therefore it makes it better for everyone and he encourages you to be part of the team.
Prepared by BR Jacobson, PLLC
Part 1: Introduction
Part 2 : Pitfall Number One: What Do You Know About This Company?
Part 3 : Pitfall Number Two – Agreeing to Below Market Compensation
If you have any questions regarding the topics discussed above or if you would like further information about BR Jacobson, PLLC, please visit their website at www.brjacobson.com or send an email to beth@brjacbson.com.
