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Speakers: Steve Galatis & Paul Papayoanou (Decision Frameworks)

Abstract:

In many situations, the decisions of biopharma companies are interdependent with those of competitors and partners. Co-marketing and licensing deals, and other M&A transactions, require negotiation of win-win agreements. Launch strategy, pricing and market access, and in-market positioning, meanwhile, are best developed by thinking through complex action-reaction dynamics and key uncertainties. For such situations, game theory is the most appropriate tool, and Strategic Gaming is a practical application that is an extension of traditional decision analysis. When we frame issues and opportunities with Strategic Gaming, we need to capture the dynamics of interactions between two or more companies. The Dynamic Framing approach involves development of a game tree that incorporates the decisions of each of the key “players” and often the resolution of key uncertainties as well. We illustrate this approach with a case example in which a company can choose to build up its own sales force or negotiate a licensing agreement with another biopharma company.