The RFP process -- three words that can cause anxiety even for the most seasoned professional. While this process for supplier selection is leveraged across most industries, we will focus today on pharma and biotech. Whether you work in procurement or marketing on the pharma side or as an agency professional on the vendor side, opinions on the subject abound. The RFP process has added another dimension to an agency’s relationship with pharma. In the past the process was simpler as the primary decision maker was the stakeholder who had the responsibility for awarding new business and managing the relationship. The assessment of quality/value was determined by a single point person or a single team. Today, with contracting and procurement departments in the mix, this is a shared responsibility.
While some view the RFP process as just a necessary evil, others advocate for reforms to the process. In any event, the RFP process remains the industry standard for evaluating and getting to know potential agency partners. Choosing the right partner isn’t always easy. There is a lot riding on the selection as the decision can make or break a product’s success.
So, what are some of the issues that are reported time and time again? To understand how pharma and agency colleagues feel about the RFP process, we did some research and talked to a few seasoned individuals (both from pharma companies and from agencies) to investigate and supplement our experiences.
On the beneficial side we concluded that:
1. RFP responses help pharma teams identify potential partners who (by their responses) appear to understand the organization’s needs
2. They are designed to help set a level playing field among competitors while ensuring fairness and transparency in the selection process
3. The process provides a data-driven structure for partner selection establishing criteria beyond cost for evaluating responses
4. RFPs often allow respondents to showcase problem-solving approaches to similar needs/challenges in the past
Through our research, we heard specifically that:
“The RFP process is beneficial when it meets the following criteria:
1. Alignment among all internal stakeholders
2. A written RFP that accurately communicates needs and evaluation criteria
3. An opportunity for the participating agencies to ask questions of the stakeholders”
~ Marketing Lead, Pharma
“It [the RFP process] allows for a greater exposure to the capabilities of various companies.” ~ Marketing Director, Pharma
“Presenting our ideas before a receptive group, realizing we're clicking with them, then winning the business.” ~ Creative Director, Agency
Some common challenges we heard:
1. RFPs can be too general, often lacking specific details, relevant background information, or clarity
2. Because of a lack of clarity, the “ask” may seem ambiguous and lead to different interpretations by the responding service providers
3. Direction is not always clear as to whether to only prioritize precise answers or add creativity to the responses
4. The process is time-consuming and costly for both pharma teams and agencies
5. Top agencies may choose not to respond to the request which could result in responses from those that need work or are less qualified
6. Small to medium-sized agencies may hesitate to respond if they sense there is little chance of winning or if they don’t have the time or dedicated resources to commit to a lengthy process, thus narrowing the selection pool
7. RFPs often set unrealistic timelines for response submissions, while including long waiting periods for engagement
8. Some claim the process is bureaucratic and unwieldy and believe there must be a better approach
Through our research, we heard specifically that:
“Unfortunately, many pharma stakeholders view the RFP process as a necessary cost of doing business without sufficiently considering alternative approaches.”
~ Marketing lead, Pharma
“In larger pharma - procurement takes a lead. While they have the best intentions, these are often driven by cost rather than capabilities.” ~ Brand lead, Pharma
“RFPs can be very labor intensive and disruptive to the agency's workings, making a loss extra discouraging.” ~ Copy Lead, Agency
“RFPs are high stakes for agencies, of course. They are the source of some of my best (and my worst) work memories. One thing I am not a fan of is when potential clients ask for too much. They should request enough to allow them to be able to judge between agencies, but not so much that the process becomes a heavy burden.”
~ Senior Client Services Director, Agency
Suggestions for improvement:
1. Pharma companies should foster open communication with prospective agencies from the start to include 1:1 calls to pressure-test thinking and approaches
2. RFPs should be composed of specific questions to elicit tailored responses and only request necessary information from the respondents
3. Proposals should indicate whether there is openness to diverse thinking when strategic ideas are sought
4. Agency responses should be drafted using specific language while avoiding overused and generic phrases
5. If appropriate, consider a trial working session or trial project as a substitute for an RFP
“Never assume, [on any request within the RFP process]. Always get clarification.”
~ Sourcing Director, Pharma
“[The biggest area for improvement in the RFP process], better tools and technologies to increase efficiencies.” ~ Procurement Director, Pharma
“Make sure to include all service providers when distributing the RFP to ensure everyone has the same amount of time to prepare their responses.”
~ Client Service Director, Agency
In the end, it seems there’s no getting around it. Procurement/Sourcing folks appear to generally like the process as a way of competing to gain business while meeting company guidelines. However, many agree that RFPs, like any process, must evolve to better meet the needs of all parties involved. The RFP process is no exception. Refining best practices and integrating new technologies should advance the process and lessen the significant financial impact and time investment currently required to develop, evaluate, and select new partners.
At SAKS Health we continue to monitor the healthcare and pharmaceutical spaces to assess where improvements can be made and how to best benefit our clients and partners. Let us know your thoughts on the pharmaceutical RFP process in the comments below.
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