Key Vendor Partnerships

A vendor is a third party that performs a function for the pharmaceutical company by providing goods, services. Vendor management is a multidisciplinary business that enables organisations to help in service excellence, control the costs, and alleviate risks to gain increased value from their vendor throughout the deal period. Pharmaceutical businesses may decide to work with certain vendors and agree to feature and promote their products in exchange for exclusive distribution rights or monetary fees.


Exclusive partnerships

When a vendor finds the right business partner, they enter into an exclusive agreement because it affords a higher level of commitment. It also gives them a chance to gain more room to break into the market, see faster success and build a better sales pipeline. When both parties, the vendor and the pharmaceutical business company, are strongly committed to achieving mutual success, they can work together throughout the sales and marketing processes. It helps them to reduce costs along the way as it starts focusing on effectiveness.

Vendors and their partners require setting up specific channel components to optimise their sales. These components include full sales pipeline visibility, salesperson coaching, advertisement, and support and marketing campaigns. Sometimes, vendors cancel their exclusivity if their partners don’t meet the performance targets. It can be an effective incentive. One may choose to limit exclusivity to the customer type, geographic region, industry sector, company division type and application area. Exclusivity may come with the promise of an upfront fee or a guaranteed order commitment.


Non-exclusive Partnerships

A non-exclusive partner agreement can allow competition in a specific market. Knowing about the competition could be the motivation that some businesses need to perform better as these agreements do not offer the comfort of exclusivity to create more transparency and harmony with partners, vendors may opt for the likelihood of exclusivity or a deal registration process. Vendors may award prospect exclusivity on specific target pharmaceutical companies. It gives their partners enough time to begin any sales process. Later, they may choose to cancel the exclusivity after a while and award it to another partner. The main advantage of a non-exclusive agreement is the increased total pharmaceutical market coverage area and a number of opportunities available. When more competitors are in the market, vendors can adjust readily when a customer changes their providers. They may also have a more motivated salesperson who works hard to develop opportunities and close deals. Though sometimes, non-exclusive partnerships can result in a negative impact on a partner’s commitment level.


Some of the factors that should be known while choosing a vendor include:

  • Vendor certification and selection- vendor, should have fully documented quality system
  • Vendor rating- it is based on quality, delivery and other added services
  • Inspection- elimination of any fraud
  • Training- technical and safety training should be provided to the vendor
  • Team approach- vendor, should be established in areas such as product design, quality system and process design
  • Recognition and award- incentives should be given in the form of a letter of recommendation to ensure that the vendor remains committed.





Proper vendor management practices can provide only the necessary information at the right time. It can allow a vendor to serve the needs of the business person better. It may include new product launches, changes in design, limited forecast information, and expansion or relocation changes. The key of succeeding in vendor management is to share information and priorities with the vendor for perfect synchronization.



Always remember the pharmaceutical business person brought in the vendor in order to make the product or service better or cheaper than others. If a vendor supplies any service to the operations, invite the vendor to most of the strategic meetings which involve the product they work with. They are the experts in the respective area, and it is advised to ask for their advice to gain a competitive edge.



The goals of vendor management are to understand that the vendor always expects a certain level of commitment. On the other hand, one needs to gain the commitment of vendors to assist and support the operations of the business. It does not mean that one should carelessly accept the prices they ask for. Instead one should go for competitive bids.



Continually changing vendors to save money can cost more money in the long run, will get one into significant losses and will impact quality. Vendor management prioritises long-term relationships over short-term gains and marginal cost savings. Other advantages of a long-term relationship include preferential treatment, trust and access to insider or expert knowledge.



If the pharmaceutical companies are constantly leaning on the vendor to cut costs, the quality will suffer, or they will go out of business. Part of vendor management is to share knowledge and resources that may help the vendor better serve the company. The vendor is part of the business to make money too. Asking questions to the vendor will help in understanding their side of the business and build a better relationship.



Proper vendor management means that all negotiations are completed in good faith. One needs to search for negotiation points that can help both sides accomplish their goals. The quality of the services should never be compromised as it is a serious matter of the safety of the subjects as well as the pharmaceutical company.



Vendor management has a lot more to it than getting the lowest price. Since, most of the times, the lowest price also brings in the lowest quality. The vendor management focuses quality for the money that is paid. It should be value for money, and one should be willing to pay more only to receive better quality. If the vendor is legit enough about the quality they deliver, they won’t have a problem mentioning the quality details in the contract.


Altogether an organization or business firm and vendors have the same goal – to satisfy the end user or customer while earning the benefits themselves.

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