Pitfalls

Successful partnerships avoid the common pitfalls that can undermine the agreement or, worse, lead to acrimony between companies involved. Although there are many challenges that occur, some of the common pitfalls include lack of communication, misalignment of goals, unresolved conflicts, different regulatory experiences, and cultural differences.

Lack of communication. Communication, or lack thereof, is probably the number one cause of unnecessary delays or even failure of a partnership or agreement. High levels of communication ensure that expectations are aligned and conflicts are resolved as they arise. Frequently, the agreement itself can cause problems when unclear or ambiguous language is used. Each party may choose to interpret it in ways which are favorable to its position, so clearly defined terms are essential. Further challenges arise when a lack of written communication exists throughout the project; written correspondence is essential for keeping the project on track. This is especially important when working with companies outside the US due to inherent differences in interpretation.

Unresolved conflicts. Conflicts should normally be resolved at the core level in a timely manner. Resolution requires a level of trust between the parties. If a conflict is left unresolved, it will erode the relationship. And certainly, any activities on the critical path of a project should be elevated sooner rather than later. Though this may not always be well received, experience has shown it necessary to keep timelines and deliverables on track. Elevating conflicts in the correct manner cannot be understated; elevating a quality issue to the quality representative may not always be the correct path. Frequently, functional issues are really business decisions that involve tradeoffs between risk and reward. Normally, a functional manager will act in ways that benefit his or her function, but not necessarily the larger project. Once the contact at the partner organization is selected, it is then key to frame the issue in a fair and balanced manner.

Different regulatory experience. If one company has more experience working with FDA, theoretically, it can guide the other through the process. In some cases, hiring an external consultant can be useful to iron out any differences. Conversely, for two companies with similar FDA experience, the unfortunate truth is that interpretations of guidance documents may become overly conservative in order to mitigate any incorrect regulatory decision liability to the detriment of the project. The interpretation may or may not be in alignment with the actual acceptable practice, but rather on what a company or individual believes the FDA likes or doesn't like. It can be subject to personal opinion and by extrapolating issues from experiences that are not always directly related. One solution during stalemate is to seek external advice from a mutually respected authority.

Language and cultural differences . Risk profiles, accountability, and the partners' decision-making processes are all potential areas for contention. It is important to understand risk tolerance from a societal standpoint (e.g., Japan, US, India, China) and a company scale (e.g., small, medium, large). These differences are not easily managed or changed and should be well understood before engaging in a licensing deal. Perhaps the most appropriate solution is to build expectations into the deal structure at the start. Having mutual respect for each other's cultural and societal norms is key as attempts to modify or retrain the partnering company will typically not be met with success and so avoided when possible.