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In the early 2000s, two important trends were developing in biopharma. The industry was doing better than ever before, riding a wave of blockbuster products. But a notable dearth of follow-on products was beginning to appear, with forecast reports noting that, although R&D spending was higher than ever, new products were not making it to market. The emphasis in the next few years would be on managing expenses and operations to preserve the bottom line for industry profitability. Into this environment came TGaS Advisors, founded by Stephen Gerard and James Mercante, two industry execs experienced in sales and commercial operations. Their idea was to set up a rigorous benchmarking and advisory practice, starting with the sales-operations practices they knew well, and then branching out as clients required. Two years after TGaS’ founding in 2004, they were joined by Gary McWalters, current president of the firm. In the intervening years, the company has grown substantially—it now has six distinct practice areas—was acquired, and then, in 2014, bought out by a management consortium.
Pharmaceutical Commerce sat down with McWalters recently. Here’s what he had to say.
1) Let’s get some history of TGaS, how it started and how it’s grown to now. Is the company’s exclusive business management consulting, or do you provide outsourcing services as well?
The company was started by founder Stephen Gerard in 2004 in response to a question he kept hearing in the industry and as a consultant: “How do other pharmaceutical companies do it?” Steve saw that Sales Operations was underserved. He teamed up with Jim Mercante, another pharma veteran, and tested out a new idea: fact-based, analytics-driven collaborative benchmark projects. They named the new company TGaS, “Two Guys and Severance.” Even at today’s new business meetings, someone invariably says, “Tell the name story!”
TGaS arrived on the scene at just the right moment. Sales Operations leaders were under terrific stress. The blockbuster model was going away, field forces were shrinking rapidly, and these folks were being asked to do significantly more with significantly less. In response, TGaS introduced its first product, a Sales Operations solution.
Over the years, we moved to a suburban corporate center, grew to about 50 employees, and based on client needs and direction, broadened our practice to include the full range of functions that enable sales, marketing and managed markets. TGaS advises on strategy, resources, processes, metrics, capabilities and continuous improvement.
The business continues to evolve to serve all commercial functions. Clients led us into other areas, including Marketing, Marketing Operations, Digital Marketing, Marketing Sciences, Managed Markets and Training & Development. We’ve also established an Executive Commercial Operations area to serve the leadership.
More than ever, clients want answers to: “What does good look like?” and “Where do we stand vis-a-vis our peers?” But they also want specifics: “How can we support effective Digital Marketing Centers of Excellence?” “What are the best ways to generate useful insights?” “How do companies optimize Managed Markets contracting?” “Achieve launch excellence?” “Improve Medical/Regulatory/Legal people, process and systems?” “Support excellence in commercial training?” And all areas ask, or need to, “How do we become indispensable business partners?”
As the business matured, we added another question: “How should pharmaceutical companies do ‘it’?” The TGaS core business, collaborative benchmarking and advisory services, increases in value as our network and database continue to expand. TGaS associates, far from being fresh out of graduate school, are 20-year+ industry veterans. Most of our customer-facing associates sat in the same chair as the client, so they understand the issues at a gut level.
Here’s what TGaS doesn’t do. We don’t share company-specific information. All client data is blinded and confidential. TGaS remains unbiased because we’re implementation-agnostic. We don’t identify issues through the benchmark, then turn around and sell the client the solution. So, for example, our Digital Marketing benchmarks often identify Search Engine Optimization (SEO) as a weakness. Instead of offering to fix it, we provide a list of half a dozen vendors our clients have told us can do a good job. This is a major differentiator between TGaS and, as far as I know, all other consulting firms in this space.
Benchmarking remains absolutely central to everything we do. It’s the fact-based foundation for a trusted advisor relationship that supports forward-looking implementation, business and strategic planning, stakeholder alignment, peer networking, and virtually anything else our clients need.
2) Benchmarking is obviously central to TGaS’ activities, but what differentiates it from the many other advisory consultants that offer it? What keeps benchmarking from being always a look backward, and rarely a source of innovation?
It depends on how you define innovation. What one company sees as innovative business practice is old news for another. We serve as a barometer for clients, separating fact from fiction. “You think this is innovative, but several companies have been doing it for a while. Here are the benchmark results that tell you how it worked … or didn’t.”
TGaS benchmarking is not like any other benchmarking you or your readers may be familiar with. It’s one of the reasons why 46 of the top 50 pharma companies, plus a dozen or so outside the top tier, chose to work with us in 2014.
Fact-based, objective benchmarking is the foundation for the trusted advisor and peer relationships that keep clients coming back. As a starting point, TGaS takes a rigorous, in-depth quantitative and qualitative approach. We start with an experienced associate who spends time onsite, conducting interviews with both the commercial side and their stakeholders, gathering detailed information and documentation. We ask the questions behind the questions to find out what commercial leaders need to know to manage now and plan for the future. The information is processed by our proprietary technology and validated with the client before we run the benchmark. We present clients with a confidential, detailed report and practical, actionable insights and recommendations they can implement short- and long-term.
Digital Marketing is a good example of a practice shaped by the changing business environment. Our engagements go from broad strategy, an overview of organizational structure and resources, to the granular, cost-per-click for a brand, and everything in between.
Taking a larger view, we conduct about 15 industry landscapes each year across our core solutions. The annual Executive Commercial Operations Landscape for commercial leadership aggregates information on structure, budgets, processes, stakeholder alignment, future forward plans and issues. Future Issues in Managed Markets aggregates historical trending, current data and future planning, critical for one of the most volatile and rapidly changing areas of healthcare.
Going from macro to micro, there’s high demand for our “VHows,” or “Virtual Hows,” brief topical surveys fielded to our network. We do about 340 a year, with thousands in our historical database. Here’s an example. We fielded a client’s request for a VHow on Fair Market Value, a provision of the Sunshine Act that mandates publication of physician spending for speaking engagements. We posed 10 questions about how companies are handling it. This sparked major interest among clients, and the VHow morphed into a full-fledged landscape benchmark.
We love innovation, but there’s also a lot to be said for paying smart attention to such issues as how teams work together. Because we work across the entire commercial organization from prelaunch on, it’s clear that alignment is a serious issue for just about everyone. To address this, TGaS introduced Organization Alignment 360, a solution that cuts across all areas, enabling commercial organizations to align with stakeholders, from team to team and within teams.
Now we’re in a position to extend what we’ve learned to emerging and pre-commercial life sciences companies through our new division, Emerging Life Sciences Network (www.elsNetwork.com), launched in May.
We’ve also figured out how to leverage this extraordinary body of knowledge and experience to develop useful tools and services for all our clients, top 50 and emerging life sciences. TGaS Insights, launched in June, is making tools, training resources and other assets more available to clients. Some will be self-driven. So, for example, a commercial leader charged with developing a budget can plug in eight or ten parameters and figure out the appropriate resources. Or the person responsible for Sales Operations can find out how comparable companies scope and size their field force headcount and spend. Tim Wohlgemut, a market research and executive operations expert, has joined us to head this division.
3) Is the industry getting better at managing its commercial operations? While many pharma companies are renowned for their marketing prowess, few are well known for the excellence of their commercial operations functions.
As Organization Alignment 360 suggests, many pharmaceutical companies still think in silos. Sales, Marketing and Managed Markets often work independently of each other within each functional team. The more innovative pharma companies are breaking down these silos and establishing true commercial analytics groups that cut across all areas in an effort to better leverage vast amounts of data, recognize business opportunities and generate better business insights for their brands and companies. Some of the emerging companies with no history of silos may have the advantage in this regard.
A second trend is the rapidly growing influence of what we call Organized Customer Groups (OCGs). Although Managed Markets divisions, who have dealt with OCGs since their inception, are furthest ahead, pharma continues to struggle with effectively targeting, supporting and ultimately influencing Accountable Care Organizations (ACOs), Integrated Delivery Networks (IDNs), Health Exchanges and other new customer groups. Sales and Marketing organizations are just getting up to speed on the significant effect these various new customers are having on representative and product access.
The best companies have clearly established cross-functional teams focused on supporting these OCGs.
4) What makes the needs of emerging companies different from your established pharma clients?
A number of pharma executives who worked with us at the top 50 have since moved to emerging companies and want to access our expertise, but at a different level. Others, some long-time companies but not top 50, also expressed interest. In response, we launched the Emerging Life Sciences Network (elsNetwork) in May specifically to help this community accelerate commercial success.
The peer network is exclusively emerging and pre-commercial companies. Data and services are more self-driven and geared to the right level for them. These companies have complex and challenging commercial needs, different from those of the top 50. How do we run a commercial organization at this level? Scale up? Prepare for our first launch? Our second? Expand into a new therapeutic area?
The elsNetwork is a unique division but follows the TGaS data-driven pattern, learning “how other emerging and pre-commercial life sciences companies do ‘it.’” Network members have access to comparative intelligence, peer networks, extensive data and experience and advice from our industry veterans. I’m happy to say elsNetwork has about a dozen charter members right now. We’re also planning two Client Summits for elsNetwork, one tailored specifically to this group’s needs and one combined with TGaS top 50 clients.
I’ve mentioned TGaS Insights. This new platform of tools and services, many of which are self-driven, is offered to all clients.
5) You held a recent client forum; what was the industry vibe coming out of that meeting?
We hold two invitation-only Client Summits each year—a spring meeting in Chicago and a fall session in Philadelphia. This year’s Spring Summit drew a record number 134 attendees from 34 companies. We present our latest industry landscape information, bring in a keynote speaker and break into sector-specific sessions for networking, exchange of ideas and brainstorming on common problems.
There was a new vibe at this year’s meeting. Oncology and specialty efforts are beginning to pay off. Instead of talk about scaling down, we heard questions about scaling up. “Do more with less” used to mean cost-cutting. This year it means having sufficient resources to do all the things on their plate. Nice problems to have!
Implicit in this environment is the realization that specialty and oncology are becoming the new norm for the industry, somewhat replacing the emphasis on primary care in years past. One aspect of this is that, instead of one billion-dollar blockbuster, a pharma company might have 10 multimillion-dollar products, and how do you manage the commercial organization around that?
Today’s launches, deals and mergers mean that commercial organizations need to prepare now for the opportunities ahead. Many are turning to TGaS to find out “what good looks like” as they scale up. And, through our existing TGaS and new Emerging Life Sciences Network, we’re confident we have the peer access, data and expertise to support this transition.
6) We’ve heard about some unusual internal staff-support activities at TGaS; tell us about that.
I came to TGaS in 2006 as Employee #13, so I’ve had an opportunity to be part of our growth and transition from a small entrepreneurial crew to an established company. I started in marketing, worked with the practices in various capacities, became EVP, and then President in 2013.
A lot has changed, but we’ve tried to sustain the founding vision for the company—a “client-first” mentality coupled with a sense of fun and informality. We work really hard trying to live our core values—exceeding client expectations, ongoing learning and growth, doing things right, doing the right thing and helping each other. At our monthly company meetings, senior leaders award gift cards to team members whose actions during the past month exemplified one or more of these values. We’re also a caring group. TGaS employees raised funds to cover the cost of a room at Ronald McDonald House for a year, giving families who can’t afford it a place to stay.
Every company meeting has a theme. Last month it was “Mad Men,” so we all dressed in 1950s attire. We’ve also done sports, Hollywood, you name it. Another highlight is our annual trip to a Phillies game. In deference to readers who just might root for other teams, I didn’t wear my Phillies shirt for the cover shot.
When our offices were on the first floor of our current building, we had a bocce league complete with teams and shirts. After our monthly company meetings, the long aisles became bocce courts. When we moved to the fourth floor, we discontinued the tournament, figuring that third floor occupants might not get into the spirit of things, but I did have special carpeting with bocce balls made for the entrance area to my office.
We’re looking forward to the next decade of serving as indispensable business partners to our clients.