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The primary advantages S corporations have over regular corporations are tax-related. Owners of S

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

corporations are not subjected to the double taxation all C corporations face. Profits can be pa

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

sed through the owners’ individual income tax, while the corporation itself is not taxed.

The ma

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

n advantages corporations have over sole propriety businesses are their limited personal liabilit

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

y. S corporations can have this same protection but not subject themselves to corporate taxation.

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

Being able to easily raise funds is also another advantage corporations have over sole proprieto

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ships. However, since a corporation is considered its own entity, the profits of a corporation ar

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

e taxed, and the shareholders are taxed again for the same income. In an S corporation, sharehold

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

rs directly file the income as individual income, while the corporation itself is not taxed.

Ano

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

her advantage S corporations have is they can declare interest paid for S corporation stocks as a

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

investment interest expense. S corporations are subject to similar rules as those with a sole p

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

roprietorship or partnership type of business. Since money obtained from S corporations are not

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

onsidered wages, they are not subject to self-employment tax.

When starting a business, it may b

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

undesirable to offer fringe benefits to employees, because it may not be affordable. S corporat

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ions are given favorable treatment over non-corporations due to their ability to deduct expenses

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

uch as this from their taxes. While sole proprietorships can only deduct 30% of benefits, such as

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

medical insurance, S corporations are allowed to deduct 100% of the cost.

When looking into what

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

type of entity your business should be, you should balance the legal protection, as well as the

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ax saving you will receive. There is no perfect form, but some will offer you more advantages ove

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

the other. Contacting a tax lawyer is the best way to figure out what is best for your situation

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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