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There are three major functional areas in accounting, which need to be considered in modern day accounting for any business. The three are financial, cost and management account

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

ing.

The first area, namely financial accounting, is primarily useful for ascertaining the results of the business on a periodical basis; for example, one year. This will help

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

Examples of combination products may in

o determine the future course of action in the long term. In economical terms, financial accounting treats money as a factor of production.

Cost and management accounting are t

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

ols to enable management to take decisions on a day-to-day basis. Cost and management accounting are not useful for their own sake. These two functions assist management in the

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

conduct of the business along with other key factors involved in running of the business. Key factors could be demand, supply, competition, availability of raw material, logisti

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

Combination pro

s etc.

The second area, namely cost accounting, seeks to ascertain the value of direct costs and indirect costs involved in production . From this value, management can make an

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

informed decision regarding the improvement of production performance. In economic terms, cost accounting is a measure of economic performance. This information gives managemen

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

a clear indication of economic performance of the production resources of the business.

Costing also helps the sales manager in setting prices. But since costing is a measure

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

f economic performance, it cannot be considered as an absolutely accurate basis for setting prices. This is because selling prices are more of an economic decision. It would no

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

be amiss to mention here that prices depend basically on market factors. Prices depend more on demand, supply and competition and less on costs. For example, high demand coupl

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

d with lack of competition would mean that business could charge higher prices for its products, well above the costs.

The third area, namely management accounting, is closely i

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

Following aspects would a

terrelated with costing accounting. Although it has evolved from cost accounting, management accounting has a broader role to play in management decisions. It measures economic

dd to the challenges in developing combination products:

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

performance of the business enterprise as a whole, vis-a-vis the economic environment in which the business operates. This function of accounting seeks to combine the financial

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

nd cost information in a broader aspect.

Finally, management accounting is instrumental in assisting and advising management in making important business decisions. It makes ma

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

agement aware of the economic implications and consequences of their decisions. In economic terms, it implies a close study of money as an economic resource, while simultaneousl

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

treating it as a measure of economic performance. This enables management to measure it as an economic factor of production, e.g. the rate of return on capital employed.

It i

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

Professional from academic institutions, pharmaceutical industries, health care indust

thus seen that accounting has a distinct role to play in three different areas, which are equally vital. With the advent of computerised accounting, it has become very easy for

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

management to monitor the accounting information on the tips of its fingers. Financial accounting programs enable financial statements and various cost and MIS statements to be

.

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

roduced almost instantly at push of a button. Now, only the laborious part of accounting is data entry. Financial managers must ensure that meaningful data is input into the sy

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

Companies that provide selfless information through particip

tem to produce meaningful information. Proper categorisation must be done and keying errors avoided at all costs, ensuring providing accurate financial information to management

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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