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“I Can Keep It in My Head”

No you can’t! No matter what size your new business is or will be, you’ll need to set up a system to keep track of your financial status. This must

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

be done to prove your income to the government for tax purposes at the end of the year, to prove your status to the bank when applying for a business loan and to show you your

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

Examples of combination products may in

wn profitability and where you might make improvements to it. As you grow and perhaps incorporate, it will become the law for you to keep good accounting records and have them

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

egularly audited by certified accountants.

For now you don’t need that, but you might as well start out right.

The Very Least You Can Get Away With

In some situations, you do

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

’t need to get a fancy accounting system. You can create a perfectly adequate system for accounting for your business with just a spreadsheet program, or even columned pad of p

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

Combination pro

per and a pencil!

Now mind you, these situations are very rare. They include such times as:

• You sell your own craftwork part time

• You’re just testing a new opportunity

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

• Any other money-making venture that has yet to achieve even minimal potential and has no debt

It’s always a great idea for even these small businesses to have their own check

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

ng accounts. In other words, have a bank account set up only for your business. You can put money into it from your personal bank account (capital), but no money ever leaves i

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

that is not related to business expenses. Therefore, you have a pretty good record of your business accounting just from your bank statements!

You may want to organize this i

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

formation into lists, using your spreadsheet software or paper pad, including, but not limited to:

• Revenue Log – Every time someone pays you for your service or product, reco

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

d it in this log. Almost every time your business checking account shows money coming in, one or more entries should go in your “Revenue Log”. The only time incoming cash shoul

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

Following aspects would a

dn’t go in your Revenue Log is when you have contributed cash to the business. You did not buy anything.

Your Revenue Log should include columns for:

customer name

dd to the challenges in developing combination products:

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

date

item # and/or description

quantity purchased

price

subtotal

sales tax collected

total

• Expense Log – Every time you spend

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

money on behalf of your business, so cash goes out of your business checking account, you need to keep track of the type of expense it was. If for nothing else, this is to prop

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

rly deduct them from income for tax purposes. You’ll create a list that can classify expenses into these and maybe more, categories:

Inventory – what you pay for the

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

roduct you sell, or the raw materials to make it

Advertising or marketing expense – website expenses, traditional media ads, related graphics and copy expenses

Trai

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

Professional from academic institutions, pharmaceutical industries, health care indust

ning – any attended classes, seminars or conventions related to your industry or running your business; books or eBooks purchased for same,

Sales expenses – display case

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

, show entry fees, eBay fees, Pay Pal or credit card vendor charges.

Postage – stamps, packaging

Office supplies – paper, pencils, software, other small-cost and

.

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

or expendable items.

Office furniture – desk, computer, other large-cost, long-term assets.

You can then provide your outside accountant with this informatio

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

Companies that provide selfless information through particip

along with all your monthly checking account statements at tax time and he/she should be able to create appropriate tax returns or financial statements for you or your business

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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