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A new study reveals that outsourcing payroll functions reduces payroll tax penalties. The study, conducted by Empagio Human Resource

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

s Outsourcing, was conducted online during the month of September 2006. 209 financial and human resource executives participated in

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

Examples of combination products may in

the study. The titles of these people ranged from CEO, CFO, president, vice-president, director, and manager. The results of the stu

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

y did not reveal the sizes of the companies represented.

Reduced Dollars Spent on Penalties

72% of those participating in t

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

he study said that outsourcing their payroll reduced the actual dollar amount of tax penalties being paid to various government agen

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

Combination pro

ies. Only 1% said their payroll tax penalties increased by outsourcing. The remainder, 27%, said there was no change in the dollar a

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

mount of tax penalties by outsourcing.

Reduced Frequency of Tax Penalties

69% of those participating in the study said that

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

the frequency of paying tax penalties was reduced by outsourcing their payroll. 2% said the frequency of paying tax penalties increa

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

sed by outsourcing, and the remainder, 29%, said there was no change in the frequency of paying tax penalties by outsourcing.

Wh

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

Should Businesses Reduce Payroll Tax Penalties?

There are three important reasons businesses should strive to reduce payroll t

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

ax penalties:

Payroll tax penalties are quite stiff; paying them damages cash flow
Payroll tax penalties are not deduc

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

Following aspects would a

tible on tax returns

Late payments and filings are frustrating to those who are responsible for them; decreased productivity re

dd to the challenges in developing combination products:

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

ults

Unlike other business expenses, there is no financial benefit to paying payroll tax penalties. They are truly a d

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

rain on business resources, both the human side and the financial side.

Why Does Outsourcing Reduce Payroll Tax Penalties?
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
>

Payroll providers are trained in the complex task of payroll. Because of all the different federal and state taxes and regulation
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
s, wage bases, reporting requirements, and payment requirements, payroll is a tedious maze of timetables and decisions. Proper train
ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust
ng and experience are important to getting the task completed correctly.

If your business runs payroll in-house and has been paying
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
payroll tax penalties, consider outsourcing this important function. Many of the smaller payroll providers offer inexpensive payrol
.

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
solutions with a wide range of up-to-date features, such as direct deposit and electronic filing at no additional charge.

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

Companies that provide selfless information through particip
information on the 2006 Empagio Executive Study on Payroll and Tax Filing, visit Empagio, Inc.

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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