Just Other Articles

The foundation for success…

A common challenge for all businesses is how to pay for the equipment needed to perform their services. Even among experts and professionals, opinions will often vary.

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

The one thing you must recognize is that each business is unique and there are no standards that work for everyone. Only you know what your capital reserves are and what type of reserves your bu

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

Examples of combination products may in

iness will require from month-to-month. While some businesses are more sophisticated than others, only you have access to the full spectrum of your financial position today and the forecast of wha

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

t responsibilities there are to come. It is not only essential that you prepare yourself adequately; it’s crucial.

In the beginning, one of the first professionals you should confer with is a Tax

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

professional. This person can view your company in its totality and then match your company’s needs with the proper tax plan. It is an accepted belief that proper tax planning is the primary step

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

Combination pro

to a successful business. Upon properly identifying your needs, it’s now time to strategize your method of operation. To assist you with that method, we’ve compiled a simple list of the advantag

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

s and disadvantages of leasing equipment versus that of buying it. This list is generic but reveals the industry norms of features and benefits. As you review, apply these characters to your busi

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

ness and see how it measures up. Good luck!

Own
1. When you decide what equipment to use, you are of course purchasing it. The equipment is yours to do with as you please.
2. By purcha

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

ing the equipment, you have immediately created an asset to your company profile.
3. Depending on what your equipment is and how your company is structured; you may be entitled to certain tax

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

benefits such as writing off the expense in the first year. (Check with a tax professional)
4. There are no payments. (You own it.)
5. Now that you own the equipment, you have the option

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

to resell it. (At a lesser price)

Lease
1. The first benefit is that if you don’t have the reserves to purchase, a lease is a viable option.
2. If you were going to purchase with a bank

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

Following aspects would a

oan, then the bank would likely require a 20% down payment. By leasing the equipment, the standard is that you are required one or two month’s payment upfront and that’s it.
3. Although you a

dd to the challenges in developing combination products:

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

re leasing the equipment, it is still an asset to your company. 4. Even though you have a monthly payment, you also have the option to upgrade the equipment prior to it becoming obsolete.
5.

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

hen you acquire assets, you want assets that will appreciate in value not depreciate. With many equipment materials needed to function, they will depreciate after the first year of usage.
6.

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

By leasing all of your equipment, you may be able to fully write-off up to 100% of your payments as a business expense. (Check with a tax professional.)
7. Most items can be leased such as pho

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

es, furniture and computers, not just heavy machinery.
8. Choosing a lease allows you the flexibility to maintain capital reserves for payroll and miscellaneous expenses that may occur.
9

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

Professional from academic institutions, pharmaceutical industries, health care indust

. There are numerous types of leases that can cater to your business profile and your company’s needs.
10. Lease rates are ‘fixed’ and range in term from 12 to 60 months.

As you can see, the

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

eatures of leasing far outweigh that of purchasing or owning the equipment for many businesses. Eight out of ten businesses prefer leasing over that of buying. The list you just reviewed points o

.

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

ut the key components to both options but with further investigation, you’ll find that leasing offers many more opportunities to fulfill your desires.

Please speak with an equipment leasing profes

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

Companies that provide selfless information through particip

ional to locate the proper lease for your company. It’s good business!

J. R. Parler

Commercial Real Estate and Finance Consultation
JRParler@yahoo.com

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

Enterprising people like to be their own masters, this is the reason why most of the enterprising people open up their own businesses so that they can enjoy working for themselves as well as earn a fair share of profit, which would be certainly more than what they would earn as a salary.

A stakeholder is a person who has a legitimate interest in a company or organisation. Stakeholders are usually effected by company's decisions and changes.

Make a lot of money fast, make a lot of money fast from th ground up, dedication, knowledge is power

Tags

Links

Just Other Articles - Lease Versus Own

Related Articles: