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The 401K takes its name from the IRC (Internal Revenue Code) of 1978. The operation of the 401K is admin

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

istered by the EBSA (Employee Benefits Security Administration) of the Department of Labor.

The 401K pl

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

Examples of combination products may in

n has a lot of advantages. First and foremost is that the employee can contribute pre-tax money that red

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

uces the tax paid in each paycheck. Also, the company contribution and any growth in the fund is free o

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

tax until withdrawn.

The compounding of the fund during a 20 to 30 year period is quite amazing. The e

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

Combination pro

mployee has a lot of control in the direction of the future contributions. When the company matches your

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

contributions, it adds something extra on top of your own money. All money in the plan can be moved from

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

one company to another unlike pension.

The 401K plan is protected by pension laws since it is a person

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

l investment plan. It includes protection from garnishment by creditors but not from domestic cases that

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

include child support.

There are some disadvantages in the 401K plan, it is hard to get your 401K cont

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

ibutions before age 60 (59 1/2 to be exact). The 401K is not insured by the PBGC (Pension Benefit Guaran

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

Following aspects would a

y Corp). Also, the company contributions do not kick in until a certain number of years of service have

dd to the challenges in developing combination products:

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

been given. The rules state that company matching contributions must either be a 3 year 'cliff' plan (10

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

percent after 3 years) or a 6-year 'graded' plan.

Employees participating in a 401K plan have many opt

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

ions for investment. In most cases a listing of mutual funds. The mutual funds usually include money mar

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

et fund, treasuries, stock funds and bond funds. Some plans may include investing in company stock and U

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

Professional from academic institutions, pharmaceutical industries, health care indust

S Savings Bonds. The employee gets to choose how the savings is invested. The employee can also choose a

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

any time to stop contributions.

Financial advisers usually say that the average 401K contributor is no

.

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

n-aggressive in terms of their investment options. Stocks have historically outperformed other types of

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

Companies that provide selfless information through particip

nvestment, since the 401K is a long term investment it should be able to minimize the stock fluctuations

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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