Advice You - Business

The last time Inflation was above 4% interest rates were 11%, Terry Waite had just been released and it was the 17th of November 1991. In business terms many lifetimes ago. Wh

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

ether the Bank of England will raise interest rates to 11% to achieve Gordon Brown’s mandate I will leave to the Money markets to speculate. It is unlikely that interest rates

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

Examples of combination products may in

and hence the cost of capital will return the “lowest rates in 30 years” within the next two years.

Within the context of Business’ implementing projects how should they res

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

ond to the changing environment? Those industries with capital intensive projects; Construction, Supply Chain related (warehousing, logistics, stock management) and IT Systems

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

(ERP never cost less than a ?1.0m to implement) will be impacted most and what can we learn from their processes? Below is a five step process which will aid management team

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

Combination pro

to focus their attention on the key tasks.

Stage One, demands a review of the projects applying the benefits ratio matrix below. This enables the management team to classify

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

projects in order that they can be compared not in absolute terms (Amount the project is spending) but relative to the Capital Expenditure Budget and the benefits ratios the

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

project will achieve. Each project is re-evaluated and the figures calculated and placed in the grid below.

Once collated all the projects are then classified

Stage 2 - The

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

roject triage aims to determine how a project should be managed
□ Stopping those projects which are capital intensive and will not drive the required rate of return

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

given the increase in Cost of Capital.
□ Starting those projects which provide a higher return, bringing forward projects that will increase revenue and reduce ov

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

rheads in order that the business has the capacity to absorb the impact of a hostile interest rate.
□ Continue the projects that are strategically correct but drive

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

Following aspects would a

them harder in order that the business can respond quicker than its competitors.

Stage 3 - With the newly re-balanced portfolio drive the benefits getting the orga

dd to the challenges in developing combination products:

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

nisation to accept the re-prioirtised and energized projects
□ Communicate revised portfolio priorities
□ Reorganise resources
□ Mothball all

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

rojects where the return is less than the revised cost of capital

Stage 4 – accelerate those projects where capital is a key element in the business contribution made by

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

the project
Stage 5 - Track the benefits against the Benefits realization charts to confirm the Business is getting a return on its investment.

Whilst we are unsure

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 to when the Bank of England will reduce interest rates, those companies which actively review their project activity will be better placed to maximise the resources they hav

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

Professional from academic institutions, pharmaceutical industries, health care indust

e available. When interests rates fall they will again be poised to recommence the Capital projects they placed on hold and drive increased business value. Terry Waite was hel

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

d in captivity for four years and nine months (2/2/1987 to 17/11/1991). Let us hope that we will not have place capital intensive projects on hold for as long. However those c

.

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

mpanies that do nothing are in danger of being impacted by the Bank of England’s policies and very few bank managers will support capital hungry organisations during a period

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

Companies that provide selfless information through particip

of rising cost drive inflation.

Takeaway Stay competitive - assess your portfolio of projects regularly and especially when there is a significant change in market conditions

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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