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Price reflects the value sacrificed for the acquisition of an item at the moment of purchase; therefore price paid is a historical fact and does not necessarily reflect the value of the item af

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

ter the transaction, since this may change. Value changes when supply or demand changes. If the value of an asset that was acquired at a specific cost changes in the course of time, the accou

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

Examples of combination products may in

nting records will no longer reflect its value.

When recording accounting transactions at historical cost it is assumed, by implication, that prices remain stable. This is obviously not so in

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

practice and consequently profit determination in a period of rising price levels poses a problem. The price of the acquisition or expense is not necessarily a reflection of the value sacrifi

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

ced.

Price level changes can be general or specific in nature. General price level changes reflect increases or decreases in the value of the monetary unit. Prices are expected to show a spe

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

Combination pro

cific trend. If an item was $10 three years ago and the same item now costs $20, it may be concluded that the price level has risen, the buying power of money has decreased and that there is i

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

nflation. Specific price level changes can result from technological advances, changes in consumer demand, etc.

If the value of money changes, measuring accounting transactions in terms of st

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

ble monetary units is obviously not a suitable method. Financial accounting statements should be adjusted for the following reasons: (1) To create a more accurate basis for the evaluation of t

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

he investment in an undertaking, (2) To enable meaningful comparisons between the results of different years and (3) To make comparisons between undertakings more meaningful.

Adjusting for pri

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

ce level changes can be partial adjustments, general adjustments or specific adjustments based on current replacement value.

Partial level changes affect those assets that have a relatively lo

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

ng lifespan, for example fixed assets subject to depreciation and acquisitions where there is a lapse of time between the time of acquisition and the allocation of that cost to the accounting r

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

Following aspects would a

ecords for a specific period. For example, inventory.

In some countries, the financial statements of an undertaking are adapted to reflect the general purchasing power of money as at the last

dd to the challenges in developing combination products:

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

day of the accounting period (general adjustments). Usually an index, such as the consumer index, is used to convert historical amounts to current purchasing power equivalents. The purpose i

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

s to convert all amounts in the financial statements to a common accounting unit with the same purchasing power.

Current cost accounting is another method of accounting for the influence of in

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

lation on the financial statements, showing some (or all) of the items in terms of their current cost. The most popular method is to prepare a distinct and separate accounting statement that r

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

eflects the financial result as restated by the following adjustments: (1) Depreciation - An adjustment for the difference between depreciation based on the current cost of the fixed assets and

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

Professional from academic institutions, pharmaceutical industries, health care indust

depreciation determined on the historical cost. (2) Cost of sales - An adjustment for the difference between current cost on inventory at the date of sale and the amount used to determine the

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

historical cost. (3) Leverage - Where the total liabilities exceed the monetary assets and where the total monetary assets exceed total liabilities.

Consistent inflation has shown that the t

.

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

raditional historical cost accounting system has serious limitations. These limitations have already resulted in deviations from the strictly historical cost conversions. For example, many un

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

Companies that provide selfless information through particip

dertakings have revaluated their fixed assets and adopted the last-in-first-out (LIFO) basis of inventory valuation in order to determine a more accurate measure of accounting for cost of sales

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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