Advice You - Business

This article completes our two-part discussion about the rules regarding forecasting that we apply in writing business plans. We share them with you in this article

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

in the hope that you will find these rules worthy of adopting in your efforts to write business plans as well.

Rule 5: Question basic assumptions.<

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

Examples of combination products may in

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It is always a good exercise to question the basis for any assumption. You may find the basis is not defendable. You may even learn a better way to

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

evelop or present the assumption.

Corollary 5A: When a forecast is developed around a specific policy or procedure, question th

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

t policy or procedure.Rule 6: Develop forecasts in the context of the entire system and properly reflects all relationships.

It

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

Combination pro

s important to understand that everything in the company affects everything else. For example, if you need to adjust the number of employees, you may also need to ad

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

ust the office space needed.Rule 7: The granularity (time divisions; e.g., monthly, quarterly, etc.) of the forecast must match the granularity o

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 system.

Corollary 7A: The granularity must match the frequency of review and decision-making.
It makes sense tha

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

you should review your projections whenever you review your actual operations. Most businesses are managed on a monthly basis. Therefore, their forecasts should be

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

based on monthly numbers.

Corollary 7B: Use the same granularity throughout the forecast.
Changin

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

the granularity of the forecasts often introduces errors. The longer the time period of the forecast, the more you have to rely on averages when reviewing your prog

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

Following aspects would a

ess. See my article "Business Plan Mistakes--The Phantom Growth Rate" for a good example of this.Rule 8: Build projections using th

dd to the challenges in developing combination products:

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

most basic assumptions as a foundation.

It is much easier to defend basic assumptions that are used to "roll up" into the larger forecasts. For exa

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

ple, if an investor were to ask you to reduce your payroll from $1,000,000 to $750,000, you may not be able to adequately explain why that would not work unless the p

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

yroll total was determined from the more basic assumptions of personnel counts and pay scales.

Corollary 8A: A forecast should

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

how its basic assumptions.

More plans are rejected because they fail to show the basic assumptions than probably any other single reason.
ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

Rule 9: An exception to a rule is valid if it can be defended.

As in any other system, every rule has its exception. Just make

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

ure you can adequately defend the deviation from the accepted norm.Rule 10: Every forecast must have at least two supporters.

"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

o heads are better than one." When is comes to defending a number or assumption, it helps to have allies.

Corollary 10A: Even

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

Companies that provide selfless information through particip

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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