Advice You - Business

What is accounting?

A simple definition is the recording of financial or money transactions. Not all transactions need to be recorded. Mostly, only busi

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

ness transactions are recorded, personal transactions are rarely recorded by individuals.

For example, you purchase a book for $10. You give the book sel

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

Examples of combination products may in

ler $10; you receive the book & a receipt for $10. More often than not you throw the receipt away; you only want to read the book. The book seller howeve

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

r is operating a business so the transaction will be recorded.

The book seller will record the $10 as a cash sale and at the end of the day will total all

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

of the book cash sales. That is easy, count the money in the till less the float amount at the start of the day and you have the total sales for the day.

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

Combination pro

The book seller now has a problem, how many books were sold, what books were sold and was there a profit for the day?

Does it matter? It does if the boo

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

k seller wishes to continue the business. This is where the accounting system or process begins to be a little more complicated.

The book seller now has

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

o figure out a few things. How many books were sold is relatively easy, 45 transactions for the day so 45 books sold today. All at $10, unlikely, so the

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

book seller needs an accounting system to record or show this information. This accounting system should show what books were sold, at what price and how

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

many were sold.

The book seller needs this information because tomorrow there will be more sales. If there were 10 books titled "Book 1" today and four w

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

re sold then tomorrow there will only be six on the shelf. If four more are sold tomorrow, there will be two left for the day after tomorrow. If customer

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

Following aspects would a

s come into the book shop to buy "Book 1" and it is not available they will go somewhere else to get it.

It may take a week to receive more books after an

dd to the challenges in developing combination products:

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

order is made.

So the accounting system must show the book seller when more books need to be ordered not just how many were sold and at what price. In t

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

he example "Book 1" the book seller will need more books arriving tomorrow or early the day after so no book sale is lost. The new book order would have n

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

eded to be made a week ago for there to be no loss of book sales.

How much did the book seller pay for the books? That information also needs to be avail

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

able to show whether a profit is being made. The simple transaction of one $10 sale is not so simple for the book seller.

Accounting is far more than the

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

Professional from academic institutions, pharmaceutical industries, health care indust

simple recording of a financial transaction. Accounting needs to be able to provide more information than the financial amount of the transaction alone.

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

A better definition would be accounting is the process of recording all aspects of the money transaction from a financial, physical and non-financial infor

.

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

mational point.

Mind you not all transactions are completely money so even the better definition is not complete when it comes to a definition of accounti

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

Companies that provide selfless information through particip

ng. Accounting involves so many different areas of business that any definition given is always going to be open to debate, especially amongst accountants

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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Whether you keep track with a pencil and a pocket notebook, a PDA, create a spreadsheet, or use one of several software packages, keeping track of every penny coming and going will transform your finances and build your financial acumen faster than any ten books on the subject.

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Advice You - Accounting - A Practical Definition

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