Advice You - Business

It is often argued in the franchising industry that the arbitration clauses in franchise agreements tend to benefit the f

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

ranchisee because they allow them to compete against the more well-financed franchisor in disputes arising from the franc

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

Examples of combination products may in

hising agreement. This is true in many cases because the cost of litigation these days is absolutely insane.

However the

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

re are often franchisees who complain that the Franchisor has the upper hand in arbitration disputes. Some franchisee att

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

orneys and sophisticated franchisees state such things as: “Over the years I can assure you that it has been with in thei

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

Combination pro

r best interest to make sure big business includes an arbitration clause in every contract.”

One problem I have seen is

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

when the franchisors are heavily community driven and they draw the arbitrators from that community where the franchisor

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

is based. Generally in the franchise agreement the Franchisor pre-stipulates arbitration and where that arbitration will

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

take place, the exact city and venue. If a franchisor is well known and gives back to that community then anyone in franc

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

hising with experience who even knows enough to hear such a case has connections or pre-concieved notions for the franchi

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

sor.

Although one might assume that if these franchise expert arbitrators hear enough cases of abuse they will soon star

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

Following aspects would a

t to turn against the franchisor. Most franchisors from larger areas such as any large MSA will be fairer, but then they

dd to the challenges in developing combination products:

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

slip to "the poor franchisee" syndrome, which I believe helps the franchisee more than the franchisor in arbitration case

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

s. This debate rages on in the Franchising Industry and is up for discussion.

Some franchisee attorneys will say that; “

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

The theory that arbitration is fast track and affordable is a myth.” And they tell stories of franchisees who put out clo

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

se to $40,000 before their case is even heard. Once there case is heard the average fees for AAA Arbitrators is an hourly

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

Professional from academic institutions, pharmaceutical industries, health care indust

rate of $300.00 an hour. Further many folks complain both before and after the fact or rendered decision that; “Arbitrat

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

ors are not even required to have a legal back ground.”

So, you can imagine the problems this causes. Arbitration clause

.

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

s in franchising agreements are very common and both parties agree in advance to binding arbitration and this causes huge

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

Companies that provide selfless information through particip

conflicts at times and yet both parties save thousands of dollars in litigation costs. Please consider all this in 2006.

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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