Advice You - Business

Cyndi Joiner had been responsible for GMAC's Corporate Real Estate and Facilities Management group for three months when she faced a major challenge: The large support operation appeared to

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

be at a crossroads. The division needed to cut costs, manage suppliers' performance better, and clean up the chaos engendered by a lack of internal controls, standards, and up-to-date tech

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

Examples of combination products may in

nology.

Joiner presented top management with three options: continue the present course, reengineer the division, or outsource the entire operation. Management selected "Door No. 3," Joine

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 says, primarily to reduce head count and improve processes quickly. But Joiner got more than she bargained for: GMAC executives were so excited by outsourcing's potential cost savings and

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

apparent ease of execution that they decided to shrink the standard timeline. Whereas many firms would have allotted more than six months to complete an initiative of this magnitude, GMAC

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

Combination pro

executives asked Joiner to do it in six weeks.

In spite of notable obstacles, Joiner met the challenge. In doing so, she and GMAC learned valuable lessons about launching an outsourcing in

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

itiative.

The decision to outsourceCompanies outsource noncore business functions to third-party providers for various reasons: to reduce head count, to cut expenses, and to improve servic

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

. In GMAC's case, the company believed it could not only trim personnel and other costs during a tough economic time but also might better fulfill its core purpose: ensuring that customers

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

have a positive home-ownership experience. That meant focusing more on selling mortgages and properties. Thus, the real estate and facilities-management arm of the business became an ideal

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

candidate for outsourcing. "The talent pool in our core competencies," Joiner says, "was much greater than in this other function. We needed a deeper 'bench' in facilities

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

management, and outsourcing would let us get that."

Selecting an outsourcing partner As a first step in selecting an outsourcing partner, Joiner recommends canvassing your industr

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

Following aspects would a

y to come up with a handful of candidates. GMAC hired a consulting firm to handle the search, owing to the accelerated timetable. The consultants served as advisers on several levels:

Sugg

dd to the challenges in developing combination products:

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

esting potential partners Helping GMAC develop a picture of what the new organization should look like after the software outsourcing was complete Offering recommendations for defining the

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

partnerships Assisting GMAC in interviewing potential partners' former and current customers Then look at each company's standing in the industry, its flexibility, and its track record with

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

firms similar to yours. "Look for companies that make a good cultural match with your own," she adds. "Find out what you can about their portfolio of talent. Make sure they're willing to ex

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

plain the reasons behind both their successes and failures." Savings and speed In proposing an outsourcing initiative to senior executives, managers need to do more than just stress the pot

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

Professional from academic institutions, pharmaceutical industries, health care indust

ential cost savings. Why? "Savings come in three forms," Joiner says. "Immediate dollars on the P&L, eventual improvements in processes, and avoidance of costs. You won't see all the saving

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

s show up immediately on your P&L, and some of them will always be hard to quantify."

Moreover, overemphasizing the financial benefits of software outsourcing can cause firms to set too sh

.

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

ort a timetable. A rapid execution has pros and cons. As Joiner discovered, speed enables a company to get through the most painful part of the change process quickly and minimizes friction

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

Companies that provide selfless information through particip

created by resisters. It also forces people to adapt quickly. As Joiner puts it, "You can't know till you jump in the middle that you don't know how to swim. But you learn how—really fast.

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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