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Advice You - Simple Is Beautiful
Business people seem to love complexity. No sooner is a simple business successful than its managers pour vast amounts of energy into making it very much more complica
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
ted. Take a company with sales of $100 Million and total profits of $5 million. The 80/20 Principle suggests that $20 million of the sales have produced $4 million of
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
the profits, a return of 20%. And $80 million of the sales have produced just $1 million of the profits, a return of only 1.25%.
Routinely, when executives are present
Routinely, when executives are present
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
d with the facts, they at first refuse to believe the data. Next they refuse to get rid of the 80 percent of the business that is unprofitable
Unprofitable business i
Unprofitable business i
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
s so unprofitable because it requires the overheads and having so many different chunks of business makes the organization so complicated. Very profitable businesses do
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
not require as much overhead. Ideally you could have a business solely composed of the profitable business and it could make the same profits, provided that you organi
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
zed things differently.
The cost of complexity
The problem is not extra scale, but extra complexity. Additional scale, without additional complexity
The cost of complexity
The problem is not extra scale, but extra complexity. Additional scale, without additional complexity
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
, will always give lower unit costs. But that is seldom the case. When we enlarge the business, we enlarge everything and try to provide more services, therefore incr
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
asing the complexity and cost.
Understanding the cost of complexity allows us to take a major leap forward in the debate about corporate size. It is not that small is
Understanding the cost of complexity allows us to take a major leap forward in the debate about corporate size. It is not that small is
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
beautiful. All other things being equal, big is beautiful. But all other things are not equal. Big is only ugly and expensive because it is complex. Big can be bea
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
tiful. But it is simple that is always beautiful.
Go for the most simple 20 percent
What is most simple and standardized is hugely more productive a
Go for the most simple 20 percent
What is most simple and standardized is hugely more productive a
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
nd cost effective than what is complex. Always try to identify the simplest 20 percent of any product range, process, marketing message, sales channel, product design,
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
product manufacture, service delivery, or customer feedback mechanism. Refine the simplest 20 percent until it is as simple as you can make it.
Make the simplest 20
Make the simplest 20
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
ercent as high quality and consistent as imaginable. Whenever something has become complex, simplify it, if you cannot, then eliminate it.
Managers love compl
Managers love compl
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
exity
Complexity is stimulating and intellectually challenging, it creates interesting jobs for managers. Unless firms are facing an economic crisis, or have
Complexity is stimulating and intellectually challenging, it creates interesting jobs for managers. Unless firms are facing an economic crisis, or have
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
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
an unusual leader who favors investors and customers rather than his or her own managers, excess management activity is virtually guaranteed.
The 80/20 Princip
The 80/20 Princip
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
le
Always recall the 80/20 Principle, if you study the output your firm generates, the chances are that a quarter to a filth of the activity accounts for thre
Always recall the 80/20 Principle, if you study the output your firm generates, the chances are that a quarter to a filth of the activity accounts for thre
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
e-quarters or four-fifths of profits. Multiply that quarter or filth. Multiply the effectiveness of the rest, or cut it out.
Because business is wasteful, and becaus
Because business is wasteful, and becaus
.
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
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
complexity and waste feed on each other, a simple business will always be better than a complex business. Because scale is normally valuable, for any given level of co
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
mplexity, it is better to have a larger business. The large and simple business is the best.
Suggested reading: The 80/20 Principle, by Richard Koch, ISBN 0-385-49174-
Suggested reading: The 80/20 Principle, by Richard Koch, ISBN 0-385-49174-
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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