Advice You - Internet and Businesses Online

In this article we describe what the ‘curse of auctions’ is and why it may result in you paying too much for AdWords or other sponsored links.

All the major search engines lik

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

e Google, MSN and Yahoo! allow you to purchase sponsored links. You make a bid for certain keywords and the higher your bid, the higher in the list of search results for the ke

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

Examples of combination products may in

ywords your ads appear.

You are in effect participating in an auction where the item traded is your position in a list. Such bidding is in many ways similar to auctions perfor

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

med in auction houses where everything from antiques, books, cars etc may be traded.

The term “curse of auctions” has been around for some time and concerns the proposition 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

at a buyer at an auction purchases an item for a price exceeding the value of the item because some bidders do not know the real value of the item being traded.

The theory is

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

Combination pro

that if all the bidders for an item know the real value of that item, then the item will be sold at this real value. This is because the bidders will bid until this real value

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

is reached. No one will bid any higher. In order for the bid to reach the real value, at least two bidders must know the real value.

If there is only one bidder who knows the

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

real value and all other bidders estimates the value of the item to be lower than it actually is, then the winning bid may be below the real value of the item. In this case, th

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

e bidder makes a good deal since the price paid is below the value of the item.

If however there are bidders who overestimate the value of an item, then these bidders will mak

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

e bids above the real value of the item. For the bidder who knows the real value, this is a lose-lose situation. If the bidder only bids until the real value of the item is rea

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

hed, then the bidder will be outbid by the less well informed bidders. This means that the bidder must either not purchase the item or he or she will have to pay a too high pri

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

Following aspects would a

ce for it. This lose-lose situation is meant by the “curse of auctions”.

In the world of online advertising and sponsored links, the “curse of auctions” may result in the pric

dd to the challenges in developing combination products:

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

e paid for some keywords to be too high. If you participate in such an auction and bid against novices who are not well informed, then your choice may well be to either not win

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

the auction or pay a price you know is too high.

The above description is a simplified version of the world of bidding for keywords for sponsored links. The primary reason fo

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

r this is that different keywords have different values for different websites. Amongst other factors, this value depends on the revenue generated per click on the sponsored th

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

is. And this revenue obviously depends on the quality of what website to which the user is directed when clicking the link.

Bids for certain keywords vary very much from searc

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

Professional from academic institutions, pharmaceutical industries, health care indust

h engine to search engine. Generally speaking, Google is the most expensive. MSN, Yahoo! and smaller search engines often have much lower bids for the same keywords and so can

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

be much more profitable for you. Smaller search engines generate less traffic, but as long as they generate profits for you, they are worth using.

If you are a website adminis

.

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

trator and make you of sponsored links, you should determine if what you are bidding for keywords represents a fair value. If not, you should lower your bids.

If you are an af

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

Companies that provide selfless information through particip

filiate you should be especially careful as I have described in the article “Why Affiliates Are Losing Money On AdWords”. You can find this article by following the links below

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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