Advice You - Finance

Credit counseling became part of the bankruptcy process in the United States with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. As a result of this legisla

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

tion, your Chapter 7 or Chapter 13 bankruptcy case will be dismissed if you cannot prove that you completed a credit counseling session, with an approved credit counselor, within the preceding 180 days.

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

Examples of combination products may in

In other words, in the United States, your bankruptcy will not start until you can prove that you have completed credit counseling.

This is in direct contrast to the personal bankruptcy

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

system in Canada, where credit counselling (yes, in Canada we spell it with two l's) is an integral part of the bankruptcy process, but it is completed during the bankruptcy, not before you file

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

It appears that the American bankruptcy reform in 2005 was championed largely by large credit card companies and other lenders, and they argued in favor of the credit counseling requir

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

Combination pro

ment primarily, it would appear, as a way to talk people out of filing bankruptcy. The mandatory pre-bankruptcy credit counseling session, among other things, discusses alternatives to bankruptcy. Sinc

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

credit counselors do not also serve as bankruptcy attorneys, it is logical to assume that they will, at the very least, make sure all debtors are fully aware of their non-bankruptcy options.

In Canada,

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

the process is somewhat different. First, all bankruptcies are handled by private individuals, generally with an accounting background, who are licensed by the federal government. In Canada, practicin

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

lawyers are not permitted to act as trustees in bankruptcy. The trustee handles all aspects of the file, including collecting assets from the debtor, and distributing the proceeds to creditors.

In Can

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

da, prior to filing a consumer proposal (similar to a Chapter 13 filing in the United States) or a personal bankruptcy (similar to Chapter 7), the debtor is required to meet with a licensed trustee in ba

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

kruptcy, and the trustee is required to explain to the debtor all of their options, including such non-legislative options as debt consolidation and debt management plans through a credit counselor. The

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

Following aspects would a

debtor then decides whether or not they will file bankruptcy.

During the bankruptcy (or proposal) the debtor is required to attend two credit counselling sessions.

The first credit counselling session

dd to the challenges in developing combination products:

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

iscusses money management, spending and shopping habits, warning signs of financial difficulties, and obtaining and using credit.

The second stage credit counseling session is designed to determine the

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

auses of the insolvency, and to provide the debtor with the skills necessary to avoid future financial problems. The credit counselor will follow up on the principles discussed in the first session, and

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

then help identify non-budgetary causes of financial problems (such as marriage break up, job loss, family problems, excessive gambling, compulsive behavior, and substance abuse).

In contrast to the Am

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

rican system where pre-bankruptcy credit counseling appears designed to talk people out of going bankrupt, the Canadian bankruptcy credit counselling system is designed to help debtors avoid financial pr

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

Professional from academic institutions, pharmaceutical industries, health care indust

blems in the future.

Obviously as a Canadian bankruptcy trustee I am somewhat biased, but given my experience with the over 3,000 personal bankruptcies and consumer proposals that I have personally hand

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

ed, I can say with confidence that in most cases the debtors viewed the credit counselling sessions as a positive experience. Many people over the years have told me that they learned many money managem

.

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

nt skills, and the vast majority of people I have helped over the years don't go bankrupt again, so I believe the Canadian credit counselling system works.

The American system has only been in place for

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

Companies that provide selfless information through particip

a short period of time, so perhaps in a few years a comparison will be done of both credit counseling systems to determine which approach is most beneficial to people with money problems

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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