Advice You - Finance

The year 2005 was witness to one of the most significant overhauls of the personal bankruptcy in more than half a century. T

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

he new laws enacted by Congress and signed by the President will make it much more difficult for many consumers to walk away

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

Examples of combination products may in

from credit card debt, overdue bills and other debts.

This overhaul of the bankruptcy system was designed to cut down on 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.

perceived abuse of the system by people who could afford to pay the money they owed but chose to file bankruptcy instead. T

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

hese new laws, however, are likely to affect more than just those who were out to cheat the system. It is important for ever

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

Combination pro

y consumer, no matter what their current financial situation, to understand the new bankruptcy laws and how they could potent

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

ially be affected.

The two types of bankruptcy filing

There are two distinct types of bankruptcy filing, Chapter 7 and Chap

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

er 13. When an individual files for Chapter 7 bankruptcy protection, all of his or her assets (minus any assets exempted by

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

the state) are liquidated, with the proceeds being used to pay the creditors. The remaining debts are cancelled under a Chap

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

ter 7 filing, providing the individual with a fresh start.

A Chapter 13 filing is somewhat more complicated, with the bankru

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

ptcy filer being put on a payment plan which can last up to five years. Any debts which have not been repaid by the end of t

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

Following aspects would a

he plan term are cancelled.

The intent of the new law

The intent of the new, more restrictive bankruptcy filling law is to

dd to the challenges in developing combination products:

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

force more consumers into the more restrictive Chapter 13 bankruptcy filing, thus forcing more consumers to pay back a greate

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

r percentage of what they owe.

Perhaps the biggest change in the new bankruptcy law is the qualifying test. Under the new b

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

nkruptcy law, each individual’s income will be subjected to a two part means test. The first means test uses a formula 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

empt expenses like rent, food and other necessities in order to determine if the debtor is able to pay back at least 25% of t

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

Professional from academic institutions, pharmaceutical industries, health care indust

he non-priority unsecured debt. This unsecured debt includes things like credit cards.

The second part of the means test co

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

mpares the income of the bankruptcy filer to the median income level for the state. Those who are determined to be able to a

.

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

fford to pay back 25% of their debt, and whose income falls above the median for the state will be required to use the Chapte

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

Companies that provide selfless information through particip

r 13 bankruptcy filing, while those who fail the means test will be permitted to file under the more generous Chapter 7 rules

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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