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An additional income tax deduction may be available by contributing to an IRA. However, many people may not realize they qualify to have an IRA. So let’s take a look at the contribution rules.

One o

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

f the things that makes IRAs so complicated is trying to understand the eligibility, maximum contribution limits, contribution phaseouts, etc. of all the types of IRAs at one time. Technically, there

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

Examples of combination products may in

are five types of IRAs: Traditional, Roth, SEPs, SAR-SEPs and SIMPLE. So we are going to limit the discussion here to the traditional IRA.

In this article, all of the rules pertain to 2007. Some of

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

the numbers used in the calculation of how much you can contribute to an IRA are subject to indexing. So you need to obtain the proper figures for any year in question.

The determination of your el

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

igibility for a traditional IRA, and the ability to calculate how much you could contribute, are dependent on several things:

1. Your age

If you are under 50, you can contribute a

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

Combination pro

maximum of $4,000 to a traditional IRA. If you turn 50 during the year or are over 50, you can add another $1,000 which is called a “catch-up” contribution. If you turn 70 ? during the year, you can'

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

t make any contribution.

2. Were you an active participant in an employer sponsored plan during the year?

If so, you still may be able to contribute to an IRA. The amount depends o

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

n how much money you made and your tax filing status (single, joint or separate).

Having “modified adjusted gross income” (MAGI) of certain levels requires applying a formula which calculates a grad

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

ually decreasing permissible deductible contribution. If your MAGI exceeds certain thresholds, you can't contribute anything. These thresholds depend on how you file your taxes. Here they are:

Marri

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

ed filing jointly: Up to $83,000 of MAGI allows for a full contribution. Then a phrase out begins as income increases. For MAGI of $103,000 or above, no deductible contribution is allowed.

Single or

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

Head of Household: If your MAGI is $62,000 or above, no deductible contribution is possible. The phase out starts at $52,000, so anything lower allows for a full contribution.

Married filing separa

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

Following aspects would a

tely: For a MAGI of $10,000 or more, no contribution is permitted and the phase out starts at $0.

3. Do you live with your spouse or file a joint return and your spouse is a participant in a

dd to the challenges in developing combination products:

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

qualified plan, but you are not?

In this instance, your ability to make a contribution is reduced to zero if you have a MAGI over $166,000. Up to a MAGI of $156,000, you can take a full de

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

ductible contribution.

4. Did you receive “compensation” during the year?

Contributions must be made from compensation received. Sorry, if you were unemployed all year, sheltering

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

that big day at the track is not permitted.

5. Do you have cash?

Contributions must be made in cash. You can't contribute stock or any other type of asset.

6. Do you file

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

a joint tax return and make less than your spouse?

If so, you may be eligible to make a contribution. This rule was originally intended for a spouse who did not work; however, it may apply

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

Professional from academic institutions, pharmaceutical industries, health care indust

to a spouse who works as well.

You will need to apply the rules and work through the math. You may find a spouse has no compensation for the year can make the maximum (i.e. under age 50: $4,000) con

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

tribution.

7. Did your employer go bankrupt?

The rules here are pretty narrow, but if you qualify you could be in for a nice surprise. You would have to have been a participant in

.

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

a 401(k) plan with specific attributes and your employer filed Chapter 11.

If you qualify, you would be eligible for catch-up contributions of $3,000 for years 2007-2009. And these catch-up provisio

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

Companies that provide selfless information through particip

ns apply to all ages-you don't have to be 50 or older.

Armed with this information, you should be in a position to determine if an additional deduction is available to you by contributing to an IRA

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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