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If your company offers a 401K retirement plan, you have the option to select the funds you desire to invest. Your choice has to be from a list of funds

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

provided in the 401K plan. Each employee can contribute up to a certain percentage of their pay, which is deducted directly from the salary before taxes

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

Examples of combination products may in

into a 401K. Some employers match a certain percentage of your contribution, which is then invested. These funds grow without being taxed. They can be w

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

ithdrawn only when you reach the age of 59 1/2. You have to pay income tax at the time of withdrawal. The funds in the account can be invested in differ

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

nt stocks, bonds, mutual funds or other assets, and are not taxed on any capital gains, dividends or interest until their final withdrawal.

What is 401

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

Combination pro

?

A 401K is an employer-sponsored retirement plan and is grouped into two categories.

1. Defined Benefit Plan: The employer promises to pay a defined

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

amount to retirees who meet certain eligibility. It usually links the benefit to the amount of service and final average salary. Employees can either r

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

ceive it as monthly retirement income or as lump sum on retirement.

2. Defined Contribution Plan: It is a contribution that an employer makes, and not

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

he benefit that employee will receive at retirement. Since it is not a monthly income, an employee receives the amount in a current or deferred lump sum

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

or annuity on leaving the company. Laws prohibit companies from utilizing the 401K money but can invest 401K money in stock fund. However, if your comp

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

ny goes bankrupt then you lose that money.

Benefits of 401K Plans:

There are five attractive key benefits.

• Tax advantage
• Employer match prog

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

Following aspects would a

ams
• Investment customization and flexibility
• Portability
• Loan and hardship withdrawals

How to Balance 401K Funds:

Do not invest h

dd to the challenges in developing combination products:

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

eavily in the stock of your employer’s stock heavily. Instead, diversify your investments. Contribute the maximum tax deferred amount to your 401K each

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

ear. You can also make additional, non tax-deferred contributions of less than $35,000 or 25% of your annual income. Your age and company’s plan policy

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

s the deciding factor in rebuilding your 401K balances. A younger person will have longer time to rebuild, than a person will over 50 years of age.

The

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

suggested allocation for balancing 401K at three life stages is:

• Aggressive- For those with 35 or more years until retirement

50%-large cap stocks<

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

Professional from academic institutions, pharmaceutical industries, health care indust

r> 15%-mid cap stocks
15%-bonds
10%-small cap stocks
10%-international stocks

• Moderate For those with 20 years until retirement

35%-

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

arge cap stocks
35%-bonds
10%-mid cap stocks
10%-small cap stocks
10%-international stocks

• Conservative-for those within 10 years

.

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

of retirement

40%-bonds
30%-large cap stocks
10%-mid cap stocks
10%-international stocks
10%-cash

The maximum benefits from your

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

Companies that provide selfless information through particip

01K plan can be derived, if you make wise investment choices and build your portfolio carefully. 401K plans are the best way to plan for your retirement

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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