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If you are considering buying a commercial property, then it is important to understa

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

nd the basic structures of the leases?

Why?

Because you’re commercial loan t

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

Examples of combination products may in

erms will be based on the type of lease of your commercial property. In this article

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

, we will only look at two of the more popular lease types…Net Leases.

#1 NNN Lea

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

se

In an Absolute NNN lease, the tenant pays for property taxes, insurance and m

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

Combination pro

aintenance in addition to the rent.

Most triple net properties are for a single tena

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

nt and are long term (5 yrs or more).

This is considered a very desirable investment

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

because the owner basically has no management or maintenance issues; they are the re

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

sponsibility of the tenant. These items are negotiable, so read the leases carefully

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

. Even though a property may be advertised as a triple net, until you read the lease

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

you will not know.

Some well known companies that are usually triple net are Walgre

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

Following aspects would a

en's and CVS pharmacies.

#2 NN Lease

NN lease is a type of lease that usuall

dd to the challenges in developing combination products:

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

y requires the tenant/lessee to pay for property taxes and insurance in addition to t

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

he rent. The owner/lessor will pay for maintenance (roof & structural).

This type o

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

f lease is not as desirable as a triple net lease for the owner. Why? Because it in

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

volves the owner in some of the management details & expenses. With a triple net lea

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

Professional from academic institutions, pharmaceutical industries, health care indust

se, the tenant is responsible for all expenses, taxes and insurance. As an owner, yo

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

u want most, if not all of your expenses "net" out of the lease.

The forms of net le

.

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

ases are: N, NN, NNN, and NNN Bond lease. The only way to know exactly what expenses

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

Companies that provide selfless information through particip

you are responsible for is to read the leases carefully before you buy the property.

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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