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Mike Caringi, owner of a small New Jersey business that sells pumps, found himself facing a gut-wrenching dilemma last summer. Should he continue payin

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

g $ 1,500 each month for essential telecommunications services he no longer receives and for leased equipment he claims was never installed? Or, should

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

Examples of combination products may in

he stop making payments and face a potential lawsuit from the firm that financed the equipment under a ‘hell or high water’ lease? Mr. Caringi’s compa

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

ny is one of several thousand small companies around the country reeling from the bankruptcy of Norvergence, a reseller of telecommunications and Inter

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

net services. At the core of the quagmire facing Mr. Caringi and others is that Norvergence succeeded in getting customers to sign separate lease and s

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

Combination pro

ervice contracts that provided its services.

When Norvergence abruptly shut its doors, it left thousands of its customers scrambling to replace teleph

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

one and Internet services while they were obligated to shell out over $ 200 million in lease payments to Wells Fargo Financial, CIT and 30 other leasin

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

g companies over the next five years.

How can you protect your company from being victimized in a similar situation? Certainly, most transactions invo

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

lving equipment leased in connection with a related service carry some degree of risk. You can reduce that risk by taking certain precautions. First, w

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

here possible, avoid leasing equipment when the equipment is proprietary to a service. The chances are that you will be stuck with the equipment if the

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

service provider fails. Make sure that the leased equipment has an underlying value that justifies the lease. By doing a present value calculation of

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

Following aspects would a

all payments owed under the lease agreement and comparing that value to the fair market value of the equipment, you can see whether the lease value is

dd to the challenges in developing combination products:

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

reasonable.

Check to see whether the equipment is used by similar service providers, in case you need to switch services. Finally, make sure you can r

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

esell the leased equipment in the after-market, if necessary. As a last resort, you may be able to cut your losses by having the ability to buy-out the

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

equipment from the leasing company to be resold to someone else.

Perhaps, one of the best protections against getting stuck with service-related leas

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

ed equipment is to thoroughly evaluate the service provider before proceeding. Make sure the service provider is financially sound and has a long track

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

Professional from academic institutions, pharmaceutical industries, health care indust

record of providing excellent service. If possible, ask for and review financial information on the service provider. Do an Internet news search to ma

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

ke sure there are no troubling stories about the service provider. Be partial to services that offer equipment under contracts that tie service and use

.

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 the equipment together, such that your obligation to pay is conditioned on the service being provided.

Lastly, since these transactions always car

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

Companies that provide selfless information through particip

ry some risk, make sure that an abrupt interruption in the service will not have a material negative impact on your company or cause financial hardship

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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Just a short and powerful way to check to see that your celebrity endorser meets the needs of your company. It's always better to be safe rather than sorry.

You're level of quality has already been assessed. Your brand image has been defined. Did you meet the test of a quality, creditable brand? Did you project an image of quality and creditability instantly? Unless you take control of your brand image, it has been created for you.

When you want to run a business you must consider what type you want to get into. There are various types including being a sole proprietor, running an general partnership, running a limited partnership, running a corporation, or running a limited liability company.

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