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QUESTION:
I have been contacted by my local city government to say that my business is schedul

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

ed to be audited to determine if I owe any sales tax from items purchased on the Internet. Can they

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

Examples of combination products may in

really make me pay this tax? I thought you could buy things online tax free? -- Katie R.

ANSWER: <

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

br> I hate to burst your internet bubble, Katie, but they are within their rights to audit your bus

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

ness and demand payment of sales tax on items purchased on the Web.

Internet sales taxation has bee

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

Combination pro

n a topic of contention even before Amazon sold its first book and Priceline booked its first flight

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 of the more controversial points is that no one, including our own government, seems to have a

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

clue how to implement a fair and logical Internet taxation process.

With over 7,500 different loca

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

, county and state taxation systems in the United States, you can understand the controversy. In 19

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

98, Congress did what it usually does when faced with a potentially explosive issue like Internet ta

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

collection -- it decided to put off making a decision. Congress enacted a three-year moratorium on

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

Following aspects would a

the collection of taxes to give an appointed advisory board time to come up with an acceptable solut

dd to the challenges in developing combination products:

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

on.

That moratorium ended last year and opened the door for municipalities to begin collecting sale

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

s tax on their own.

Here in Alabama the sales tax collection department is airing radio spots askin

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

Alabamians to step up to - and toss dollars into - the proverbial collection plate. The commercial

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

kindly suggests that if I have purchased anything from an online retailer, I am honor-bound to procl

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

Professional from academic institutions, pharmaceutical industries, health care indust

im such purchases and submit the appropriate sales tax to the collection department right away. They

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

thank me in advance for my cooperation.

So, Katie, when the auditor shows up at your door the best

.

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

thing you can do is smile politely and be totally forthcoming. The sales tax that you pay is a sm

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

Companies that provide selfless information through particip

all price for the convenience of shopping online.

Now where did I put all those Amazon.com receipts

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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