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According to the latest newspaper headlines Britain has a debt epidemic and what is more it’s growing. More than 5,300 people a day are seeking advice on their financial situation. The Citize

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

ns Advice Bureau dealt with a staggering 1.4 million debt problems last year – 11% up on the previous 12 months and double the figure just eight years ago.

However, as landlords we shouldn’t b

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

Examples of combination products may in

scared of taking on debt. Spending money on holidays, cars, flash clothes is pure consumption. Nobody buys a new suit or a car thinking they will secure an income from it or indeed sell it a

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

a profit somewhere down the line.

Being a landlord you are an owner of a business and in that respect you should be regularly evaluating whether with a little bit of targeted expenditure it’s

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

possible to increase not only the value of your investment, but also your rent and thereby your total investment returns.

What do I mean by this?
Take for example the case of a two bed ap

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

Combination pro

artment currently let at ?1000 pcm. The property has been let for several years and it would be possible to let it again without too much difficulty. However, the interior is looking pretty t

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

red and the kitchen, whilst clean definitely has more of a ‘country cottage’ vibe going on and didn’t really fit with the modernist decor of the rest of the flat. The options is either to let

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

t as is and probably have to accept a slightly reduced rent to allow it to compete on price with more expensive new build units. Alternatively, it would be possible to spend approximately ?500

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

on a new kitchen, redecoration and even some new flooring throughout. The projected financial results of this would be as follows:

1. The rent could be upped by ?125 per month generating an

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

annual increase in income of ?1500
2. The void period would be likely to reduce by several weeks per annum giving an annual saving of approximately ?460

Payback period
At just under

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

?2000 per annum increase in net revenue; this gives you a pay back period if you used your own ‘hard cash’ of just over 2.5 years. This is pretty good for any commercial project where a pay ba

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

Following aspects would a

k period of 5-7 years would be considered viable. Remember also that this expenditure would probably put ?5000 on the capital value of the property for the next 5-10 years at least.

However,

dd to the challenges in developing combination products:

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

here is a catch – where do you pluck ‘five grand’ out of the air from. It’s great if you have it but it is still a considerable amount of money for most people to find. This brings me back to

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

my original point. There is nothing wrong in borrowing money. Debt is not a bad thing per se, when it used to invest in a way that levers greater returns from your business.

In the above sc

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

nario the expenditure of the ?5000 would almost be instantly recouped by a corresponding rise in the capital value of the investment. In addition the cost of the interest and capital repayments

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

should be met from the additional rent received. Therefore in essence the work costs you nothing.

A two minute bit of research on the Internet at www.moneysupermarket.com revealed the best 5 y

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

Professional from academic institutions, pharmaceutical industries, health care indust

ar unsecured loan on the market has an interest rate of 5.6%, which equates to a repayment of ?95.42 per month. This would be easily afforded out of the additional rent and there and still lea

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

ve a surplus of just under ?30 per month from the projected rental increase. Finally, there are the potential tax benefits. Any interest on the loan can be offset against your rental profits.

.

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

In this particular case the interest element of the loan accounts for ?23.33. Therefore if you did pay tax on your rental business this would mean a saving of about ?300 over the period of the

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

Companies that provide selfless information through particip

loan at the basic rate which would almost double to ?560 if you pay tax at the top rate.

The message for landlords is clear, don’t be scared of debt; used wisely it can be a very useful friend

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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