Useful Advices - Business

Are you selling goods or services both in the US and internationally? Then you know that finding the right fin

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

ancing tools is critical for the success of your business. Although finding the right business financing for U

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

Examples of combination products may in

based transactions is not simple. Finding the right financing for your international transactions can be expo

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

nentially more difficult.

The most common tool used in overseas transactions is the letter of credit. A lette

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

of credit is a payment vehicle that guarantees payment to suppliers and ensures that clients get the products

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

Combination pro

/services they contracted for. The challenge with letters of credit is that they are as hard to get as a busin

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

ss loan. If you or your business cannot qualify for traditional bank financing, then more often than not you w

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

on’t be able to get a letter of credit. Unless, of course, you find an alternate business financing tool.

Thi

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

is where factoring and purchase order financing come into play.

Factoring financing has been around for a ve

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

ry long time. But only recently has export financing (or international factoring) become a popular tool to fin

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

nce international trade transactions. Factoring is a way to help business owners who cannot afford to wait 60

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

Following aspects would a

days to be paid by their international customers.

Factoring provides you with financing based on your

dd to the challenges in developing combination products:

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

nternational invoices from credit worthy commercial customers. Basically the factoring company advances you up

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

to 85% of your invoices and holds 15% as a reserve. The factoring company waits to get paid while you get use

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

of the funds. The remaining 15% (less a fee) is rebated as soon as your international customer pays the invoic

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

e. Furthermore, most factoring agreements will protect you from the credit risk.

Purchase order financing<

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

Professional from academic institutions, pharmaceutical industries, health care indust

b> is a bit different. It helps distributors, resellers and wholesalers who have large purchase orders but can

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

’t afford to pay their suppliers. The PO financing company covers all supplier expenses and helps with the del

.

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

very of the goods. The transaction is settled as soon as your customer pays the invoice.

As opposed to most b

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

Companies that provide selfless information through particip

usiness financing options, factoring and purchase order financing are easy to obtain and can be set up quickly

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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Useful Advices - Trade Financing Alternatives

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