E-Folder - Business

There is one thing that all business owners, managers, and shareholders have in common, no matter where in the world we are from, we all want to make money! The methodology and the understanding of how to make money varies widely how

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

ever, as a consequence my experience is that less than 20% of businesses really make an acceptable profit, which is bankable!

Business is no different to a professional sporting venture in that it requires;

Working as a te

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

Examples of combination products may in

Having flexible game plans. (strategies)

The ability to conduct detailed analysis.

Sound administration.

Choosing good support.(suppliers, employees and professional advisors)

Respecting and know

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

ng your opposition.

Introducing plenty of training.

Playing to win.

The very foundation of good performance in any company comes down to structuring your financials properly. From this solid foundati

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

n, you can then build a far more profitable business.

Core business sales

Sales do not reflect the profitability of the company, but rather reflect the base on which to structure the company's costs, and consequently, the

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

Combination pro

company profits. (See graph 1 for a typical, commercially sound structure.)

Sales need to be:

Within the core business of the company.
Quality sales.
Paid for within a reasonable time.
A good mix across custo

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

mers and product groups.

Value adding costs

Value adding costs are made up of

Direct Labour plus on costs.
External costs.
- Materials
- Subcontractors
- Com

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

onents

Costs assisting the value adding process

These costs often referred to as overheads. These costs are made up of:

Indirect Labour
Supervisors and managers.

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

tores personnel.

Truck / forklift drivers.

Cleaners.

Factory Overheads (Burden)

Workshop consumables.

Freight.

Motor vehicles.

Depreciation.

Interest.

Fac

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

ory administration.

Rent and associated outgoings (rates, water etc.)

Energy.

Gross profit

Gross profit is calculated as the Sales less the value adding costs and the costs assisting th

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

value adding costs.

The gross profit is the primary 'financial' key performance indicator, as it determines how much of the sales revenue is left to maintain the operations of the company and final profitability.

Operating Expens

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

Following aspects would a

es

Operating Expenses are all those expenses required to efficiently operate the business and are made up of

Administration costs.
Marketing costs.
IT costs.
Financial costs.

dd to the challenges in developing combination products:

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

li> Operating Profit

Operating profit is the secondary 'financial' performance indicator and determines the overall performance of the company. It is not the final profit (or loss) the company makes but rather the profit after all co

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

e business sales and expenses are taken into account.

The operating profit is calculated from the gross profit less all the operating expenses.

In some cases where companies have a reasonable amount of 'non-core' expenses and income (su

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

h as school fees, private flying lessons, sale of assets, government grants etc.) we would list these AFTER operational profit but BEFORE calculating our profit before tax (PBT.) The question is then "Why bother to have an Operating Profit?
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
trong>"

There are 2 main reasons for this;

To conduct proper analysis of the company it is important we don't contaminate the core business information with non-core data.

In most medium to large companies, the m
ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust
ajor share holders are not running the company on a day to day basis, but do have a significant amount of control. The day to day running is left to managers and executives. In these instances, you want to measure their performance on core business i
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
come and expenditure, not on income and/or expenses over which they have no control.

Why is it that when one asks an executive "What size is your company?" the answer is almost always "We have sales of $xxxx!"

Well whoop
.

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
doo, however it tells us nothing about how the company performs or about its efficiency or lack thereof!

Why can't we say "We are a company that has a profit of 17% of sales?" Now that tells us a lot more about the
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip
ompany, its efficiency etc.

I am sure this "Sales" story has come about from embarrassed business people who can sell heaps but cannot bank any of the profit, simply because profit is a bit like practical business tools, very scarce

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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