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If you are running a mid-sized company and have foreign earnings through offshore subsidiaries, then there is a good chance for you to bring t

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

hat income back home. The American Jobs Creation Act has opened a one-year window for mid-sized companies to “repatriate” income earned overse

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

Examples of combination products may in

as. In return, it requires the money to be reinvested in the United States.

The law requires that foreign earnings be converted into cash and

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

repatriated in U.S. dollars. This is done to avoid foreign exchange issues. The benefit of such repatriation is that the company has to pay t

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

ax at the rate of 5.25%, more than seven times less than the usual corporate tax rate. Moreover, the company doesn’t have to segregate the or

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

Combination pro

igin of the money.

The Reinvestment Plan for Repatriation: The law requires a company to prepare a plan specifying how it will invest the re

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

patriated funds for the benefit of workers in the United States. The plan is presented by the executive management of the company and the gran

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

ts for it are approved by the company’s board of directors.

The Association for Financial Professionals permits the following activities for

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

repatriating funds:

Research and development activities

Advertising and marketing programs

Hiring and training new recruits

Acquiring pate

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

nt and other rights to intangible property

Improving infrastructure

Funding capital investments with the purpose of job creation and job ret

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

ntion

Funding product liability or environmental claims

It prohibits certain activities like:

Tax payments

Payment of executive compensati

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

Following aspects would a

on

Payment of dividends

Redemption of stocks

Debt investments

Portfolio investments

Therefore, before repatriating the money you must con

dd to the challenges in developing combination products:

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

sider whether it is worth it or not. You may rather wish to invest these foreign earnings in emerging markets or to expand the business of off

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

shore subsidiaries.

You must consider the factors like tax implications and foreign exchange when repatriating the money. You can also opt fo

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

r hedging the foreign currency. In this, a company can sell a specified amount of currency on a specific future date at a predetermined exchan

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

ge rate or it can sell a specified amount of currency on a specific date at a specific rate, all to mitigate interest rate and/or currency exc

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

Professional from academic institutions, pharmaceutical industries, health care indust

hange fluctuations.

However, if you find the repatriation of these earning beneficial to your company, you need to prepare a detailed written

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

plan for domestic reinvestment. It would best to open a separate account for repatriated funds to help facilitate an audit. In addition, beca

.

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

use certain uses of the funds are prohibited, you need to prepare detailed records of expenses made according to the plan.

To make the right

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

Companies that provide selfless information through particip

decision on the issue of repatriation, you can get the help of a financial professional who can elaborate on the pros and cons of repatriation

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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