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In an earlier article we drew attention to the need to review assets and the manner in which they are held in order to escape liability to inheritance tax in the United K

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

ingdom. The key lies in domicile, even more so after the British Government's decision to tax the most basic of estate planning arrangements. So what is domicile?

Dom

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

Examples of combination products may in

cile
In Cyprus, as in the U.K. everyone is born with a domicile. This is generally the domicile of the father and is known as the domicile of origin. The domi

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

ile of origin is retained until by his actions a person demonstrates that he has broken his ties to his domicile of origin and established a domicile elsewhere - a

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

domicile of choice. Moving to Cyprus and making it his permanent home with the intention of staying can be such an event.

So far as moveable assets are concerned -

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

Combination pro

anking accounts, share portfolios and assets other than real estate, it is the law of domicile, which governs the ability to bequeath assets freely on death. Many legal s

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

stems, including Cyprus, restrict this freedom so that the greater part of an estate passes to the testator's family. The part of the estate, which may be freely disposed

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

of is called the disposable portion and this ranges from one-quarter where there is a spouse and child, to the whole estate where there is no spouse, no children

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

r descendants of children and no father or mother.

Sounds complicated? Read on. A surviving spouse is entitled to a share in the statutory portion (the part of the estat

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

which may not be freely disposed of by will) and in the undisposed portion, if any. The size of the share is determined according to whether there are children or descen

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

ants of children, or ancestors or descendants of ancestors. Some, e.g. the descendants of children, share the portion of their deceased parent, others, such as descendant

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

Following aspects would a

s of brothers and sisters, simply take equal shares. Anyone who has received a gift from the testator during his lifetime may have to bring it into account. Where there i

dd to the challenges in developing combination products:

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

no spouse and only very remote relatives, the beneficiary may turn out to be the Republic of Cyprus.

As mentioned above, the law of domicile covers only personal pro

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

erty. Real estate passes according to the law of the place where it is situated. The will may or may not be valid in that country. The heirs of a testator who died do

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

miciled in Cyprus, leaving a banking account in the Isle of Man and real estate in three other different countries may have to cope with five legal systems, and pay three

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

lots of estate tax, before they can enjoy their inheritance. They will remember him!

A possible solution
One answer to the problem is to avoid having to bec

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

Professional from academic institutions, pharmaceutical industries, health care indust

me involved with the succession laws. Assets placed in trust outside Cyprus will not be covered by the will and the terms of the trust can ensure that they eventually

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

pass to the testator's intended beneficiaries. The laws of most of the major offshore financial centres also exclude claims arising under the forced heir ship laws of

.

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

foreign countries.

Finally
Cyprus law contains a concession for British citizens who may dispose of their property freely by will. It may be a simple way out

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

Companies that provide selfless information through particip

but does it undermine a claim to Cyprus domicile? It certainly wastes an opportunity to create a very attractive tax-planning vehicle for heirs in the U.K.

Ref: CO05060

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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