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Compounding is interest earning interest and it is powerful because as the interest that is earned by th

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

e initial capital also earns interest, the value of the account grows at a geometric (ever-increasing) r

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

Examples of combination products may in

ate, rather than an arithmetic (straight-line) rate.

AN EXAMPLE OF HOW COMPOUNDING WORKS

Two investors

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

have $1,000 each to invest every year in a mutual fund, leaving the dividends to compound. Investor A'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

fund provides an 7.9% annual return, while Investor B's fund returns only 4.1%. While Investor A's rate

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

Combination pro

f return is twice that of Investor B's, over time the increase is significantly more than twice as much.

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

After 10 years, Investor A's gain is 2.2 times greater, and after 20 years, it is 2.6 times greater.

<

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

pre> Investor A Investor B Rate of return 7.9.0% 4.1% 10

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

year gain 44.9% 20.1% 20-year gain 128.8% 48.9%

Remember

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

that examples in articles and on the website are for illustrative purposes only and do depict the actual

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

performance of any fund. A mutual fund's investment return and share value will fluctuate.

PUT COMPOUND

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

Following aspects would a

ING TO WORK FOR YOU

Reinvest dividends

Instead of taking your mutual fund's distributions in cash, ins

dd to the challenges in developing combination products:

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

truct your fund to let them remain in your account to purchase additional shares. Most companies will al

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

ow you to do this without paying an additional sales charge.

Invest regularly

Add to your mutual fund

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

account on a regular basis, perhaps monthly or quarterly. You may be able to have this done automaticall

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

by setting up a systematic investment plan with your mutual fund company. By investing regularly you ta

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

Professional from academic institutions, pharmaceutical industries, health care indust

ke advantage of a strategy called dollar-cost averaging.

Make time your ally

The longer your money can

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

work for you, the better compounding works. Consider this: $1,000 invested at 8% earns $80. Left to com

.

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

ound, the original $1,000, plus accumulated interest, will earn $160 in the 10th year, $507 in the 25th

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

Companies that provide selfless information through particip

year, and $1,609 in the 40th year -- returns of 16%, 51%, and 161%, respectively, on the original $1,000

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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