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There are several definitions of accounting. Accounting may be defined as (1) a service activity wherein its primary function is to supply quantitative information ess

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

entially financial in nature that is all about economic entities which may be significantly useful in decision making for top management. Another definition Accounting

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

Examples of combination products may in

may also be defined as (2) the art of recording, classifying and summarizing in a considerable manner and in terms of money, business transactions, activities and event

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

s, which are part of a financial character and later on interpreting the results of the reports. Another definition of accounting is (3) the process of identifying, me

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

suring and communication economic information to allow knowledgeable judgments and decisions by all users of the information.

The world of accounting follows certain g

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

Combination pro

idelines and procedures that compose of acceptable accounting practice at a given time. These set of guidelines and procedures are known as GAAP which means generally

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

accepted accounting principles. The basics of accounting principles are as follows.

Adequate Disclosure. This accounting principle states that all relevant informati

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

n which would affect the understanding and evaluation or assessment of the user of the accounting entity should be disclosed in the financial statements.

Consistency P

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

rinciple. As the name, consistency, implies, there should be consistence. Firms should use the same accounting method from period to period in order to attain compara

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

ility over time within a single enterprise. Nevertheless, companies are allowed to change as long as it is justifiable and be disclosed in the financial statements.

E

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

pense Recognition Principle. In this principle, it is stated that expenses should be recognized in the accounting period wherein goods and services are used up to gene

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

Following aspects would a

rate revenue and not when the entity pays for those services and goods.

Historical Cost. This principle states that purchased assets should be recorded at their actua

dd to the challenges in developing combination products:

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

cost and not what management thinks they are worth as at reporting date.

Materiality. It should be noted that financial reporting is only concerned with information

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

that is significant enough that will likely affect assessments and decisions. Materiality is dependent on the size and nature of the item judged in the particular situ

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

tions of its omission. Upon deciding as to whether an item or collection of items is material, the nature as well as the size of the item is assessed together. Either

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

of the nature of the item or the size may be the determining factor, depending on the circumstances.

Objectivity Principle. Records and statements in accounting are b

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

Professional from academic institutions, pharmaceutical industries, health care indust

ased on the most reliable information available in order for them to be as accurate and as useful as possible. Information that is considered reliable may be verified

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

nd confirmed by independent observers. It is mainly ideal in accounting that all records are based on information, which flows from activities that are documented by o

.

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

bjective evidence. Without the objectivity principle, accounting records may be based on opinions and impulses that may be subject to dispute.

Revenue Recognition Pri

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

Companies that provide selfless information through particip

ciple. In revenue recognition principle, revenue is to be recognized in the accounting period when services are rendered or performed or when goods have been delivered

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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