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Business entities can be distinguished into two different categories: (1) unlimited liability entities; and (2) limited liability entities.

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

In order for you to have a better understanding of these various entities, this post will be broken into two parts. This part will discuss

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

Examples of combination products may in

unlimited liability entities.

Unlimited liability entities mean that one is personally liable for all the debts of the entity. You are no

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

personally protected if you form an unlimited liability entity!

Two types of unlimited liability business entities exist: (1) a sole prop

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

ietorship; and (2) a general partnership. You may be wondering why somebody would set up one of these entities. If you can be held personal

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

Combination pro

y liable for all the debts of the business, what is the advantage of forming one of these? Although a person may be held personally liable,

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

there are some advantages to setting up one of these entities.

First, no filing requirements exist with either of these entities. This is

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

great because you literally save hundreds, if not thousands, of dollars. States require a filing fee and the execution of certain documents

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

for other entities, however, these two unlimited liability entities require neither.

Second, both of these entities are very easy to opera

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

e. There are no board of directors, no stock holders, and no other level of management, except you. This creates a very easy management sit

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

ation because you only have you to answer to.

Last, these entities do not have the problem of double taxation. In other words, any money t

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

Following aspects would a

e company makes is not taxed separately from the money it distributes. The money saving tax advantage to this is obvious.

Unfortunately, s

dd to the challenges in developing combination products:

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

me negatives exist in forming these types of entities. First, and most obviously, you are unlimitedly liable for all debts and judgments. T

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

is can literally financially ruin you.

Second, raising capital can be difficult. You cannot sell shares of stock because there are no shar

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

es. Usually, you bring all of the money to the table or you have to take on a partner in order to receive capital.

Last, you cannot transf

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

r your interest in these entities. In other words, you cannot sell your ownership in these companies. The effect of selling your interest i

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

Professional from academic institutions, pharmaceutical industries, health care indust

the dissolution of the previously existing entity. For example, if you owned a corporation, you could sell your stock to whomever you want

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

(and thus in effect, sell your ownership interest in that company) without creating a dissolution. The same is not true with these unlimite

.

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

liability entities.

The previous was just a brief overview of some of the various entities you can form. Do not dive head first into form

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

Companies that provide selfless information through particip

ng a company. Although they offer various business and tax advantages, you will probably want to talk with a lawyer before forming anything

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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