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For most small medium sized businesses positive cash flow is always of great importance.

All too often the owner is looking for a business solution to overcome

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

a cash shortage.

Typically the actions taken to mitigate the impact of the situation include delaying settlement of supplier’s accounts, seeking a bank overdraf

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

Examples of combination products may in

t facility or taking out a business loan against which significant security may be required.

It may be appropriate in such circumstances for the small medium si

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

zed business owner to consider INVOICE FACTORING.

Invoice Factoring is an arrangement whereby a financial institution will advance moneys again

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

st the value of the business sales ledger receivable balance or future sales invoices as they are raised. The attraction to a business owner struggling to find s

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

Combination pro

ufficient finance to support the required working capital of the business is enormous.

In a very short period a significant proportion of the sales receivable o

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

utstanding debt on the balance sheet can be replaced by cash, enabling the business to invest, grow or simply survive a short term difficulty. The management of

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

the sales ledger would normally pass to the Invoice Factor and that body would have responsibility for the collection of valid outstanding monies from the debtor

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

.

This will then relieve the business owner of credit management responsibilities; however, charges would be levied by the Invoice Factor for the services it re

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

nders. Effectively, whilst the business will sell and invoice goods or services to its customer, it also ‘sells’ its debt to the Invoice Factor in exchange for t

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

he advance against the sales invoice value.

The business should not expect to receive full value of the invoices raised. In fact the sum advanced against a sale

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

Following aspects would a

s invoice will be subject to business risk and negotiable between the business and the Invoice Factor. Usually between 65% and 90% of the debt will be advanced.

dd to the challenges in developing combination products:

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

In the United Kingdom it is normal for the advance to be paid within 10 days of raising the invoice, with the balance payable upon receipt by the Invoice Factor

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

of the full settlement from the customer.

The advantages for the small medium business owner struggling to generate adequate cash flow are:

If sales l

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

edger debt currently exists then a significant cash lump sum could be available through factoring the receivable balance.

A significant proportion of the

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

cash inflow from future sales would be received within a short time of raising the invoice, rather than having to wait perhaps 45 days or longer.

The bu

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

Professional from academic institutions, pharmaceutical industries, health care indust

siness relationship with the customer is not affected

The credit control function is taken away from the business, perhaps relieving the business of much

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

administration.

Normally Invoice Factors do not require any form of personal security; the sales ledger provides the assurance that the advance will be

.

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

cleared when the customer settles the invoice.The main consideration for the business owner to reflect upon when considering invoice factoring is the c

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

Companies that provide selfless information through particip

redit worthiness of his customers. If customers are ‘bad’ risks then the Invoice Factor may be reluctant to enter an arrangement to provide this type of finance.

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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