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There is no doubt that interest in corporate governance has substantially increased in recent years. Not only have separate states adopted their own corporate codes but also changes in corporate governance are dir

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

ected at a global level. For developing economies, corporate governance helps to achieve stable economic growth by means of effective management of corporations and, to some extent, governments (Bushman and Smith

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

Examples of combination products may in

2001).

Countries which already possess advanced corporate governance standards strive to strengthen adherence to them. It goes without saying that the catalyst of the process was the corporate and financial colla

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

se of Enron. The crash of this company illustrated that even a company with good financial results might go bankrupt if it lacked solid corporate governance mechanisms guaranteeing trustworthy work of non-executiv

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

e directors, auditors and the board of directors. Following the scandal, the regulators all over the world developed a number of policies to prevent further failures (Papers4you.com, 2006). Among the most influent

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

Combination pro

al documents are the Sarbanes-Oxley Act of 2002 and the Higgs Report of 2003.

So what is corporate governance? There exist numerous definitions of corporate governance, though most of them can be divided into the

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

so called “narrow” and “broad” views (Shankman 1999). The former emphasizes the role of corporate governance in improvement of the relationship between an enterprise and its shareholders. In other words, the main

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

stress here is on resolving the agency problem. On the other hand, the latter and more modern approach states that corporate governance facilitates relationships not only between a company and its shareholders, b

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

t also between different stakeholders in the company, including employees, customers, suppliers, bondholders and the government. Therefore, corporate governance becomes important for the society as a whole (Papers

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

4you.com, 2006). There is growing evidence that recent changes in corporate governance make its practical realization conforming to the second view.

It is interesting to look at the most pronounced tendencies in

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

orporate governance development. First, it is increasing institutional investor activism. Big asset management funds, pension funds and other institutional investors now not only passively wait for return on their

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

Following aspects would a

invested funds, but discharge accountability, for instance, when it comes to directors’ remuneration. Second, there is some evidence of harmonization in corporate governance standards. This process is led by glob

dd to the challenges in developing combination products:

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

alization of international trade and financial activities. As a result, many countries adopt the OECD (1999) principles of corporate governance, which predominantly represent an Anglo-American style of governance.

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

However, due to significant political, legal, religious and other differences between various countries it is difficult to expect a high degree of convergence. Third, the scope of corporate governance goals has al

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

so increase. Nowadays, managers of corporations make decisions taking into account corporate social responsibility. In other words, social and environmental issues now increasingly determine how well the company p

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

rforms (Alexander and Buchholz 1978). To sum up, corporate governance in the 21st century is the system of checks and balances which ensures that business entities act in a socially responsible way in all their en

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

Professional from academic institutions, pharmaceutical industries, health care indust

deavors, while maximizing shareholders’ value.

References

Alexander, G. J. and R. A. Buchholz (1978). "Corporate social responsibility and stock market performance." Academy of Management Journal 21(3): 479–486.

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

Bushman, R. M. and A. J. Smith (2001). "Financial accounting information and corporate governance." Journal of Accounting and Economics 32: 237–333.

Papers For You (2006) "C/F/119. Globalization and Corporate G

.

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

vernance", Available from http://www.coursework4you.co.uk/sprtfina23.htm [19/06/2006]

Papers For You (2006) "P/F/397. Corporate governance and Sarbanes Oxley Act law", Available from elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

/www.coursework4you.co.uk/sprtfina23.htm">Papers4you.com [19/06/2006]

Shankman, N. A. (1999). "Reframing the debate between agency and stakeholder theories of the firm." Journal of Business Ethics 19: 319–334

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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