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“What can I reverse auction” is a typical question that we hear nearly everyday from our clients. This article will define and explain the Top 10 criteria that we look at to make a decision as to whether or not an item or

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

service is a good reverse auction candidate. We have found all of these topics to be very important and they will provide a guideline to help you along the sometimes bumpy reverse auction road. While these points are not ru

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

Examples of combination products may in

es written in stone, they are based on research and our experience in helping reverse auction clients.

Here is eDynaQuote’s Top 10 List:

1) “The dollar amount should be sufficient to generate the interest of potential sup

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

liers.” The sufficient dollar amount will be relative to the market, but larger dollar volumes will generate a lot of interest from many suppliers. And the more interested suppliers you have in a reverse auction the better.

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

2) “You should have at least two qualified suppliers.” Have a documented supplier qualification requirement process in order for the vendors to know that their competition is legitimate and to validate your selection proc

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

Combination pro

ss. Qualifying your vendors is extremely important since you need to have your competition on a level playing field, and you do not want sub-par products or services.

3) “Write clear and complete purchase specifications.”

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

ou should know exactly what you want, how much you want and when you want it or your suppliers will not be able to bid apples to apples. A reverse auction is not an RFP where some details can be left to figure out later. Yo

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

u should be able to clearly specify your purchase before you choose to run a reverse auction.

4) “Define and document award criteria.” Since most commercial purchases are based on factors other than lowest price, you shoul

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

define, document and make available to the suppliers your award criteria. You should be able to accurately tell your vendors exactly what they need to do in order to win your business.

5) “Supplier change-over risk is low

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

” Look for areas where the cost to change suppliers is low. Keep in mind that costs are not just a hard dollar figure for the product or service you want to reverse auction. Think of all the other costs involved such as tra

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

ning, compatibility issues and what the learning curve looks like.

6) “Have a good forecast of the quantities and dollar volume.” Be sure to aggregate accurate data on how much you currently spend. You should be able to cl

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

Following aspects would a

early document what and how much you are buying so you can provide those details as historical data to potential suppliers. You could be short-changing yourself and not getting as big a volume discount as you could be.

7)

dd to the challenges in developing combination products:

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

Only include similar items in the same bid package.” While you can have many similar line items in a reverse auction, you do not want unrelated items in the same lot or bucket. Keep dissimilar items separate to avoid confus

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

on. This will also allow suppliers to focus on their core competencies, and not disqualify them from bidding if they do not provide one item in the lot you are reverse auctioning.

8) “Keep reverse auctions below ten line i

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

tems.” You want to keep the bidding simple, so do not over-complicate it by adding too many line items to the reverse auction. You can say “see attached spreadsheet” and include many similar items for them to bid on in one

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

verall line item. Once you get too many line items, the suppliers will lose their focus and not be as competitive.

9) “Clearly define an alternate submission process.” If alternates, substitutes or options are allowable, y

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

Professional from academic institutions, pharmaceutical industries, health care indust

u will need to clearly define what the submission process is and make those alternates available for all suppliers to bid on. You still want an apple to apple comparison when using reverse auctions, so be as clear as possib

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

le as to what you will or will not accept as an alternate. You do not want to leave a potential supplier in the dark about what alternates you are willing to accept, or you run the risk of not having a successful reverse au

.

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

tion.

10) “Are there compressible margins for the suppliers to compete on?” Stay away from using reverse auctions on items that have a market traded price such as oil and natural gas. You can reverse auction the distribu

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

Companies that provide selfless information through particip

ion of these items though. The idea here is to reverse auction items that have prices set by the decisions of people and company pricing policies, and to avoid reverse auctioning items that have a freely traded market price

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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