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Main Subject - Don't Let New Postal Rates Put You Out of Business
Intermittently the USPS raises domestic and foreign postal rates. The last raise was on June 30, 2002. The latest rates take hold on January 9, 2006. The increase is 5.405% for a first class letter and 6.579 for th
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
e standard Priority Mail envelope. The new first class letter cost is $0.39. The new standard Priority Mail envelope cost is $4.05.
Increasing postal rates have been hurting mail order and direct mail businesses f
Increasing postal rates have been hurting mail order and direct mail businesses f
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
r a long time. Will this last raise be the straw that breaks the camel’s back? Some will just give up on making money in direct mail or mail order. The main impact is on businesses that are in the startup stage. Ye
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, this includes Farmer Brown who is trying to make a buck off his kitchen table.
I use first mail letters to promote my business activities. I use Priority Mail on many shipments. The factor is time.
Customers w
I use first mail letters to promote my business activities. I use Priority Mail on many shipments. The factor is time.
Customers w
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
nt their stuff fast. If they bought it in the store they would not have to wait. Any delay in receiving their shipment is detrimental.
Cost can be reduced by using bulk rates for direct mail. Some operators think
Cost can be reduced by using bulk rates for direct mail. Some operators think
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
that hurts response. Does it? I don’t know for sure because I just take their word for it. I don’t use bulk rates. That doesn’t mean that you shouldn’t. Talk to your Postmaster about the opportunity.
Look at Th
Look at Th
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
s Example of a Direct Mail Program
Joe Blow sends out 1000 letters promoting his product.
The printing cost is $250.00.
The First Class mailing cost is $390.00.
He gets a 1% return or 10 orders for his prod
Joe Blow sends out 1000 letters promoting his product.
The printing cost is $250.00.
The First Class mailing cost is $390.00.
He gets a 1% return or 10 orders for his prod
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
uct.
The postage and printing cost per order is $64.00.
If Joe’s product sells for $100.00 and the product cost him $50.00 AND it cost him $5.00 to ship it, what will he make? (Joe offers FREE SHIPPING as
The postage and printing cost per order is $64.00.
If Joe’s product sells for $100.00 and the product cost him $50.00 AND it cost him $5.00 to ship it, what will he make? (Joe offers FREE SHIPPING as
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
come on.)
Order Income $1000.00
Shipping Cost -50.00
Cost of Goods Sold -500.00
Printing/Postage Cost -640.00
Profit or Loss -$190.00 LOSS
Joe looses $19.00 on every order.
Now What
Order Income $1000.00
Shipping Cost -50.00
Cost of Goods Sold -500.00
Printing/Postage Cost -640.00
Profit or Loss -$190.00 LOSS
Joe looses $19.00 on every order.
Now What
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
Happens?
A. Joe has only one product. He would like to raise the price but he thinks that his customers will not pay the increased price. He drops the direct mail program and tries mail order. He places a cla
A. Joe has only one product. He would like to raise the price but he thinks that his customers will not pay the increased price. He drops the direct mail program and tries mail order. He places a cla
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
sified ad for inquiries. He sends his letter to those who respond and gets a 10% response. If Joe’s ad cost $35.00 and he got 100 inquiries and sold 10 of them, what would his cost be?
Order Income $1000.00
Ship
Order Income $1000.00
Ship
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ing Cost -50.00
Cost of Goods Sold -500.00
Printing Cost -25.00
Postage Cost -39.00
AD Cost -35.00
Profit or Loss $351.00 PROFIT
B. Joe
Cost of Goods Sold -500.00
Printing Cost -25.00
Postage Cost -39.00
AD Cost -35.00
Profit or Loss $351.00 PROFIT
B. Joe
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
has more than one product. He knows that he will sell that product to 20% of those who sell the first product. He knows that he can get back his money from new orders. He charges for shipping on the second product.
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
He packs the new sales letter in with the first product and here is what happens:
Order Income (2 of the 10) $200.00
Cost of Printing Second Letter 25.00
Cost of Product 100.00
Order Income (2 of the 10) $200.00
Cost of Printing Second Letter 25.00
Cost of Product 100.00
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
Profit or Loss $75.00 PROFIT
The total LOSS for the direct mail campaign is now $115.00.
Joe still has options. Can he reclaim the rest of the loss by promoting future products?
He knows that his customer l
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
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
st is his most important asset.
But he needs to reduce the loss on the first mailing.
To do this, he makes a moderate price increase to break even. What is the new price? It is $119.00.
He requests a discount fr
But he needs to reduce the loss on the first mailing.
To do this, he makes a moderate price increase to break even. What is the new price? It is $119.00.
He requests a discount fr
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
om his vender of 10% and gets it.
He spoofs up his sales letter emphasizing the (new) low price.
He includes a discount coupon for the next purchase.
Joe is able to increase the response to 2%. Can you calculate
He spoofs up his sales letter emphasizing the (new) low price.
He includes a discount coupon for the next purchase.
Joe is able to increase the response to 2%. Can you calculate
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
the profit on the first mailing under the new conditions?
Order Income $2380.00 (remember there are 20 orders this time)
Shipping Cost -100.00
Cost of Goods Sold -900.00 (remember the 10% discount Joe ne
Order Income $2380.00 (remember there are 20 orders this time)
Shipping Cost -100.00
Cost of Goods Sold -900.00 (remember the 10% discount Joe ne
.
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
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
gotiated)
Printing/Postage Cost -640.00 (this didn’t change, did it?)
Profit or Loss $740.00 PROFIT
Joe earns $37.00 on every order.
Joe still has the option of trying a classified ad. He knows that he mus
Printing/Postage Cost -640.00 (this didn’t change, did it?)
Profit or Loss $740.00 PROFIT
Joe earns $37.00 on every order.
Joe still has the option of trying a classified ad. He knows that he mus
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
work every angle to stay in business.
For example, he can ask other shippers to include his offer in their packaging. He can include their offer in his shipments.
What would you do in this situation? Let us know
For example, he can ask other shippers to include his offer in their packaging. He can include their offer in his shipments.
What would you do in this situation? Let us know
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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