Main Subject - Business

This article is one of the many articles still to come in which I will discuss very basic yet proven techniques that you could use immediately in your encoun

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

ters with your suppliers.

Oh but wait, to find any value in this article, you must be a firm believer that Purchasing strategies have evolved from just 1) 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

ocusing on price and 2) focusing on quality, reliability, responsiveness and total cost to a much broader focus of building supplier relationships.

Did you

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

now that for each $1.00 you save in your “total cost of ownership” reduction efforts, you will improve your bottom line profitability by $1.00? And did you

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

also know that most companies do not get this concept and continue focusing their resources in all the wrong places?

Now is the time when I want to share wi

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

Combination pro

th you 4 basic rules that have proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally

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

benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult

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

to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bott

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

om line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with and build a “preferred” supplier base.

Rule #3: Communicate

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

o your suppliers on “how to” earn a “preferred” supplier status and what is required of them to remain a “preferred” supplier.

Rule #4: Tell your suppliers

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

what’s in it for them (WIIFT) as they partner with you and build a “preferred” relationship.

To earn a “preferred” status means that your supplier will have

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

Following aspects would a

the first shot to quote on new business, parts and project. In fact you can go so far as to create “earn a point” program every time you achieve your cost

dd to the challenges in developing combination products:

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

eduction goals using these techniques as they apply to your business.

Supplier earns a previously agreed upon point(s) when:

1) Shared tooling costs or sha

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

red engineering costs on a project

2) Extended terms: 60 or 90 day billing terms for a period of one year

3) Certified as “ship to stock” on all supplied p

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

arts or assemblies for a period of one year and remain compliant for every year thereafter

4) Ship zero defects for a period of one year and continue as suc

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

for every year thereafter

5) Work with purchasing, manufacturing or engineering to add value

Working with your suppliers to explore these techniques not o

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

Professional from academic institutions, pharmaceutical industries, health care indust

nly presents opportunities for you to reduce your “total cost of ownership” but also helps your suppliers to review, improve and streamline their processes a

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

nd grow internally to be able to meet your expectations and earn that “preferred” supplier status.

Use this “total supply chain cost” model as your guide to

.

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

isolate and focus on the actual cost elements impacting your bottom line profitability.

Total supply chain cost=

Buying price=

+Supplier performance cost

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

Companies that provide selfless information through particip

+Cost of acquisition

+Out-of-sync planning

-Speculation returns

+Speculation cost

+Mfg. cost

+Selling cost

+Distribution cost

+Profit

=Selling pric

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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