Main Subject - Business

Every product has a life cycle and the various stages of this can produce different profit margins and as such it is best to be aware of the product life cycle when looking at your selling margins going forward, first lets

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

define the Product Life Cycle:

The timescale within which a product is introduced leading to a growth in sales, before sales mature and begin to decline, possibly even ending in the product being withdrawn.

So as c

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

Examples of combination products may in

n be seen there are four clear sections which I will discuss further using the pending launch of the Sony Playstation 3 as a working example, we all know the Playstation 3 is coming, developer releases and games conferences

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

have seen examples and demos which has meant that the press have latched on and the hype is starting to grow. So much so that to say it is going to be a hot product is an understatement. As such this gives a great working e

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

ample to illustrate the product life cycle on your product selection choices.

Stage 1 - Introduction Phase

With all consoles at launch the demand well outstrips the supply which ensures that the market price of the produc

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

Combination pro

t will be artificially high, the reason being that there will be relatively few suppliers with stock and basically people will pay anything for the product. From your perspective you have no competition in the marketplace a

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

d you are guaranteed to sell them at a large mark up. This is one of the best times to sell and your margin will be through the roof.

Stage 2 - Growth

The supply is starting to catch up with demand, which in turn means t

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

at there are going to be more people with the product and hence the price will start to fall. Increased advertising by Sony and increased press coverage will ensure that the demand rises and as such you can make a continued

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

profit (albeit at a lower rate). Early growth stage is the key are as you approach the latter end the market starts to get saturated with sellers. A good part of the cycle to be selling in as the volume sales counter the r

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

educed margins and provide a great selling base.

Stage 3 - Maturity

This is probably the hardest stage of the cycle to operate in and unfortunately the point where most sellers start to sell, product supply is normal and

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

ots of sellers that have seen the previous profits made jump on the band wagon to get a slice of the action. Sales start to stabalise and then Sony will start to introduce differentiated product into the marketplace to main

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

Following aspects would a

ain sales such as a limited edition designed Playstation 3.

The effect of all these sellers coming into the marketplace means that price wars and intense competition occur, the market is basically becoming saturated and th

dd to the challenges in developing combination products:

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

s is where you see the bigger players leaving the marketplace as the margin produced by the product sale is no longer ‘worth the effort’. These big players leaving the market also compounds the problem because the product t

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

hey were buying now become more available to Joe Bloggs and they join the sale battle and so on.

Profit wise this is a bad time to sell, the margin per unit will be low compared to the effort that it takes to market the pr

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

duct. It is best to drop your price to cost and clear your stocks and look to the next product.

Stage 4 - Decline

We all know there will be a Playstation 4 (probably named differently) and the market starts to decline bec

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

use people are waiting for the new model to come out, maybe even a competitor brings out a console that will ‘take up the slack’ during the interim period. This generate intense price cutting in the marketplace and the pric

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

Professional from academic institutions, pharmaceutical industries, health care indust

can drop significantly from day to day.

Try not to carry stock into this phase as the likelihood is that you will be selling at a loss. If you are carrying stock then consider the loss leader principle.

The hardest part

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

of selling any product within the profitable sections of the product life cycle is judging the time of each stage, every products life cycle is different with some having longer stages than others and even some missing stag

.

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

s completely and going from introduction straight to decline.

The key is to become an early adopter and aim to get the product early and maximise the market potential of the product, using the Playstation 3 example this wi

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

Companies that provide selfless information through particip

l be extremely difficult for the majority of sellers however every product has a life cycle and every product has the potential to make profit so limiting yourself to a specific product is like throwing money down the drain

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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