Main Subject - Finance

AT A GLANCE

The Bank provides debt relief to low-income countries through the Debt Relief Initiative for Heavily Indebted Poor Countries (HIPC), created in 1996

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

, and the Multilateral Debt Relief Initiative (MDRI), created in 2006. Thirty countries are receiving debt relief under one or both of these initiatives, with t

; 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 other countries potentially eligible. This debt relief is worth over US$63 billion in 2005 net present value terms (NPV) if all creditors participate. For the

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 30 countries, World Bank debt relief is expected to total about US$25 billion (NPV: US$10 billion under HIPC and about US$15 billion under the MDRI). If all p

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

tentially eligible countries qualify, this total could rise to about US$30 billion (NPV). In countries receiving debt relief, debt service has been cut by two-t

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

Combination pro

hirds, and annual spending on anti-poverty programs increased from US$4 billion to US$11 billion since 1999. Overview

Following the buildup of foreign debt owe

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

by many low-income countries throughout the 1970s and 1980s, low growth, falling commodity prices, and other economic shocks left many nations with unsustainabl

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

e debt burdens. By 1992, the 33 most indebted low-income countries faced debts whose present value had more than doubled in ten years to over six times their an

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

ual exports. Starting in the late 1980s, the Paris Club and other bilateral creditors rescheduled and forgave many of these debts. But by the mid 1990s, with an

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

increasing share of debt owed to multilateral lenders such as the World Bank, the IMF, and regional development banks, a new debt relief initiative was called fo

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

, involving these creditors, to address the concern that poor countries’ debts were stifling poverty reduction efforts.

In response, in 1996 the International D

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

Following aspects would a

velopment Association (IDA), which is the World Bank’s concessional lending arm for poor countries, and the IMF launched the HIPC Initiative. The Initiative is c

dd to the challenges in developing combination products:

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

omprehensive – it calls for the voluntary provision of debt relief by all creditors, whether multilateral, bilateral, or commercial – and aims to provide a fresh

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

start to countries struggling to cope with foreign debt that places too great a burden on export earnings or fiscal revenues.

The HIPC Initiative was enhanced i

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

n 1999 to provide deeper, more rapid relief to a wider group of countries, and to increase the Initiative’s links with poverty reduction. By Jan. 2007, 30 count

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

ies had benefited from HIPC debt relief, 22 having reached the completion point, at which debt relief becomes irrevocable. Eight more are receiving some debt re

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

Professional from academic institutions, pharmaceutical industries, health care indust

lief and a further ten are potentially eligible for HIPC debt relief, pending the agreement of macroeconomic reforms, poverty reduction strategies, or arrears cl

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

arance plans.

In 2006, following the 2005 Gleneagles Summit of the G8 group of nations, the World Bank joined the IMF and the African Development Bank in implem

.

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

enting the Multilateral Debt Relief Initiative (MDRI), forgiving 100 percent of eligible outstanding debt owed to these three institutions by all HIPC countries

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

Companies that provide selfless information through particip

eaching the completion point of the HIPC Initiative. The MDRI will effectively double the volume of debt relief already expected from the enhanced HIPC Initiativ

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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