Main Subject - Finance

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, aka the “new bankruptcy law”, became effective October 17, 2005. The law introduces several

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

changes to the existing bankruptcy rules. Some of these changes include the fact that potential bankruptcy filers must meet a “means test”. The test determines

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

Examples of combination products may in

whether you are eligible to file for bankruptcy or not.

The term “Creditor” refers to those organizations owed money. “Debtor” refers to the consumer who owes

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

money. “Filer” refers to the consumer filing for bankruptcy.

Here is a summary of the major changes:

“Means Test” for Chapter 7
A creditor may file

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

a motion to dismiss a bankruptcy case, if the debtor’s income is greater than the median state income and the debtor can afford to pay $100 per month over a per

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

Combination pro

od of five years towards paying down your debts. In this case, a debtor has to file for Chapter 13 instead of Chapter 7.

Mandatory Credit Counseling

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

Potential bankruptcy filers must undergo credit counseling via an “approved nonprofit budget and credit counseling agency”, prior to filing for bankruptcy. Her

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 is the list of government approved consumer credit counseling agencies.

Mand

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

tory Debtor Education
Chapter 13 filers must complete a course in “personal financial management” prior to filing for bankruptcy.

Discharge of Debts

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

/b>
Certain debts cannot be discharged. Debts to a single creditor of more than $500 for luxury goods that were incurred 90 days before filing cannot be di

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

charged. In addition, cash advances of $750 within 70 days are also non-dischargeable.

Proof of Income and Tax Return Filings
Filers must show pro

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

Following aspects would a

of that they paid taxes from the last year. This also provides verification of income. If a filer has not paid taxes for the previous year, they must pay befor

dd to the challenges in developing combination products:

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

they can continue the bankruptcy process.

Time between Discharge
If you are filing for Chapter 7 and you have a previous discharge within the last

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

years – you cannot receive another discharge. This time period used to be 6 years.

Fewer "Automatic Stay" Protections
Filers will no longer enjoy

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

some of the legal protections they used to have such as stopping or delaying evictions, driver's license suspensions or child support proceedings.

Attorney

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

Verification Required
Attorneys are responsible for verifying that information contained in petitions and schedules are “well grounded in fact.” Attorne

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

Professional from academic institutions, pharmaceutical industries, health care indust

s are required to sign petitions to acknowledge this fact.

Eviction Proceedings
Filing for bankruptcy will not stop an eviction proceeding.

Prio

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

rity For Unpaid Child Support and Alimony
The repayment of unpaid child support and alimony take priority over any other creditor.

Retirement and c

.

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

llege savings gain protection
Funds in retirement accounts such as 401K, 403b and IRAs are deemed as assets that are not available to creditors as part

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

Companies that provide selfless information through particip

of the bankruptcy. Debtors can continue to contribute to these accounts, if they can. Additional accounts that are exempt are college savings funds for children

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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Main Subject - New Bankruptcy Law - A Summary of Changes You Should Know About

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