Main Subject - Business

I recently spoke with a retail merchant who told me that she was not too concerned about the fees that we assess. While I was detailing all relevant rates, she asked me a very i

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

nteresting question: “How much do you think that I should charge my customers to make up for my credit card processing costs?” She added, “I would like to charge a surcharge.”

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

Examples of combination products may in

I had an instant flashback to the time I placed a food order with a pizzeria. When I walked into the restaurant, the aroma whetted my appetite. Immersed in the beckoning scent,

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

barely heard the cashier when he told me that the bill was “$24.95.” Upon seeing my credit card, however, the cashier rang up “$26.50.” At the risk of appearing frugal, I did n

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

ot question this action – only taking notice that it was blatantly unfair. Apparently, the restaurant owner decided to charge a surcharge when customers presented credit cards a

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

Combination pro

though I’m not certain how the cashier came up with a surcharge of $1.55. (What would have been the surcharge if my bill were $100 or more?)

Sharing this experience with the re

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

tail merchant, I explained that charging a surcharge is against Visa / MasterCard rules and violates the stipulations in merchant account contracts. Indeed, if a retail merchant

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

decided to add a credit card payment surcharge, this business owner can lose the right to process credit cards and be placed on the infamous MATCH / Terminated Merchant File (T

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

F) where it would be exceedingly difficult to secure credit card processing capability with anyone.

The retail merchant protested and said, “But I know some fast food restauran

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

ts charge a surcharge for debit cards.” I answered, “If they are processing pin-based debit cards over the Visa / MasterCard network and charging a surcharge, they’re violating

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

isa / MasterCard terms.” I explained that if a business owner uses a credit card terminal to process both credit and debit cards over the Visa / MasterCard network, the retail m

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

Following aspects would a

erchant cannot indiscriminately surcharge those debit cards.

Of course, exceptions always exist and certain government and municipalities, and even the IRS, can charge a “conve

dd to the challenges in developing combination products:

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

nience fee,” especially when credit cards are not a traditional form of payment. Moreover, merchants who accept Discover cards can institute a surcharge. After a federal antitru

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

t suit was brought by a group of merchants who contended that they would have to raise prices if not allowed to surcharge, Discover yielded. They now permit merchants to surchar

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

ge. It may only be a matter of time before Visa and MasterCard consent or are forced to allow merchants the right to surcharge.

But I suggested an alternative to the retail mer

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

hant. Perhaps she can offer a cash discount for non-credit card payments. “This is perfectly acceptable,” I assured her.

This retail merchant wanted to know about the surcharge

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

Professional from academic institutions, pharmaceutical industries, health care indust

rules for online merchants. I extended a simple, “I don’t know,” and committed to researching this topic. Upon investigation, I learned the following:

Internet business owners

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

can surcharge under the following conditions: a) A fixed surcharge is assessed, not a percentage of the sale; and b) Any surcharge must be assessed for all forms of payment –

.

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

not just credit cards.

Of course, as a final thought, merchants may very well factor in the costs of credit card processing to determine the fees that they should charge their

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

Companies that provide selfless information through particip

customers. Moreover, as always, it is imperative for merchants to reduce the costs of doing business. Finding an affordable merchant account provider will help in this endeavor

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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