Answers - Finance

This is a huge question for anyone who invests and it really depends on three things:
1) Time
2) Money
3) Risk Tolerance and Desired Return
For simplicity, we are going to say that there are three investment vehicles:

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

1) Bonds
2) Mutual Funds
3) Stocks

Bonds are simply loans to the government with the promise to pay the principal(price paid for the bond) plus interest. The best thing about bonds is that they are low risk, but conseque

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

Examples of combination products may in

tly the return is also relatively small.

Mutual funds are another type of investment that collects money from many investors and invests in stocks, bonds, and other securities. The gains or losses from the fund are then passed on to 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.

investors. Mutual funds offer a few advantages: diversification and professional management. While they are more risky then bonds, they offer greater potential returns. They are also a great way to diversify without spending a fortune on

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

commissions to your broker. Stocks are essentially the purchase of a portion of the company you choose to invest in. If the company performs well, you generally reap the benefits(with good management), if it performs poorly, you lose mon

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

Combination pro

y. Stocks are risky because there is no guaranteed stable flow of money when you buy a piece of the company, but if you do your research and the company does well, the advantage with stocks are the potentially great return on investment.

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

So, should you diversify? It really depends on your situation. Diversification is a way to limit risk, but it may not be necessary. The first thing to determine is your investment goal(retirement, education, increase net wealth, etc.).

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

Knowing that, you must design an investment strategy based on your goal. If you are saving for retirement, it may be smart to diversify to protect you from risk. If you need a steady, safe flow of money then bonds may be for you. That is

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

not to say you can't buy mutual funds and stocks as well, but it is saying that you should weight the three according to your needs. 50% bonds, 30% funds, and 20% stocks should give you that desired stability, though it is certainly not

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

concrete figure and should be based on your needs. With investment goals like retirement or education, you may also want to seek a financial advisor to help determine a good allocation of finances. Keep in mind, though, that financial a

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

visors may be biased. For one, they will likely tell you to diversify not only to protect you, but to protect their reputation as well. Also, if the advisor is connected to a brokerage, he is earning a commission for your purchases-be ca

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

Following aspects would a

reful that he is not simply padding his or her pockets. It comes down to the fact that no one will watch your money better than you would, but if you need an advisor, hire one who you are comfortable with because ethics is important(espe

dd to the challenges in developing combination products:

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

ially when they have your money!). There is a great post at Sound Money Tips-"Tip On Questions To Ask A Financial Advisor"-check it out.

If you do not have much money to invest(less than $2000), then mutual funds offer you the opportuni

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

y to diversify without stock commissions eating away at your principal. Mutual funds allow you to be a passive investor-you don't have to keep up with news, events, charts- because there is a professional running the fund and doing the d

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

rty work for you.

If your investment goals are high returns and you can tolerate the risk associated with stocks, then the stock market is where you want to invest. Here, if you have the time and money, I really don't think you have to

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

e diversified. Time means research, reading, and learning about the stock market, investment strategies, and the stocks you are interested in. To take the risk associated with the stock market you have to be an active investor-constantly

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

Professional from academic institutions, pharmaceutical industries, health care indust

perusing news, quotes, and charts. If you don't have that time, then diversify. Once you put the time in to learn the stock market, you can make informed choices about stocks, and because you're informed, there is less risk than simply

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

aking a flyer on a stock tip. Warren Buffett goes as far as to say, "Diversification is a protection against ignorance. [Diversification] makes very little sense for those who know what they're doing."

The answer to the diversification

.

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

uestion is ambiguous-it depends on your situation. Money, time, and goals should shape your investment decisions. The most important thing: don't lie to yourself. If you don't have the time to make informed decisions, hire an advisor to

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

Companies that provide selfless information through particip

elp you invest. If you don't have the money, then go with mutual funds or bonds, or weight your stock exposure so that there is less risk. Finally, set a goal and stick to it-it can be expensive to switch an investment plan along the way

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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