Answers - Finance

One of the questions we get asked a lot is, I know the limit that the IRS puts on my 401k contributions for the year is $14000 (for a pers

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

on under 50) (2005) but is this the limit I can get from one employer or is it the total amount I can get from all my employers? So if I h

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

Examples of combination products may in

d 5 jobs could I get a total of $70 000 5 x $14 000 in contributions?

The simple answer is $14 000 is the personal limit you have as an i

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

dividual and there for the total from all your employers, so if you have more than one employer then between you all the total that can be

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

added for each year is $14 000. If you do over pay into the plans you have, it is easy to do if you are running more than one plan with mo

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

Combination pro

e than one employer making contributions, you can claim back the overpayments but the claim must be made by 15th March.

The part of the I

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

S guidelines that causes a lot of confusion with reference to these limits is this paragraph;

“Additional limits. There are other limits

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

hat restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accoun

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

s - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeit

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

res to your accounts - may not exceed the lesser of 100% of your compensation or $42,000 (for 2005, $44,000 for 2006). In addition, the am

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

unt of your compensation that can be taken into account when determining employer and employee contributions is limited. In 2005, the comp

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

Following aspects would a

ensation limitation is $210,000; for 2006, the limit is $220,000.”

Now a lot of people ask us at http://www.the401k.info how the limit ca

dd to the challenges in developing combination products:

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

be $42 000 and this is the best explanation we have seen so far,

Ok, let's say you make $260,000 per year, your plan allows you to defer

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

up to 100% of your compensation, and your employer matches all your deferrals up to 3% of your compensation plus makes a 5% profit sharing

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

contribution to all participants. In your case, for 2006, you could defer the maximum legal limit of $15,000 (roughly 6.8% of your legally

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

capped compensation of $220,000), receive a match of $6,600 (3% of your legally capped compensation) plus $11,000 in profit sharing contri

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

Professional from academic institutions, pharmaceutical industries, health care indust

ution (5% of your legally capped compensation), for a total of $32,600, well below the $44,000 overall contribution limit. If, however, yo

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

r employer decided to make a 15% profit sharing contribution ($33,000) instead of a 5% contribution, because the total of these contributi

.

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

ns exceeds the overall limit of $44,000 for 2006, your profit sharing contribution would most likely be reduced so that you would not exce

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

Companies that provide selfless information through particip

d the overall limit. As you can see, there are numerous limits applied in different situations in different layers that must be adhered to

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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Do you own a small business or work for a large corporate marketing department? If so have you considered exactly who your best customers are? Have you identified your target market yet? Is your target market and customer evolving in your business? How much has it evolved over the course of your business? Are you able to target the customers you wish to sell to?

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Answers - If I Have More Than One Employer Can I Have More Than One 401k Limit of $14 000?

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