Answers - Finance

When it comes to leasing equipment, understanding what it can do for your business is only part of the equation. Understanding and choosing the best lease for your business is another matte

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

r altogether. The market is primed for the use of equipment leasing to expand, grow and hone a businesses assets, but at the same time there is little material out there to help a business

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

Examples of combination products may in

udge what’s a good lease and what isn’t.

What You See Is What You Get

There is an old truism that says you get what you pay for. When it comes to equipment leasing, you want a lease that

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

learly defines your responsibilities versus the lessor’s responsibilities. You really want it to be what you see is what you get. So how do you go about choosing the best type of lease for

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

our business?

Shop the options is the best way to get started. If you know what type of equipment you need, then comparison-shop the options with different companies. Some key figures to m

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

Combination pro

ke sure are included in any lease option are:

• Cost Per Month
• Maintenance Contract
• Cost of Maintenance Contract
• Training Available
• Customer Service
• Ava

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

lability for Software and Hardware Support
• Obsolescence Upgrades
• Term of Contract
• Renewal Terms

When it comes to long-term leases, it’s better to set the terms from th

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

outset to deliver the best possible results to the company overhead. When it comes to maintenance, many leasing companies package that as a separate component. If a piece of equipment fail

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

altogether, it’s likely the leasing company will replace it. But what if the piece of equipment goes down? Will there be a 2-hour, 4-hour or 24-hour response time to getting a service tech

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

ician on-site and the equipment back into operation?

This information is critical because when a piece of equipment is operable, it’s just a piece of junk taking up room and preventing the

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

business from operating normally. Upgraded maintenance contracts will have to be negotiated. But there’s also the concern about what happens when a newer, better model of equipment becomes

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

Following aspects would a

vailable? Does the lease terms support an upgrade to this model of equipment or will it require waiting until the contract is up for renewal?

Beware Hidden Costs

By getting the informatio

dd to the challenges in developing combination products:

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

up front, a business can avoid hidden expenses. They can plan budgetary requirements and potentially for long-term leases, bring up training requirements for their staff. This is another c

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

ncern that some companies don’t consider when negotiating a lease. Will the operator of the equipment receive training from the leasing corporation? Do they have representatives that unders

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

and the operation of the equipment and provide certified instruction? If not, how is that handled?

While this will not be a concern for every piece of equipment leased, for those businesse

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

that require certified training it’s good to know if it will be available. Also in the case of leasing computer equipment, how is software licensing handled? Is packaged into the hardware

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

Professional from academic institutions, pharmaceutical industries, health care indust

ease or do those licenses need to be obtained separately?

Finally, understanding the renewal terms can help circumvent a rise in cost for renewing an equipment lease. Some contracts will a

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

low locking a price for a period of five years. The lease may only last two years, but at the renewal point the cost is locked in for that particular piece of equipment. When it comes to a

.

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

ong-term budgetary forecast, every piece of information can help.

Clearly defining what an individual contract delivers from a leasing company can provide a business with the opportunity t

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

Companies that provide selfless information through particip

comparison shop. By comparing the different options, price levels and services from one leasing company to the next, a business will be choosing the best equipment lease for their business

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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