Answers - Finance

Everywhere we turn it seems we are bombarded with the notion that buying a home is always preferable to renting. We here statements like, “Young people need to build eq

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

uity” or “Rent is just throwing money away” or “It is never better to rent than to own.” The key point to take from this is that any time you hear the words “always” or

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

Examples of combination products may in

“never,” red flags should fly up and alarm bells should go off! Just remember, “never” is a very, very long time.

Making a Fair Comparison
In order

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

o fairly evaluate the individual merits of owning a home versus renting, we must first place the cash flows required on equal footing, and then we can evaluate the futur

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

value of each option. For example, let’s say you want to buy a house that will require a monthly cash outlay of $1,000, which includes mortgage payment, basic fire ins

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

Combination pro

rance, principle mortgage insurance, neighborhood association dues, property taxes, basic maintenance, etc. The rental you are considering will cost you $500 per month,

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

which includes rent and rental content insurance. To make a fair comparison, we would have to add an extra $500 in cash flow to the rental option, which we will invest

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

into a stock index mutual fund returning 10% annually over the long term. If we estimate to live in the home for 10 years, we would next calculate what the value of the

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

stock market investment would become, and then calculate the equity we will have built in the home, accounting for principle payments and price appreciation. The option

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

with the largest total wins!

A Real World Example
Let’s assume you are currently renting a home for $600 per month plus an extra $25 for rental conte

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

t insurance. Over the years, you have managed to save several thousand dollars for the purchase of a new home. You find a home you absolutely love for $100,000. This

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

Following aspects would a

ome will require monthly insurance payments (fire & flood) of $100, property taxes of $1,000 per year, annual maintenance expenses of approximately $500, and $3,000 in c

dd to the challenges in developing combination products:

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

osing costs. If you put $20,000 down on a 30 year mortgage at 6%, your monthly mortgage payments will be $480, and total expenses will reach $705 per month. Assuming y

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

u hold onto the home for 10 years and the home appreciates at 3% annually, you will realize a profit of $67,987. The home purchase option sounds good so far, doesn’t it

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

?

Now let’s look into the rental option. To equalize the cash flows, we will immediately invest $23,000 into our stock index mutual fund – $20,000 for the down payment

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

and $3,000 for the closing costs. Also, for the entire 10 year period, we will invest $80 per month in our stock index mutual fund to account for the difference in mont

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

Professional from academic institutions, pharmaceutical industries, health care indust

ly cash flow between the two options. Assuming the stock index mutual fund returns 10% annually, at the end of the 10 year period your account value will be $78,576 – o

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

$10,589 MORE THAN THE PROFIT REALIZED FROM THE HOME PURCHASE OPTION! In this example, the rental option is the correct choice.

Summary
From a stric

.

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

ly financial perspective, the correct choice between renting and owning changes frequently and depends on many factors. The key thing to remember is that to make a fair

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

Companies that provide selfless information through particip

comparison, the cash flows between the options must be placed on equal footing. Once this is accomplished, the option with largest accumulated profit is the correct one

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.answers.org.ua/article/114037/answers-Is-Owning-A-Home-Always-Better-Than-Renting.html">Is Owning A Home Always Better Than Renting?</a>

BB link (for phorums):
[url=http://www.answers.org.ua/article/114037/answers-Is-Owning-A-Home-Always-Better-Than-Renting.html]Is Owning A Home Always Better Than Renting?[/url]

A small space with a lot of income earning potential for advertiser and readers alike. keep us in your hearts and minds when applying or registering for our service. We aim to please one and all.

If you need cash before payday the first thing that you will notice is that there seems to be no low interest faxing payday loans online.

Tags

Links

Answers - Is Owning A Home Always Better Than Renting?

Related Articles: