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The second quarter estimated tax payment is due in less than two weeks (June 15). Do you know if you need to make estimate

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

d tax payments?

The federal income tax system is a pay-as-you-go tax system. That means you pay taxes as you earn income

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

Examples of combination products may in

hroughout the year. If you are an employee of a company, you pay taxes through withholding from your paycheck. If you are

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

self employed, you pay taxes by making estimated tax payments.

The general rule is that you must make estimated tax paymen

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

s if you expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and tax credits,

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

Combination pro

AND if you expect your withholding and tax credits to be less than the smaller of:

* 90% of the tax liability on your curr

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

ent year tax return, or
* 100% of the tax liability on your prior year's tax return

Example: If your tax liability f

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

r 2006 was $1,500, but you expect to owe $2,000 this year because your business did better than the previous year, then the

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

minimum you would need to pay in to avoid underpayment penalties is the lesser of $1,800 (90% of your current year tax liab

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

lity) or $1,500 (100% of last year's tax liability).

The easiest way to estimate your quarterly estimated tax payments is

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

o estimate your tax liability for the entire year and divide that amount by four. However, if you don't receive your incom

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

Following aspects would a

e evenly throughout the year, you may use the annualized income installment method. A worksheet and instructions are avail

dd to the challenges in developing combination products:

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

ble in IRS Publication 505, Tax Withholding and Estimated Tax.

The due dates for estimated tax payments are:

For the peri

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

d: Jan 1 - March 31
Due date: April 15

For the period: April 1 - May 31
Due date: June 15

For the period: June

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

- August 31
Due date: September 15

For the period: September 1 - December 31
Due date: January 15 the next year

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

If the 15th falls on a holiday or weekend day, the due date will be the next business day.

You can pay your estimated tax

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

Professional from academic institutions, pharmaceutical industries, health care indust

es by using payment vouchers (Form 1040-ES), or by using the Electronic Federal Tax Payment System (https://www.eftps.com/e

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

tps/). In addition, if you have an overpayment from a previous year, you can apply the overpayment to your next year's est

.

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

mated tax.

Resources:
IRS website - http://www.irs.gov/index.html
IRS Publication 505, Tax Withholding and Estim

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

Companies that provide selfless information through particip

ted Tax -
http://www.irs.gov/publications/p505/index.html
Form 1040-ES - http://www.irs.gov/pub/irs-pdf/f1040es.pd

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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