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Nearly every financial adviser always advises that debts should be paid off in a particular order: from highest interest rate to lowest interest rate. While this method makes sense from a mat

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

hematical point of view, it makes less sense from a psychological point of view.

Psychologically, 7 outstanding debts "feels" more overwhelming than 2 outstanding debts even if the

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

Examples of combination products may in

y are at the same total balance. Many people are struggling with debt and have tried on several abortive attempts to eliminate their debt using the highest-to-lowest method, and each time 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.

y failed. Why?

Because this payoff plan does, indeed, make the most financial sense if you have the discipline to adhere to it. By paying off the high interest rate debt first, you are minim

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

izing the total you will eventually pay in interest. But this method does not work for everyone.

For many debtors, their highest interest rate debt was also their debt with the highest balan

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

Combination pro

ce. Psychologically, they felt defeated; they could pay on this debt for months at a time and never seem like making the progress.

Dave Ramsey, the financial expert and the nationally-syndic

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

ated talk radio host of The Dave Ramsey Show has introduced "Debt-snowball Method" as the alternative to the highest-to-lowest method in paying off the debt. His method had

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

been recognized to make more sense from a psychological point of view.

How's Debt-snowball Method Work?

The basic steps in the debt snowball are:

List all debts i

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

n ascending order from smallest balance to largest.

Commit to pay the minimum payment on every debt.

Determine how much extra can be applied towards the smallest debt.

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

Pay the minimum payment plus the extra amount towards that smallest debt until it is paid off.

Then, add the old minimum payment from the first debt to the extra amount, and appl

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

y the new sum to the second smallest debt.

Repeat until all debts are paid in full.

In theory, by the time the final debts are reached, the snowball will be "rolling

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

Following aspects would a

" quickly as it has picked up a lot of financial mass. Hence, larger debts will be paid off faster.

Let take an example to illustration the Debt-snowball Method. Assume a typical young

dd to the challenges in developing combination products:

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

woman in her mid-twenties who awakes one morning to realize that she's in debt and decides to do something about it. She might be burdened with the following hypothetical liabilities:

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

i>$30,000 college loan at 5%

$10,000 credit card balance at 12%

$2,000 computer loan at 10%

$3,000 car loan at 4%

The highest-to-lowest method would adv

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

ise her debt to be paid off in this order:

$10,000 credit card balance at 12%
$2,000 computer loan at 10%
$30,000 college loan at 5%
$3,000 car loan at 4%

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

But, using the Debt Snowball method, she should organize her debt from smallest balance to largest balance as follow:

$2,000 computer loan at 10%
$3,000 car loan a

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

Professional from academic institutions, pharmaceutical industries, health care indust

t 4%

$10,000 credit card balance at 12%

$30,000 college loan at 5%

After you have listed your debts from smallest to largest; pay the minimum amount on all of th

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

em except the smallest. Throw every dollar you can scrimp and save against your smallest debt until it has been eliminated, then move on to the next-smallest debt.

Summary

.

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

In short, the Debt-snowball Method is another method to help a debtor to clear off his debt in more psychological way: by reducing the number of debts first as compare the total debt amount.

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

Companies that provide selfless information through particip

Those who are unsure of their ability to stick with the plan may want to pay the smallest debt first, because the thrill of eliminating an entire balance sooner may encourage them to continue

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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