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There was dancing in the streets, well, at least on the floor of the New York Stock Exchange last week when the Dow

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

Jones Industrial Index closed at an all time high. The many cheerleaders on CNBC-TV were ecstatic screaming, “I told

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

Examples of combination products may in

you so”. But what did it really tell us.

The DJIA or DOW as it is also called is composed of 30 stocks that actual

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 represent about 25% of the value of the NYSE. That is very impressive and one of the main reasons this index is wa

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

ched by so many the world over.

Caterpillar Tractor Company was $16 in the year 2000 and closed on October 2, 2006

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

Combination pro

at $65. The worst was Intel that dropped from $72 to $20. Many fell 50%. So what really happened? Only 9 of the 30 s

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

ocks made new highs that day – only 30%. No one on CNBC bothered to mention 21 stocks, 70%, failed to participate.

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

ew highs were entered by American Express +3 points, Boeing +12, Caterpillar +49, Johnson & Johnson +30, Minnesota M

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

ning & Manufacturing (MMM) + 33, Altria +55, Proctor & Gamble + 4, United Technology + 39 and Exxon + 25.

There is

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

no point in listing all the losers. Three lost more than 50% from the 2000 high. How can this make a new meaningful

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

igh when the index shows 70% of the stockholders lost money?

Way back when before you were a gleam in Daddy’s eye (

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

Following aspects would a

896) when the original average created by Mr. Dow and Mr. Jones first appeared in the Wall Street Journal all you di

dd to the challenges in developing combination products:

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

was add up the price of all the stocks and divide to get the Index.

Stocks went up and dividends were issued and t

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

hose darn stock splits played havoc with computing what the average was each day. There is no point in going into th

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

complex details, but let’s look at how they get to the final index number.

Each stock in 1990 was added and multip

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

ied by 2. Today each stock is added and multiplied by 8 to get the DOW number. If you add the closing prices of the

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

Professional from academic institutions, pharmaceutical industries, health care indust

JIA stocks on October 3 it came to 1465.91. With the current multiplier of 8 makes a closing DOW Index of 11,727. A

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

new high. Not really.

Every investor is encouraged to go on the Internet to www.bigcharts.com to look at a 10-year

.

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

istory of each of the 30 stocks. A comparison to the DJIA may be superimposed. It will shock most investors.

Don’t

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

Companies that provide selfless information through particip

uy stock based on what the DOW is doing. You must do your own research for each issue before parting with your money

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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