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In the dealer-agent relationship, the agent merely undertakes to sell the goods on behalf of the dealer at the best possible price. For these servi

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

ces, he receives compensation in the form of commission on the sales. Until the goods have been sold, they remain the property of the dealer and no

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

Examples of combination products may in

of the agent. This means that the dealer is entitled to the proceeds from the sale of the goods dispatched, so the agent is obliged to pay the dea

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

ler the proceeds after deducting his commissions and expenses.

Usually each consignment is identified separately, by the opening of an independent

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

ccount for it and the profit (loss) per consignment is determined as soon as the result is known. Goods sent to a consignee remain the property of

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

Combination pro

he consignor until sold and in the case of a perpetual accounting inventory system the consignment is journalised at cost.

In the case of a periodi

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

c accounting inventory system, the purchases account will be credited. The consignment 'accounting account' has a twofold purpose: it serves as an

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

nventory account for goods held by agents and also as a consignment income account.

Costs such as rail or sea freight or insurance will be incurred

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

on each consignment. These additional costs form part of the cost of the consignment inventory and must be debited to the appropriate consignment

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

accounting account'.

As soon as the consignor receives details from the agent regarding the sale of goods, he (the consignor) is able to determine

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

he profit or loss on the consignment. The notice or accounting report received from the agent is known as an account sale and provides full details

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

Following aspects would a

about the goods received by the agent, goods sold, cost incurred by the agent, a debit for his compensation (commission) and the balance of unsold

dd to the challenges in developing combination products:

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

oods.

Thus, the consignment 'accounting account' contains all the details concerning the consignment transactions. Therefore, a profit (loss) can

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

be determined and transferred to the general income account. The balance on the account represents the cost price of the unsold inventory and is sh

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

wn, together with other inventories, in the financial accounting statements.

The cost price of unsold inventory consists of the initial purchase pr

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

ce plus the proportional portion of all costs related to the consignment, but excluding commission. Commission is a function of sales and is, there

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

Professional from academic institutions, pharmaceutical industries, health care indust

fore, a selling expense that must be written off against the profit (loss) arising from the particular sales transaction.

When the agent receives t

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

e goods, he does not usually make a formal accounting entry, since he did not purchase the goods nor did they belong to him. However, he will keep

.

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

an inventory record to record the receipt and sales of the goods. An alternative would be to debit a consignment received 'accounting account' with

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

Companies that provide selfless information through particip

the invoice price and to credit the consignor. When the goods are sold the amount will be credited to the 'consignment accounting received account'

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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