Cases - Finance

If you use U.S. dollars in large quantities either as an American living in the U.S., or if you are a businessman that lives outside of the U.S but pays vendors in U.S. dollars, or if you are an American expat living oversea

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

s crying buckets everyday as the dollar buys less and less of the foreign currency of the country you are living in, then this article is for you.

Don’t be fooled by U.S. Federal Reserve Chairman Bernanke’s comm

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

Examples of combination products may in

ents in mid-2006 which fueled fears about the Feds raising interest rates. Oh this will happen, and the dollar will temporarily strengthen, but after that, say sayonara to the dollar’s strength. If you aren’t fam

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

iliar with the overhwelming arguments for the dollar continuing to weaken over the next year, then perform a Google search of my article entitled “The Biggest Threat to the Global Stock Markets that You Haven’t H

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

eard About Yet” and read it carefully. But now on to the main point of this article – How to protect yourself against a falling U.S. dollar.

If you’re a business that pays vendors/suppliers in large quanti

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

Combination pro

ies of U.S. dollars the best strategy to protect yourself against the weakening dollar is to buy forward spot contracts that lock in today’s exchange rates for future accounts payables. Any respectable international ba

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

nking institution has an F/X (foreign exchange) desk that can handle this. If you’re an individual investor, then the simplest is just to buy foreign currency. Of course you could engage in the much more lucrative acti

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

ve trading of foreign currency, but in this case, I hope you have time to sit in front of your computer all day. So I’m just going to discuss the simpler case of buying foreign currency and the options you have.

If y

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

ou buy foreign currency from the Foreign Exchange desks of large institutions like Citigroup, often you won’t start getting really good rates unless you purchase blocks of foreign currency worth U.S. $200-250,000 or mo

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

re. So if you don’t have that much to hedge against a dollar that is most likely to weaken for the remainder of the year, what can you do if you would like to takeadvantage of the falling dollar?

Well if you contact i

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

stitutions such as Citibank, they offer foreign currency “baskets” usually containing foreign currencies from four or five different countries. For example they offer an Asian foreign currency basket, but initial

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

Following aspects would a

minimum positions are U.S. $50,000. This is option number one. And you can also buy Euros directly from them although you won't get the more competitive exchange rates at lower purchase amounts.

So what if you don’t

dd to the challenges in developing combination products:

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

want to hedge $50,000 of your current portfolio with foreign currency? Then you can use Everbank. Everbank offers CDs that in essence, or similar in structure to Citigroup’s foreign currency baskets. Actually many bank

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

s do, but I'm suggesting Everbank because of the several I scoured, Everbank allows you to buy in at much smaller positions. You can buy 3, 6, 9, or 12 month CDs denominated in a single foreign currency such as the Euro, the

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

Canadian Dollar or the British Pound. Or you can purchase foreign currency “basket” CDs. For example, Everbank’s Asian Advantage CD consists of 40% of the New Zealand dollar, 20% of the Japanese Yen, 20% o

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

the Thai Baht, and 20% of the Singapore Dollar. And you can buy these CDs at a lower minimum investment of only U.S. $20,000.

If you’re a maverick, Everbank even offers a "Bullish on the U.S. dollar" CD, b

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

Professional from academic institutions, pharmaceutical industries, health care indust

ut it's not at the top of my list right now.

Also know that most times I don’t bother mentioning the exact timing of when things should be done because I assume everybody has a competent advisor that advises them on t

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

he matters I speak of in my articles. So when considering buying foreign currency as a hedge, know that the Euro is at a year high against the U.S. dollar now, so that it might be wise to wait for a small bounce in the dolla

.

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

r against the Euro if you are planning on using the Euro in particular as a hedge in your portfolio. Long term for the rest of the year, I think that Citigroup’s Asian foreign currency basket, (or Everbank’s Asia

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

Companies that provide selfless information through particip

n Advantage CD)and the Euros are both good hedges against the weakening dollar, but consult your advisor for the proper time to enter these positions. The best bet is to buy a mix of Euros and Asian currency. Happy investing

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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