Top Adding - Finance

As a practicing attorney for more than five years I have faced a number of interesting creditor/debtor issues. One issue I have faced deals with businesses

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

that buy delinquent debt from banks and other lending institutions. The following is a summary of the problems faced by debtors in this situation and a su

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

Examples of combination products may in

ggestion for avoiding such problems:

One Common Scenario

One common debt scenario goes like this. The debtor obtains a credit card from

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

a bank or other lending institution. The debtor loses his job and cannot make the credit card payments. The bank starts sending "late payment" letters, bu

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

t the debtor does not respond. After three months the bank stops sending the letters and the debtor assumes the bank has "written off" the debt and that th

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

Combination pro

e debt has gone away.

The debtor's assumption could not be further from the truth. Although the bank may have "written off" the debt, this term is merely

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

an accounting term and does not mean anything with regard to the bank's right (or desire) to collect on the delinquent credit card account.

Instead, what m

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

ost banks do is report the delinquent account to the big three credit reporting agencies (Esperion, Equifax and Transunion) and place the account into a por

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

tfolio of bad accounts to be sold. After six to nine months the portfolio is sold to a business that purchases bad debts for literally pennies on the doll

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

ar. The business that bought the portfolio then pursues the debtor through either a collection agency (you've heard of the midnight telephone calls and pho

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

e calls at work) or a collection law firm.

The Problem Under this Scenario

The problem the debtor faces in this scenario is that the orig

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

Following aspects would a

inal bank reported the delinquent debt to the credit reporting agencies. That means the original bank must also report when the debt is paid off. Once the

dd to the challenges in developing combination products:

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

debt is sold, the business that bought the debt cannot legally report the debt as paid off without some document by the original bank regarding the assignm

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

ent of the debt to the new business. Banks usually charge the new business for providing this document.

As the new business does not feel any obligation t

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

o make sure the debt is reported as paid off, very often it will not even tell the original bank about it. As a result, the debt remains on the debtor's cr

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

edit report indefinitely.

Now you may argue that the bank and the business that bought the portfolio are legally obligated to make sure the debt is reporte

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

Professional from academic institutions, pharmaceutical industries, health care indust

d as paid off. It has been my experience that a lawsuit is usually required to get the debt purchaser to actually make sure the report is made. Few people

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

have the funds to file such a law suit. If they did, they would not have been delinquent in the first place.

The Solution

If you are de

.

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

linquent in your payments contact the issuing bank immediately and try to work out some type of reduced repayment plan. Do this even if the bank has not co

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

Companies that provide selfless information through particip

ntacted you for months because they may still own your account. Again, once the debt is sold you will have a much more difficult road back to health credit

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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Top Adding - Settle with the Original Creditor Before the Debt Gets Sold

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