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This is a question that we get asked frequently by landlords. The majority of landlords see this type of cover as an extra un-necessary expense that simply eats into their profits. The

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

landlord has obtained glowing references for their tenants from the previous landlord & current employer so there does not seem to be any risk. Well, this is where they are wrong. Eve

; 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 credit check and reference under the sun can be obtained but this can only ever show the tenants past history. This is obviously all we can go by as none of us have a crystal ball to

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

ee into the future but you only need to talk to other landlords or indeed watch the ‘Tenants From Hell’ programmes on ITV to realise that things can change at the drop of a hat.

A tenan

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

previously stated as a ‘model tenant’ can turn your buy to let investment into a nightmare. A bad break-up with a partner or unexpected redundancy are a couple of common problems that

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

Combination pro

ause a tenant of good repute to go ‘off the rails’. Think, if your tenant defaults on their rental payments for 2-3 months would you be happy to absorb this? Could you afford to fund t

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

he mortgage payments yourself? What if the tenant will not communicate with you or leave the property, you stand to loose thousands of pounds in lost rental income and legal expenses in

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

urred to fight the tenant and you should also take into account the time and stress involved.

There are generally two types of Rent Guarantee Insurance policies, Percentage Rated and En

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

ry Level.

Percentage Rated

The majority of Rent Guarantee Insurance policies are charged at a certain percentage of your annual rental income. This is typically around 4% plus Insuran

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

e Premium Tax (IPT) of 5% on the premium. A landlord with a monthly rental income of ?800 per month would pay ?420 for this cover.

Entry Level

These policies are more basic and do not

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

have all the ‘bells and whistles’ but are much cheaper. For around ?100-?150 per annum you can purchase an entry level policy that includes legal expenses cover and will pay you your re

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

Following aspects would a

nt arrears up to a certain limit (typically ?2,500 per month) with a maximum indemnity limit for rent arrears of around ?10,000 per claim. These entry level policies are seen as a more

dd to the challenges in developing combination products:

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

iable way of providing landlords with that extra protection for their buy to let investment. The costs are more justifiable and usually the cover provided is sufficient for the landlord

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

needs.

What are the differences?

Typically the main difference between the policy charged on a percentage of rental income and the entry level policy is when the rent arrears payments

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

start and finish. The percentage policy may not have an excess period and may continue to pay rent arrears after the tenant has been evicted to assist while you search for a new tenant.

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

These payments are normally made for up to 3 months after vacant possession is obtained and pay around 75-90% of the normal rental income. The Entry level policies usually have a 1 mont

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

Professional from academic institutions, pharmaceutical industries, health care indust

h excess and will cease to pay rent arrears as soon as vacant possession has been obtained. You should carefully examine the ‘Summary of Cover’ or ‘Key Facts’ document for each policy t

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

see where your money is going.

Both types of policy will generally require you to obtain references and carry out a credit check on your proposed tenant(s). 9 times out of 10 the Rent

.

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

Guarantee Insurance provider will be able to offer you a referencing service, usually via an approved third party. If you have not already arranged a tenant reference or credit check, i

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

Companies that provide selfless information through particip

makes sense to use the insurance providers approved service to assure you comply with the policy referencing requirements to avoid a claim being declined to due insufficient referencing

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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