Clinical trials and the life science industry
27 June 2019
From a legislative point of view, there has been a cooling off in the clinical trials aspect of the life science industry which has been welcomed
Anti-money laundering legislation, which is gathering pace in geographical regions like Latin America and countries like Georgia, is something that should be on the radar of insureds and carriers. In any of these countries where trials will be happening, more due diligence will need to be carried out. Companies should expect a lot more paperwork to fill out, which will require a lot of laborious information filling. Insureds should try to be attached to the same carrier because once all this work is done, if a company wants to carry out another trial again in the same country, the carrier already has all the information and work won’t need to be replicated again.
There is nobody better than your broker, carrier and people on the ground who can tell you what the regulations are that need to be complied with. Early planning/preparations leads to fewer surprises when you’re quoting for clinical trials to be carried out in any geographical location.
Finance Ministries in Sub-Saharan Africa have been seen by some to be trying to encourage the development of their home insurance markets by strengthening the regulatory controls over foreign insurer (and reinsurer) activity (i.e. outlawing non-admitted paper) which leads to timing issues when it comes to placing cover which is ultimately to the detriment of foreign research sponsors conducting trials in the region.
Brexit is also creating some insurance hurdles – not so much from a policy point of view, but from a servicing one. France has been quite firm on this and it wouldn’t be surprising if other EU territories started to follow suit.
Technology and the impact advances are having on the insurability of clinical trials
The world is changing and a big driver of that has been the advancements in transformational technology. Personalised medicine is a very interesting concept and technology is moving fast. Gene therapy and personalised therapy trials have presented underwriting difficulties – how does the industry go about underwriting this?
Gene therapy presents a number of long tail issues and concerns. An insurance company can request a 10-year reporting period but, for something like gene therapy, is that really enough? Probably not. How can the industry construct a policy which truly reflects that exposure? These are questions which require a collaborative approach.
In light of some of these big questions, it is more important than ever that insureds watch out for exclusions in their policies.
Regulatory authorities, including ethical committees, are expected to take a much closer look at policies for new clinical trials, especially for those who use cutting-edge technology.
Looking at recreational drugs, we expect this focus to increase, but these also come with concerns. If there is a true therapeutic reason behind the trial and it’s receiving proper oversight, being able to underwrite the risk shouldn’t change that much, but this isn’t always the case. Lack of oversight and therapeutic benefit are important when it comes to recreational drug trials.
Brokers and carriers do want to get their clients over the line with what they’re trying to achieve, but this requires a collaborative approach and much needed transparency.
Document requirements from regulators
Insurance policies and certificates for clinical trials should be presented to regulators and ethic committees, but the reality is that there isn’t a consistent approach to requirements. This is clearly a point of annoyance for insureds/carriers when getting trials over the line. There is a feeling of being asked to provide unnecessary paperwork, and less paperwork means less opportunity for pushback. So why can’t the policy and the certificate be considered the same thing, which in many respects they are?
Differing approaches between insurer and captive demonstrates a disjointed approach; many don’t understand the difference between an insurer and captive. A solution to this could be that the industry comes up with a standardised document that can be submitted – there should be harmonisation of regulation across the globe, but how achievable this is, is questionable. The main issue is there are too many interpretations on this matter, with different insurance regulations per country and clinical trial regulations. Could a lawyer come up with a solution as a trusted third party?