Insurance and risk management challenges in overseas clinical trials for U.S.-based life sciences companies

“For a variety of reasons, U.S.-based life sciences companies now conduct business and clinical trials all over the world, and their dramatic global growth presents unique insurance and risk management challenges. One of the largest is overseas clinical trials,” said Mr. Farrow. “Many challenges await the risk manager. For instance, to begin a clinical trial, a life sciences company must have local insurance policies (with the required coverages) in many different countries around the world and provide the clinical trial insurance certificate in the local language in a timely manner. In addition, ethics committees in these countries may not permit the trial to proceed without an appropriate certificate.”

Commenting on the need to keep track of insurance requirements around the world, and the challenges faced when the regulations in a certain country are not fully understood, Mr. Gaffney said, “Insurance requirements for clinical trials vary by country. For example, studies in Brazil typically need a local insurance broker, as the premium and fees must be paid locally to the insurer. Other Latin American countries require that the clinical trial sponsor have a local physical presence in the country, and if not, a local representative is needed. In Europe, many countries require significant limits, including France, The Netherlands, and Belgium.”

The white paper also discusses the need to work with an insurer that has the insight into the emerging exposures stemming from clinical trials in order to help insureds manage those risks proactively. Mr. Farrow said, “Risk managers should work with an insurer that has the unique underwriting expertise necessary to effectively implement complex multinational programs such as these. The insurer should also be highly rated and have financial strength and an excellent reputation, as well as have access to a global network. The insurer must be able to provide appropriate products and services to protect insurers across all lines of business, with sufficient underwriting limits as well as needed coverage.”

The following attributes of an insurer are desirable in the field of global medical risk insurance and global services:

• Breadth of product and geographic reach
• Access to the indigenous resources of a global network
• Ownership of a proprietary database of information that clearly spells out the insurance regulatory requirements for clinical trials in a large number of countries
• Timely, accurate clinical trials, insurance policies, and certificates; and
• Ability to deliver as reflected by established standards.

This article discusses many of these issues and possible solutions. To access the white paper, please visit: www.aceusa.com/News/Pages/ACEProgressReports.aspx.