Sun. Oct 25th, 2020

How insurance can help in the medical fight against COVID-19 pandemic

By Christophe Durand-Maniclas

In the fight against COVID-19, the search for a potent vaccine is a major international effort. Besides trying to find a vaccine for the virus, drug companies are also working to find medical treatments that could alleviate some of the symptoms of the virus and help patients to recover faster and better. Insurance requirements for clinical trials continue to be decided on a national basis. Increasingly, governments are introducing mandatory requirements for trials to have insurance coverage over and above that offered by national healthcare systems.

Behind the scenes, underwriters and risk engineers are involved in this effort too. We have brought our risk expertise to discussions with clients that are exploring potential vaccines and treatments or looking at adapting existing medicines to address some of the effects of COVID-19.

There is obvious human importance to finding ways to tackle the COVID-19 pandemic. And the financial risks and rewards for pharmaceutical companies are significant.

The development and marketing of new drugs is big business. For pharma companies, it takes a massive investment of both time and money to develop drugs. Industry experts estimate that it costs about $800 million to bring a new drug to market. And according to the Tufts Center for the Study of Drug Development, in the U.S. this figure is even higher at an estimated $2.6 billion.

As well as being a large financial investment, developing a new drug is a lengthy process. It takes an average of 12 years for an experimental drug to make it from the laboratory into homes in the US, for example.

Christophe Durand-Maniclas

Clinical trials and how they work

Clinical trials are a vital step in bringing a new drug to market. Testing on humans before a drug reaches the shelves can drastically reduce the risks involved. But, by their very nature, trials themselves are not without risk.

Clinical trials are observations of the effects of drugs on human participants that are designed to answer specific questions about their safety and efficacy.

Trials are conducted after the go-ahead is given by health authorities or ethics committees in the country where approval for the drug is being sought. Individual countries have many such ethics committees; as an example, in France, there are 39 research ethics committees. Similarly, there are 53 in Germany and more than 100in the UK.

Trials of new drugs typically have three phases. During phase 1, drugs are tested on healthy volunteers to test the safety of the drug. In phase II, drugs are tested on patients to assess their efficacy and safety. And in phase III, drugs are tested on patients to assess their efficiency – their cost-effectiveness – as well as their efficacy and safety.

Trials can range in size and cost and often take place in multiple countries. They can range in length from a few months to several years.

It is vital that risks are identified and monitored throughout the duration of a clinical trial. Key risk indicators include patient recruitment, patient safety, site performance, data quality and vendor performance. Data must be monitored throughout the trial, and the trial team must remain focused on risk at all times.

Regulatory considerations

There is a raft of regulations that pharmaceutical companies need to keep abreast of across the world. And as well as varying from state to state, these rules can often change quickly, meaning that a company’s risk manager and their insurer must keep informed and up to date at all times.
In Europe, for example, the EU Clinical Trials Regulation is aimed at ensuring high safety standards and greater transparency, and also is intended to make it simpler for pharmaceutical companies to conduct multinational trials of drugs.

Insurance needs

Insurance requirements for clinical trials continue to be decided on a national basis. Increasingly, governments are introducing mandatory requirements for trials to have insurance coverage over and above that offered by national healthcare systems.

And the insurance requirements differ from country to country. In some countries, for instance, insurance coverage can only be written on a non-admitted basis. In some, there are mandatory insurance limits, and in other deductibles are not allowed. In addition, the extended reporting periods can differ from several years to more than two decades, depending on the jurisdiction. Most countries require pharmaceutical companies to conduct a clinical trial in order to be able to sell their drug there; so compliance with local regulations is vital. Clients often run multi-centric trials of new drugs and, therefore, they need to be sure that their insurer has the global reach and expertise to offer appropriate coverage wherever the trial is taking place.

While clinical trials can be covered under general liability policies, there are sometimes shortcomings to this approach. If a certain claim not related to the clinical trial occurrence, this could exhaust the limits of that general liability policy, potentially leaving the pharmaceutical company exposed.

One of the most obvious options that pharmaceutical companies can consider is standalone clinical trials coverage. Standalone clinical trial insurance covers the policyholder for the entire duration of a specific clinical trial – which can be several years. Many European regulations specifically require a stand-alone solution for study subjects enrolled in one country.

Global expertise, innovation, and flexibility are key to ensuring that pharmaceutical companies have the coverage they need for this important step in bringing potentially life-saving new drugs to people.

In these unprecedented times, this has come into even sharper focus. As clinical trials insurance underwriters and risk engineers, we continue to stand alongside pharmaceutical companies as they seek to innovate and find a way to defeat COVID-19.

(Christophe Durand-Maniclas is head of Executive Underwriting, Life Science at AXA XL)

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