Globally, clinical trial is becoming a major thrust area, essential for development of new drugs and devices. Presently, nearly two thirds of R&D costs go into drug development, of which clinical research accounts for 70 per cent of time and resources spent. The size of the global clinical trials market is around $10 billion today and could rise to $26 billion by 2007, according to a US estimate. The Confederation of Indian Industry (CII) estimates that India could earn $200 million from clinical trials by 2007 and $1 billion by 2010.
These figures spell that there will be an upsurge in the number of clinical trials to be conducted in India. Often, considering the safety and well being of the trial participants, clinical trials are conducted in a controlled clinical environment. By the standards of regulatory guidelines set up by many countries including India, clinical trial insurance is made mandatory for the purpose of risk management.
Health insurance and clinical trial
As healthy citizens are a deciding factor of a country's economy, governments of the many advanced countries have made health insurance schemes a mandatory to take care of human health. Unfortunately such schemes do not exist in India. However, the need for such schemes is felt in view of the escalating cost of medical treatment in India. Statistics says that hardly 10 per cent of the Indian population - the well-to-do segment in rural and urban areas - have adequate personal insurance cover to safeguard their health related risk. But the impoverished segment is either ignorant or cannot afford an insurance.
Globally, clinical trials involve two types of costs - patient care costs and research costs. Patient care costs cover usual care costs - the doctor, hospital and laboratory expenses that a participant would have, even if he or she were not enrolled in a trial - and costs related to additional tests and procedures included in the trial. In western countries, health insurance covers the usual patient care cost, including expenses of experimental or investigational procedures and some extra care costs. The clinical trial sponsor or research institution works with participants' health insurance to resolve coverage of extra care costs.
In India, most of the clinical trials are conducted in public and trust hospitals. These hospitals provide standard medical care at a subsidised cost, attracting a huge patient pool and contributing in a big way to the trial enrolment. In the absence of a government mandated health insurance, these hospitals expect either the sponsor or its mandated insurance to reimburse all the costs associated with the trial. The costs may include that of standard care, tests and procedures, investigational product related and unrelated injuries and any other adverse reactions. The hospitals, investigators and their ethics committee (and in some hospital there are administrative committees) ensure that proper financial agreement and liability insurance are in place so that there will be no financial liability on the hospitals or the subjects on account of participation in a clinical trial.
Clinical trials are considered to be one of the most risky investments for a sponsor. With the evolution of numerous guidelines focussing on the rights, safety and well being of the patient, insurance cover has been made a must in some countries by the local laws. In some countries this insurance cover is mandated by the Ethics Committee. Hence, the importance of clinical trials liability insurance is enormous.
As safety-catches are being put in place to protect the human subject on whom a medicine is tested by a drug company, a silent demand is building on insurance companies to formulate schemes to cover clinical trials. Insurance coverage for participants in a clinical trial is a new concept in India. Also, insurance companies in India are amenable to this idea only recently. They are not sure how to protect and how far to go. ICH GCP guidelines specify that if required by the applicable regulatory requirement(s), the sponsor should provide insurance or should indemnify (legal and financial coverage) the investigator/the institution against claims arising from the trial. However, claims that arise from malpractice and/or negligence are not valid.
Investigational items or services being tested in a trial, items or services used solely for the data collection needs and anything being provided free by the sponsor of the trial are usually not covered by the insurance company. However, the clinical trial insurance policy indemnifies the company/industry against costs liable to pay as damages or compensation and claimants' costs. It also covers expenses in respect of any claim made by research subjects for bodily injury caused by an incidence after the retroactive date within the policy period and claims arising out of the business of the company/industry.
Insurance Form
Globally, the forms of insurance are stated either as 'admitted' or 'non admitted' or even 'claims made'. The insurance required to be issued on an 'admitted' form refers to a policy of insurance that is written and issued in a specific locale by an insurer authorized to transact business under the confines of the local insurance laws. These policies are written in the local language and currency and may be written for an annual, renewable period, or for a period that reflects the anticipated length of the trial. Some countries do not allow multi-year policies, but when available, they allow the company to budget the full expense of the insurance up-front, instead of paying multiple premiums as policies renew. Unlike admitted insurance forms, coverage that is written on a 'non admitted' basis allows the insurer greater flexibility in the design of the policy and the coverage. Generally speaking, admitted coverage is required in majority of the countries where human clinical trials are conducted.
Most commonly accepted form of insurance is one written on a 'claims made' basis, as opposed to written on an 'occurrence' basis. With a 'claims made' policy, a claim is covered under the policy with effect at the time the claim is made (with some deviations permissible), regardless of when the injury occurred, as long as the period of injury is encompassed within the policy retroactive date. On the contrary, occurrence policies allow claims to be covered under the policy period with effect at the time of injury. While occurrence policies are advantageous to the insured, most insurers do not write drug exposures or other perceived long tail liability exposures on any form but claims made. Usually, the insurance company will require a set of documents and/or information (as mentioned in Table I) to issue clinical trial insurance policy.
Insurance players
The insurance players in India offering general and life insurance to the public are governed by the regulatory agencies called Insurance Regulatory and Development Authority (IRDA). This body was constituted by an act of parliament to protect the interests of the policy holders to regulate, promote and ensure orderly growth of the insurance industry. IRDA also protects matters connected with it or incidental to it. Overall there are 28 Insurance companies listed on the website of IRDA, including 4 public limited companies under General Insurance Corporation of India. The rest are private companies entered into this segment of business after privatisation. Several of these companies operate in the health insurance business, while very few offer clinical trial insurance. The companies like New India Assurance Company Limited, ICICI Lombard Insurance Company Ltd, Bajaj Allianz Insurance Company Ltd and Cholamandalam General Insurance Company Ltd have already issued clinical trial insurance. Looking ahead, a couple of companies are ready to foray into this segment, realising the potential of the business.
Besides these players, there are many brokerage firms, who are authorised by insurance regulation to coordinate and issue clinical trial insurance. Although many of them are market leaders and competing players in the general and life insurance industry, they appear to be new players in the business of clinical trial insurance. The policy makers in this business generally refer to the Master Global Policy, if one exists and/or evaluate the risk assessment of the project keeping opinions from medico-legal and risk management experts.
Challenges
Considering the fact that clinical trial is a new form of business in India and reports of failure rates, it poses a lot of challenges to all the stakeholders, including the service providers. Since there is an uncertainty in the drug development outcome, insurance companies are getting stricter and stricter day by day in formulating the policy.
By and large, the validity of the insurance policies last for a period of 12 months and it appears to be much shorter than the expected duration of the trial. It is not uncommon in clinical trials to discover the adverse drug reactions much after the conduct of the study. The patients sometimes report them either spontaneously or while their extended follow up visits. Considering the nature of the trial and the uncertainties, sometimes renewal of policies is required (two to three times). If clinical trials are not planned properly, it could be considered unethical and may jeopardise the entire conduct of the trial. The litigation arises when an event occurs, insurance policy is not renewed and a subject/insurer makes a claim after the expiry of the insurance period.
The insurance companies usually insure the insurer, provided that the investigator and his/her team members have practiced diligence. In case of an unforeseen adverse event due to the negligence on part of the investigator, which might be inclusion of a wrong patient against the eligibility criteria and thereby exposing the patient to more risk, the insurance company usually does not cover the repercussions. However, normally it is difficult to establish the relationship of the event with that of the study requirements or investigator's negligence. It adds to a significant element of challenges for the stake holders and service providers.
The guidelines for clinical trial insurance are not transparent and subject to interpretations. Usually the insurance company takes decision on a case-by case basis by carefully assessing the established risk benefit ratio.
(Dr Umakanta Sahoo is Managing Director, Chiltern International Private Ltd, Mumbai. Nishant Kumar is Assistant Manager, Clinical Research, Chiltern International Private Ltd, Mumbai)