Transcript No Slide Title

Life Sciences Industry,
Challenges,
Opportunities
Christine Fernandez and
Mike Costas
October 2012
Disclaimer
The material in this presentation has been prepared
solely for informational purposes by Chubb Insurance
Company of Canada. The material is compiled from
external sources and from proprietary Chubb data. We
do not represent as to its accuracy or completeness.
The content of this presentation is intended to provide a
general guide to the subject matter discussed. For
specific circumstances, specialist advice should be
sought.
Agenda
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Global Market vs Canadian Market
Targeted life science segments
Property considerations
Liability considerations
Human clinical trials
Why choose Chubb?
Life Sciences Opportunity:
Global Market – Dynamic Growth
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Medical Devices - $350B+ Market
Biotechnology - $250B+ Market
Pharmaceuticals - $1.1 Trillion by 2014
Dietary supplements - $74B+ Market
Emerging segments:
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Drug Discovery
Proteomics
Bioinformatics
Genomics
Nanotechnology
Health Information Technology
Life Sciences Opportunity:
Canadian Market
• Medical Devices
• Revenue of $3B +
• Approx 1,000 development and manufacturing firms
• Approx 600 firms engaged in wholesale distribution
• Biotechnology/biopharmaceuticals
• Biopharmaceutical market has 180 private and public firms, all
in different phases of the development cycle
• 500 new products currently in development
• Focus: Toronto, Vancouver and Quebec
• Pharmaceuticals and Biopharmaceuticals
• Pharmaceutical market place is still dominated by US owned
brand name drugs – 78% of sales.
Life Sciences Opportunity:
Canadian Market
Reasons for optimism:
• Low-cost advantage
• Favourable tax treatment for R&D
» Scientific research and experimental development
program
• Supportive network of associations
» BIOTECanada
» Ontario Bioscience Industry Organization
» MaRS
Chubb’s Targeted Life
Science Industry Segments
• Medical Devices
• Biotechnology / Pharmaceuticals
• Healthcare Product Service Organizations
• Third party outsourcing
• Dietary Supplements
• Drug Discovery Technologies
• Bioinformatics, genomics, proteomics,
combinatorial chemistry, high throughput
screening, computational sciences, etc.)
Medical Device Target
Customers
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Clinical Applications
Monitoring Equipment
Diagnostic Imaging Equipment
Surgical/Dental/Therapeutic Equipment &
Instruments
• Lab/Research Equipment & Instruments
• Medical Software/Healthcare Information
Technology
• Optical/Ophthalmic Instruments & Lenses
Pharmaceuticals - Biotechnology
Target Customers
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Therapeutic Products
Diagnostic Test Kits (including reagents)
Biotech Equipment
Bioinformatics Software
Drug Delivery Systems
Veterinary Products
Healthcare Information Technology
Industrial and Agricultural biotechnology
products are not targeted
Service Organizations
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Companies performing drug and device
development services for others:
1. Contract Research Organizations
2. Contract manufacturers
3. Contract sales organizations
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$5.5 Billion industry with rapid growth
Important Property
Considerations for Life Sciences
Companies
• Changing nature of operations over time,
exposures evolve over a firm’s life cycle
• Unique exposures - i.e. spoilage, change
in temperature/humidity, radiation,
contamination
• Need for backup power, temperature
alarms, disaster recovery planning
• Complex supply chains
Important Property
Considerations for Life Sciences
Companies
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High-valued lab equipment
Protection for Scientific Animals
Research & Development Income
Pollutants/contamination
Lengthy recovery due to delays in
validation and regulatory approval
Important Liability Considerations
for Life Sciences Companies
• Off-label Study Information Dissemination
• Invasion of Privacy
• Faster Review Periods by Regulatory Bodies
• Clinical Trial Controls
• TV & Internet Advertising/Promotion/social media
• Plaintiff lawyers monitoring of FDA information
• Post Market Surveillance
Clinical Research Process
• Pre-Clinical - animal testing, cell cultures,
computer modeling
• Phase 1 - Safety focus
• Phase 2 - Safety & efficacy
• Phase 3 - Safety & efficacy (large scale)
• Approvals by health regulatory agencies
• Phase 4 - Post-Market studies
Clinical Trials
“Clinical trials are voluntary research studies, conducted in
people, that are designed to answer specific questions
about the safety and/or effectiveness of drugs, vaccines,
other therapies, or new ways of using existing treatments.”
• Over 50,000 trials conducted worldwide with 20MM+ people
enrolled in those trials
• Many countries require compulsory local insurance to protect
their citizens – Germany, France, Spain, Columbia, Brazil,
Australia.
Most Common HCT Claim
Allegations
• Failure to monitor study properly
• Failure to select qualified/competent clinical
investigators/staff
• Failure to properly inform (therapeutic
misconception, risk, rights)
• Failure to perform per contract-CRO’s
• Failure to adhere to research standards
– Conflict of interest
– Non-compliance
– Privacy
Sample of Clinical Trial Cases
• TeGenero/Paraxel – U.K. TGN1412 clinical trial
case.
• Fialuridine (FIAU) (NIH,Lilly, and others)
• Jesse Gelzinger vs. UPenn
• Ellen Roche vs. John Hopkins
• Quinn vs. Abiomed
• Nicole Wan vs. Rochester MIT
• Suthers /Martin vs. Amgen
Source: http://www.sskrplaw.com/gene/index.html
Sold Product Allegations
• Failure to warn (labeling, advertising, safety
surveillance, off-label, study results, etc,)
• Product Defects
• Product not doing what it was intended to do
(design defect)
• Fraud
• Negligence
High Profile Cases
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Vioxx - Cox 2 inhibitor
Hormone replacement therapies
Anti-depressants
Accutane
Drug Eluting Stents
Contact Lens solution
Metal-on metal hip implants
Surgical mesh
Coverages tailored to unique Life
Sciences property exposures
• Property enhancements
Spoilage / Change in Temperature Coverage
– R&D Property (research animals, cell cultures, etc.)
– R&D Business Income (contemplates grants, milestone
payments, endowments, etc)
– Ordinary payroll coverage included
– Pollutants (radioactive contamination, microorganisms)
– Radioactive Contamination (Typical PD / BI sublimit $250,000)
– Physical vs. Operational Restoration of Property, Unlimited
Extended Period of Indemnity
– Contingent Business Interruption (Dependent Business
Premises - worldwide)
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Coverages tailored to unique Life
Sciences Liability exposures
• Premises Operations on Occurrence trigger, defence
costs outside the limit
• Product Liability - Claims Made, defence within limit
• Human Clinical Trials
• Ability to insure admitted foreign trials in many
jurisdictions
• Professional Liability Endorsements (clinical
investigators, medical sales personnel)
• Errors & Omissions –cyber liability and privacy
remediation available
• Product Withdraw Expenses - $25,000 included with
higher limits available
WorldCert for Foreign
Trial Placements
• State-of-the-art, interactive clinical trial insurance
and certificate management system.
• Web based system features include:
• Instant trial insurance quotes.
• User-controlled – no waiting for an insurer to complete backend processes for certificate issuance.
• Instant issuance and modification of global clinical trial
insurance certificates.
• Database of country-specific insurance requirements.
• Certificate issuance in the local language.
• Capability to email certificates to anyone worldwide.
• Customized insuring options
Chubb Value Proposition
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World-class claim service based on a no-hassle philosophy
The strongest level of underwriting acumen
The ability to grow with companies throughout their life cycle
A willingness to engage on companies of all hazard groups
• Tongue depressors to pacemakers
• Vitamins to Vaccines
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Superior, well-diversified portfolio of broad language
policies.
One of the largest specialty Loss Control teams globally
Global Network and Financial Strength
Chubb Life Sciences
Thank you for your participation