Update on Sponsor Insurance For Clinical Trials

1. June 26, 2008 Update on Sponsor Insurance For Clinical Trials Ty Howe, Life Sciences Practice Leader Boston office

2. Health InsurersWill they pay for subject injuries? • Specific facts of the situation will have a large bearing on whether health insurance will cover these medical costs. Will the current costs limit larger, long term medical costs? • Self insured plans are more likely to pay than insured plans • Some local plans will be more likely to pay than national plans (Aetna, United Health), due to local community standards • Sponsors have no ability to predict what percentage of medical expenses might be paid in a clinical trial

3. Clinical Trial Liability Insurance • A Liability policy, that may include Medical Expense coverage • Medical Expense insurance: No fault insurance for medical expenses incurred by a clinical trial participant • A sublimit within a clinical trial liability policy • Limits range from $0 to $10,000 • New $250,000 excess option • Insurers include CNA, Berkley, Chubb, Medmarc, ACE • Profitable business: insurers will compete for accounts • International market is completely different from US market

4. Insurer’s mentality about claims • Yes, it is a liability policy, but… • As always, facts determine the insurer’s response • If the plaintiff’s argument will present a sympathetic set of facts to a jury, insurers will want to settle without proof of liability or even a lawsuit