Will Your Client Lose His/Her Medical Practice?
Part One of Two-Part Article.
By Norman M. Goldfarb
T
he plaintiff's bar has discovered an opportunity in clinical research. The deep pockets of pharmaceutical companies provideone attraction, but attorneys are seldom shy about suing anyone who might even remotely be found liable for an
injury. Successful litigation is rare, but the judgments can be expensive. Because of this, many physicians who conduct
clinical research are reviewing their medical malpractice insurance policies. Many others, however, have no concept of the looming
risks and of whether they are protected by their medical malpractice insurance policies when taking part in clinical trials.
WHAT DOES YOUR INSURANCE COVER?
The courts (for example,
Heinrich v. Sweet, 62F. Supp.2d 282, 313 (D.Mass. 1999)) generally regard clinical researchinjuries as regular medical injuries, but medical malpractice policies are often ambiguous on the topic of clinical research.
They may refer to coverage for "medical care," which, strictly speaking, clinical research generally is not. People in clinical
trials are not "patients"; they are "subjects," "volunteers" or "participants." Sometimes, unapproved drugs and devices
or clinical research are specifically excluded from coverage. The investigator may be able to purchase a clinical research
rider on the policy, but often not.
Pharmaceutical companies that sponsor clinical trials generally do not call attention to this issue, except by sometimes
requiring medical malpractice insurance in the clinical trial agreement. (Required coverage limits are usually $1 million
per incident and $3 million in aggregate.) Sometimes, they will ask for a certificate of insurance, or the right
to obtain one on request. (Occasionally, they require general property and liability insurance and not medical malpractice
insurance, which probably reflects a contract that has been adapted from a different area of business.) Because many
investigators never read the clinical trial agreement, they will miss these "fine points."
Health insurance companies generally cover the cost of treating subject injuries, but they, too, are becoming more
aware of their exposure to clinical research risks. There is an ongoing debate in the clinical research industry about who
should pay for this treatment. On the one hand, there is evidence that clinical research does not increase, and might even
decrease, direct costs to insurance carriers. In addition, new treatments proven in clinical trials keep people healthier,
reducing insurance carrier costs or at least performing a valuable public service. On the other hand, it is not entirely clear
why insurance companies and their customers should subsidize clinical trials for highly-profitable pharmaceutical companies.
Also, subjects who make health insurance claims may hit their policy limits; their premiums may increase; and,
if they subsequently lose their jobs, new coverage may be expensive and difficult to find.
Unfortunately, injured subjects sometimes want more than free repairs. A few carriers offer special clinical research
malpractice insurance, but it is prohibitively expensive for part-time investigators. One bright spot is that hospitals and
clinics that perform a lot of clinical research usually have professional risk managers and adequate insurance coverage,
subject to the discussion below. (Note, however, that it generally covers only activities on their premises.)
WHAT MAY BE MISSING IN THE CONTRACT
Clinical trial agreements generally indemnify clinical investigators for problems with the study drug, but never for the investigator's
negligence. Most indemnification clauses contain loopholes. For example: 1) Injuries caused by study procedures
often are not covered; 2) Injuries prior to randomization — in other words, during the screening process — may not be covered;
3) Even 1% contributory negligence by the investigator may void the indemnification, as may an unrelated deviation
from the protocol on
another subject; and 4) Prior written authorization may be required to charge the sponsor for treatment.
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