A Complex Picture: What to Know About Clinical Trials Insurance

Cristina Varner, LUTCF, ARM, SVP/national life science and digital health & telemedicine practice leader at insurance brokerage Newfront, has vast experience working in the clinical trials insurance space. She twice developed and launched proprietary technology platforms for clinical trials that have reduced administrative friction for companies while protecting key liabilities. She also crafted proprietary insurance policy language with Lloyds of London to provide coverage not typically afforded to emerging biopharmaceutical organizations.

In this interview, Varner explains the nuances of insuring clinical trials in today's growing digital health climate and the newer risks in areas such as cybersecurity that developers are facing.

ACT: You have spent 10 years at Newfront. Can you explain your career journey and current work?

Cristina Varner: As one of the founding members of Newfront (formerly ABD Insurance), I’ve played an integral role within the company helping life sciences, digital health, and telemedicine companies grow to scale. My domain expertise lies in product liability, professional liability, and clinical trial insurance.

In 2021, ABD Insurance merged with Newfront to drive innovation and positive change in the insurance industry. Prior to merging with Newfront, I worked at ABD Insurance helping technology companies manage risks. ABD saw a need for a dedicated life sciences practice focused solely on the unique exposures of these companies, and I was asked to build and scale the practice to where it is today.

For the past few years, I have also started focusing on digital health and telemedicine companies because some of our life sciences clients began working in this space. As a result, we built a vertical around this industry sector as well. The risks these companies have requires bespoke coverage and consideration.

Aside from life sciences and digital health, we are a full-service brokerage, meaning we are well versed in directors and officers liability, retirement services, employee benefits, and more. We have different teams across Newfront that service their area of expertise, and most of our clients touch multiple verticals within our business lines.

ACT: Tell us about the technology platforms you’ve developed and launched for clinical trials?

CV: When building the life sciences practice, we recognized a need for a technological platform for clinical trials that could help reduce administrative friction for companies while also protecting its key liabilities. This led to the development of Newfront’s Clinical Trial Portal. In March, Newfront launched version 2 of the portal, which provided a number of enhancements, including the ability to run reports.

Clinical trial managers face a wide range of complexities when preparing, launching, and managing clinical trials, partly due to the vast amount of information that must be organized from multiple countries with different regulatory requirements.

Insurance is mandatory for clinical trials to begin, and delays in securing coverage could cost companies hundreds of thousands of dollars. Most clinical trial coverage varies by country and each country requires large volumes of data to establish a trial site, but also to secure the required insurance coverage.

The Newfront Clinical Trial Portal helps users gain the policy coverage they need by harnessing the right data. Today, Newfront is placing coverage for companies’ clinical trial needs in more than 160 countries, and there’s a clear need for data consolidation.

ACT: Where do you see most clinical trial stakeholders go wrong with risk management?

CV: The largest exposure faced by life sciences companies is product liability. Product liability is a huge exposure because it encompasses anything that results in bodily injury due to products or trials, and this is where we find ourselves spending most of our time and domain expertise. At the same time, the life sciences industry is experiencing an increase in patient use of smart technology and continuous innovations to improve the way healthcare is delivered to patients (i.e., personalized, smart medication). This increase in big data and cloud technology is causing data breaches and ransom attacks to be more prevalent, making cyber liability more important than ever.

Historically, life sciences companies weren’t as concerned with cyber liability, and the primary insurance procured was to cover exposures relating to product liability and clinical trials without much focus on cyber exposures. That has since changed dramatically in the past few years, and cyber continues to be the biggest area of focus for most companies now.

Ransomware is key coverage protection and is an area we see stakeholders increasingly pay more attention to with the rise of data breaches and ransomware attacks.

ACT: For recruitment outside of the US, what is the impact on insurance/risk management?

CV: Patient recruitment, including patient retention and population diversity, tops the list of challenges faced by most clinical trial managers. Many clinical studies are becoming larger, longer, and more complex, leading to increased competition for study centers and individual patients. The pandemic continues to have an effect on trial activity and new patients entering trials, as we’re seeing a decreased number of patients entering trials compared to before the pandemic.

Ninety percent of our life sciences clients are in active trials today, and less recruitment is being done in the US. We’re seeing most companies source trial participants internationally, which brings a new set of regulations into play; each country requires specific data to obtain insurance, so we spend a lot of our time focusing on these varying clinical trial regulations.

In the past, companies would manage data with Excel spreadsheets and through email, but by leveraging a platform, such as Newfront’s Clinical Trial Portal, clinical trial managers can better navigate insurance requirements in various countries and obtain quotations in an expedited manner.

Clinical trial researchers are considering countries that they didn’t previously seek recruitment since they’re having such a difficult time. But the impact this geographical shift in recruitment has on risk management varies from country to country, making it difficult to follow the different regulations and ensure you are compliant.

ACT: Looking forward, what are some emerging risks in the clinical trial space/life sciences industry?

CV: With the rise in advanced technologies, such as artificial intelligence (AI), decentralized clinical trials, cyber liability, and data privacy will continue to be pressing concerns, as well as create unique challenges. We expect AI to have an impact, but it’s too early to tell what that will look like. There’s a lot of saturation in the marketplace and there’s an evolution in clinical trial processes, making it difficult for companies to keep up with changing regulations, etc., making it important now more than ever to partner with an insurance expert in the field.