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Top 6 Risks for Pharmaceutical Businesses - How to insure against them?

The pharmaceutical industry is a rapidly changing global environment in which diseases are being prevented and managed rather than simply treated. Nonetheless, this market continues to discover, develop, and market pharmaceutical drugs in order to improve patient's quality of life. Many experts believe that pharmaceutical innovation has been stagnant for nearly a decade. However, it is understandable that this industry is having difficulty adapting to the new shift in society's approach to healthcare.

Furthermore, consumers demand value and measure it in terms of cost-effectiveness and positive outcomes - a shift from previous generations. Nonetheless, the pharmaceutical industry is prepared to navigate the ongoing changes with data-driven scientific discovery and medicine.

Why is Pharmaceutical Organization Insurance Important?
Although the pharmaceutical industry is currently facing enormous challenges, these same forces will provide opportunities in the near future. With a solid scientific foundation and knowledge of genetics and genomics, this market is cutting through the fog of multiple vulnerabilities.

Pharmaceutical companies must safeguard their assets as regulatory requirements and harsh tax reform weigh on the market's momentum. Insurance for pharmaceutical companies ensures that patients' needs are met on a consistent basis and that companies, in general, stay afloat.

How much does Insurance for Pharmaceutical Companies Cost?
The cost of insurance for Pharmaceutical companies will depend on several things, including the size of the company and the stage of the company in its development process. 
Other factors include
  1. Exposures: risks being insured.
  2. Company practices: views on safety, compliance, and risk management.
  3. Program structure: the amount of deductible and willingness for a company to assume more risk
  4. Claims history: the type and amount of past claims against the company

The Top 6 Risks for Pharmaceutical Businesses: How to insure against them?
As the pharmaceutical industry changes, so do the risks that pharmaceutical businesses face on a daily basis. Whether they’re making new drugs, improving old ones, or investing in clinical trials, companies in this industry are taking significant risks both in terms of their finances and their reputations. Today, we take a look at the top Six risks that pharmaceutical businesses face and offer advice on how to mitigate them with insurance coverage.

1. Regulatory Risk
This risk refers to any mandate, regulation, or guideline that may hamper your business's ability to operate. Some examples of this would be changes in the marketplace, formulation of a prescription drug, and new legislation.

Business insurance can help mitigate regulatory risk by helping you maintain sufficient funds and prevent losses. Regulatory risk is also a great reason to look into small business insurance because many small businesses are not aware they are at risk due to their size and limited resources.

2. Property Risks
Property risks are a serious problem in the pharmaceutical industry. Disputes over patents and intellectual property, especially patents on new drugs, often lead to lawsuits, which create uncertainty that makes it difficult or impossible for businesses in the pharmaceutical industry to plan. These kinds of disputes can last years, but because they involve public institutions such as governments or universities they're virtually never settled out of court. 

Insurance is one way of dealing with these risks; business insurance policies can help protect your business from property damage due to accidents, theft or fire. 

3. Product Liability
Product liability insurance protects your business from a product-related lawsuit. Liability may result in: personal injury, property damage, or even environmental damage that occurs because of the use of the product. Small business insurance can help protect your assets with much lower premiums than those charged by large companies, while providing a similar level of protection.

Small businesses are not usually affected by company-wide liability like larger organizations. You can protect yourself by checking the policies before you buy or make changes to equipment or products you are supplying. Some of the coverage includes different forms of property damage (including theft), bodily injury, legal defense costs, and more. 

There is also coverage for employees if they injure themselves on the job; such injuries might happen when using dangerous tools or materials at work. Product liability insurance covers losses due to faulty products--for example, if someone uses a drug that's later found to be dangerous, it will cover any losses incurred due to wrongful death lawsuits.

4. Cyber Security
Cyber security is one of the top risks for businesses in the pharmaceutical industry. Hackers have a single goal: Data. And it's becoming increasingly easy to get access to large amounts of sensitive data, quickly and with less risk than ever before. So what can you do? Take advantage of your insurer's expertise by asking questions like these: What types of cyber threats does your insurance cover? What type of cybersecurity coverage should I be thinking about investing in? Is there an annual limit on cybersecurity coverage, or will I be liable for any breach even if it exceeds my policy limits? The more informed you are about your cyber risks, the better prepared you'll be to protect yourself from breaches.

5. Political Risk
In the pharmaceutical industry, there are a number of political risks that a company may face. The reason why there is such an emphasis on political risk is that one company can have its best-performing product cut off at the knees by government regulations. Political risk insurance would cover a business in case its pricing was reduced or if the company was refused coverage for products due to price controls. For example, as of December 1st 2016, China has required all foreign pharmaceutical companies to first form joint ventures with Chinese companies before they will be able to produce and sell drugs in China. That rule alone will dramatically change the profitability forecast for most major pharma companies.

In order to protect themselves from this type of event, a company should consider adding liability insurance which would cover losses related to canceled contracts or delays in production due to actions taken by regulatory agencies.

6. Product Recall
When a product is recalled, it is often due to some kind of problem that occurred with the product. The problem can range from a design flaw or malfunction in production, to mislabeling or incorrect storage. In some cases, a recall may also happen when the company realizes they have a potential manufacturing defect in one batch of products. Either way, it could lead to potential lawsuits and injury claims if you do not do your research and respond appropriately. You will need to hire a lawyer and make sure any legal proceedings are handled correctly. A good insurance plan will allow you time to gather information about the safety of your product, as well as let you know what to expect once the recall is announced.

So now you know the risks for pharmaceutical businesses. Of course, it's impossible to prepare for every scenario. Instead, take a look at these five most significant risks and choose an insurance package that protects your business from those threats. That way, you can focus on what you do best: making groundbreaking drugs that make people's lives better. 

Startups are always looking for more capital to finance their company. Capital is one of the biggest reasons why startup companies fail-but with funding comes risk. And unfortunately, there is no magic solution to manage funding risk; all a startup can do is try its best and hope it gets lucky enough not to run out of money before success finds them.

There are some other common issues that could come up in any type of business in today's changing world environment including things like cyber-attacks, employee turnover or misuse of corporate data. Insurance can help mitigate some of these issues that said, startups have to consider if they're financially prepared to meet insurance requirements or whether they're better off taking a gamble on another unknown.

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