Thursday, 17 May 2012
French Mediator drug scandal reaches court with insurers keeping close watch
A high profile liability trial involving French pharmaceutical company Servier began this week in Paris closely watched by the general public and an interested insurance market.
Jacques Servier, the 90-year-old founder and chairman of Servier, along with four other executives, risks going to jail and faces heavy fines if a Nanterre court finds them guilty of causing deaths and injuries as a result of manufacturing Mediator, a diabetes drug that was often prescribed for weight-loss purposes.
Servier is accused of knowingly misleading medical practitioners about the risks of taking the drug. Hundreds of patients have joined the civil case seeking compensation of about €100,000 each from the company. The drug is suspected of having caused the deaths of anything between 350 and 2000 people over more than three decades. Servier has denied the accusations.
The company is already being sued for the so-called ‘Mediator scandal’ in another criminal court in Paris and has argued that it should not be submitted to separate trials at the same time. As a result Servier has managed to postpone the proceedings for a week on procedural grounds. The trial will resume on Monday 21 May.
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The case is one of France's biggest health-related scandals and has fascinated the public since it came to light in 2010. It has not only tainted the reputation of Servier, but also of the country's public health authorities that have been accused of failing to protect consumers.
But the Mediator case has not had much impact on the French pharmaceutical market as firms have complained for some time that cover is restricted. However it has made insurers even less keen to touch certain risks.
A recent controversy surrounding PIP, a French producer of breast implants that are accused of causing injuries to patients, has not helped to smooth the market.
Mediator is accused of causing fatalities and injuries while it was used as a complement to treatments for diabetes. It is a generic drug that used the same active ingredient and was also taken by people who wanted to lose weight.
It is estimated that 5 million people took the drug for an average of 18 months each between 1976 and 2009, at which point the drug was taken off the market.
The fact that Mediator was used as a complement to other treatments raises questions that are still being addressed by the insurance market.
“It is still a bit early to see any changes in the way insurers approach the matter of auxiliary drugs,” said Sylvie Menashe, from independent broker CRF, in Paris.
“Insurance companies have often refused to take a position about this risk. This situation has not really changed. We can say that insurers that were previously reluctant to subscribe to this kind of risk are even less inclined to take them today,” she pointed out.
Capacity in the French insurance market for pharmaceutical and related companies, such as biotechnology firms, is not as big as many risk managers would like.
Insurance companies will take risks of up to €30m. HDI is the largest player with Chubb also playing a pre-eminent role in the market, Ms Menashe said.
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