Reimbursing Side Effects of Pharmaceutical Drugs - a Scandinavian Speciality Einar Perman

OPINION SECTION

Abstract: Pharmaceutical insurance applies to drugs which are Address: Trygg-Hansa Insurance approved by Swedish licensing authorities and are marketing in Company, Fleminggatan 18, Sweden. This paper reviews the pharmaceutical insurance. Stockholm, S-19626, Sweden.

Correspondence: Einar Perman, PhD., MD [email protected]

Key Words: Pharmaceutical Insurance, Side Effects

Received: November 1, 1996 Accepted: January 10, 1997

Journal of Insurance Medicine March 1997, 29:36-38

As Medical Director I evaluate applications "which could have been avoided" in connec- for life, sickness, waiver of premium and tion with diagnostic procedures (endoscopy, accident insurance. I also evaluate claims radiology, etc.) or treatment (surgery, radiation submitted to Pharmaceutical Insurance, treatment, etc.). If the injury "could have been which is handled by Trygg-Hansa. This avoided" the case is decided without legal scheme is a Scandinavian speciality, little proceedings. known in North America. Its background, design, claims, costs and results are reviewed It was, however, recognized that side effects in this article. of pharmaceutical drugs could not be reimbursed under the Patient Insurance scheme, Patient Insurance and Pharmaceutical since side effects cannot be avoided. As a Insurance complement Pharmaceutical Insurance was Both the Swedish medical community and its started in 1978 as a voluntary undertaking by governing bodies have always disliked med- companies marketing pharmaceutical drugs ical litigation of the type prevalent in the U.S. in Sweden. Its premiums are paid by the com- and some other countries. When, in the early panies. It reimburses patients who have suf- seventies, there were signs that patients (and fered rare and significant side effects, or some lawyers) were increasingly active in severe variants of common side effects. The this field, two no-fault insurance schemes decision if a claim is to be reimbursed is made were started. without legal proceedings. Finland and Norway have similar insurance schemes. Patient Insurance started in Sweden in 1975. It was introduced by the government and pre- Which side effects are reimbursed ? miums are paid mainly by the State. It reim- Pharmaceutical Insurance can accept claims burses patients who have sustained injuries for side effects caused by pharmaceutical 36 VOLUME 29 NUMBER 1 1997 JOURNAL OF INSURANCE MEDICINE drugs approved by the Swedish licensing several reasons why Swedish taxes are high). authorities and marketed in Sweden. The same applies to pharmaceutical drugs undergoing Pharmaceutical Insurance will only reimburse clinical trials. "Alternative remedies," such ascosts not paid by the state medical care system herbal preparations, homeopathic pills, etc. are or other sources. When a claim is accepted, not included. The pharmaceutical drug must reimbursement can be made for a number of have been obtained in Sweden and used such costs. It is made for medical consultations, according to accepted medical practice (if not, hospital care, nursing care, physiotherapy, the claimant can direct his claim to Patient transportation, etc. Permanent defects (e. g., Insurance). loss of hearing, paraplegia) are reimbursed, as well as loss of current and future income. An There must be a strong probability that the example of how a claim is settled is given in injury is due to a side effect of the pharmaceu- Fig. 1. In addition, costs incurred by family tical drug. This means that the injury should be members costs (e. g., funeral expenses) are noted as a side effect in the FASS (the Swedish reimbursed. equivalent of the PDR), or adequately docu- mented in the medical literature. The injury has How are claims handled ? to be fairly severe. Injuries which decrease abil- The patient fills out a claim form and the ity to work for less than three months are usu- attending doctor adds medical information. ally not reimbursed. Psychiatric side effects The claim is then submitted to the insurance (depression, psychotic reactions, hallucina- company (Trygg-Hansa) which may request tions, etc.) are reimbursed only if they are direct additional information (medical records, consequences of a somatic side effect. Rare side etc.), outside medical expertise may also be effects are more likely to be reimbursed than consulted, particularly for establishing if the common ones, since they are less likely to have injury was due to a side effect. been considered by the patient’s doctor. Finally, the severity of the side effect has to be consid- I then review the claim with the company’s ered in relation to the disease for which the claim specialists, and they decide if the claim pharmaceutical drug was prescribed, and to the will be reimbursed. If the patient is not satis- general medical condition of the patient. The fied, the company’s decision can be appealed to numerous and serious side effects of cytotoxic a review board (Lakemedelsskadenamnden). and similar pharmaceutical drugs are usually This board has four members appointed by the not reimbursed when used for the treatment of Swedish Cabinet. Legal competence is well rep- malignant tumors. resented and the pharmaceutical industry has only minority representation. No reimbursement is given for lack of effect of a pharmaceutical drug, or if the injury was due How are claims reimbursed ? to inappropriate activity when the drug was Reimbursement follows Sweden’s general used (e. g., driving after taking a sleeping pill). legal standards for damages. Payments are, Injury due to abuse of a pharmaceutical drug is however, limited to 5 rail. Sw.Cr. (U.S.$ likewise not reimbursed. 700,000) per person, per year. If several claimants are to be reimbursed for the same Which costs can be reimbursed ? side effect (serial injury), the upper limit is 150 Sweden’s state medical care system absorbs a rail. Sw. Cr. (U.S.$ 21,000,000) per year for large share of every citizen’s costs for medical that particular side effect. care. At present there is an upper limit of 1800 Sw.Cr (U.S.$ 230) per person, per year. Costs The most serious and costly side effect that above that limit are paid by the state (one of Pharmaceutical Insurance has reimbursed so

37 JOURNAL OF INSURANCE MEDICINE VOLUME 29 NUMBER 1 1997 far is HIV infection via blood factor concen- Case description: A 50-year-old woman, trates. As of the end of 1994, a total of 97 HIV- working in a restaurant, starts taking a infected persons have been reimbursed with NSAID because of hip osteoarthritis. After a total of 57 mil. Sw. Cr. (U.S. $ 8,000,000). In a week she develops a severe Stevens- addition, five HIV infected partners of those Johnson syndrome, initially requiring hos- patients have received a total of 2,4 mil. Sw. pitalization because of nutrition problems. Cr. (U.S. $ 34,000). Off work for a total of two months. Complete recovery. Claim submitted to Has Pharmaceutical Insurance been a good Pharmaceutical Insurance. thing ? About 450 claims are handled every year, and Evaluation of claim: Known, rare and 25-30 percent of these are reimbursed. About severe side effect. Clear time relationship: 10 percent of refused claims are appealed to drug - side effect. Drug used for compara- the review board, which reverses about 10-20 tively benign condition. percent of appealed decisions. Her claim was reimbursed as follows: Pharmaceutical Insurance seems well accept- Ordinary income during two ed by all concerned, only a few legal pro- months period $4550 ceedings related to side effects are in progress against pharmaceutical companies in Reimbursed by employer and state $-3650 Sweden. Actual loss of income $900

Smart money $680

Extra costs for hospitalization, medical consultations, pharmaceutical drugs, transportation, assistance at home, etc. $760

Total reimbursement to patient U.S.$ 2340

Fi0. 1. Example of how a side effect claim is decided and the claimant reimbursed. It should be pointed out that Swedish smart money reimbursement (i.e. money paid to the patient for pain and suffering) are generally lOW.