of pharmaceuticals in drinking water,
the threat to human health is so low
that the WHO didn’t even think it
necessary to develop a formal health-based guideline for pharmaceuticals
and drinking-water quality.
That won’t stop the plaintiff’s bar.
“Plenty of smart attorneys will
want to test the waters,” said Mark
Ware, vice president and director at
brokerage IMA Financial, who then
asked forgiveness for the pun. The
dearth of evidence demonstrating
correlation, he added, does not
mean people can’t bring class actions
against pharmaceutical companies.
Vetter agreed that third-party
legal claims are “really where things
could get potentially challenging.”
Nonmeritorious types of claims will
be a challenge, he said.
We can only surmise whether Big
Pharma knows the risk of its products
tainting drinking water, year after year,
pill after pill. Perhaps a smoking-gun
document will emerge during lawsuits
20 years from now, just as such
damning evidence came out regarding
cigarettes and Big Tobacco’s knowledge
about adverse effects and addition.
In any case, pharmaceutical
companies can act now to mitigate
some of their exposure by creating
“defensible space,” demonstrating that
they managed the issue even before
regulators passed guidance, said Ware.
One way, Ware said, would be for
the drug manufacturers to design
drugs that have higher absorption
rates in the human body. They might
also develop procedures, perhaps
in partnership with pharmacies, for
consumers to return unused drugs
(instead of, say, dumping them in the
Getting out in front of this risk could
be a wise move for the largest drug-makers in particular, given their largely
self-insured risk-transfer program.
Firms with coverage in the
traditional insurance market may
find a duty to defend or requirement
for indemnification with their
general liability and product
liability policies,;Ware;said. Sure,
these policies will have a pollution
exclusion. But it might not be broad
enough to exclude coverage when the
product itself is the pollutant.
Insurance could be available for
another sector exposed to this risk,
municipal water treatment facilities,
according to Vetter. The coverage
he has in mind, pollution legal
liability environmental is for more
traditional pollution scenarios—a
water treatment plant being fined or
sued for releasing toxins, for example,
or by the drug companies themselves
having a spill at one of their facilities.
“That has a lot of potential cost,”
When Vetter approached
environmental insurance markets a
few years ago when this issue first
appeared on the radar, some markets
were willing to entertain such risk-
transfer products for these scenarios.
MATTHEW BRODSKY, a former Risk &
Insurance® editor, is editor-in-chief of Wharton
SEPTEMBER 5TH, 1: 45 A.M. A DEADLINE
AND A BUSINESS
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• Pharmacy companies can act now
to mitigate their exposure.
• The FDA keeps adding new elements
to its list of regulated substances.