About us
The purpose of the Finnish Co-operative for Pharmaceutical Injury Indemnities is to take out the pharmaceutical insurance for its members.
The Co-Operative represents the policyholder members in the context of the medicine-related injuries insurance.
Most of the members are pharmaceutical companies but other manufacturers of medicines, including pharmacy and hospital representatives, can also join the Co-operative. The members are responsible for the Co-operative expenses in proportion to their membership shares.
The Co-operative's largest expense item is the insurance premium related to the insurance for medicines-related injuries.
The Co-operative purchases the pharmaceutical insurance from the Finnish Mutual Insurance Company For Pharmaceutical Injury Indemnities. Acting on behalf of the Co-operative, the Finnish Mutual Insurance Company For Pharmaceutical Injury Indemnities is also in charge of the claims handling related to the pharmaceutical insurance.
A quarter-century track record
The insurance for medicines-related injuries taken out by the Co-operative for its members entered into force in 1984. Today, the insurance has a history of a quarter of a century.
Over the years, the pharmaceutical insurance premiums and the criteria for allocating them between the underwriter and the policyholders have been slightly modified and the insurance itself has undergone minor changes. However, the rationale of the insurance remains the same.
In the beginning, the premium was calculated as a fixed percentage of the pharmaceutical sales. During the first insurance period it was 0.29% of the value of the pharmaceutical sales.
Moreover, the Co-operative faced a 5 million markka annual deductible for any occurrence of the insured event. Quite a large sum, the deductible factually meant that the payments made by the policyholders accounted for as much as 0.56% of the then annual value of pharmaceutical sales.
A few changes along the way
Over time, statistical data on the medicines-related injuries started to accumulate, and it was noted that the number of injuries, the increase in the pharmaceutical net sales and the premium were not showing a parallel trend. This resulted in a change in the premium calculation criteria.
Detached from the value of the pharmaceutical sales, the premium started to be quantified in the same manner as is customary in the insurance business in general, i.e., on the basis of past injuries and future risk assessment.
The agreement on the first premium calculated using these criteria was made at the beginning of 1993.
The terms and conditions of the insurance were also revised on that occasion.
Current situation
In 2012, the premium payable for the pharmaceutical insurance is about 4,8 million euros.