Insurance premium hike is unlikely despite drug costs

Worries that company medical insurance premiums could rocket following the approval of breast cancer drug Herceptin are largely unfounded, according to a medical expert.

Herceptin was licensed by the government drugs watchdog, the National Institute for Health and Clinical Excellence, last month. It has caused controversy over its cost – £20,000 for one year’s treatment – and whether or not it should be covered by the NHS or by private health providers.

Last week, major health insurer AXA PPP agreed that herceptin would be covered by its policies, despite the fact it was a preventative drug – a category not traditionally covered by the insurer’s policies.

Victoria Georgalakis-Hardy, strategic marketing director at AXA PPP, said: “We recognise that cancer treatment is developing, so we are changing our rules to cover these types of cancer drugs. As long as they are licensed, our policyholders will be covered for 12 or 36 months, depending on their level of cover.”

She told Personnel Today that over time this would affect the amount companies pay in premiums.

However, Nicky Crystal, who specialises in corporate healthcare at SPS Wellbeing, said concerns over premium rises had been “over-hyped”.

She said a combination of factors would limit the impact of claims in the corporate sector.

“Many sufferers of breast cancer are over 50, which means fewer staff are likely to need the treatment,” Crystal said. “Also, there are unlikely to be many claims in total, and corporate premiums are based on claims history and not the total number of claims made across the market.

”But she warned that there were similar drugs to Herceptin in the pipeline to deal with conditions such as colon and prostate cancer, which could cost up to £69,000 for a year’s course.As more conditions were covered by insurance schemes this would push up premiums, Crystal said.

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