Insurance cover negotiation

It is normally required that the contractor takes insurance cover against damage to the works, in the joint names of the contractor and client. This obligation should not be understood as being upon the contractor only it is a joint insurance. It is possible that there will be discrepancies between the exceptional risks under the contract and those covered under the insurance. These differences must be negotiated and agreed upon. 

While the US doesn t believe in the government negotiating prices with the pharmaceutical industry, the rise of formularies by Medicaid and by private insurers has played a similar role in cost contaimnent and has dramatically transformed the potential returns on research investment. The principle of tiered formularies is theoretically simple - insurers cover the cost of basic dmgs for an indication and the consumer then makes choices about how much additional value they want, and accepts the additional costs. Most formularies have three tiers, possibly four as shown in Table 11. Managed care formularies vary considerably in the co-payments expected for each tier, and the tiers assigned to a given dmg. 

The suggestion to use prevailing transaction prices is also less straightforward than it seems for new products. In country U, analysts would need to estimate what the price for the new product would be. Not only is this difficult, but it is virtually certain that the price will depend on the public insurer s reimbursement policy if patients covered by the public insurer are to be major users of the new product. In country T, where prices are negotiated, the advice to use average price obviously presents a complex problem of simultaneous decision making. The public insurer cannot decide whether to reimburse the new product until it knows its price, but that price will be highly dependent on what the reimbursement is. 

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