Pharmaceutical heist highlights a growing trend
The $75 million theft of pharmaceuticals from an Eli Lilly warehouse on Sunday in Connecticut is just the latest in a series increasingly large thefts of prescription drugs. Authorities say the thieves lowered themselves from the roof of the warehouse after cutting a hole in it. According to Freight Watch International, a supply cain security consultant, the number of prescription drug shipment thefts quadrupled over the past four years.
Insurers of work in process and finished goods in the pharmaceutical industry are alarmed at the claim trends. Michael Falvey, President of Falvey Cargo Insurance outlined his new underwriting position: “It is crucial for clients to have detailed information on how their products are secured by carriers in transit. We have extensive experience in working with clients to make sure that the transportation carriers are using best in class processes. Clients that are not focusing on this are being subject to higher theft deductibles, increased rates and warranties. This is particularly important when transit limits are exceeding $5 million per truck or aircraft.”
Another insurer said earlier today that they are already experiencing stricter guidelines and are looking for substantially higher premiums for coverage. It looks like the size of last week’s theft, couple with the sophisticated means by which the thieves were able to steal the goods, are both having an impact on the marine insurance market with respects to pharmaceutical risks.