Pharmaceutical

Heparin producer's insurers file lawsuit

The insurance companies for Scientific Protein Laboratories’ parent company, American Capital Ltd., are suing to nullify the policies with the laboratory, according to The Daily Record. The Wisconsin-based company entered a joint venture with Baxter International Inc. to produce heparin in China. Last year, heparin produced at that plant was found to have been contaminated with oversulfated chondroitin sulfate (OSCS), a heparin-mimicking material that can cause life-threatening allergic reactions. The contaminated heparin killed more than 80 people in the U.S. and sickened hundreds more before several batches of the blood thinner were recalled.

American Capital purchased 87 percent of Scientific Protein Laboratories in 2006. Scientific Protein Laboratories has a fair market value of $186.5 million. Last year, the parent company sought coverage from its insurers for lawsuits related to Scientific Protein Laboratories’ involvement in the tainted heparin scandal.

While Baxter International is at the center of the tainted heparin controversy, the Charter Oak Fire Insurance Co. and Travelers Property Casualty Co. of America argue that in its application for coverage, Scientific Protein Laboratories’ parent company American Capital claimed it had no subsidiaries and never mentioned Scientific Protein Laboratories or its China-based heparin venture, according to the report. In its lawsuit filed last week, the insurance companies claim that “American Capital provided false answers to Charter Oak and Travelers regarding the non-existence of subsidiaries.”

The lawsuit also claims that American Capital and Scientific Protein Laboratories entered into an agreement with Baxter International that included making payments to Baxter and giving “rights to insurance proceeds and benefits,” according to the report.