The American Red Cross will have to pay $16.18 million in federal fines because of a failure to comply with safe practices dealing with collection and manufacturing of blood products, including red cells, plasma, and platelets, the U.S. Food and Drug Administration announced late yesterday....The fines include $9.79 million for mismanagement of certain blood products and $6.39 million for violations of Good Manufacturing Practice standards. The American Red Cross processes 43% of the nation's blood supply, or about 6.5 million units, which are turned into 9.5 million blood products used by patients each year....In a response posted on its website last night, the America Red Cross said it is "disappointed that the FDA believed it necessary to fine us for prior violations dating back several years. The FDA also acknowledged no evidence that the Red Cross violations endangered any patients....The Red Cross is fully committed to meeting all FDA standards, and we have made significant progress over the past two years in improving our regulatory compliance by our implementation of system-wide changes to our operations....It's important to understand that many of the incidents cited by the FDA in the October 2009 notification occurred prior to the improvements made by the Red Cross. In fact, 98% of the events identified by the FDA took place in 2008 and before. The recalls cited represent 0.0775 percent of our blood products, which is less than one-tenth of one percent of our total number of blood products produced,"....In the FDA's statement, the agency said that FDA officials notified the ARC last October that federal inspections in 2008 and 2009 discovered violations, such as failure to identify manufacturing problems and failure to adequately investigate those problems.
These are fines and bad publicity that would put many healthcare businesses out of business. If a pharmaceutical company were involved, the news would probably be on the front page of most newspapers. But the ARC keeps rolling, providing 43% of the nation's blood supply. Here is a very good example of "too big to fail" outside of the financial sector. Why doesn't the ARC stake steps to avoid these recurring fines? First of
all, it doesn't need to -- it can pay the fines and there is generally
no public outcry that forces them to modify their systems and procedures. Secondly, it's a large
bureaucratic organization and would have trouble changing its culture
and operating procedures even if it wanted to. The span of these violations goes back at least seven years.
The spin put on this news of the new fine by the ARC is interesting. First of all, it says that this is mostly old news but the FDA responds that there were violations discovered in 2008 and 2009. Secondly and in relation to the scope of the problem, it calculates, to four decimal places, the percentage of blood products involved (0.0775%). Then, for the slower among us, it spells out that this is "less than one-tenth of one percent of our total number of blood products produced." What the ARC don't stipulate is that, given the fact that the organization processes 6.5 million units per year, the math works out to about 520 suspect units and certainly a larger number of blood components. Blood collection and blood transfusion is an unforgiving branch of medicine and all personnel and organizations involved must strive for zero errors. At least from the perspective of the FDA, the American Red Cross appears to be far from this goal.