Bad blood separates Red Cross and FDA

By Gilbert Gaul

The Washington Post

WASHINGTON — The American Red Cross, which completed a huge blood drive after the Sept. 11 terrorist attacks, is still struggling to prove to federal regulators that it can collect blood safely and keep track of the 6 million pints donated every year.

This week, the nonprofit organization goes back to court to update U.S. District Judge John Penn on its efforts to improve a safety record that has troubled regulators for more than a decade and puts it at risk for multimillion-dollar penalties.

The safety issue has escalated tension between the Red Cross, the nation’s largest blood supplier with a $1.5 billion-a-year program, and the Food and Drug Administration, which has cited violations in Red Cross blood collections repeatedly since the mid-1980s. The Red Cross entered a court-supervised consent decree in 1993, promising to make major improvements in its testing, handling and tracking of blood supplies.

The organization’s progress has not been fast enough to satisfy the FDA. While acknowledging that the Red Cross has made some advances, government attorneys have said in court filings that its claims of improvements are "inaccurate and incomplete." The FDA says it has found "significant deviations" from safety regulations 10 times since the consent decree was entered.

An April 2000 inspection of the Red Cross’s national blood-collection headquarters in Arlington, Va., for example, resulted in 21 pages of findings. Among the problems cited was the release of blood products that tested positive for a virus that can cause retardation and liver damage in infants.

An inspection this spring of the Red Cross’s Salt Lake City blood facility found many problems, including failing to follow up with potential high-risk donors, delivering blood products outside required temperature ranges and breakdowns in quality assurance.

At the Atlanta Red Cross center in 1999, inspectors found that workers had commingled "acceptable blood products and blood products that had positive test results for infectious diseases" because of inadequate storage facilities.

Red Cross officials say the blood supply is safer than ever and that the risk of contracting a disease through a transfusion is minimal. Moreover, said Brian Rhoa, vice president of finance and business planning for blood services, the blood collection after Sept. 11 was demanding, but "I believe we came through that with no safety or compliance issues."

However, the Red Cross’s interim chief executive, Harold Decker, said he is concerned "that an organization under a consent decree since 1993 has not been able to get out from under it."

  • ?
  • ?
  • While many Americans think of the Red Cross as a volunteer disaster relief agency, its biggest activity is collecting, processing and selling blood. The organization spends five times as much on its blood business as it does on disaster relief, and revenue from blood sales to hospitals has tripled in the past decade.

    In essence, the Red Cross is attempting to operate the equivalent of a highly sophisticated, $1.5 billion-a-year pharmaceutical company under the umbrella of its nonprofit parent, former Red Cross executives said. If the organization’s blood business were a free-standing company, it would be the size of DuPont Pharmaceuticals before it was acquired in October by Bristol-Myers Squibb Co.

    With 36 regional centers, nine testing laboratories and 16,000 employees, the blood program’s size and complexity pose significant management challenges as the Red Cross faces growing pressures from regulators and the public for a risk-free blood supply. One measure of those challenges is that the Red Cross recently appointed new management for blood services — its fourth management turnover this decade.

    Frederick Kyle, a former pharmaceutical executive who headed the Red Cross blood program in the early 1990s, said the culture required to run a highly regulated health-care business such as collecting and processing blood is far different from the social-services culture that pervades the Red Cross.

    "To be successful, Red Cross must organize itself to clearly separate blood from social services to allow the blood program to staff and organize itself like a pharmaceutical company that can focus single-mindedly on its mission," Kyle said.

    Jeffrey McCullough, a physician who preceded Kyle, said the Red Cross’s national network of blood centers makes it difficult to adopt a pure business model. "Red Cross has already had a decade of effort to emulate pharmaceutical manufacturing corporations and this does not seem to have had a huge impact," McCullough said.

    The vacillation over the blood program’s direction extends from the 50-person Red Cross board to its hands-on managers, other former executives said. As a result, the mission suffers. "One time it’s treated like a competitive, for-profit business. Another time, like a charity," one said. "At one point, some of the executives even began referring to it as ‘the company,’ as if it were Merck or General Motors."

    Red Cross executives invoked almost precisely that language last year when the FDA moved to levy fines, complaining that regulators were treating it like a large pharmaceutical company, not a charity.

  • ?
  • ?
  • Problems in the Red Cross blood program surfaced in the 1980s, before a test for detecting the AIDS virus was developed. For years, the blood program was overshadowed by disaster relief and accounted for less than one-quarter of the organization’s spending. But by 1985, the situation had reversed, with the Red Cross collecting nearly $500 million a year from blood sales — 60 percent of its revenue. The fees cover the cost of collecting, testing and distributing blood to 3,000 hospitals nationwide.

    At the time, the blood program was highly decentralized, with more than 50 centers, each with its own director. There were 28 separate computer systems. A donor who tested HIV-positive at one center could appear at another, which would not have a record of the test.

    In 1988 the FDA found that the St. Louis Red Cross blood center had misplaced thousands of records, ignored safe testing procedures and was storing safe blood plasma alongside plasma that had tested positive for hepatitis or the AIDS virus.

    That year, the Red Cross agreed to evaluate its computer systems, establish rules for tracking dangerous donors and develop training programs.

    By the early 1990s, it was clear the agreement had not worked. FDA inspections continued to turn up numerous safety violations, including the release of blood products that had tested positive for viruses. The FDA threatened to revoke the licenses of three Red Cross centers.

    In May 1991, the Red Cross announced a plan to spend more than $100 million on "a complete transformation" of the blood program. Elizabeth Dole, who was then president of the Red Cross, said the organization would develop a single computer system for all its blood centers, centralize its testing laboratories and require all workers to undergo extensive retraining. Since then, the Red Cross has invested $280 million in its blood program, much of it in response to FDA demands.

    But the transformation plan was "deeply flawed" and intended to buy the Red Cross time with regulators and the public, said an executive who was involved. The plan called for shutting down each blood center as employees were trained. "Yet somehow Red Cross expected to collect the same amount of blood. We dropped that idea and redid the whole plan."

    A few years later, the Red Cross hired a consulting firm that recommended a different approach: centralizing control at national headquarters.

    The Red Cross subsequently consolidated testing for viruses at nine laboratories, built a new computer system and added employees in an effort to meet federal safety standards.

    It wasn’t enough to satisfy the FDA. The May 1993 consent decree required the Red Cross to undertake top-to-bottom improvements, or face being held in contempt of court. Since then, the FDA says, it has spent more than 30,000 hours inspecting Red Cross centers.

    Nearly nine years later, the FDA and Red Cross disagree sharply on the extent of the Red Cross progress. The organization says the FDA hasn’t found safety violations at its new testing laboratories and notes that FDA citations have fallen from an average of 15 per site in 1994 to four per site in 2000. Infection risk from a transfusion has dropped "one thousand fold," it says.

    But in court filings, government attorneys characterize Red Cross claims as telling only part of the story.

    At an Aug. 14, 2000, meeting with FDA officials, Bernadine Healy, who was Red Cross president at the time, said she had uncovered "both a willfulness and a lack of urgency on the part of some ARC (American Red Cross) staff in not responding to FDA, and that there were widespread infrastructure, quality and auditor problems at ARC," according to an FDA summary of the meeting.

    The FDA moved last fall to amend the consent decree to include penalties of as much as $15,000 a day for each violation. Red Cross lawyers calculated that the fines could cost the organization as much as $15 million a year.

    The fines would only add to the financial burden the consent decree has imposed on the Red Cross, the organization’s lawyers argued in court filings. They said the Red Cross has cooperated in trying to resolve its problems, which have attracted critical publicity. Extra penalties "would needlessly divert resources from its efforts to improve Blood Services and substantially compromise the goal of a safe and available blood supply," the lawyers said.

    FDA officials contended that after more than a decade of trying to coax the Red Cross into compliance, fines were necessary to get the organization’s attention.

    "After 15 years of noncompliance and distribution by ARC of many units of unsuitable product, the public is entitled to more than another round of assurance by ARC that it will continue to make progress," the FDA said last year.

    In August, Penn ordered the two parties to take their dispute over fines to mediation. The hearing on Friday is expected to include a review of their progress so far.

    Talk to us

    > Give us your news tips.

    > Send us a letter to the editor.

    > More Herald contact information.

  • More in Local News

    A Cessna 150 crashed north of Paine Field on Friday evening, Feb. 16, 2024, in Mukilteo, Washington. The pilot survived without serious injury. (Courtesy of Richard Newman.)
    ‘I’m stuck in the trees’: 911 call recounts plane crash near Paine Field

    Asad Ali was coming in for a landing in a Cessna 150 when he crashed into woods south of Mukilteo. Then he called 911 — for 48 minutes.

    Snohomish County likely to feel more like winter, beginning Monday

    Get ready for a mix of rain and snow this week, along with cooler temperatures.

    Anthony Boggess
    Arlington man sentenced for killing roommate who offered shelter

    Anthony Boggess, 33, reported hearing the voices of “demons” the night he strangled James Thrower, 65.

    Mt. Pilchuck covered in snow is barely visible through the clouds as the sun breaks through illuminating raindrops as they fall off of the Mountain Loop Highway on Wednesday, Feb. 7, 2024 in Granite Falls, Washington. (Olivia Vanni / The Herald)
    ‘Active’ weather brings rain, snow, hail, fresh powder to Snohomish County

    Up to an inch of snow could accumulate in the lowlands. Three inches of rain could fall in Darrington. And Stevens Pass is “doing quite well.”

    Joanne Fisher, right, a meat wrapper with the Marysville Albertsons, hands a leaflet to a shopper during an informational campaign on  Wednesday, Nov. 9, 2022. Fisher was one of about a dozen grocery store workers handing out leaflets to shoppers about the proposed merger between Albertsons and Kroger. (Mike Henneke / The Herald)
    US sues to block merger of grocery giants Kroger, Albertsons

    Grocery workers in Snohomish County and elsewhere have argued the merger would stymie competition and hurt workers.

    The Senate Ways and Means Committee during its meeting on Monday, Feb. 26, 2024, where the panel indicated it would not move ahead with legislation to cap residential rent increases at 7%. The move effectively killed the bill for the 2024 legislative session. (Bill Lucia/Washington State Standard)
    Plan for 7% statewide cap on rent increases fails in Olympia

    State Sen. June Robinson, D-Everett, told reporters the bill did not have enough support to move it forward.

    People look out onto Mountain Loop Mine from the second floor hallway of Fairmount Elementary on Wednesday, Jan. 10, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
    Mining company ordered to stop work next to school south of Everett

    After operating months without the right paperwork, OMA Construction applied for permits last week. The county found it still violates code.

    Shoppers cross Alderwood Mall Parkway after leaving the mall and walking through its parking lot on Thursday, Feb. 15, 2024, in Lynnwood, Washington. (Ryan Berry / The Herald)
    Lynnwood police seek 3 suspects after pursuit, brief shootout

    The driver of a stolen car intentionally hit a teen boy Sunday, officers said. Police pursued the suspects near I-5.

    Starbucks employee Zach Gabelein outside of the Mill Creek location where he works on Friday, Feb. 23, 2024 in Mill Creek, Washington. (Olivia Vanni / The Herald)
    ‘We cannot keep up’: Mill Creek Starbucks workers file for unionization

    The cafe’s crew joins the ranks of the 624 stores nationwide, including two other locations in Snohomish County.

    The Nimbus Apartments are pictured on Wednesday, March 1, 2023, in downtown Everett, Washington. (Ryan Berry / The Herald)
    Snohomish County has the highest rent in the state. Could this bill help?

    In one year, rent for the average two-bedroom apartment in Snohomish County went up 20%. A bill seeks to cap any increases at 7%.

    The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
    Westwood Shipping Lines, an Everett mainstay, has new name

    The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

    A Snohomish County no trespassing sign hangs on a fence surrounding the Days Inn on Monday, Feb. 12, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
    Meth cleanup at Edmonds motel-shelter made matters worse, report says

    Contamination has persisted at two motels Snohomish County bought to turn into shelters in 2022. In January, the county cut ties with two cleanup agencies.

    Support local journalism

    If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.