As Red Cross fined $9.6M, questions arise on use of penalties

Posted: January 18, 2012

As the Red Cross faces yet another fine in a decadelong series of multimillion-dollar fines for unsafe blood-management practices, questions are being raised about the effectiveness of the penalties.

The Food and Drug Administration's latest fine of $9.6 million covers many facilities, but focuses on hundreds of violations found during a late-2010 inspection of two new blood-donor support centers in Philadelphia and Charlotte, N.C.

The FDA announced the fine Friday, exactly a week after the consumer advocacy group Public Citizen contended that the agency was stalling. The group said federal officials had agreed on a fine "months ago."

Including the latest sanction, the FDA has levied $47 million against the Red Cross blood business since 2003. It cited chronic problems with understaffing, inadequate training, quality assurance, and product surveillance that put blood donors and recipients at risk.

"Many of the violations recounted in this letter are virtually identical to violations charged" in previous penalty-notification letters, FDA official Evelyn Bonnin wrote Friday to the Red Cross. The organization "has failed to take adequate steps to correct them."

In a written statement on its website, the Red Cross maintained that it had corrected the problems and expressed "disappointment" that the FDA "believed it necessary to issue a fine" for an inspection done 15 months ago.

Yet, the Red Cross would not release more-recent inspections because they are considered "open."

"You'd have to go through the FDA to get them," said Red Cross spokeswoman Stephanie Millian.

An FDA spokeswoman said Tuesday evening that the agency did not have time to answer questions submitted by e-mail early in the day.

Sidney Wolfe, director of Public Citizen's Health Research Group, said the FDA's unsuccessful pursuit of compliance has become "a vicious continuum."

"The longer the FDA waits to impose fines, the more opportunity the Red Cross has to say: 'That was then. This is now. Everything is fine,' " Wolfe said from his Washington office.

Even if the FDA were to act in a more timely fashion, fines simply would not be enough incentive for improvement, Wolfe and other observers believe.

"The Red Cross considers the fines part of the cost of doing business," said Daniel Borochoff, president of CharityWatch, a watchdog group that evaluates the efficiency of charities. "They may feel it's cheaper to pay the fines than to handle the blood supply in a more correct way."

"These fines," echoed Wolfe, "are ridiculously low."

The Red Cross said it had made provisions for the fine.

"In the scope of a $2 billion enterprise, the fines recently levied are unlikely to cause an increase in fees charged for our products and services," Millian e-mailed in answer to questions. "We have sufficient funds to cover this fine."

Since 1993, the Red Cross has been under a federal court order to improve the way it collects and processes blood.

Many of the latest lapses cited by the FDA involved bureaucratic steps - for example, final reviews of completed cases were delayed. But other infractions were potentially serious. The FDA cited miscoding of donors' names and improper management of "suspect" blood.

"The failures ... increase the likelihood that unsuitable blood products will be transfused," the FDA's Bonnin wrote.

The Red Cross, which controls 43 percent of the nation's blood supply, said in its statement that "we are not aware of any adverse donor reactions or patient issues due to the problems in the FDA report."

Identifying such harms is difficult: Did an illness arise from a tainted transfusion, or from the surgery, or from trauma that made the transfusion necessary?

While the FDA report did not say patients were harmed, it discovered that eight units of blood stored at the wrong temperature wound up being transfused - even though the support center's records said those units were destroyed.

Wolfe said the FDA should ask the federal court that approved the consent decree to hold Red Cross officials in contempt.

"How many times is the Red Cross going to make these mistakes?" Wolfe asked. "It's just a matter of time before there will be injuries."

Borochoff agreed: "Some stronger measures need to be taken. People need to be held personally accountable."

Fines notwithstanding, CharityWatch gives the Red Cross a high efficiency rating because a large percentage of its funds goes to services.

The Red Cross says it has not seen any backlash. "Red Cross donors have confidence in our organization," Millian e-mailed, "and have demonstrated that they are unlikely to stop donating blood because of events that happened 15 months ago."


Contact staff writer Marie McCullough at 215-854-2720 or mmccullough@phillynews.com.

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