Red Cross Agrees To Pay Fines for Future Violations of FDA’s Blood Safety Standards

The American Red Cross on Friday agreed in a court settlement to meet all FDA blood-safety rules or pay fines for failing to comply, the AP/Philadelphia Inquirer reports. The FDA has accused the Red Cross of "persistent and serious violations" of blood testing, handling and tracking regulations and about two years ago went to court to seek a contempt citation against the group for failing to follow a 1993 agreement on blood-safety standards (Schmid, AP/Philadelphia Inquirer, 4/13). In December 2002, an inspection report released by the FDA stated that the Red Cross had violated more than 200 blood safety laws. According to the inspection report, the Red Cross was unable to account for small amounts of blood infected with HIV and human cytomegalovirus; lacked management control and quality assurance oversight; had data integrity problems; failed to correct violations from previous inspections; released blood labeled as "unsuitable"; and failed to screen out people who were not qualified to donate blood. The FDA also found evidence of employees falsifying records and shipping orders without carrying out blood testing (Kaiser Daily HIV/AIDS Report, 12/23/02).

Agreement Details
The agreement calls for fines of up to $10,000 per event or $10,000 per day for violations of standard operating procedures, the law or consent decree requirements. Further, the agreement means that the Red Cross could face fines of up to $50,000 for the preventable release of blood that could cause a serious health problem or death; $5,000 for each release of blood that could cause temporary problems, up to $500,000 maximum; $50,000 for improper release of an unsuitable blood unit; and $10,000 for each donor improperly removed from the National Donor Deferral Registry (AP/Philadelphia Inquirer, 4/13). In total, the group could be fined as much as 1% of its annual blood revenue in the first year of the agreement, a percentage that could increase to 4% by the fourth year of the agreement. The agreement would permit the Red Cross to dispute the fines in court. Until Friday, the Red Cross had opposed the idea of fines, noting that since 1991 it has spent $300 million to improve blood safety and that fines would "siphon money from its mission," the Post reports (Flaherty/Gaul, Washington Post, 4/12). The Red Cross said in a statement that the agreement is the start of a "new era of agreement" between the FDA and the organization (Wall Street Journal, 4/14). FDA Commissioner Mark McClellan said, "The new financial penalties in the consent decree create an important new incentive for (the American Red Cross) to improve the processes and controls necessary for making safer blood products" (AP/Philadelphia Inquirer, 4/13). A federal judge must approve the agreement before it can be implemented (Washington Post, 4/12).