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The Blood Services Complex

ContentsPage

Part 1: The Voluntary, Whole Blood, and Blood Components Sector. . . . . . . . . . 51Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Blood Collecting Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Blood Collections in the Voluntary Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Costs of Blood and Blood Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Costs and Charges for Blood Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Part2: The Commercial Plasma and Plasma Derivatives Sector . . . . . . . . . . . . . 63Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,Sources of Raw Plasma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Finished Products Licensed for Use in the United States . . . . . . . . . . . . . . . . . . . . 67

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

LIST OF TABLESTable No. Page

10.11.12.

13.

14.15.

16.17.

18.

19.

20.

Whole Blood Collections by Type of Facility and Affiliation, 1980.. . . . . . . . 52Activities of Three Major Voluntary Blood Service Organizations . . . . . . . . . 53American Blood Commission Member Organizations and Its Board ofDirectors, April 1984. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56American Blood Commission Statements of Support, Revenue, andExpenses and Changes in Fund Balances for Years Ended Mar. 31,1976-83 (thousands of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Blood Center Processing Fees for Blood and Components (1983) . . . . . . . . . . . 60American Red Cross Blood Services Statements of Revenue and Expensesand Statement of Assets and Liabilities, 1980-83 (or the year ended June 30)(in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Blood Center Costs and Hospital Charges for Red Cells, 1980. . . . . . . . . . . . . 62Changes in Processing Fees for Red Cells Compared to Changes in TotalU.S. Health Care Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Number of Plasma Centers Located in the United States (by owner,fractionator, multi-operator single operator, and nonprofit) . . . . . . . . . . . . . . 63Production and Consumption of Human Serum Albumin andAntihemophilic Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Albumin and Plasma Protein Fraction Consumption unselectedCountries, 1976. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

21. Principal Producers of Human Plasma Derivatives for the U.S. Market . . . . . 6622. Manufacturers of Normal Serum Albumin (NSA) and Plasma Protein

Fraction (PPF) Licensed for Use in the United States . . . . . . . . . . . . . . . . . . . . . 6723. Manufacturers of Coagulation Factors Licensed for Use in the

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6924. Manufacturers of Selected Immune Globulins for Use in the United States . . 7125. Representative Blood Center Prices for Plasma Derivatives. . . . . . . . . . . . . . . . 73

LIST OF FIGURESFigure No. Page

4.5.

6.

7.

8.

Relationships Among Blood Collecting Facilities, 1980 . . . . . . . . . . . . . . . . . . . . 52Increases in Red Cells Available for Transfusion As a Result of ImprovedInventory Management and Decreased Outdating . . . . . . . . . . . . . . . . . . . . . . . . 58Recent Trends in Whole Blood and Components Distributed forTransfusion( Red Cross data only) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58U.S. Production of Factor VIII (inactivity units) and of Albumin/PPF(in 12.5 Gram Equivalents), 1971-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Flow of the Nation’s Blood Resources, 1980... . . . . . . . . . . . . . . . . . . . . . . . . . . 74

3 .The Blood Services Complex

PART 1: THE VOLUNTARY, WHOLE BLOOD, ANDBLOOD COMPONENTS SECTOR

Introduction

The whole blood sector is called “voluntary”because it collects blood primarily from unpaiddonors. In 1980, only 2.2 percent of the 11,880,000units of whole blood collected was collected frompaid donors (518), in contrast to the situation of10 years ago when over 10 percent of whole bloodwas collected commercially. Three types of facil-ities are involved in the voluntary sector: 1)community and regional blood centers whichcollect and distribute blood to hospitals in cir-cumscribed geographic areas; 2) hospital bloodbanks which both collect and transfuse wholeblood and components; and 3) hospitals whichprimarily store and transfuse blood, but do notcollect it. In addition, the voluntary sector de-pends on the commercial pharmaceutical firms tofractionate its recovered and salvaged plasma.

Community or regional blood centers generallyprovide a full range of blood services to a sur-rounding geographic area. These services may in-clude collection, testing, and labeling of blood,and distribution of blood and blood products tohospitals, physicians, and hemophilia care cen-ters. In addition, blood centers often conduct re-search and training programs.

Hospital blood banks generally provide asmaller range of services than regional bloodcenters, usually limited to the collection and stor-age of whole blood and components. Some com-mon laboratory tests may be available in-house,depending on the size and scope of the blood bankoperations, while other tests must be sent out toprivate laboratories or the regional blood center.Often hospital blood banks orient donor recruit-ment efforts to the friends and relatives of pa-tients; thus, many of the existing nonreplacement

fee programs are associated with hospital bloodbanks.

The third type of facility involved in the volun-tary sector is the hospital transfusion service,which is responsible for the administration ofblood and blood components within the hospi-tal. Some hospitals do not collect any blood butobtain their blood and blood products throughan outside supplier, either a regional blood cen-ter or another hospital blood bank, thus makingthe transfusion service the primary participant inblood management and use in such noncollectinghospitals. While transfusion services also serve asblood banks, they are called transfusion servicesto differentiate them from blood banks which col-lect, as well as store, blood.

Although blood collection began in hospitalblood banks, over time they have come to playless of a role in blood collection. In 1971, 69 per-cent of the blood collected came from regional andcommunity blood centers (555). By 1980, regionaland community blood centers collected 88 per-cent of the total, and comparable, though lessreliable figures for 1981 indicate that 91 percentof total whole blood collections were made throughblood centers (29). Surgenor & Schnitzer/ABC(518) attribute the predominance of regionalcenters to the centers’ ability to collect bloodthrough constant mobile collections. In 1980, 69.5percent of whole blood collections was throughmobile units. There is some speculation that thedominance of regional blood centers may bereversed in the future as hospitals seek to gain con-trol over costs in the face of such cost contain-ment measures as the prospective payment sys-tem—although, as discussed below, there arethose who argue that cost containment may accel-erate the trend toward more centralized collections(see ch. 5, pt. 3).

51

52 . Blood Policy and Technology

Blood Collecting Organizations

As shown in figure 4 and table 10, blood col-lection and transfusion facilities in the voluntarysector are represented by three organizations withoverlapping memberships: the American RedCross (ARC), the American Association of BloodBanks (AABB), and the Council of CommunityBlood Centers (CCBC). The American Red Crosshas 57 regional centers operating under a singleFederal license, and also maintains an affiliationwith the New York Blood Center (which is a mem-ber of CCBC). The Red Cross regional centerscover about half the geographic area of the UnitedStates, and collect about half the Nation’s wholeblood.

Another 45 percent of the Nation’s whole bloodis collected by institutional members of the Amer-

Figure 4.—Relationships Among Blood Collecting

L (41 facilities)

1 57 I

\ARC regions I

Other

fig. 8).

Table 10.—Whole Blood Collections by Type ofFacility and Affiliation, 1980

Number of Unitsfacilities collected

Regional and communityblood centers:

AABB only . . . . . . . . . . . . . . 101 2,163,614CCBC . . . . . . . . . . . . . . . . . . 41a 1,866,586ARC . . . . . . . . . . . . . . . . . . . . 57 5,434,783Unaffiliated. . . . . . . . . . . . . . 16 208,421

Total for blood centers 215 9,673,404Hospitals:

AABB affiliated . . . . . . . . . . 1,977 1,116,143Unaffiliated. . . . . . . . . . . . . . 4,455 73,895

Total for hospitals 6,432 1,190,038Other collections. . . . . . . . . . . 16,637

Total—U.S, collections 10,880,079Euroblood imported . . . . . . . . 265,839

Grand total 11,145,918

ican Association of Blood Banks, including mem-bers who belong to CCBC. In 1980, seven ARCregional centers and all but two Council of Com-munity Blood Centers belonged to AABB, as did1,977 blood collecting hospitals. There were 101community blood centers that were membersonly of AABB. Approximately 2 percent of bloodcollections were through 16 unaffiliated bloodcenters.

The AABB was formed in 1947 to protect theinterests of already existing hospital blood banksin the face of a plan announced by the Red Crossto attempt to collect and organize the Nation’s en-tire blood supply (307). Existing hospital and re-gional blood banks wanted to maintain theirestablished collection programs. Today, theAABB represents over 2,OOO institutional (voting)members, as well as about 7,OOO individual mem-bers, primarily blood bank personnel (e.g., ad-ministrators, medical technologists). Institutionalmembers include blood centers, hospital bloodbanks, and transfusion services. While bloodcenters account for two-thirds of the blood col-lected by AABB members (29), each institutionalmember has a single vote regardless of its size.

In 1962, the Council of Community BloodCenters was formed by six community blood bankadministrators who were dissatisfied with thedominance of the AABB by hospital blood banks.

Ch. 3—The Blood Services Complex • 53

CCBC today consists of 27 institutional members,i.e., community or regional blood centers. All buttwo current CCBC members (New York BloodCenter and Puget Sound Blood Center in Seat-tle) are also members of AABB. CCBC as an orga-nization has played a relatively minor role in thepolitics of whole blood delivery, which has beendominated by ARC and AABB. CCBC’S recentmove to the Washington, DC, area, where theRed Cross, the AABB, and the American BloodCommission are headquartered, was a move de-signed in part to make CCBC more of an activeparticipant in National Blood Policy deliberations.

Thus, three major organizations representalmost all the blood collection organizations inthe United States. Although there is some overlapin organizational membership and in function, thethree major organizations espouse different phi-losophies and are designed to serve different func-tions (see table 11). The AABB and CCBC areorganizations which represent individual bloodcollection facilities. The Red Cross, as a corpora-tion and a blood collector in its own right, pro-vides a Federal license to collect and process blood

as well as an organizational framework to itsmember centers, although each center operatessomewhat independently and is required to bemore or less self-sufficient. “

American Red Cross (ARC) Blood Services

Red Cross chapters choose whether or not toengage in blood services and other services offeredby the Red Cross, except disaster services andservices to the Armed Forces, which are requiredto be available from all chapters. In 1982, 1,873of the 3,01.1 Red Cross chapters participated in57 ARC regional blood services. Donor recruit-ment, blood collection, and processing are per-formed by volunteers and staff of the regionalcenters. In addition to blood collection, regionalcenters also provide diagnostic and other blood-related services. National headquarters providesstandards for its 57 regional blood centers and in-spects them periodically. Interregional resourcesharing is accomplished by the use of a com-puterized inventory system. ARCmaintains a Rare Donor Registry,its regions conduct research (so).

national alsoand many of

Table Il.—Activities of Three Major Voluntary Blood Service Organizations

ARC AABB CCBC

Actual blood services:Number of institutional members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 regions 2,176 27

1,873 chaptersUnits of blood collected by organization or members in 1981a. . . . . . . . . . . . . 5,799,024 3,395,854 b 2,320,750C

Actual blood collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x ● ●

Formal resource sharing program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x x

Other activities or characteristics:Management conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xGovernment liaison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xOrgan and tissue procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x ● *

Scientific programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xScientific and educational publications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xRare donor registry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xBlood bank procedures manual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xStandards published . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xInstitutional inspection and accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xTraining for technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x xIncorporation as single entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xPlasma products marketed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xFormal ongoing strategic planning activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x● Collected by members.“ “Several members of these organizations are engaged in organ and tissue procurement.

ards of care.

SOURCE: Office of Technology Assessment.

xx

● *


Red Cross Blood Services also maintains aplasma products division operating out of its na-tional headquarters, which is responsible for ar-ranging contracts for fractionation of plasma fromRed Cross blood collections and marketing of theproducts on a competitive basis with the commer-cial fractionation industry (see below). The RedCross recently entered into an agreement withBaxter-Travenol which would give it more con-trol over fractionation of the plasma it collects(and the ability to develop new products), but RedCross does not fractionate its own plasma. In gen-eral, 85 percent of the plasma products sold bythe Red Cross (primarily albumin and Factor VIII)is marketed by and within Red Cross regions; andthe remaining 15 percent is marketed outside theregions (486). Eleven Red Cross regions are alsolicensed as source plasma centers.

Other fairly new activities of the Red Cross in-clude efforts at strategic planning and manage-ment, and involvement in organ and tissue pro-curement (see ch. 7, pt. 2). In the last year, RedCross Blood Services has created a Planning, Mar-keting, and Operations Research Division at Na-tional Headquarters. Blood services is one con-cern of an organization-wide planning groupcalled the President’s Council. The Red Cross isconcerned that particularly because of technologi-cal advances such as genetic engineering, bloodservices as it exists today may be a declining in-dustry. Currently, Blood Services accounts foralmost 60 percent of the Red Cross’s gross rev-enues (see “Costs and Charges for Blood Prod-ucts” for further discussion of Red Cross BloodServices finances).

The entire ARC organization holds a specialposition in the national blood services complex.ARC is the only one of the blood service organi-zations with a congressional charter, although thecharter is for disaster relief, not blood collections.(The charter is dated 1905, and Red Cross bloodcollections were not begun until the 1940s. ) ThePresident of the United States is ARC’s honorarychair, and other cabinet members serve as hon-orary counselor and treasurer. The President ap-points eight of the ARC’s Board of Governors,and by an act of Congress ARC audit reports arereviewed by the Department of Defense. For these

reasons, ARC is sometimes described as a quasi-governmental agency.

American Association of Blood Banks (AABB)

The American Association of Blood Banks char-acterizes itself as the only organization devotedexclusively to blood banking and blood transfu-sion services (28). As a scientific and administra-tive association, AABB sets technical standardswhich are followed by its members (see, e.g., 583),inspects and certifies the operations of its institu-tional members, and serves as a liaison with theFederal Government and with the other blood col-lection organizations. A major part of AABB’soperation is its National and Regional Clear-inghouse (see “Coordination of Blood Resources”in ch. 5), which accounted for two-thirds of itsassets at the end of 1982 ($1.3 million of AABB’s$2 million total) (20).

The basic standards in blood banking were firstformalized and published by the AABB. The RedCross and AABB have agreed to keep their stand-ards essentially identical and even jointly publishthe “Circular of Information” which must be in-cluded with shipments of blood components asrequired by the Food and Drug Administration(FDA). The AABB also initiated the first formalnongovernment inspection and accreditation sys-tem. All institutional members of AABB are in-spected on a regular basis and are dropped frommembership if they are not in compliance. AABBalso conducts inspections of approved schools fortraining specialists in blood banking to ensure thatthe required educational standards are main-tained.

Council of Community Blood Centers (CCBC)

The primary audience for CCBC activities isblood center managers. (The AABB has recentlybecome more actively concerned about blood cen-ter administration; to date, the AABB has orienteditself primarily to hospital blood banks and to theday-to-day technological aspects of blood serv-ices. ) CCBC describes itself as serving as a forumfor blood center administrators, medical directorsand senior management. It publishes no techni-cal or procedures manuals, and does not operate

Ch. 3—The Blood Services Complex ● 5 5

a formal resource exchange system, but holds twomeetings a year to discuss management issues.CCBC is a relatively small organization which hasstruggled financially in the past. It derived almostall of its $207,000 income in 1983 from member-ship dues (136).

Each of the three organizations described abovealso serves its members or chapters by represent-ing them on the American Blood Commission’sBoard of Directors.

American Blood Commission (ABC)

The American Blood Commission is the oneformal mechanism enabling the AABB, ARC, andCCBC to work together, along with other healthcare providers (e.g., American Hospital Associa-tion, American Medical Association), consumergroups (e.g., National Hemophilia Foundation,National Kidney Foundation, American Legion),and representatives from the commercial plasma-pheresis industry (e.g., Pharmaceutical Manufac-turers Association of America). A list of ABC’smembers and governing board is shown in table12.

Given its unique position as a private volun-tary association charged with implementing publicpolicy, ABC has been forced to influence bloodpolicy through nonregulatory channels. Its poten-tial effectiveness was limited by its lack of enforce-ment powers. In addition, philosophical differencespersist among ABC’s member blood collectingorganizations, both voluntary and commercial,and the organizations fear losing control over theiroperations to the ABC. Many early attempts bythe commission to mediate a compromise betweenthe major blood collection organizations failed.For example, while ABC’s Board adopted the rec-ommendation of its 1977 Task Force on DonorRecruitment that the nonreplacement fee be abol-ished, it was never acted upon by the full com-mission because of AABB’s opposition.

Some of ABC’s programs and initiatives arewidely credited for catalyzing change in the bloodindustry-or at the very least, for maintainingconstructive dialog conducive to problem-solving.It has been suggested that ABC may have suc-ceeded in its role as conscience of the bloodindustry (270) by providing a public forum for

discussion of blood policy issues. ABC has estab-lished standing committees on donor recruitment,and regionalization, for example; both are issuesin which the exchange of information, and aneventual consensus, are of value both to the in-dustry and to those served by it.

ABC, and many others, see its regionalizationrecognition program as having been fairly suc-cessful, with 44 regions, representing over 50 per-cent of the Nation’s blood supply, having achievedfull recognition status. ABC’s attempt at a morefar-reaching effort at resource sharing (whichwould have overcome the discontinuities betweenthe AABB Clearinghouse and the ARC system)was delayed when the commercial sector objectedto limiting resource sharing to noncommercialblood, and the Red Cross withdrew in fear thata civil suit would be filed. The Red Cross has sub-stantial assets which it fears could be attached ifsuch a suit were filed and won.

In an attempt to get an agreement about re-source sharing signed, the ABC Board contem-plated, but never enacted, a motion to seek Fed-eral legislation that would, in effect, exemptparticipation in resource sharing from antitrustaction. The strategy now is to see whether themove of the AABB National Clearinghouse oper-ation to the Washington, DC, area will make re-source sharing seem more feasible. The continu-ing failure of the blood collectors to agree on ameans of coordination has been frustrating to theconsumer representatives on the ABC Board, butit is not clear that such coordination would con-tribute significantly to the efficiency of blood col-lection (see ch. 5, pt. 2).

ABC’s effort at coordinating an ongoing sys-tem of data collection and analysis was a mixedsuccess. While the 1979 and 1980 data collectedfor the ABC’s National Blood Data Center rep-resent the only systematic national data collec-tion since 1972, ABC was unable to maintain datacollection on an ongoing basis, or to make it com-mercially viable, as had been hoped. The effortwas marked initially by heated debates among theparticipating organizations (e.g., on the collectionof information on outdated blood, which wasdefined differently by different organizations (270;see also 547). Further, National Blood Data Cen-ter data do not include information on the com-

56 ● Blood Policy and Technology

Table 12.-American Blood Commission Member Organizations and Its Board of Directors, April 1984

Member organizations:American Association of Blood BanksAmerican Association for Clinical Histocompatibility

TestingAmerican Association of Donor Recruitment ProfessionalsAmerican Association of Retired PersonsAmerican Association of Tissue BanksAmerican College of PhysiciansAmerican College of SurgeonsAmerican Federation of Labor—Congress of Industrial

OrganizationsAmerican Heart AssociationAmerican Hospital AssociationAmerican LegionAmerican Medical AssociationAmerican Nurses’ Association, Inc.American Osteopathic AssociationAmerican Red CrossAmerican Society of AnesthesiologistsAmerican Society for ApheresisAmerican Society of Clinical PathologistsAmerican Surgical AssociationCollege of American PathologistsCommunications Workers of AmericaCooley’s Anemia FoundationCouncil of Community Blood CentersHealth Insurance Association of AmericaLeukemia Society of AmericaNational Association for Sickle Cell Disease, Inc.National Association of Patients on Hemodialysis and

Transplantation, Inc.The National Hemophilia FoundationPharmaceutical Manufacturers AssociationUnited Way of AmericaVeterans Administration

Board of Directors:Ray Andrus

American Federation of Labor—Congress of IndustrialOrganizations

J. Newton Ashworth, Ph.D.Pharmaceutical Manufacturers Association

Fred A. Barnette, at-largeOrtho Diagnostics, Inc.

Carl G. Becker, M.D.American Heart Association

Hamp ColeyUnited Way of America

Margaret M. Diener, MPHNational Association of Patients on Hemodialysis and

Transplantation, Inc.Suellyn Ellerbe, R. N., M.N.

American Nurses’ Association, Inc.—

Ralph G. Golden, Ph.D.American Association of Retired Persons

Charles R. GouletBlue Cross/Blue Shield Association

David Guri, at-largeAlpha Therapeutic Corp.

Douglas Holloway, at-largeJames B. Hubbard, Vice President

American LegionAlfred J. Katz, M.D.

American Red CrossRoland H. Lange

American Red CrossPaul McCurdy, M.D.

American Society of HematologyFranklin D. McDonald, M. D., Secretary

National Kidney FoundationMary L. Mays

Communications Workers of AmericaHarold T. Meryman, M.D.

American Association of Tissue BanksJohn D. Milam, M.D.

American Association of Blood BanksWilliam V. Miller, M. D., President, at-largeGerald S. Moss, M. D., FACS

American College of SurgeonsVictor H. Muller, M.D.

American Society of Clinical PathologistsRichard E. Palmer, M.D.

American Medical AssociationPeter J. Quesenberry, M.D.

Leukemia Society of AmericaRandall H. Rolfe

American Hospital AssociationDale A. Smith, at-large

Baxter-Travenol Laboratories, Inc.James M. Stengle, M.D.

The National Hemophilia FoundationBill T. Teague, B. S., M.T. (A. S. C.P.), S.B.B., Treasurer

American Association of Blood BanksJohn L. Thornton, M. D., Vice President

Council of Community Blood CentersMartin J. Valaske, M.D.

College of American PathologistsEdward L. Wampold, at-large

Cooper DiagnosticsCharles F. Whitten, M.D.

National Association for Sickle Cell Disease, Inc.Edward C. Zaino, M.D.

Cooley’s Anemia Foundation

SOURCE: American Blood Commission.

mercial plasmapheresis industry, which was col- Federal funding. A great blow was the withdrawallected and published separately by the American of the American Cancer Society, the AmericanBlood Resources Association. College of Emergency Physicians, the American

Osteopathic College of Pathologists, and the Na-Government support for ABC has diminished tional Medical Association in 1983. Although

over the years, necessitating increases from pri- members are often delinquent in their dues, col-vate funding (see table 13). ABC now receives no lections of membership dues for fiscal year 1984


Table 13.—American Blood Commission Statements of Support, Revenue, and Expenses andChanges in Fund Balances for Years Ended Mar. 31, 1976-83 (thousands of dollars)

1983 1982 1981 1980 1979 1978 1977 1976

Public support:U.S. Government contracts . . . . . . . . . . . .Private grants. . . . . . . . . . . . . . . . . . . . . . . .Contributions . . . . . . . . . . . . . . . . . . . . . . . .

Total public support . . . . . . . . . . . . . . . .Revenue:

Membership dues . . . . . . . . . . . . . . . . . . . .Investment income . . . . . . . . . . . . . . . . . . .Conference fees . . . . . . . . . . . . . . . . . . . . .Publications and miscellaneous. . . . . . . .Loss on sale of equipment . . . . . . . . . . . .

Total revenue . . . . . . . . . . . . . . . . . . . . . .

Total support and revenue. ., . . . . . .Expenses:

Program services:Technical advisory panel . . . . . . . . . . . .Resource sharing . . . . . . . . . . . . . . . . . .Policy operations . . . . . . . . . . . . . . . . . .National Blood Data Center . . . . . . . . .Regionalization . . . . . . . . . . . . . . . . . . . .Management and Logistics

Conference. . . . . . . . . . . . . . . . . . . . . .Plasma study . . . . . . . . . . . . . . . . . . . . . .Utilization . . . . . . . . . . . . . . . . . . . . . . . . .Long range planning. . . . . . . . . . . . . . . .Commonality . . . . . . . . . . . . . . . . . . . . . .Clearinghouse . . . . . . . . . . . . . . . . . . . . .Donor recruitment. . . . . . . . . . . . . . . . . .Planning and implementation . . . . . . . .

Total program service expenses. . . .Supporting services:

Management and general . . . . . . . . . . .Financial development . . . . . . . . . . . . . .

Total supporting services . . . . . . . . .

Total expenses . . . . . . . . . . . . . . . .

Excess (deficiency) of public support andrevenue over expenses . . . . . . . . . . . . . . .

Fund balances, beginning of year . . . . . . . .

Fund balances. end of year. . . . . . . . . . . . . .

$ 5 6 $296 $467 $337 $348 $526 $389 $12912 42 100

126 123 46 51 61 46 7

$182 $419 $513 $389 $420 $614 $395 $229

$166 $169 $179 $179 $159 $144 $144 $14120 19 9 8 3 1 410 8 23 10

22 6 3 2 2(3)

$202 $219 $217 $200 $163 $147 $144 $145$384 $638 $730 $589 $583 $761 $540 $374

3 3 1612 8

93 137 142 173 149 139 16973 240 277 191 165 237 106 2957 84 103 70 87 88 72 36

8 32 4

5 7 41

46 107 395 5

44 63 2035

$225 $475 $555 $440 $407 $565 $525 $158

$110 $157 $178 $141 $119 $172 $ 85 $ 4 07 4 13 2 21

$117 $161 $190 $143 $139 $172 $ 8 5 $ 4 0

$342 $636 $746 $583 $547 $737 $609 $199

$42 $ 2 $(16) $ 6 $ 3 7 $ 2 4 $ (69) $175

157 156 172 166 129 106 175

$199 $157 $156 $172 $166 $129 $106 $175SOURCE American Blood Commission, 1983

exceeded ABC’s goal. Nevertheless, as a conse-quence of corporate contributions not meetingABC’s goal, ABC now projects a $20,000 short-fall in fiscal year 1985. Some believe that the de-cline in support indicates that there is no longera need for such an organization to resolve dif-ferences among blood collectors.

Blood Collections in theVoluntary Sector

Whole blood collections have been able to keepup with increasing demand at the same time thatpaid whole blood donations have decreased sig-

38-647 0 - 85 - 5

nificantly (fig. 1 in ch. 1). This increase hasoccurred through increased recruitment, improvedinventory management, and a large increase inthe use of blood components instead of wholeblood.

The most recent comprehensive data on wholeblood collections and transfusions are for 1979and 1980 (518). Partial data are available fromblood collection centers (but not transfusion serv-ices) represented by ARC, AABB, and CCBC for1981 (29) and from the American Red Crossthrough June 1983. In 1980, out of 11.15 millionunits of whole blood collected, 14.8 million unitsof blood components were transfused, exclusive


of blood that was outdated or lost (see fig. 2 inch. 1). Between 1971 and 1980, whole blood col-lections increased from 8.8 million to 11.15 mil-lion units, while whole blood and red cell lossesdecreased from 2.44 million to 1.15 million units,an improvement in losses from 28 to 10 percentof blood collected (see fig. 5). (Solutions increas-ing the storage life of blood from 21 to 35 dayswere introduced in 1980, and this effect is onlypartially reflected in the 1980 data. Recent ap-proval of a solution that allows a 49-day shelf lifefor packed red cells should result in further im-provement, although the additional cost of suchsolutions may limit their widespread acceptance. )

Losses in Red Cross centers have remainedfairly stable in the years since 1980 but these datado not include reports from hospitals and otherblood banks to which blood is shipped. Red Crossdata shown in figure 6 for products distributedfor transfusion (but not necessarily transfused) in-dicate that trends toward component therapy andthe use of blood components have continued.

Figure 5.—Increases in Red Cells Available forTransfusion As a Result of Improved Inventory

Management and Decreased Outdating

1.21M

1.23M

1971Years

m - l

19791980

Outdated units

Lost or unaccounted for units

Figure 6.—Recent Trends in Whole Blood andComponents Distributed for Transfusion

(Red Cross data only)

10

8

6

4

2

01981 1982 1983

Years

SOURCE: American Red Cross, Blood Services Operations Reports:

Red blood cells (including whole blood) con-tinue to dominate use and are the driving forcebehind collection efforts in the voluntary sector.Platelet use rose from 0.41 million units in 1971to 2.86 million units in 1980. (Approval in 1982of platelet storage bags that extend the storageperiod from 3 to 5 days is expected to increasethe availability and use of platelets, as well as todecrease outdating, which is substantial.) Mostplatelet concentrates are made from whole blood,but platelets are also collected directly (platelet-pheresis). Plateletpheresis collections have in-creased steadily in Red Cross regions since 1979(45,46,47,48). The reported nationwide drop inplateletpheresis collections between 1979 and 1980(518) may be misleading because of a simultane-ous increase in combined leukaplateletpheresisprocedures (47o).

Fresh-frozen plasma (FFP) production has alsoincreased, although indications for its use arelimited and have become the topic of private andFederal scrutiny (see ch 5, pt. 4). In the Red Crossalone, 3.2 million units of FFP were produced in1983, a 27.2-percent increase over the previousyear. However, only 30 percent of the fresh-frozenplasma produced was distributed for transfusions.Two-thirds was used for fractionation.

Ch. 3—The Blood Services Complex ● 59

Use of the final product from voluntary wholeblood collections, cryoprecipitate, which containsantihemophilic factor (AHF) and other coagula-tion proteins, remained constant from 1972 to1980, primarily because of availability of a moreeffective and stable way to inject concentrates ofAHF derived from pooled plasma. However, inlight of the AIDS crisis, and because new useshave been found for the substance (see ch. 5, pt.4), cryoprecipitate production has increased re-cently (23,48).

Costs of Blood and Blood Components

On the whole, the cost of blood and bloodproducts has not been a major factor in discus-sions of health care expenditures, probably be-cause it has been estimated that the total valua-tion of collected and transfused blood and bloodproducts (including plasma derivatives) is onlyabout 1 percent of total health care expenditures(31a). However, the National Blood Policy (NBP)pointed out that costs could have an impact onaccess to health care. Another issue addressed bythe NBP was the need for public confidence in thereasonableness of service charges to encouragevoluntary donors. To this end, the National BloodPolicy encouraged development of accounting andreporting systems to identify relationships be-tween the costs and charges for all services andmaterials associated with transfusion therapy(180; see table 2 in ch. 2).

In 1979, the U.S. General Accounting Officerecommended that the Health Care FinancingAdministration (HCFA) investigate the relation-ship between costs and charges for blood prod-ucts to determine if Medicare was being over-charged by hospitals (546). Concern had also beenraised about whether nonreplacement fees con-stituted “profiteering,” especially when patientswere charged for nonreplaced blood that wasoriginally obtained from unremunerated donors(e.g., see 511). The nonreplacement fee was alsoviewed as causing problems of access to healthcare for Medicare patients, who are responsiblefor paying a three-unit deductible if they cannotarrange to replace the blood transfused in hospi-tals charging a nonreplacement fee.

Costs and Charges for Blood Products

The costs associated with voluntarily donatedblood derive from donor recruitment, equipment(hardware and software) and labor, testing, in-ventory management and distribution, and trans-fusion. When donors are paid, the costs of re-muneration must be added. Blood collecting andtransfusing facilities in the voluntary sector havenot developed a uniform industrywide system forallocating costs to each step in the collecting andtransfusing process. The American Red Cross andsome larger independent blood centers (e.g., theNew York Blood Center) have developed costaccounting systems for internal use.

There is wide variation in the fees charged tohospitals and patients by blood collectors and byhospitals to patients. As shown in table 14, 1983processing fees for whole blood charged by Amer-ican Red Cross regions ranged from $28 (in SanJuan, PR) to $59 (in San Jose, CA). Charges insome community blood centers can be higher,e.g., $67 for whole blood in San Mateo, CA (in-cluding a replacement fee); $75 at the IrwinMemorial Blood Bank in San Francisco. Similarvariations are found for other components. Pro-duction and sale of the several blood componentsmeans that an average Red Cross blood centercould collect up to $105.54 from a single unit ofwhole blood donated in 1983, not including rev-enues from recovered plasma (higher if red cellsare frozen or washed).

Increases in processing fees for blood compo-nents, as well as better inventory management,have meant that blood suppliers have been ableto accumulate substantial fund balances. For ex-ample, as shown in table 15, Red Cross net assetsat year-end increased by 18 percent from 1980 to1981, by 30 percent from 1981 to 1982 and by 32percent from 1982 to 1983. Although apparentlysubstantial on a cumulative basis, Red Cross netassets of $36,053,000 for the year ended June 30,1983, amounted to only 8.5 percent of that year’sentire blood services revenues, representing fewerthan 36 days of operating expenses, according tothe Red Cross (43). Some blood centers (e.g.,Puget Sound Blood Center, Hoxworth Blood Cen-ter) have deliberately accumulated revenues over

60 • Blood Policy and Technology

Table 14.–Blood Center Processing Fees for Blood and Components (1983)

Average processing feesBlood components ARC CCBC Range a

Whole blood. . . . . . . . . . . . . . . . . . . . . . . . $ 41.83 $42.59 $28.00 (San Juan)–$ 59.00 (San Jose)Red blood cells . . . . . . . . . . . . . . . . . . . . . 41.17 40.41 28.00 (San Juan)— 59.00 (San Jose)Red blood cells deglycerolized. . . . . . . . 131.55 — 91.00 (Portland) – 225.00 (Atlanta)Red blood ceils washed. . . . . . . . . . . . . . 86.00 NA 60.25 (Roanoke) — 160.00 (Atlanta)Fresh-frozen plasma . . . . . . . . . . . . . . . . . 25.08 24.49 17.00 (Waco) – 38.00 (San Jose)Cryoprecipitated AHF. . . . . . . . . . . . . . . . 12.28 12.68 8.00 (Great — 18.00 (4 centers)

Falls, Daytona)Platelets . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.41 25.31 17.00 (Waco) — 40,00 (Boston)aRed Cross data only.NA = not available.SOURCES ARC—American Red Cross (1983), fees shown are as of June 30, 1983, and do not include the NYBC; CCBC—Huitt, letter to OTA, 1964; fees shown are

as of July 1983.

those required for operating expenses in order toprovide for capital expansion (221,242). Red Crossheadquarters usually does not exercise direct con-trol over blood services assets; such assets are usedat the discretion of individual blood services re-gions (141). A small portion of Red Cross reve-nues is devoted to research—less than 2 percent.

The difference between community blood cen-ter processing costs and hospitals’ charges to pa-tients is shown in table 16. In table 17, the proc-essing fee for red cells charged by blood centersto hospitals is compared to hospital charges to pa-tients. In 1980 the average community blood cen-ter red cell processing fee to hospitals was about$32. (The average cost of $45.91 for collecting andprocessing a unit of whole blood is offset by salesof remaining blood components. ) The averagetotal hospital charge for a unit of red cells was$88.97. In addition to a processing fee, hospitalcharges might include an additional processingfee, a replacement charge, a laboratory charge,an infusion charge and other charges (table 16).Data for processing fees for hospitals include hos-pitals which also collect their own blood. Wallace& Wallace/ABC (576) found that total charges arehigher at collecting than at noncollecting hospi-tals, and that higher processing fees and replace-ment fees accounted for the higher total charges.As might be expected, there is substantial varia-tion in hospital charges for red cells (the only com-ponent for which hospital data are available), withstandard deviations from a quarter to a third ofthe mean.

Increases in blood costs have not exceeded in-creases in total health care costs. As shown intable 17, national health expenditures have in-

creased on an average of 15 percent per year (for1980 to 1982), while blood center processing feeshave increased 7 percent (CCBC members) and12 percent (Red Cross regions). Increases in hos-pital charges for blood appear closer to increasedhospital charges in general, although it is diffi-cult to draw conclusions with information fromonly 2 consecutive years.

Access

Issues of access are more difficult to sort outthan issues of cost/charge relationships. It is cur-rently unlikely that individuals will be denied hos-pital care because they cannot afford the cost ofblood to be transfused during their hospital stay,but the issue may become more complicated asprospective payment systems are phased in (seech. 5, pt. 4). At present the only real threat toaccess posed by the cost of blood products seemsto be that uninsured hemophiliacs may receive lessFactor VIII than is optimal.

At present, there is wide variation in the waythird-party payers cover the costs of blood prod-ucts. Since 1968, Blue Cross/Blue Shield nationalpolicy has been to encourage voluntary donationand replacement, and blood assurance programs(79). Like Medicare, then, most Blue Cross/BlueShield policies have a three-unit deductible fornonreplacement fees when they are charged. ForFederal employees covered by Blue Cross/BlueShield, however, replacement fees are partiallycovered by the supplemental portion of the pol-icy (i.e., 80 percent coverage for high option; 75percent coverage for low option). Policies morecostly to patients are followed in at least one State.


Table 15.—American Red Cross Blood Services Statements of Revenue and Expenses and Statement ofAssets and Liabilities, 1980-83 (for the year ended June 30) (in thousands)

1983 1982 1981 1980

Revenues:Blood Services processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Government and private foundation grants . . . . . . . . . . . . . . . . .Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$418,9625,389

17773

1,292

$371,9013,695

200101

1,371

377,268

$301,6852,252

$241,1551,213—

2091,021

662,016

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,893 306,019 243,598

233,684

(10,633)

223,051

Expenses:Blood Services expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Less—expenses incurred by chapters funded from non-

Blood Services support and revenue . . . . . . . . . . . . . . . . . . . . .

379,091 342,813 292,281

(9,821)

369,270

(9,469)

333,344

(9,673)

282,608Net Blood Services expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .

Excess of revenue over expenses before property andequipment acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property and equipment acquisitions—net of proceeds fromsales of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56,623

(20,570)

43,924 23,411 20,547

(9,577)

———

(17,927) (10,130)

Net Excess of Revenues Over Expenses andProperty Acquisitions:Increase in designated balances approved by Board

action for:Replace and improvement of buildings and equipment . . . . .Other specific purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net operating assets required . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,2716,193

20,589

———

.

36,053111,364

$147,417

25,99785,367

$111,364

13,28172,086

10,97061,116Designated Net Assets, Beginning of Year . . . . . . . . . . . . . . . . .

$ 85,367 $ 72,086

$ 6,6589,365

31,12952,351

353—

Designated Net Assets, End of Year . . . . . . . . . . . . . . . . . . . . . . .

Assets:Cash and time deposits .., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other assets... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Due from undesignated funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 14,39246,41547,74555,116

1,0848,172

172,924

$ 6,42529,35047,07347,268

7994,015

134,930

$ 5,98215,18141,45851,975

541—

115,137 99,856

15,136602

12,032

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities:Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . .Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Due to undesignated funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,018494

9,258

25,48027

23,132434

——Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,507 23,566 29,770 27,770

$111,364 $85,367 $ 72,086

$ –——

—

Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net assets—as follows:Replacement and improvements of building and equipment . . . .Other specific purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net assets required for operations . . . . . . . . . . . . . . . . . . . . . . . . . .

$147,417

$20,51116,405

110,501

$147,417

$ 11,240—

100,124

$111,364

$ 6,577—

78,790

$85,367Net assets—as above, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes: Compared to:● Total ARC Public Support and Revenue . . . . . . . . . . . . . . . . . . . .

● *Total Net Assets of ARC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$722,159628,658

$637,059559,949

$556,911231,298

$484,300214,647

SOURCE American Red Cross Annual Report, 1980-83.


Table 16.—Blood Center Costs and Hospital Chargesfor Red Cells, 1980

Average community blood centercost per unit whole blood collected . . . $45.91 (15.34)’

Average total hospital charge for unitof red cells . . . . . . . . . . . . . . . . . ., . . 88.97Charges may include:b

Processing fee (average) . . . . . . . . . 37.94Replacement fee (average) . . . . . . . . . 27,54Laboratory fee (average).,..,..,,,. 40.51Infusion fee (average) . . . . . . . . . . . . . 20.41Other (e.g., blood delivery,

general administration), ............ 17.32aFigure in parenthesis is standard deviation.

charge all types of fees. Of the 2,441 respondents to the survey conducted by

60 charged a fee related to some other service.

SOURCE: Wallace and Wallace/ABC, 1982.

Mississippi Blue Cross/Blue Shield has a three-unit deductible for all costs associated with bloodtransfusions, including processing charges andadministration charges.

Some blood centers offer coverage incentivesto donors in addition to replacement credits. TheGulf Coast Regional Blood Center in Houston hastwo blood assurance plans. “Life Plan I,” for fam-ilies and individuals covers the donor (and cer-tain selected others) for all Gulf Coast RegionalBlood Center service fees for blood and bloodcomponents transfused in the gulf coast regionserved by the blood center. Hospital charges fortyping and crosshatching etc. are not covered,and, as in most insurance plans, preexisting con-

ditions are not covered. “Life Plan II” is a groupplan which fully covers participating donors andtheir immediate families and also provides par-tial coverage (equal to one replacement donation)for nondonors in the group, if there is 25 percentparticipation. Gulf Coast also charges and cov-ers replacement fees.

Mississippi Blood Services (MBS) has probablythe most generous coverage plan for donors. Its“donor protection program” covers any out-of-pocket blood charges (including any hospitalreplacement fees) up to $10,000 for any MBSdonor, without geographic restrictions. MBS itselfdoes not charge a replacement deposit fee. In1983, MBS paid out-of-pocket blood chargesamounting to $51,163 for 393 patients. The largestsingle payment for one patient was $3,759. MBSacknowledges that such a system would not befeasible for blood centers on a large-scale basisbecause insurance companies might increase theirdeductibles if such a plan were adopted nation-wide, or even in entire regions.

Table 17.—Changes in Processing Fees for Red Cells Compared to Changes in Total U.S. Health Care Expenditures

Percent change Percent changeProcessing fees charged by from previous year in nationalcommunity blood centers ARC CCBC3 ARC CCBC health expenditures4

1976-77 . . . . . . . . . . . . . . . . . . . . . . . . . . 22.19’ n/a — — 11.91979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n/a 32.301980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.232 34.141981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.302 36.981982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.802 39.721963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.47’ 40.41Hospital charges5 Total Processing Fee1979. . . . . . . . . . . . . . . . . . . . . . . . . 79.06 32.071980 . . . . . . . . . . . . . . . . . . . . . . . . . 88.97 37.94Percent change 1979-80 . . . . . . . . 13% 18%

8.0426.7

1.36.9

Replacement28.3127.54– 3 %

5.77.77.41.7

Laboratory33.9440.5119%0

13.515.815.112.5n/a

Infusion Other19.94 13.6020.41 17.32

20/0 270/on/a = not available.

Ch. 3—The Blood Services Compiex ● 63

PART 2: THE COMMERCIAL PLASMA ANDPLASMA DERIVATIVES SECTOR

Overview

Demand for large amounts of plasma, prin-cipally for production of albumin, antihemophilicfactor (AHF, or Factor VIII), and immune serumglobulins, has led to what is known as the “sourceplasma” industry, in which donors provide plasma,not whole blood.

The source plasma sector is largely commercialand has three main components: collectors, orplasmapheresis centers; fractionators; and brokers,all of whom operate on a for-profit basis. Not-for-profit blood banks and blood centers also playa part in the commercial plasma industry whenthey sell recovered or salvaged plasma (i.e.,plasma recovered after components have beenremoved from whole blood, or after whole bloodhas outdated) to fractionators, or when theycontract with commercial firms to fractionateplasma into derivatives which they then marketthemselves.

Forty-five percent of the Red Cross’ recoveredplasma is fractionated by commercial fractiona-tion companies (486). It is estimated that from 17to 20 percent of the plasma derivatives sold in theUnited States is sold by the voluntary sector (i.e.,by the Red Cross and the New York Blood Cen-ter). These sales put the not-for-profit industryin direct competition with the commercial plas-mapheresis industry.

As shown in table 18, at present there are ap-proximately 336 source plasma centers licensedby the FDA: 317 U.S. centers are commerciallyoperated, and 19 are community or Red Crossblood centers—i.e., they are not operated for

profit. The largest portion (90 percent) of sourceplasma centers is owned by independently oper-ated multi-location companies. These multi-loca-tion centers are owned by 30 companies market-ing biological products. Some of these biologicalcompanies are subsidiaries of larger corporations(e.g., Sera-Tec Biological, owned by the Rite-AidCorp. in New York, operates nine centers in theEast and Midwest, most of which are near col-lege campuses). The plasma collected by commer-cial plasmapheresis centers is either sold to U.S.fractionators who separate it into a number ofproducts, primarily albumin, Factor VIII (anti-hemophilic factor) and immune globulins, or ex-ported to fractionators in Europe, Japan, or SouthAmerica.

The way plasma is provided from plasmaphere-sis centers to fractionators varies. Four fractiona-tion companies “self-source”; i.e., they run theirown source plasma centers. According to thelatest figures, 98 (30 percent) of the U.S. sourceplasma centers are owned by fractionation com-panies. Most centers contract annually with frac-tionators to provide a certain amount of plasma,although there is some “spot buying. ” Recoveredplasma (from whole blood) is not contracted for,but is marketed through the efforts of nine ma-jor brokers. Both the brokers and the for-profitsource plasma centers are members of the Amer-ican Blood Resources Association (ABRA), a non-profit trade association organized in 1972 to rep-resent the interests of businesses engaged in thecollection, manufacturing or distribution of cer-tain biological products—in particular, plasma forfurther manufacturing (437).

Table 18.-Number of Plasma Centers Located in the United States(by owner, fractionator, multi-operator, single operator, and nonprofit)

Nov. 1979 July 1980 Mar. 1981 Apr. 1984 Percent change

Fractionator owned . . . . . 121 123 107 92 – 24%Multi-operator. . . . . . . . . . 171 167 213 177 + 4%Single operator. . . . . . . . . 98 104 50 48 – 51%Non-profit . . . . . . . . . . . . . 9 9 11 19 + 110YO

Total . . . . . . . . . . . . . . . . 399 403 381 336 – 160/0SOURCE: Plasma Ouarter/y, summer 1984,


The market for source plasma is largely con-trolled by four pharmaceutical companies (HylandTherapeutics, Cutter Laboratories, Alpha Ther-apeutics, and Armour), which are in turn sub-sidiaries of major corporations (Travenol, Bayer,Green Cross of Japan, and Revlon, respectively).Each commercial fractionator accounts for about1 million of the 4 million liters of plasma frac-tionated in the United States annually (459). Inaddition, the nonprofit New York Blood Centeroperates its own 300,000-liter-capacity plant forfractionating plasma recovered from its owndonors and from a portion of Red Cross donors.(The States of Michigan and Massachusetts eachhave small [approximately 50,000 liters each] frac-tionation capacities, with derivatives distributedprimarily in each State. )

The U.S. source plasma collection industry isthe most important contributor to worldwideplasma fractionation. The approximate disposi-tion of both source and recovered plasma col-lected in the United States at the present time isshown in figure 3 in chapter 1. About 1.3 millionof the 6 million liters of source plasma are ex-ported, in addition to the exportation of plasmaderivatives manufactured in the United States.About 5.5 million of the 12.5-million-liter world-wide manufacturing capacity in 1978 was in theUnited States. Of the 7-million-liter capacity out-side the United States, about 5 million liters werein the commercial sector, and about 2 million literswere in the voluntary sector. But there were onlyabout 77 plasma fractionation firms worldwide(439), and commercial plants outside the UnitedStates operate at about 68 percent capacity, com-pared to about 85 to 90 percent of capacity in theUnited States (459). As shown in figure 7, domes-tic production of AHF and albumin have increasedsteadily. In 1971, 110 million activity units of Fac-tor VIII were sold; in 1982 the figure was 528 mil-lion. Comparable increases have occurred foralbumin. Albumin accounts for the largest shareof total sales (see table 1 in ch. 1). It is estimatedthat in 1984, approximately one-third of thealbumin and one-half of the Factor VIII producedwill be used in foreign countries (see table 19).

Figure 7.—U.S. Production of Factor VIII (in activityunits) and of Albumin/PPF (in 12.5 Gram Equivalents),

1971-82

6.0

5,5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

1971 1979 1980 1981 1982

Years

millions of activity units.

Thus, much of the plasma and plasma derivativesused worldwide comes from U.S. sources.

The principal products of the source plasma in-dustry that are used in this country are albumin,AHF, and plasma protein fraction (PPF), whichis used much as is albumin. Other products in-clude intravenous gamma globulin (IVGG), im-mune serum globulin and hyperimmune globulins.Worldwide use differs from use in the UnitedStates. For example, in 1978, at a time whenIVGG was not licensed in the United States, it ac-counted for 23 percent of worldwide demand for

Ch. 3—The Blood Services Complex ● 6 5— —

Table 19.—Production and Consumption of Human Serum Albumin and Antihemophilic Factor

Forecast1971 1976 1979 1984

Plasma processed in the United States (thousands of liters). . . . . . . . 1,950 2,910 3,950 6,920HSA production in the United States (millions of grams) , . . . . . . . . . . 39 67 91 159HSA consumption:

Domestic (millions of units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 4.6 5.8 8.5Foreign (millions of units). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 0.7 1.5 4.2

Total (millions of units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 5.3 7.3 12.7Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940/0 870/o 800/0 670/oForeign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60/0 13 ”/0 20 ”/0 330/0

HSA revenues:Domestic (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58 $133.4 $168.2 $300Foreign (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 20.3 43.5 148Total (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 153.7 211.7 448

Plasma processed globally for AHF (thousands of liters) . . . . . . . . . . . 365 1,600 2,750 5,320AHF units processed (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 400 688 1,330Domestic consumption: ●

Millions of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 300 412 648Average price (cents/units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 10 10 14Sales (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8 30 41.2 91

Foreign consumption:Millions of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 100 275 682Average price (cents/units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 30 30 27Sales (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 30 82.5 184

Total AHF sales (millions of dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 60 123.9 275SOURCE: Office of Technology Assessment, based on data and estimates in M M. Le Coney,“Who Needs Plasma?” Plasma Ouarterly 2:68-93, September 1980.

plasma fractions (see table 1). Table 20 sum-marizes differences in albumin/PPF consumptionbetween selected countries in 1976.

Sources of Raw Plasma

In the 1960s, the introduction of plastic bagsfor collection of whole blood enabled componentseparation to increase, and blood centers beganto address the need to more effectively utilizeplasma from whole blood. Today, plasma in ex-cess of a region’s needs is supplied by bloodcenters to plasma derivative manufacturers forfurther processing. Plasma is supplied as fresh-frozen plasma or liquid recovered plasma tolicensed processors (253).

Table 20.—Albumin and Plasma Protein FractionConsumption unselected Countries, 1976

Consumption in kilogramsCountry 1 million population

West Germany . . . . . . . . . . . . 499kgUnited States . . . . . . . . . . . . . 301Austria . . . . . . . . . . . . . . . . . . . 259Finland . . . . . . . . . . . . . . . . . . 213France . . . . . . . . . . . . . . . . . . . 59Japan . . . . . . . . . . . . . . . . . . . . 50Brazil . . . . . . . . . . . . . . . . . . . . 14SOURCE” Adapted fromT. Drees, Plasma Forum, 1979,

The American Red Cross, which has been in-volved in providing plasma for fractionation sincethe pioneering work of E. J. Cohn, does not oper-ate any facilities for production of plasma deriva-tives. One regional blood center, the New YorkBlood Center (NYBC), has its own plasma frac-tionation facility. The Red Cross maintains anumber of contracts with domestic and foreignplasma fractionation facilities to process RedCross plasma in accordance with Red Cross speci-fications, and the products are returned to RedCross regional blood centers for distribution tohospitals and other users (319). Through its sys-tem of regional blood centers, the Red Cross col-lects more plasma for fractionation than any othersingle entity in the world. As described earlier,however, the vast majority of the plasma requiredto meet the needs of the United States and otherparts of the world is provided by commercialplasmapheresis centers. While some of the majormanufacturers operate their own plasma collec-tion centers, many are operated by independentmulti-location companies.

Plasmapheresis has several advantages overrecovery of plasma from a single unit of wholeblood, First, the volume of plasma recovered perdonation is greater with plasmapheresis. Up to 600


ml of plasma can be taken per donation, versusan average recovery of 200 to 250 ml per dona-tion of whole blood. Second, under current FDAguidelines, a donor can be plasmapheresed twiceeach 7 days, while a whole-blood donor can con-tribute only once every 8 weeks and a maximumof five times per year. Third, because plasmapher-esis collections are specifically for fractionationinto derivatives, the plasma is frozen immediatelyupon collection, thereby preserving more of thelabile protein fractions whose functional loss isproportional to delays in freezing.

Finished plasma derivatives for the U.S. mar-ket are produced and supplied by several com-panies. Most manufacturing facilities that producehuman plasma derivatives are located in theUnited States, but some are located in Europe andCanada. The principal producers of human plasmaderivatives for the U.S. market are identified intable 21. None of these licensed manufacturersproduce all of the plasma derivatives approvedfor distribution in the United States. In additionto those listed, numerous other manufacturersproduce plasma derivatives for use in other partsof the world (319).

The cost of plasma is generally determined bythe number of products that can be made fromthe plasma and the anticipated protein yield. Fro-zen source plasma, collected by plasmapheresis,and fresh-frozen plasma obtained from wholeblood but frozen shortly after processing, havetraditionally provided the highest product andprotein yield. Although all plasma processing is

based on the basic Cohn process (described in ch.4), modifications and improvements in methodsor equipment enable some fractionators to proc-ess plasma more cost effectively than do theircompetitors.

The time from collection to processing intolicensed, finished products takes as much as 4 to6 months, depending on the products producedand the manufacturer. Temporary shortages andsurpluses can occur, with parallel increases anddecreases in price. In addition, such factors asprice variances between nations, due to pricesgovernments and insurance plans pay for a par-ticular plasma derivative, affect where productsare distributed. Many manufacturers have distri-bution networks in numerous countries and di-rect their products to the markets where demandis great and prices are higher.

Barriers to entry into the plasma fractionationbusiness are substantial, due to the need to de-velop cost-effective production techniques, con-struction of a capital-intensive facility, and strin-gent licensing requirements for biological products.For these reasons and the volatile and competi-tive nature of the plasma derivatives market, nonew production facilities have been constructedin the past 12 years by firms not already in thebusiness. In the recent past, except for continuedmarketing of some immune globulins, severalfirms have left the plasma derivatives market, in-cluding large pharmaceutical firms such as Parke-Davis, Squibb, Upjohn, and Merck Sharp &Dohme.

Table 21.—Principal Producers of Human Plasma Derivatives for the U.S. Market

Company Manufacturing location OwnershipAlpha Therapeutics California Green Cross/JapanArmour Illinois Revlon/USAConnaught Canada Connaught/CanadaCutter North Carolina Bayer/GermanyHyland California Baxter Travenol/USAImmuno Michigan/Austria lmmuno/AustriaMassachusetts State Laboratory Massachusetts State of MassachusettsMichigan State Laboratory Michigan State of MichiganNew York Blood Center New York New York Blood CenterSwiss Red Cross Switzerland Swiss Red CrossNetherlands Red Cross Netherlands Netherlands Red CrossSOURCE: Grossman & Schmitt, 1984


Finished Products Licensed for Usein the United States

Normal Serum Albumin andPlasma Protein Fraction

Normal serum albumin (NSA) and its closerelative, plasma protein fraction (PPF), are pro-duced from Cohn Fraction V, with PPF also con-taining proteins from Cohn Fraction IV-4. UnderFDA standards, greater than 96 percent of the pro-tein in NSA must be albumin, while for PPF therequirement is that only greater than 85 percentof the protein in the solution must be albumin. Theproduction of PPF instead of NSA is economicallyadvantageous to plasma fractionators due to theallowed differential in albumin concentration inthe final product.

Normal serum albumin is available in 5 and 25percent concentrations in various vial sizes. PPFis available ins percent concentrations in variousvial sizes. NSA and PPF are generally regardedas generic products by users, and distributors andhospitals often obtain these products from sev-eral sources (319).

Many of the major manufacturers of NSA andPPF often contract to deliver their products tousers on a direct basis. The need for these prod-ucts and the size of the market requires that nu-merous outlets be made available. Users includehospitals, nursing homes, dialysis centers andpheresis centers, as well as the local physician whorequires an occasional vial to treat a patient inhis office.

NSA and PPF account for approximately one-half of the total dollar volumes of plasma deriva-tives distributed in the United States. In the last5 years, there has been a steady decrease in theuse of PPF, with increasing use of 5 percent NSAdisplacing PPF (486).

One liter of plasma processed into NSA willyield approximately 25 grams of protein. Basedon market prices in mid-1984, the value of theproduct would be between $2.50 and $2.80 pergram, or between $62.50 and $70.00 per liter ofplasma. The manufacturers that operate FDA-licensed facilities for the processing of plasma intoNSA and PPF for the U.S. market are listed intable 22.

Table 22.—Manufacturers of Normal Serum Albumin(NSA) and Plasma Protein Fraction (PPF) Licensed for

Use in the United States

Alpha TherapeuticsArmour PharmaceuticalConnaught LaboratoriesCutter BiologicalHyland LaboratoriesImmunoMassachusetts State LaboratoryMichigan State LaboratoryNew York Blood CenterNetherlands Red CrossSwiss Red CrossSOURCE: Grossman & Schmitt, 1984

Although there are numerous distribution out-lets, the vast majority of these products are sup-plied by the manufacturers and the Red Crossdirectly to hospitals. Distributors are used to serv-ice the specialized needs and regional requirementsof other users.

Every institution that uses NSA and PPF inde-pendently determines the purchasing method thatprovides it the most benefits. The various pur-chasing alternatives currently available are: 1) ar-ranging an independent purchase contract witha manufacturer, 2) participating in group purchas-ing contracts, 3) purchasing from local AmericanRed Cross centers, and 4) purchasing from a com-munity blood center or distributor. Institutionsthat have special requirements, in addition to ne-gotiating prices, make these needs known to theirsuppliers. Some of these special requirementsoften preclude delivery of products in large ship-ments to one central warehouse facility. When thisoccurs, the cost of servicing an account is greatlyincreased, and manufacturers may lose the con-tract to smaller distributors or regional bloodcenters.

One of the most common ways of pricing NSAand PPF is by annual bidding from the variousmanufacturers and suppliers. Some hospitals ne-gotiate annual prices with a local blood center ordistributor that can provide supplies in quantitiesthat meet the hospital’s special needs.

Many not-for-profit hospitals have joined to-gether to form joint purchasing groups. The con-cept of a joint purchasing program is that a sup-plier will bid a lower price if it can more easilyobtain a substantial and reliable quantity of busi-


ness. Member hospitals provide the joint purchas-ing programs with projected use figures. The in-formation is consolidated, and bids are solicitedfrom approved manufacturers and suppliers.

Most purchasing groups operate as clearing-houses for information between their respectivemembers and potential vendors, and never ac-tually take delivery of the products. Orders areplaced by each member institution directly withthe supplier. Delivery and supply arrangementsare coordinated between the hospital and the sup-plier. The purchasing group receives a rebatedirectly from the supplier, based on the actual vol-ume of business, and manufacturers supply monthlyreports to the purchasing groups.

Some purchasing groups or shared service cor-porations actually take ownership of the products.These purchasing groups provide warehousingand delivery services for its members as required.Shared service warehouses offer the hospitals nu-merous advantages, such as ordering all supplies,not only PPF and NSA, from one source. Themanufacturer benefits by reducing costs for ship-ping and billing, since an order will only have tobe sent to one location and billed to one account.

One of the problems arising from purchasinggroup programs is that manufacturers or dis-tributors who are awarded supply contracts arerequired to rebate a specified percentage of therevenue to the purchasing group to offset its costs.Since these costs are paid by the supplier, theymust be factored into the bid price and are ulti-mately paid by the hospital. The issue is oftendebated as to whether or not direct purchasescould be made for less, especially by the largerhospital members.

The large chains of proprietary hospitals alsosolicit annual bids from the major producers. Inmany cases each hospital is given the opportunityto negotiate a more favorable supply arrangementwith a local supplier. If a more favorable pricingarrangement cannot be made, the hospital canpurchase from the vendor who has been awardedthe national supply agreement for the chain.Dialysis centers and nursing homes requiring NSAand PPF usually negotiate with local sources atspot market prices because their requirements areoften very sporadic.

In all cases, however, supply is a major factor.Reliability is often more important than savinga few cents per vial. When an organization canavoid having to carry a large dollar item in in-ventory, such as NSA and PPF, it often offsetsthese costs by purchasing from local sources ratherthan purchasing in large quantities from one ofthe manufacturers.

Supply and availability of all plasma deriva-tives are dependent on both the availability of theraw material (human plasma) and the prices ob-tainable for manufactured products. Prices as wellas supplies have traditionally had very large“peaks and valleys.” To offset price volatility, sup-pliers and manufacturers often resort to producttransfer from one country to another.

Competition for business among the manufac-turers and suppliers of NSA and PPF is very fierce.Traditional emphasis has been for pricing to actas the main element for differentiation. Purchas-ing groups which control a substantial volume ofthe NSA and PPF market tend to treat these prod-ucts as commodities. The market is sensitive toprice changes and thus maintains a high level ofprice-competitiveness. Margins earned by man-ufacturers on the sale of NSA and PPF are sub-stantially below those characteristically earned onthe sale of pharmaceutical products.

The second major determinant of consumerpreference in the purchase of NSA and PPF is con-fidence in the suppliers’s ability to fulfill its pur-chase obligation. Long production lead time, aswell as sudden pricing shifts, make it difficult forsuppliers to plan for and rapidly provide addi-tional material. Some hospitals have encounteredsupply problems with a particular vendor and areoften reluctant to purchase from that firm again,even if the price offered is lower than that of acompetitor.

Other less significant determinants of purchaserpreference are items such as packaging, whichdoes affect sales to some accounts. Package size,type of intravenous hanger, cap or stopper, aswell as the administration set used, have becomecompetitive opportunities.

Differentiations between NSA and PPF prod-ucts have become more related to the source of


service, packaging, and availability than to theproduct itself.

Coagulation Factors

Approximately one-quarter of the total dollarvolume of plasma derivatives distributed in theUnited States are represented by coagulation fac-tors, which are used for treatment of individualswith congenital deficiencies of Factor VIII or Fac-tor IX. Antihemophilic factor, or concentrates ofFactor VIII, is distributed and prescribed by thenumber of “activity units” desired. An “activityunit” is defined as that amount of Factor VIII pres-ent in 1 ml of normal plasma. The protein is veryunstable and is therefore prepared as a lyophilizedpowder, which is reconstituted with sterile waterprior to injection, AHF is available in recon-stituted volumes of 10 to 40 ml, with associatedactivity unit ranges from 250 or 400 to 1,250 or1,500. Manufacturers licensed by the FDA for Fac-tor VIII and Factor IX sales in the United Statesare listed in table 23.

All major plasma fractionators in the UnitedStates produce AHF (see table 23). Unlike otherplasma derivatives, coagulation factors are pro-duced only from plasma frozen within 24 hoursof collection. The activity of these factors de-creases rapidly unless the plasma is frozen andstored at —18 o C or colder until used by a plasmafractionator. Economics dictate that plasma befrozen as quickly as possible after collection inorder to maximize product yields.

One of the major disadvantages of use of AHFhas been the inability to treat the product in amanner that would reduce or eliminate the po-tential for disease transmission. Recently all four

Table 23.-Manufacturers of Coagulation FactorsLicensed for Use in the United States

Factor IX Anti-InhibitorManufacturer Factor Vlll Complex ComplexAlpha. . . . . . . . . . x xArmour . . . . . . . . x xCutter . . . . . . . . . x xHyland . . . . . . . . x x xImmuno . . . . . . . xNew York Blood

Center. . . . . . . xSOURCE: Grossman & Schmitt, 1984.

commercial manufacturers received approvalfrom FDA to begin marketing of heat-treatedAHF. Although some manufacturers have datawhich indicate the process may reduce the trans-mission of viral diseases, there is no AHF prod-uct which has yet been proven to be entirely freeof risk.

One liter of frozen plasma processed for AHFwill yield approximately 200 AHF activity units.Based on market prices in mid-1984, the value ofthis product would be between $0.07 and $0.10per activity unit, or between $14.00 and $20.00per liter for non-heat-treated product. The heat-treated product sold during the same period for$0.11 to $0.16 per activity unit, or approximately$22.00 to $32.00 for the yield from 1 liter of fro-zen plasma. (It has been reported that the yieldof heat-treated Factor VIII is slightly less than theyield of non-heat-treated Factor VIII from 1 literof frozen plasma. )

The second major coagulation factor is FactorIX Complex, which is a product consisting ofcoagulation factors II, VII, IX, and X. Factor IXComplex is used in treatment of hemophilia B,as well as in treatment of some patients with in-hibitors to Factor VIII. As with AHF, Factor IXComplex is measured in activity units and is pre-pared as a lyophilized powder which is reconsti-tuted prior to injection.

Most of the U.S. market for Factor IX Com-plex is shared by two plasma fractionators, Cut-ter and Hyland. The total U.S. consumption ofFactor IX Complex is estimated at approximately130 million activity units per year. Based on ayield of approximately 400 activity units per li-ter, it takes 325,000 liters of plasma to meet thisneed. Based on market prices in early 1984, thevalue of Factor IX Complex was between $7.8 mil-lion and $13 million.

The other coagulation factor product is “ac-tivated” Factor IX, or anti-inhibitor coagulantcomplex, for treatment of patients with inhibitorsto Factor VIII. This part of the market is servicedby two companies, Hyland and Immune.

In addition to the manufacturers listed above,who distribute the products manufactured in theirown processing facilities, the American Red Cross


has plasma fractionated into the various clottingfactors by selected manufacturers. These plasmaderivatives are returned to the Red Cross regionalblood centers for distribution to hospitals and he-mophilia treatment centers. Numerous suppliersand regional blood centers also purchase prod-ucts for distribution to their local hospitals andhemophilia treatment centers.

Distribution channels for the coagulation pro-teins vary from region to region. Availability isoften dependent on whether there is a hospital orhemophilia treatment center in a particular region.Most large urban areas have at least one majorhemophilia treatment center that routinely stocksthe various clotting factors.

Depending on the size of the region, patient re-quirements, and product preferences, numerouspurchasing channels can be encountered. The hos-pital may solicit bids for the various factors re-quired through its Purchasing Office in conjunc-tion with the Pharmacy or Blood Bank, but theredoes not appear to be a standard as to which de-partment should take responsibility for purchas-ing, inventory control, or distribution of coagula-tion factors within a hospital.

Depending on the institution, it could be as-signed to the Blood Bank, Pharmacy, Purchas-ing Office, or Hemophilia Treatment Center. Itis not uncommon for one company to receive theentire award for a l-year period for a particularproduct at a hospital or hemophilia treatment cen-ter. When numerous patients are treated at a hos-pital, the treating institution may require prod-ucts manufactured by several manufacturers. Toassist hospitals and reduce their inventory require-ments, many institutions utilize the services of alocal distributor or regional blood center, whichmaintains adequate supplies of each of the neededclotting factors.

In recent years, home care treatment of hemo-philiacs has increased. At least one manufacturer,numerous distributors and pharmacies, and sev-eral regional blood centers have begun to supplythese products directly to the patient at home.Orders are filled in response to instructions fromthe treating physician, and home care treatmenthas lifted the burden from the patient of havingto visit the hospital each time a treatment is re-

quired. The regional blood centers, manufac-turers, distributors, and pharmacies that distrib-ute clotting factors to home care patients oftenprovide the supplies needed to administer the clot-ting factors—which saves time, money, and ef-fort in having to secure them from another source.

Some manufacturers will only supply end-users,such as hospitals or blood centers, or directly topatients. Other suppliers provide products to end-users, distributors, and other suppliers. Suppliersof coagulation factors vary from region to region,as does the availability of these products. Pur-chase and selection of a specific brand is often leftto the patient, unless the physician specifies a par-ticular brand.

Packaging, supplies, and availability, as wellas price contribute to the numerous differencesin the supply and use of the various clotting fac-tors. Brand awareness of the product on the partof physicians, nurses, and patients often plays animportant role in sales of various coagulationfactors.

Brand loyalty is encouraged by manufacturersby supplying information at educational seminarsand through direct communication with the phy-sician and hemophilia nurse-clinician. Informa-tion is also provided directly to the patient bycompany representatives at many of the variousnational and local hemophilia meetings. Manu-facturers provide a wide array of product sizes,and product preferences and loyalty are oftenbased on the successful response a patient has hadwith the product in past treatment episodes, noton what manufacturers tell patients.

Immune Globulins

Immune serum globulins (ISG) account for ap-proximately 10 percent of the total dollar volumeof plasma derivatives distributed in the UnitedStates. A typical preparation of ISG will containmultiple antibodies to a wide variety of infectiousagents.

ISG is available in either “normal” or “hyperim-mune” preparations. The “normal” product is pro-duced from the plasma of donors who have notbeen stimulated to produce elevated levels of spe-cific antibodies. “Hyperimmune” ISG products are

Ch. 3—The Blood Services Complex ● 71

obtained from donors with elevated levels of aspecific antibody. This elevation may occur nat-urally, as with antibodies to the Rh blood type(Rho(D)) or hepatitis B, as a result of the donor’sprior medical experience, or maybe obtained byinjection of materials designed to produce an im-mune response in the form of antibody formation(319).

Specific types of ISG which are presently avail-able in the United States include normal immuneserum globulin, and hyperimmune globulinsagainst hepatitis B, measles, mumps, pertussis,tetanus, rabies, varicella zoster, and RHo(D). Allof these ISG products are available for intra-muscular, not intravenous, injections. ISG is pre-pared as a 16.5 percent protein solution and dis-tributed in vials ranging from 2 to 10 ml each.

In the United States, varicella zoster immuneglobulin (VZIG) is manufactured only by the Mas-sachusetts Biologics Laboratory and is distributedprimarily by the American Red Cross and otherregional blood centers. Since this limited marketdrug was licensed, no other manufacturer hasbegun to produce it for distribution within theUnited States.

Intravenous gamma globulin is indicated formaintenance treatment of patients who are unableto produce sufficient amounts of IgG antibodies.Use of this product may be preferred to that ofthe intramuscular immunoglobulin preparations,especially in patients who require an immediateincrease in intravascular immunoglobulin levels,in patients with small muscle mass, and in patientswith bleeding tendencies in whom intramuscularinjections are contraindicated.

Intravenous gamma globulin (IVGG) is cur-rently produced only by Cutter, and is availabledirectly from Cutter, regional blood centers, ordistributors for purchase by prescribing hospitalsand physicians. Immuno and Sandoz have appliedfor licensing of their IVGG products. The prod-ucts under review by FDA are prepared in alyophilized form, whereas Cutter’s IVGG is pre-pared in solution. Manufacturers of some of theseproducts are listed in table 24.

Manufacturers of the various immune globulinsdistribute their products through many channels.

Table 24.—Manufacturers of Selected ImmuneGlobulins for Use in the United States

Manufacturer ISG IVGG RHoD HBIG VZIG

Abbott ., . . . . . x xArmour. . . . . . . . . . . . . . . . X xConnaught/BCA, . xCutter. . . . . . . . . . . . . . . . ., X X x xHyland . . . . . . . . . . . . . . XImmuno ., . . Xa

KABI . . . . . . . . . . . . . . . . . . . xMassachusetts

Biologics Laboratory. . . . xMerck Sharp & Dohme . . . . xNew York Blood

Center . . . . . . . . . . . . . . . . XOrtho . . . . . . . . . . . . . . . . . . . xSandoz. . . . . . . . . . . . . . . . . . Xa%ppi(catlon for licensing pending before FDA as of May 1~.KEY: ISG: immune serum globulin; IVGG: intravenous gamma globulin; RHoD:

anti-RH antigen immune globulin; HBIG: hepatitis B immune globulin; VZIG:varicella zoster immune globulin.

SOURCE: Grossman & Schmitt, 1984.

While almost every hospital utilizes some or allof the immune globulins, there is usually no cen-tral distribution or supply network as is availablefor normal serum albumin or coagulation factors.Some manufacturers, such as Ortho, have a largeshare of a specific market such as for RHo(D),but they do not sell other plasma derivatives inthe United States.

Immune globulin products are routinely deliv-ered by pharmaceutical distributors, hospitalsupply companies and blood centers, as well asdirectly by manufacturers to the numerous hos-pitals, nursing homes, physicians, and clinics thatprescribe these preparations.

Many manufacturers have their own sales rep-resentatives, who contact individual physiciansto encourage the ordering of brand-specific prod-ucts. Within the hospital, these products may beordered by the Pharmacy, Purchasing Office,Blood Bank, or by a special user department. Thedepartment requesting the product often specifieswhich supplier or manufacturer should be used,based on services and product results in the past.

Annual bidding for each immune globulinproduct is not as prevalent as for other humanplasma derivatives, but is gaining. Usually, anaward is made for one company’s product, andsupply has not been a factor since all manufac-turers usually have adequate inventories.


Many other manufacturers of immune globulinsoffer various products and numerous customeradvantages, including low prices, well-located dis-tribution outlets, and ease of ordering. The twomost important advantages are availability at thetime the product is needed and pricing.

Reagent Products

Plasma not suitable for further manufactureinto injectable is available for use by reagentmanufacturers. Plasma for this market is avail-able from a variety of sources, including regionalblood centers, hospital blood banks, plasmapher-esis collection centers, and plasma fractionators.

The number of manufacturers within the UnitedStates requiring plasma for reagents is quite large,and each one has strict requirements for theplasma that it obtains. Usually, human plasmadestined for reagent use is sold to plasma dealerswho routinely supply laboratory reagent manu-facturers and are familiar with the necessary speci-fications. Many of these dealers also provide awide array of animal proteins to the same lab-oratory reagent manufacturers.

Each manufacturer of reagent products providesits sources of human plasma with the requirementsthat must be followed in the preparation of thematerial. These strict manufacturing specificationsoften limit the sources of plasma to a highly selectgroup of hospitals, plasma collection centers, andbulk product manufacturers. Plasma suppliersthat specialize in meeting the reagent manufac-turer’s specifications usually maintain a long-termrelationship with these manufacturers. Some col-lection centers specialize in preparation and seg-regation of plasma from donors with special orrare characteristics for use by selected reagentmanufactures.

Other Plasma Derivatives

At the present time, many proteins found inhuman plasma are being evaluated and studiedfor their therapeutic value. Proteins such as AlphaI Antitrypsin, Antithrombin III, Factor XIII,Fibronectin, Tissue Plasminogen Activator, vonWillebrand Factor, and Interleukin-2, as well asnew immune globulin preparations, are beingevaluated by numerous commercial and nonprofit

research facilities. The American Red Cross andthe Michigan Department of Public Health arejointly evaluating as a new plasma derivative aFactor IX Concentrate depleted of Factors II,VII, and X; and a concentrate of C1 Inactivator(373).

Several new plasma derivatives have beenlicensed for use in other countries and will, afterpassing the necessary testing, be licensed in theUnited States. Some of these products are: 1) An-tithrombin III, currently marketed in Europe byBehring (Germany) and Kabi (Sweden); 2) Fac-tor XIII, currently available in Europe by Behr-ing (Germany); and 3) Fibrin Tissue Sealant(Tissell), currently marketed in Europe by Im-muno (Austria) and projected to be available inthe United States in 1985.

Costs of Major Plasma Derivatives

As already discussed, the market structure forplasma derivatives differs substantially from thatfor whole blood. However, the voluntary collec-tors compete with the commercial sector whenmarketing plasma products. Prices charged byselected not-for-profit blood centers are shown intable 25. Current retail prices for Factor VIII inthe not-for-profit centers range from $0.10 to$0.147 a unit for non-heat-treated Factor VIII andhigher for heat-treated Factor VIII. Prices chargedby hospitals to patients are reported to range from$0.09 to $0.26 per unit in the United States (99;464). Assuming an average consumption of 50,000units per year (293), Factor VIII could cost theaverage hemophiliac from $4,5oo to $13,000 peryear, although “average” consumption can be amisleading figure.

Hemophiliacs can require a large infusion ofFactor VIII for surgery, including minor surgery.Needs also vary for mild, moderate, and severehemophiliacs. In addition, from 10 (99) to 15 (76)percent of hemophiliacs have inhibitors to Fac-tor VIII and require anti-inhibitor coagulant com-plex, which can cost from $0.70 to $1.00 per unit(99).

Federal activities in support of hemophiliacswere discussed in chapter 2. While provisions forhemophilia care have improved in the last dec-ade, coverage for coagulation proteins on an out-


Table 25.—Representative Blood Center Prices for Plasma Derivatives

Blood Center

Goldman S.E. Central NYBCa

Major blood derivatives (Okla.) La. Sacramento (Pittsb.) List Actual

Serum Albumin 5°/0 250 mlSerum Albumin 5°/0 500 mlSerum Albumin 25°/0 20 mlSerum Albumin 25°/0 50 mlSerum Albumin 25°/0 100 mlPlasma Protein F. 250 mlPlasma Protein F. 500 mlFactor Vlll

Factor VIII, (Heat-treated)

Factor Vlll Anti-InhibitorComplex 200-600 FECU

Factor Vlll InhibitorComplex 200-600 FECU

Factor ll, Vll, IX, Xcomplex 500 u vial

34.1OF67.65F

35.20F

0.132iu C

0.165iu H

0.77iu FB

1.22H

57.20C

28.0055.6520.00

31.00 28.0075.00 55.6536.00 27.35

54,350.10iu

62.50 0.12iu

41.0082.00

41.0082.0041.0082.00

0.11 N0.147A10.1 IArO.1O4CO.1O8H0.187A1 b

0.145Ar0.142C0.129–0.153H

0.75FB

1.01 H

0.066A10.057Ar0.065C0.113H

31.0062.00

31.0062.0031.0062.00

0.110.1470.110.1040.1080.1870.1450.1420.129–0.153H

.75

1.01

0.0660.0570.0650.113

Legend: Al =Alpha Therapeutics product; Ar=Armour product; C= Cutter product; F= Fenwal product; FB = FEIBA product; H = Hyland product, N = New York BloodCenter product.

Where no letter is given, product name was not specified.

and hemophilia home care service.

SOURCE: Grossman & Schmitt, 1964

patient basis varies widely, and they are often not expensive alternatives for volume restoration (seecovered because they are regarded as drugs rather ch. 5, pt. 4). A 12.5 gram dose of albumin, pre-than biologics. When they are covered, copay- pared by a commercial fractionator and purchasedment provisions can burden patients. Pharma- from a blood center, cost approximately $32.00ceutical companies that distribute Factor VIII in 1984. In 1982, the cost from commercial man-sometimes ignore the copayment requirement for ufacturers was $27.40 (464).individual hemophilia patients.

The price of albumin has not been challengedper se, but some have encouraged the use of less

CONCLUSION

U.S. blood resources consist of two distinct sec- blood collected, markets (domestic v. interna-tors, a voluntary whole blood system and a com- tional), indications for use, and Federal policy at-mercial source plasma industry (fig. 8). Human tention and directives. Even the acquisition andblood is the common denominator, but there are use of the products of these two sectors differ.distinct differencesdonor populations,

between the two sectors in Whole blood and its components are ordered andrecruitment policies, type of monitored through blood banks and transfusion

38-647 0 - 85 - 6


Figure 8.—Flow of the Nation’s Blood Resources, 1980

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