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The Food and Drug Administration (FDA) today announced that the American Red Cross (ARC) has agreed to substantial revisions in its consent decree with the FDA. The revised consent decree includes financial penalties if, in the future, ARC fails to comply with FDA laws and regulations that are aimed at ensuring the safety of the nation's blood supply.
In the original 1993 consent decree, ARC agreed to establish clear lines of managerial control over a newly established comprehensive quality assurance system in all regions; to enhance training programs; and to improve computer systems, records management, and policies for investigating and reporting problems, including adverse reactions.
The revised consent decree includes many of the same substantive provisions, updated to provide a series of clear deadlines for completing specific requirements of the decree and addressing additional types of violations observed since the original consent decree was signed in 1993. It also includes a comprehensive penalty scheme to address potential future violations.
If ARC fails to comply with blood safety rules and revised decree requirements, FDA can assess penalties up to the following maximum amounts:
During the first year of the decree, penalties will be capped at one percent of the gross annual revenues generated by ARC's Biomedical Products and Services (ARC's blood operation). These gross annual revenues are currently $1.924 billion. The cap increases to two percent in the second year, three percent in the third year, and reaches the maximum of four percent in the following years.
As in the original 1993 consent decree, ARC has agreed to retain the services of outside consultants to assure quality control. In addition, ARC must reimburse FDA for the costs of all FDA inspections that FDA considers necessary to evaluate ARC's compliance with the decree.
"The new financial penalties in the consent decree create an important new incentive for ARC to improve the processes and controls necessary for making safer blood products," said FDA Commissioner Mark B. McClellan, M.D., Ph.D. "I am hopeful that the acceptance of this agreement by ARC's new leadership reflects a new willingness to implement a management culture that expects and achieves good blood safety practices."
ARC is responsible for approximately 45% of the nation's blood supply; other independent community-based blood centers together provide another 45%, and hospitals collect most of the remaining 10%. Since entering into a consent decree with ARC in 1993, FDA has also reached similar agreements in 1996 with other major blood manufacturers such as the New York Blood Center and United Blood Systems. Those organizations have been able to avoid the chronic recurrence of problems that has characterized the ARC's performance under its 1993 agreement with FDA. In addition, FDA inspections of many other independent blood centers result in fewer significant findings of safety problems, consistent with management practices that consistently support safe blood practices.
This agreement between FDA and ARC today stems from FDA concerns arising from inspections over the past 17 years revealing persistent and serious violations of blood safety rules. One such inspection that raised substantial concerns occurred at ARC headquarters in the spring of 2000.
FDA and ARC began negotiations to amend the consent decree in August 2000. In December 2001, when it appeared that a settlement could not be reached, the government filed a motion to hold ARC in civil contempt for violating the 1993 decree and to amend the 1993 decree.
The court has not ruled on the motion the government filed in 2001. The court strongly encouraged both parties to continue negotiations and to reach a settlement if possible. To that end, both FDA and ARC agreed suspend court proceedings and continue talking. Today's agreement resolves the dispute.
FDA has reviewed the results of the most recent inspection of ARC headquarters, which ended in December 2002. The inspection revealed numerous and troubling problems in producing blood products - including systemic problems such as a lack of management control and quality assurance oversight that could lead to a patient receiving potentially unsafe blood.
For example, ARC failed to correct deviations from the previous inspection; ARC's lack of quality assurance oversight led to the release of unsuitable products; and the lack of ARC's inventory control led to the unknown disposition of blood products. FDA is detailing these concerns in a formal letter it will send to ARC under the terms of the 1993 consent decree on Monday, April 14. The letter highlights the need for management changes to promote a culture of safety at ARC.
With the legal issues now resolved and when the revised decree has been entered
by the court, FDA expects that ARC will be able to concentrate fully on responding
to the agency's concerns about
blood safety. FDA, for its part, will have enhanced tools to encourage ARC to
promptly correct problems when they are discovered and, more importantly, to
take action proactively to prevent further violations from occurring.
Because receiving blood products always carries a degree of risk, it is important that the blood industry complies with the full set of safeguards in FDA laws and regulations to minimize that risk. However, any particular breach of the safeguards does not necessarily translate into unsafe blood products, because the safeguards designed to protect the blood supply are to some extent overlapping.
"Patients who need a blood transfusion should not hesitate to get one," Dr. McClellan emphasized, "The risk of failing to get a needed blood transfusion far outweighs the risks of transfusion."
As always, FDA encourages donors to come forward to give blood, which is perishable and often in short supply.
The revised consent decree between FDA and the ARC has been submitted to the
court for approval and will not be enforceable until it has been approved.
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April 14, 2003 formal letter from FDA to American Red Cross