American Red Cross fined for violations

November 27, 2006

By ANDREW BRIDGES, Associated Press Writer

WASHINGTON - The federal government has fined the American Red Cross $5.7 million for violating blood-safety laws and the terms of a 2003 consent decree.

The fine covers quality assurance, inventory management, control of non-conforming blood products, donor screening and blood component manufacturing issues turned up during a 2005 inspection of a Red Cross facility in West Henrietta, N.Y., the Food and Drug Administration said in a Nov. 21 letter.

The letter, to Red Cross interim president and CEO Jack McGuire, was posted Monday on the FDA Web site.

The fine appears to be the largest single penalty ever assessed under terms of a 2003 court settlement that allows the large fines when the Red Cross violates FDA rules. Previously, the FDA had fined the Red Cross a total of nearly $10 million.

"We will review the letter, which we are doing now, and if we have any questions or issues that we want to resolve, we will get back with the FDA," American Red Cross spokesman Ryland Dodge said.

Messages left with two FDA representatives were not immediately returned.

The fine stems from the FDA's inspection of the Red Cross New York-Penn Region's blood services facility. FDA inspectors, over 29 days, turned up 207 deviations from a 2004 plan devised to detect, investigate, monitor and correct problems. The inspection was the first comprehensive evaluation of how the Red Cross implemented the plan, the FDA said.

The Red Cross board of governors has asked for an independent and comprehensive assessment of how it complies with FDA regulatory requirements.

The ultimate size of the fine could grow if the FDA deems a required compliance plan inadequate, the agency said.

The Red Cross said does not use donated money to pay fines, but instead relies on operating funds, it said. Those include revenue from the sales of blood products.

The 2003 consent decree settled charges that the Red Cross had committed "persistent and serious violations" of federal blood safety rules dating back 17 years.

The Red Cross provides more than 40 percent of the nation's blood supply, selling blood products to health facilities.
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