DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration
Baltimore District Office
Central Region
6000 Metro Drive, Suite 101
Baltimore, MD 21215
Telephone: (410) 779-5454
FAX: (410) 779-5707

February 6, 2008

ADVERSE DETERMINATION LETTER

BY FACSIMILE &
CERTIFIED MAIL
RETURNED RECEIPT REQUESTED

Mr. J. Chris Hrouda
Executive Vice President
Biomedical Services
American National Red Cross
2025 E Street, N.W
Washington, D.C. 20006

RE: United States v. American National Red Cross, Civil Action No. 93-0949 (JGP)

Dear Mr. Hrouda:

Paragraph X.A. of the Amended Consent Decree of Permanent Injunction (Decree) entered on April 15, 2003, provides the Food and Drug Administration (FDA) with authority to assess a penalty for "each unit of unsuitable blood or blood component that [the American Red Cross (ARC)] distributes after entry of [the Decree] for which FDA determines that the release was preventable by ARC…." Paragraph X.A.2. of the Decree provides that "[i]f FDA determines that use of, or exposure to, the product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote, FDA may assess a penalty of up to $5,000 for each such unit of blood or each such blood component. Notwithstanding the foregoing, FDA shall not assess ARC under this subparagraph (X.A.2) for the improper release of more than 100 units in any one event."

FDA has recently completed a review of its database and files to identify classified¹ recalls conducted by ARC. We focused on the recalls that occurred during the period of April 15, 2003, through April 15, 2006. However, several recall events involved the distribution of multiple unsuitable blood products over a period of time, and some of the individual distributions within such events fell outside the specified time frame. Such distributions and events are nevertheless included in this Adverse Determination Letter (ADL) but will not be revisited in future ADLs. In addition, this ADL does not include any classified recalls previously identified in the May 16, 2005 or September 7, 2006 ADLs. Furthermore, this ADL includes only those recall events classified by FDA as of June 21, 2007, and, therefore, does not necessarily include all events that occurred during the specified time period. After FDA review, additional penalties may be assessed for events that occurred during the aforementioned time period but not included in this or other previous ADLs.

In FDA’s review, we identified 113 events in which ARC reported to FDA that it retrieved unsuitable blood components. The unsuitable blood components are listed by event in the attachment to this letter. The events are identified by ARC-assigned biological product deviation numbers and FDA-assigned recall numbers and are arranged by ARC regions. FDA determined that all of these events were preventable by ARC, that they all meet the health hazard criteria of Paragraph X.A.2. of the Decree, and that no penalty exception listed in Paragraph X.B. of the Decree applies. These events involved a total of 4,094 unsuitable blood components. However, seven of the recall events involved distribution of more than 100 unsuitable blood components but were limited for penalty purposes to 100 units as provided by Paragraph X.A.2. of the Decree. Thus, the total number of unsuitable blood components for which FDA assessed a penalty under Paragraph X.A.2. of the Decree is 1,001.

Paragraph X.A.2. of the Decree sets forth three factors FDA must consider when determining whether to assess a penalty and the amount of a penalty: "(1) the potential effect of the event on the public health, e.g., the number and seriousness of exposures; (2) ARC’s trends with respect to the same or similar events involving the release of unsuitable products; and (3) the degree to which ARC contributed to the improper release of the blood or blood components." FDA has considered these factors and has assessed penalties accordingly for each unsuitable blood component (see attached list). Some of the individual penalty amounts are higher than penalties assessed for similar events in earlier ADLs. FDA believes this adjustment is warranted based on the cumulative numbers of such events. The total penalty being assessed under Paragraph X.A.2. of the Decree is $4,614,000.

Paragraph X.C. of the Decree provides that FDA "may assess an additional penalty of up to $50,000 for each unit of unsuitable blood or blood component that was returned by a consignee and re-released for distribution by ARC, if ARC had the ability to determine that the blood or blood component was unsuitable, and failed to do so. ARC shall not be assessed the foregoing penalty if ARC demonstrates to FDA’s satisfaction that ARC took appropriate steps to bring blood and blood components into compliance with the law, ARC SOPs, and this Order."

ARC reported to FDA that on July 2, 2004, it re-released a Red Blood Cell Leukocytes Reduced blood component that it had previously "recalled" from a consignee on June 25, 2004. ARC initially recalled the component from the consignee because required quality control steps were performed incorrectly on the microhematocrit centrifuge used during collection of the unit of whole blood². ARC’s problem report [REDACTED] indicates that after it notified the consignee of this component on

June 25, 2004, the consignee returned the component to the ARC, instead of discarding it. ARC subsequently removed the computer hold applied to the unit, which resulted in ARC’s re-releasing of this unsuitable component to another consignee for transfusion purposes. FDA has assessed a $35,000 fine under Paragraph X.C. of the Decree for the re-release of an unsuitable blood component.

Paragraph IX.F.5 of the Decree states that "All penalties assessed under this Order shall be based on the year in which the violative conduct occurred. The annual cap amounts described in paragraph IX.F.1 of this Order shall also be attributed solely to the year in which the violative conduct occurred." The penalty period described in this letter includes violations that occurred in 2003, 2004, 2005 and 2006. The penalty amounts assessed as a result of the violations for each of those years is $793,000 in 2003, $698,000 in 2004, $3,090,000 in 2005 and $68,000 in 2006.

The total fine that FDA is imposing is $4,649,000. As provided in the Decree, if ARC agrees with this adverse determination, it must, within 20 days of receipt of this letter, notify FDA of its intent to come into compliance with the Decree, submit a plan to do so, and pay the penalty no later than thirty days (30) thereafter. If ARC disagrees with FDA’s adverse determination, it shall respond in writing within 20 days of receipt of this letter, explaining the reason(s) for disagreeing with FDA’s determination. The response must be submitted to me at the Food and Drug Administration, Baltimore District Office, 6000 Metro Drive, Suite 101, Baltimore, Maryland 21215, with a copy to Jesse Goodman, M.D., M.P.H., Director, Center for Biologics Evaluation and Research, 1401 Rockville Pike, Suite 200N, Rockville, Maryland 20852.

Sincerely yours,

[Handwritten Signature]

Evelyn Bonnin
Director, Baltimore District

Enclosure

cc:     Mary Elcano
         Interim President and CEO
             and General Counsel
         American National Red Cross
         2025 E Street, N.W.
         Washington, D.C. 20006

         Eva Quinley
         Senior Vice President for Quality
             and Regulatory Affairs
         American National Red Cross
         2025 E Street, N.W.
         Washington, D.C. 20006

         Bonnie McElveen-Hunter
         Chairman, Board of Governors
         American National Red Cross
         2025 E Street, N.W.
         Washington, D.C. 20006

^[1]Recall classifications are numerical designations assigned by FDA to indicate the relative degree of health hazard presented by the recalled product. 21 CFR § 7.3(m).

^[2]Microhematocrit centrifuges are used to determine donor hematocrit levels and to verify qualitative donor hematocrit tests. Collecting blood from donors with low hematocrit levels could be detrimental to the donor and result in blood components that do not possess their purported quality or potency. Day-of-use quality control checks are required to ensure the functionality and accuracy of such equipment.

AMERICAN RED CROSS:  Certain Class II recalls for the period April 15, 2003 through April 15, 2006.

Several recall events listed below involved the distribution of multiple unsuitable blood products over a period of time, and some of the individual distributions within such events fell outside the April 15, 2003 through April 15, 2006 time frame.  In addition, this chart does not include any classified recalls previously identified in the May 16, 2005 or September 7, 2006 Adverse Determination Letters (ADLs).  Furthermore, this chart includes only those events classified by FDA as of June 21, 2007, and therefore does not necessarily include all events that occurred during the specified time period.  After FDA review, additional penalties may be assessed for events that occurred during the aforementioned time period but not included in this or other previous ADLs.  ARC did not identify to FDA any recalls that met the requirements for penalties under Paragraph X of the Decree for the following regions:

Appalachian Region, FDA Registration 1173010
Central Plains Region, FDA Registration 1973042
Greater Alleghenies Region, FDA Registration 2573016
Greater Ozarks-Arkansas, FDA Registration 2372998
Gulf Coast, FDA Registration 1073005
Heart of America, FDA Registration 1473043
Midwest, FDA Registration 1973037
New York-Penn, FDA Registration 2438445
Northeastern Pennsylvania, FDA Registration 2573018
Northern California, FDA Registration 2971430
Penn Jersey, FDA Registration 2573021
Puerto Rico, FDA Registration 2675945
River Valley, FDA Registration 1073003
Southwest, FDA Registration 1673040
Western Lake Erie, FDA Registration 1573020