DEPARTMENT OF HEALTH AND HUMAN SERVICES

    ADVISORY COMMITTEE ON BLOOD SAFETY AND AVAILABILITY

    Nineteenth Meeting

    "The Economics of Blood and Where Blood Fits in the

    Overall Cost of Health Care"

    9:03 a.m.

    Friday, May 2, 2003

    Hyatt Regency Hotel on Capitol Hill

    400 New Jersey Avenue, N.W.

    Washington, D.C.  20001

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[`Committee Members`]{.underline}

    Mark Brecher, M.D., Chairman

    Celso Bianco, M.D.

    Rajen K. Dalal, MBA

    Richard Davey, M.D.

    Ronald Gilcher, M.D.

    Edward D. Gomperts, M.D.

    Paul F. Haas, Ph.D.

    W. Keith Hoots, M.D.

    Dana Kuhn, Ph.D.

    Jeanne Linden, M.D.

    Karen Shoos Lipton, J.D.

    Lola Lopes, Ph.D.

    John Penner, M.D.

    Mark Skinner, J.D.

[`Non-Voting Government Representatives`]{.underline}

    Mary E. Chamberland, M.D.

    Jay Epstein, M.D.

    Colonel G. Michael Fitzpatrick

    Harvey Klein, M.D.

[`Consultants to the Committee`]{.underline}

    Captain Lawrence McMurtry, Acting Assistant Secretary

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[`AGENDA ITEM`]{.underline}`	`[`PAGE`]{.underline}

    Call to Order	4

    Roll Call	4

    Can the Blood Centers Just Charge More?

      Melissa Fisher	6

      Mike Fuller	49

    Break

    FDA Update on HCV - Paul Mied	97

    CDC Update on SARS - Matthew Kuehnert	121

    Lunch	148

    Public Comments	149

    Committee Discussion	159

    Adjournment	255

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    	DR. BRECHER:  We're going to begin.  I'd like to welcome everybody to the second day of the Advisory Committee on Blood Safety and Availability for the economics of rounding dust.

    	[Laughter.]

    	DR. BRECHER:  We have to do a roll call again today, and Mac is going to start with the roll call.  He's getting his jog in for the morning.

    	CAPT. McMURTRY:  Mark Brecher is here.  		Larry Allen?

    	[No response.] 

    	CAPT. McMURTRY:  Celso Bianco?

    	DR. BIANCO:  Here.

    	CAPT. McMURTRY:  Rajen Dalal?

    	MR. DALAL:  Here.

    	CAPT. McMURTRY:  Richard Davey?

    	DR. DAVEY:  Here.

    	CAPT. McMURTRY:  Ronald Gilcher?

    	DR. GILCHER:  Here.

    	CAPT. McMURTRY:  Paul Haas?

    	DR. HAAS:  Here.

    	CAPT. McMURTRY:  Keith Hoots?

    	DR. HOOTS:  Here.

    	CAPT. McMURTRY:  Dana Kuhn?

    	DR. KUHN:  Here.

    	CAPT. McMURTRY:  I'm sorry.  I skipped Edward Gomperts.

    	DR. GOMPERTS:  Here.

    	CAPT. McMURTRY:  Jean Linden?

    	DR. LINDEN:  Here.

    	CAPT. McMURTRY:  Karen Lipton.

    	MS. LIPTON:  Here.

    	CAPT. McMURTRY:  Lola Lopes? 

    	DR. LOPES:  Here.

    	CAPT. McMURTRY:  Gargi Pahuja is still not here.  John Penner?

    	DR. PENNER:  Here.

    	CAPT. McMURTRY:  Mark Skinner?

    	MR. SKINNER:  Here.

    	CAPT. McMURTRY:  John Walsh is absent today.  Jerry Winklestein is absent today.

    	One last thing before we start, I only have two of those affidavits that the lady talked to us about yesterday.  I need you all to sign those, the Affidavit of Appointment, and get it in to me.  Celso, I have yours.

    	DR. BRECHER:  Caroline has it.

    	CAPT. McMURTRY:  Never mind.

    	DR. BRECHER:  We're going to begin by discussing "Can the blood centers just charge more?"  We actually only have two speakers, as opposed to the three that were on the original agenda.

    	Why don't we begin.

    	MS. FISHER:  Good morning.  My name is Melissa Fisher, and I'm the chief financial officer for the Gulf Coast Regional Blood Center.  I've been with the blood center for about the last eight years and have had the opportunity to see a lot of changes in the industry, some of which have come very quickly these days.  I think yesterday's discussions were very enlightening, and I'll be able to reflect on some of those as we move through today.

    	First off, I'd like to give you a perspective about who we are because in this topic of "Can we charge more?" I think it's important to understand who the blood center is.  We're a regional blood center based in Houston, Texas.  We cover about 24 counties in the Gulf Coast and East Texas region of our state.  We've been in operation since 1975.

    	We're trying to collect 240 units of blood this year to serve over 200 health care institutions.  That covers about 5 million people in the 24 counties.  Our per capita usage is .13, which is just above the national average of .10.

    	Now, we serve one of the largest medical centers, if not the largest medical center in the world.  We have level trauma Trauma 1 centers, heart transplant facilities, major heart institutes and cancer treatment facilities.  And unlike yesterday, when Mr. Penny talked about the RBC usage in England, where it has been decreasing for the last couple of years, we have seen a 10-percent increase in the usage of red blood cells in our area.

    	Now, the question might be for this group, why does the blood center even charge for blood?  And we have some fairly significant costs, and the largest is related to our people and the related costs.  Forty-eight percent of our expenses go to those costs.

    	The second-largest expense that we have is related to collection, and testing and our laboratory supplies, and that comprises about 30 percent.  Those things are all necessary for us to do our jobs so it's very difficult when we have to try and cut costs trying to make decisions about where we cut those costs.

    	Our recruitment costs of our donors, which without them we don't operate and neither do our hospitals, are about 5 percent of our budget.  So, again, that's a very important area for us.

    	Now, the types of costs that we have, to be sure, many of which you are very familiar with, relate particularly to new testing, and I've got a list here of items that certainly have been around for a while and some of which are in the future, but have a very significant impact on our organization.

    	NAT testing for HCV and HIV added a cost of $4.3 million to what we have to do every year, and this includes both the costs from 1999, when we first started NAT testing, as well as the new licensure costs that have just gone into effect.

    	The difference with I think to test today--and, again, I've only been in the business for about the last eight years, so that's my window of real-life experience--of today and of yesteryear, I compare that to the p24 antigen test that came in, in 1996, and the disparity in cost between the NAT, HIV and the p24 is significant; versus a few dollars versus the $15- to $20-range tests.  So I wish to say there wasn't an even swap when we got rid of one--and we're very thankful to get rid of one--but the cost went up significantly.

    	West Nile, it was certainly very interesting to hear Dr. Epstein's comments yesterday.  This is a very significant issue for us in the Gulf Coast Region.

    	One year ago, from my recollection, I don't even recall talking about mosquitoes and West Nile Virus, and maybe this group was doing that, but we weren't even thinking about maybe there was West Nile, but was there a test that was necessary.

    	Six months ago, we underwent a major withdrawal of our frozen products, and for the Gulf Coast Region, that was significant.  That was five months of our inventory, comprised of approximately 53,000 products that were in the overall set, and we discarded about 14,000 units that hadn't already been transfused.  The cost to our organization was about $800,000, and as far as I know, that may have been one of the most significant impacts related to West Nile Virus in our nation.

    	Today, we are on the cusp of implementation of our new test.  We are fully expecting to be up and running on July 1st, God willing that there is a test available on that day, and sooner, if at all possible, because we know in the Gulf Coast Region we are already experiencing West Nile Virus in our birds, quite a few in Louisiana.  I'm not aware of any in the State of Texas at this point, but since we are so close to Louisiana, it is very much a concern for us.  The added cost of that is estimated to be about $2 million.  So that's something that we have to consider in passing that cost along.

    	Bacterial contamination is a new standard that I'm sure each of you are very familiar with, and we expect to implement that by March 2004, as required.  Our estimated costs for that is it to be about $3.6 million.  Now, all of these things, so far as I know and understand, and again my background is a certified public accountant, and I do the best that I can to understand all of the technical aspects of the business, but it is my understanding that these are all nonoptional expenses that we must incur.

    	One that's on the forefront and also was mentioned yesterday is pathogen reduction.  This new technology frankly is one that concerns me as a chief financial officer for the cost of $150 per unit.  Dr. Snyder talked about it yesterday when he talked about the costs that his hospital experiences and the fact of how do we manage that cost and how do we really assess the benefit of the cost to incur that type of cost for a unit of blood, and I think it's very critical, as this committee moves forward in evaluating those types of procedures in the future, can the system, can the hospitals, can the blood centers, can the reimbursement system actually pay for that process.

    	Now, oftentimes, when I'm dealing with our hospitals, if they're not actually getting a new test out of the deal, they say, "Hey, we're not affected.  You shouldn't be charging us anything else."

    	Well, that's not necessarily the case because many times, when questions are added, there might not be a test available, but when questions are added, we have the ability to lose a lot of our donors, and CJD is one of those examples.

    	Now, my mad cow on this slide is a picture of what I would say some of our donors looked like the day that we told them.  You've been a full-time, regular donor.  You've given us six times a year, but today you can no longer give blood.  We went through that experience way too many times.  We lost 6 percent of our donations, and it was a significant impact to our donor base.

    	The challenges with the increased questions, and this is not only for mad cow disease, but also for the others that we have added questions, is that it increased the time for the donor to give, questions that already a donor deems are invasive to their privacy and their personal life, but they're willing to put that on the line for they know the need for blood is out there, and they want to make sure it's available, and they may be the one who needs it.

    	However, it does have an impact because they say, "Well, I don't want to spend more time doing this.  I want to be over here.  It takes too long."  So we're working to try to make sure that we can have a process that's efficient and effective for the donor as well, but as we add more questions, it is a challenge.

    	It's also a challenge for our staff, for we have to educate them, make sure that they understand the ramifications of the new questions, and then it takes time for them so that we are decreasing the amount of donors that can be seen by each staff person.  We have to recruit new donors, and I'm going to talk more about our recruiting costs, but more money is necessary to do that to educate our donors, to increase our donations, not just today, but on a long-term basis.

    	Other questions that affect us are malaria, not necessarily a new question, but however periodically we have new places that people can't go, and that adds some education.  Last year, we had smallpox.  Now, we have SARS.  And from what I understand, we're about to put that on our donor questionnaire as well.

    	Quality and compliance are also an area of concern, and it is preeminent that we make sure that our staff are quality and compliant, and we want to make sure that they have the tools in order to be able to do that.  That's a cost that we have to incur.

    	As I indicated, recruitment is a big expense, and for years we said, well, we'll just cut costs there, and you can see where we made some dips, and we went up, but this is a picture of what our recruitment costs are doing today.  And we've recognized that in the years that we did not increase our cost in this area that we were at a point where we were losing donors.  So at the time that we lost that donor who gave six times a year, we didn't have anybody to replace him with.  So it's critical that we don't cut that cost.

    	Salaries are another area because it's critical that we make sure that we have a staff that is adequately trained and has the experience, and certainly one of the greatest burdens to bear today for not only us, but the entire health care industry, is insurance costs.  In some cases, can we even get insurance to cover the things that are going on.  Utilities, inflation, those are all things that are out there, but we have to take things into consideration.

    	So I ask the question, why do blood centers just not choose to implement a test or regulation?  I'd say that we have no choice.  I have never seen a document from Dr. Epstein that said, "Hey, just you choose and decide whether or not you want to do this NAT test.  You know, you don't have to ask this question."  I have never seen that document.  Usually, it says you need to do this, and you need to do it right now.  So it's the law.  We have to comply with the law, and we will comply with the law.

    	Quality is preeminent for us.  We will follow the regulations and the standards that are given to us to make sure that we have a safe blood supply.

    	We have public perception.  Everybody wants the safest unit of blood that they can get, and so if there is a test to be done, we want to do that.  It doesn't matter what the cost is.

    	I think we're also faced with creeping precautionism, and this is a phrase I keep seeing bantered about, that zero-risk blood supply that we've got to get to.  And, again, being an accountant, I'm not a clinician, I would probably say that the human body is a living being, and it changes.

    	And as we've learned recently, we have new viruses that come up that we didn't know about before, and things are going to continue to happen.  so the answer or the question might be can we get to a zero risk and how do we manage the cost of getting to a zero risk because the more procedures we put in place the more costs that will have to be incurred by the blood centers, the hospital and the system.

    	Now, the challenge we face is with our hospitals, and you might say, "Well, the hospital just wants everything that we can give them."  My experience has been that's not necessarily the case.  There is a push-back that is created by our hospitals in many cases, and I'll give you two examples.

    	Bacterial contamination was recently a debate, and there was a group of our hospitals in our area that basically said this is not something that we need.  This is not a problem that we have, and we don't need that.  They expressed those comments to the groups or powers that be, and still we had the regulations.

    	So, when the time comes, and I have to implement this new test, this cost associated with this, the value to my hospitals is that there is no value.  There's no perceived value to them.  So I run the risk of them trying to explain to them you need to do this and making a decision for them.

    	Another example is leukoreduction.  We had a resounding, yes, we want to have 100-percent leukoreduction from our hospitals.  But interestingly enough, within the few days of us going to 100-percent leukoreduction, we had a giant push-back, and you know why?  It was because of the cost.  It was at that moment that they realized, "Oh, my, this is going to cost us an awful lot of money."

    	So, from the clinical side, it was determined, although I know that there are very competing ideas on that topic of whether or not 100-percent leukoreduction makes a difference, but there was that challenge that, yes, we want to do this, it is good, but then, wait a minute, it's going to cost a lot of money.  So that's a challenge that we face in working with our hospitals and our customers.

    	So can blood centers just pass the costs along?  I have an answer of yes and no.  I think it just depends.  I feel like I'm in Ken Blanchard's leadership training, it just depends.  It depends on the situation.  And I'm going to talk to you about the cycle that we go through.

    	Now, this is what I call the "yes cycle," and up here at the top I have, in the beginning, if we pass along our costs, the blood center feels good because we have maintained our financial stability, and I'm going to talk more about financial stability a little bit later.

    	The hospital is not happy because their price went up, and they feel like, well, their reimbursement didn't go up, they can't get anything else.  So their expenses are higher--perceived--and as we heard from Dr. Snyder yesterday, they reallocate, and reallocate, and reallocate.  My question is how long can they reallocate?  And also that goes for the blood center; if we don't pass it along, how long can we reallocate?

    	So the hospital begins to seek out their best price because they have limited dollars that they have to be able to spend, and that creates competition.

    	Now, competition comes from a variety of different places.  Competition comes from other blood centers who have the ability to collect excess, particularly in Group O's,which is the driving factor in our medical center.  We already collect 56 percent of our RBCs as O's, and I consider that to be a pretty high number, but our usage is in the 70-percent range.  So we can't get there with what we have, and we're continuing to force our way and trying to encourage more O donations.

    	We also face competition from the local hospital blood banks because they say, Well--and we heard this yesterday--I can do it cheaper, so I'm just going to do it myself.

    	Well, the one problem there, and I've talked with the hospitals about this issue, is they don't consider all of their costs because it's already embedded into the hospital.  So it is a perceived less cost.

    	The challenge with the hospital blood bank is that we start to compete for donors and, in some cases, the resources of the hospital are not such that they can collect those donors multiple times during the year.  They may be able to go once or twice.  Whereas, we might be able to go to those donors four times a year.  So then we face a situation of underutilization of a donor.  And the goal here, obviously, is to max out that donor to the best of our ability, and I know we continue to try to get two donations per donor a year, and we're steadily holding at 1.5 right now.

    	So we move on from competition.  The blood center starts to lose their customer because they're seeking out that best price.  The support for other regional programs starts to diminish, and the blood center begins to lose its financial stability.  So while we started at financial stability because we went this route, we end at the other end of the spectrum that maybe we're not really there.  So there is a challenge that we face.

    	The "no cycle" is a little bit shorter.  The hospital is happy.  The blood center has to basically do everything the hospital did and try to reallocate and absorb those costs.  We do our cutting costs, and we still, in my opinion, face competition because getting that lowest price is the best way to go.

    	Now, in cutting costs, I think there are a couple of things that happen, and I would say this is probably similar in our hospitals.  We cut costs, we put quality at risk.  We have to be very careful where we cut costs and how we do that.  We cut salaries, which then means our people are going to try to find places to find better employment, which means we have to face, and challenges an adequate workforce with experience and knowledge to do the job.

    	And believe me this, I think, being a blood donor phlebotomist and sticking everybody in the arm every day and having to do that perfectly is a real challenge, so it's not a job you can just pull somebody off the street to do.

    	We cut recruiting costs, which we've done in the past, but there's a challenge with that, and that's the shrinking donor base that we face with deferrals.  And if we're not adding new donors, then we face the biggest problem, and that's the increased shortages I think that we continue to see today that are much larger and more intense.

    	And, finally, the challenge that we face, and this is going to be no different from our hospital so that we don't replace infrastructure, so our flexibility to react to new tests and having the resources available are challenging enough, but to do that without the proper infrastructure is hard.

    	So one of the things that we've tried to do, and that is to be a partner with our hospitals.  To do that, we've designed some programs, some of which we've copied from others and some we've created on our own, to try to work with them to decrease the cost impact that they feel when we have to increase the cost of blood.

    	The first is a 1-percent, on-time payment rebate.  Now, this is not your normal payment rebate because normally you'd go to a, you know, you don't pay, you have a late charge.  From our perspective, we said, well, that doesn't really work because people don't like to pay late charges.  So we said, well, why don't we do it to where we incentive the hospitals to pay us consistently.

    	So if a hospital will pay us three months a row in a quarter, they'll get a 1-percent rebate on their total sales for that quarter.  This does two things.  It helps us because it improves our cash flow, which is very important, and it also helps the hospital because they get the rebate.  And really it's pretty, I would say it's not like we pay by the 10th of the month.  We have, say, by the 25th of the month.  So it's not like it's real tight.

    	The next thing is a hospital drive blood rebate program.  Again, this has a twofold:  We want to be partners with our hospitals, and that's critical in our community.  Obviously, as I said, we face blood shortage, and we need more blood.  Ironically, it is our hospitals that we don't have a lot of blood drives with.  We rely on our churches, and our schools, and large corporate donor groups, but our hospitals we really want to get involved with the blood program.

    	So this summer we'll be starting a hospital blood drive rebate program so that if a hospital has blood drives with our organization, that we will give them a rebate for every tenth unit that they collect, and that way, again, they're increasing the supply to the region, and it allows all of our hospitals to be able to work better, and it will again allow a financial incentive to the hospitals to participate there.

    	Lastly, as a reimbursement seminar, we heard a lot about coding yesterday and how our hospitals may not be coding blood, and we want to try to help that.  And through AdvaMed and the AABB we will be putting on a reimbursement seminar early this summer, and, again, hoping that education for that two-year lag and hoping to build that database so that blood pricing and reimbursement will be appropriate for the future.

    	So what happens to a blood center when costs are not passed along?  Here, I want to give you a short case study of what happened to the blood center in the 1990s, when competitive market forces increased substantially?

    	This is a picture from 1990 to 2002 of our expenses and our revenues, as well as our red cell fee.  The red cell fee is this bottom line down here, and you can see in these years where it stayed very stable.  Now, in the front end, it really wasn't bad.  We didn't have increasing costs that bad.

    	It was about 1992 to 1998 we had a 56-percent increase in our costs, and we only had a 9-percent fee increase.  So what did that do?  That started to precipitate losses.  We incurred losses, and after those years of losses, we made some decisions that we had to continue to pass the cost along to the hospital.

    	Now, when I looked back at the graphs and the information we talked about yesterday, one thing that is very interesting is the fact that between 1995--and I think that's right there--and 2003, we saw RBC prices increase 135 percent, but from 1999 to 2003, they increased 110 percent.

    	So that answers the question of where that cost increase has happened.  It's happened in the last few years, and that's because of NAT, leukoreduction.  As I indicated, the challenges we faced with recruiting and trying to decrease the shortages that we're feeling, CJD and now with the West Nile Virus and the NAT licensure.  So the cost increases are substantial.

    	Now, as a comparison to show you--that's our center--a graph from the America's Blood Center shows virtually the same thing.  This is the red cell, and it has that increasing trend going for the same period.  So this is an average of the America's Blood Centers' membership over that period of time.

    	We, also, I don't know, I'm sure you all read it, was Toby Simon's article in Transfusion, in February of this year, talked a lot about this.  And when I read that article, I said, "My goodness.  I feel like I'm reading about my blood center."  And he talked about reserves dropping, and this is what happens when you don't increase your prices.  Your reserves drop away and go to nothing.

    	I will tell you that our low point, right here, we had 13 days of reserves, and there were days that I seriously questioned whether or not I would be paying payroll that day.  It's very unnerving to know that you don't have that flexibility.

    	And what makes this really relevant is when you think about the West Nile Virus.  In one day, in a decision that we made, we lost $800,000.  Now, was it the right decision?  I'm not here to place judgment on that, but I know the impact that we felt.

    	Had this happened in 1997, that would have decimated my reserves.  I would have had virtually nothing left.  So to have financial flexibility for a blood center is very important because we have to react to those things that occur.

    	Now, I've been talking about margin quite a lot, and I want to be able to show you the impact that that has because a low margin doesn't help the organization.  What I'm showing you here is the blood center, more in red.  This is our annual margin.  These are our years of losses for the last 13 years, and this is the average hospital profitability, and this is pulled from the Modern Health Care magazine that annually publishes by the numbers.

    	As you can see, our bottom line continues to be below that.  And the margin is very slim.  Knowing that I haven't had a 4-percent margin in 13 years, and I look at that, that would be nice just to be able to try to cover my capital expenditures.  But that really shows you the lack of flexibility as an organization for generating cash.

    	Why I think this is so important is because we are here to make sure that we can provide a resource that can't be created, at least not today, for the patients that come into our hospitals.  We provide a critical, as all blood centers do in this nation, a critical service to the patients of this country, and if we can't do our jobs, it's going to be dependent on somebody else to have to do that, but we know that shortage challenges exist.  We want to be able to be flexible and have the ability to do that.

    	So basically we weren't able to replace our infrastructure.  We decreased capital expenditures significantly, and what that does is it just delays it.  Eventually, we're going to have to catch up, which we're doing today.  Salaries were not increased for a couple of years.  We didn't have increases.  We lost experienced staff.  We reduced expending in vital areas such as donor recruitment, and again that really was a significant impact on us.

    	So financial stability with a question mark.  It's a balancing act.  It's a balancing act between us, and our hospitals, and the system.  It is a challenge, but it is necessary to talk about financial stability because we need the care of our institutions to be able to serve the patients in our nation.  And as we talked about yesterday, the two-year lag in reimbursement is just too long.  Somebody's got to take the heat during that time period while that's happening.

    	So I think really everybody pays.  Everybody feels the impact.  It starts with us, depending on how we approach this, and we work very hard to make sure that our costs are at a level that are reasonable, but when we don't recreate years of losses, we maintain a low margin no matter what we do, it creates a lack of flexibility for us to respond.

    	We do have the challenge of decreasing purchases of our blood components, and ultimately what that creates is a situation that we have to spread our fixed costs over a smaller area, which is in the highest-demand products, which is our red cells.

    	The hospitals are impacted because they can pay, but they don't get reimbursed, which then affects their expenses.  They seek the lowest price that they can because that is what they need to do.  That's what their administrators are telling them to do.  They feel increases in other areas that may or may not be appropriate, and like we talked about, the decimal dust of the 1 percent of the hospital, it's not decimal dust to the laboratory because that's the budget that it's sitting in, and they're feeling the pain when their administrators are telling them to get the costs down.

    	But, ultimately, again, I come back to the patient.  I really feel like this ultimately affects them, and Dr. Snyder said it yesterday, and, Dr. Klein, you appropriately addressed that issue.  Is the patient getting the quality of service that they need, and that's very important to consider.

    	And, finally, Dr. Bianco had a comment that we're in a trap, and I agree.  I think this cycle never ends, and until we can break it, it will continue to be a challenge.

    	So, from our perspective, service maybe matters today, quality maybe matters today, which concerns me.  Supply of O red cells, no question, certainly for us that is the greatest level of demand, as I am sure it is for most of the blood centers in our nation.  And price, price and price is continually what I hear, as a chief financial officer, is that you cannot continue to raise the price of blood.

    	But I'm stuck in that wedge because I can't make a choice over here, but I have to make sure that my business, and I will say it is a business, I have 600 people that we employ, and I am responsible, as far as I'm concerned, to make sure that we have financial stability so that we maintain those jobs.

    	So then blood may become no different than orange juice or wheat or coffee or pork bellies, a commodity.  I can't imagine that blood is a commodity, but I really think today we feel that it is--get what you can for the best price--and we hope that that doesn't continue.

    	So, in summary, increase costs must be considered when looking at safety.  We really need to determine the additions and the risk benefit for that.

    	Reimbursement changes, again, we heard it all day yesterday.  We've really got to try to make those match the safety regulations.  If the safety is mandated, we need to have the reimbursement changes at the same time.

    	The loss of eligible donors needs to be considered.  Again, as we heard yesterday when Dr. Epstein talked about the West Nile, that we have the potential of losing 1 percent, less than 1 percent I believe is what you said.  And for me, again, living in the hotbed of Houston, as we were called last year, that's a big concern.  I hope the number is 1 percent or less, but I don't know.

    	So can blood centers just charge more?  Again, I say yes and no.  It just depends.  It depends on the impact that the blood center wants and can survive, and only time will tell.

    	But as I close, I'd like to just reflect on one important reason, and I've mentioned it an awful lot through my presentation.  I want to remember why we're here and show you some of the things, one of the people that we work for every day.

    	This little girl's name is Victoria, and she is a patient, leukemia patient, in our Texas medical center.  She was a vibrant 5-year-old one day and feeling just fine.  She started to develop a fever, and she started to easily bruise, and her parents became very concerned by that.  So they rushed her to the Texas Children's Hospital and our medical center, and within a day they had diagnosed her with leukemia.

    	She obviously was impacted by the therapy that she had to go through, and she needed weekly platelet and blood cell transfusions.  Her parents fortunately were a match for her so they gave as often as they could, but they had to rely on the gifts of other people, and I want to read to you a quote from her mom.

    	"When you have your kids and your family, you take pride in how you support them every day, but to sustain my daughter, I have to depend on other people.  It's a scary thing because you don't know how long people's good will is going to last."  	Once afraid of needles, her mom has a new appreciation for giving blood, and I am happy to report that Victoria has gotten a clean bill of health and that she will finish school with her friends and that she will spend the summer having fun like any normal kid because the gifts of so many donors were there, and I hope that they can continue to be there.

    	So she is dependent on so many of the things that we do.  She is just one of the patients, obviously, and certainly, as physicians, you probably see many more of these than I ever have the opportunity to, but these are the reasons why I come to work every day, to make sure that we can provide the services to our hospital so that they can do the fabulous job that they do.

    	Thank you very much.

    	DR. BRECHER:  Thank you, Melissa.

    	Do we want to open for questions?

    	John?

    	DR. PENNER:  Just a quick question.  I can see that if we assume that we have lean production costs, which most of our centers are attempting to do in peeling this down, we continue to add on new laboratory assessment for quality and for safety,  we're still left with the fact that we're operating, as we've already heard, with a DRG program.  So what would you propose?  Would you consider having a line item for blood separate from the DRG or would you have some folding in of product costs into DRG that can be recognized so that at least the hospitals would not look at this as a cost center problem that they can just attack, that they would consider it a necessity which they have to respond to?

    	So what of those things do you think might be plausible here?  Otherwise we're in the box, and you can't wiggle out.

    	MS. FISHER:  Right.  That's a very good question, and certainly the challenge I think that we all face.  I think it can work either way.  I think somehow blood has to be recognized by itself as a line item and somehow has to be recognized so that when these measures are demanded, they have to be done.

    	There is not an option that those costs are recognized and placed against that.  So the hospital doesn't feel like they're just getting hit, and I think that's got to be part of the deal.

    	DR. PENNER:  So Jay has to work on getting this as a line item separate from the DRGs, right?

    	DR. EPSTEIN:  If I could just comment that the FDA is not responsible for the financial side of this.

    	[Laughter.]

    	DR. BRECHER:  Dana?

    	DR. KUHN:  Ms. Fisher, thanks for that financial perspective of what goes into impacting the cost of blood.  As a chief financial officer, I know that you're probably pretty frustrated when you see the costs going up, and I guess the quality and also the service going down.

    	But in order to incorporate the cost of testing and also some of the losses that you shared with us, what is your perspective of what the percentage of the increase in the cost per unit would need to be in order to incorporate the testing, as well as the losses that are incurred?

    	MS. FISHER:  Well, again, I think it depends.  When we have a new test come up, and I'll use the West Nile as a perfect example, we spend a lot of time to strictly evaluate what our cost is associated, and we really look at it what's our cost?  We look at people, the reagent costs, which frankly are generally the most expensive part at this point because we do have a high-quality lab that does an awful lot of testing right now.  So that adding labor to that is not extensive.

    	In some cases, however, we do have to construct new space because we don't have space to put it in there.  So we're looking at the direct cost of that.  It's going to depend on every situation.  The cost for NAT was different than West Nile, and as I indicated, it's different for p24.  So is this going to vary by the situation the impact that we feel?  So I can't recommend a percentage to you, but I do think that it needs to be considered, and it certainly can't be considered by blood center because blood centers are going to vary in that cost, but I know that we worked with America's Blood Centers when we went through the clinical trial of NAT testing to where we created an average of everybody's cost of what the NAT cost us as the clinical trial, and that was reported to the FDA.

    	So I think, from that point of view, the data could be picked up from the blood centers and provided to the agencies.

    	DR. KUHN:  I think the reason why I asked that, I may be looking at this too simplistically, but if you had a NAT that added cost to $4.3 million, and then West Nile, $2.2 million, and then $3.6 million, I would think you'd be able to figure out mathematically what kind of percentage increase that would be over a unit of blood, at least based on those numbers.

    	MS. FISHER:  I could.  I'm sorry, I don't have that information.

    	DR. KUHN:  I think that would be helpful information, I know for me, to be able to say what is the percentage increase that is going to be necessary for us in order to continue to offer units of blood uninterrupted and without having these losses, but also do it in a fair and equitable way?  I think that's very important information whether you get it aggregately from all blood centers, but I think that is an important piece because you're asking for, in some ways, how do we increase the costs to cover everything?  Well, unless you know really what that cost is and how you're going to add that onto a unit of blood, you're kind of like swatting flies in the air.  You need to have some real numbers.

    	MS. FISHER:  Well, and again, I would say that, as I indicated to you in the last four years, 110 percent I think is what the figure was that our costs have gone up.  I can certainly say that from 1995, when I joined the blood center and blood was mid 70s, that a unit of red cells today is in the high 170s.  So that's a huge increase that you can see right there.  That was, I said, 110/135 percent.

    	DR. KUHN:  Thank you.

    	DR. HOOTS:  You were talking about your $800K write-off, single, for having to discard for potential West Nile contamination of your frozen reserves.  There are precedents in society because obviously that reserve is critical in a number of ways, and Dr. Snyder alluded yesterday, in terms of even reserve, in terms of potential terrorism having redundancy in case something happens, and certainly FEMA provides for structural reserve for our society, in terms of if you were to be blown away by one of our hurricanes or something, then FEMA would come through and help you with your physical infrastructure.

    	But I don't know that there is any way to indemnify yet, at least, for this kind of one-time hit, and perhaps that's one way we could explore, from the federal level, to help indemnify blood centers because obviously Houston is in a critical West Nile thing.  The next pathogen may strategically hit the Northeast and the Northwest, and those kind of one-time things are, it won't solve the big problem, but certainly if you didn't have to take an $800K hit, it would probably have helped you, at least in terms of reestablishing that critical reserve.

    	MS. FISHER:  Very true, and one of the things we did do, Dr. Hoots, when that happened, was we evaluated whether or not there was federal funding that might be available to us from either a disaster perspective or related to West Nile.  We found none at that time.

    	DR. BRECHER:  Mike?

    	COLONEL FITZPATRICK:  I just have two questions.

    	One, given your reserves, other than making capital improvements to incorporate a new test or buy new equipment to do testing or meet a regulatory requirement, have you been able to look at other capital investments in the way of modernizing your procedures and your equipment or are you restricted because of this in doing that?

    	MS. FISHER:  In 1999, when we made the decision that we could not absorb costs going forward after we had done it for the years in the past, we have started to build our reserves again.  We have a goal that's 90 days, and we're still at less than half of that at this point, but we are steadily building it in small increments.

    	We find the ways to do it.  We will figure out ways within operations.  I'll give you an example.  For the West Nile lab we're constructing, it's about a $350,000 expenses.  We had to evaluate other things we already had planned for this year and make a decision that we're not going to do those.  So we really have to do the reallocation game that Dr. Snyder talked about and make certain decisions, what are we going to give up to make sure that we can do this?

    	Somehow, interestingly enough, we always figure out the way to do it.  I applaud our team at the blood center because we always figure out the way to make it happen.  Sometimes it's very difficult, but we make it happen.

    	COLONEL FITZPATRICK:  My other question was could you explain a little bit more about the donor rebate program.

    	MS. FISHER:  The hospital program or the on-time--

    	COLONEL FITZPATRICK:  The hospital.

    	MS. FISHER:  We are looking at our hospitals that we have or don't have blood drives, particularly the ones we don't have blood drives with, and we will establish a goal with the hospital, and they will meet or exceed, we hope, the goals that are set with them.

    	When we do that, for every unit of blood that we collect, we will return to them the value of an RBC for every tenth unit that they collect.  And if they exceed the goal for I think it's every five--and, again, this is a very new program, Colonel, so I'm not positive this is exactly what it ends up being--but for every five they'll get half of the value of an RBC returned to them in that rebate.

    	DR. BRECHER:  Last question, Ron?

    	DR. GILCHER:  Mine is just a comment, Melissa.  We've been doing this for about three years, using the rebate program.  For us, with many rural hospitals, it's been very, very successful in bringing in significant numbers of donors because the CEO of the hospital gets behind the community blood drive.  We've had a dramatic increase, at least with the rural hospitals.

    	We've also done it with the large hospitals, and it's not had as great an impact, but we actually have now some hospitals that collect so much blood that they have virtually no blood bill, and that has become very important to some of the rural hospitals, in terms of how we are helping them stay afloat because the rural hospitals are in crisis with respect to funding, but I want to point out that this mechanism works extremely well.  We are now going into our fourth year with it, and it has worked extremely well for us.

    	MS. FISHER:  That is great news.  I hope it works the same in the City of Houston.

    	DR. BRECHER:  Sorry, Karen.  You can have the last word.

    	MS. LIPTON:  I just wanted to ask, and actually, Mike, if you could think of this, too, do you know what it costs you to recruit a new donor when you lose somebody, for example, who is a six-time a year donor?  I mean, I think it would be very important for us to know what does it cost you to bring in a new donor and bring that donor up to that same place?  Because it seems to me we keep saying, well, we're only going to lose 1 percent of donors over this, but there is a real cost to that.  And I think if we understand in dollars what that means to go out and get a new donor when you have to replace them, I think that would be a very important thing for the committee to know.

    	MS. FISHER:  That's a tough answer to give you, Karen.  I can tell you that our cost overall per donor is like $10 to $14 for recruitment, but your question was directed at how do I get that donor to be a six-time-a-year donor.

    	I can probably get them back one time, but to have them have that much commitment is questionable to that donor, what can I do?  Because I think a lot about the donor is the donor has to feel the commitment themselves.

    	And one of the things that we're working on right now, which we'll probably roll out later this year, possibly early in 2004, is a program called Commit for Life.  And what we're trying to do there is instead of getting people to focus in on an annual, you know, give four times, five times a year, we want to commit them for life.  So, instead, give every quarter, so then it's a continual cycle that goes round and round.  We hope that with that type of a program, people who may just give once a year will consider I'll give once a quarter and automatically we get them to that point.

    	So I think it's difficult to say how do I get them to be that six-time regular donor.

    	DR. BRECHER:  Thank you, Melissa.

    	MS. FISHER:  Thank you.

    	DR. BRECHER:  We'll now move to our next speaker on the same topic, Mike Fuller.

    	MR. FULLER:  Good morning.  I noticed yesterday that the church was arranged with the pulpit in the direction so that we can preach to the choir a lot easier, and I appreciate that.

    	My name is Mike Fuller, and I'm the chief operating officer at the Blood Source in Sacramento.  I've been in blood banking almost 30 years now.  And just as a point of reference, I do remember when blood was $30 a unit, so it has gone up dramatically, but I would indicate that I don't think it's the same unit of blood that we were supplying back in 1974 as we're supplying today.  A lot has changed.

    	I think Melissa did a wonderful job.  I just wanted to say that Sacramento is just slightly smaller than Houston.  The medical community is obviously a little bit different.  We only serve about 40 or 50 hospitals, but a lot of the operations and the issues that we deal with are exactly the same.

    	It was really surprising to see her presentation because it was exactly what I had thought we ought to do to present, and I had to figure out where we're going to go from here based on what Melissa had started with.

    	The one thing that is different in Sacramento our financial picture is not as rosy as Houston's.  We've only had one year in the past six where we have made money, so our reserves are nonexistent.  As is the case or was the case, at least before the last couple of years, with a lot of our local hospitals.

    	You've probably seen that commercial on TV, where the baseball manager goes to the mound, and he tells the pitcher he has good news and bad news.  The bad news is that he's relieving him; the good news is that he saved money on his car insurance--the manager did.

    	Well, I do that with the board kind of periodically.  You go to the board and you have good news/bad news.  We're losing five point something million dollars/six million dollars over the last six years, but the good news is I don't have to hire any accountants to take care of our reserves.

    	[Laughter.]

    	MR. FULLER:  So there's always a positive way to look at this, and I think our hospitals are pretty much in that same situation, at least in California and certainly in Northern California.  It's been an interesting managed care experiment, and I think the experiment is over with, and I think that most of the hospitals, and certainly the blood centers, in California would agree that it's not been particularly successful. 

    	I don't believe that the system can be repaired.  I believe that the box that Dr. Bianco mentioned yesterday has to be completely blown apart, and we have to start all over, and I'm going to try today to kind of walk through why I feel this way and the reasons why that I don't think that we can take a line item or do any of these things and really fix this system because I don't think it is fixable.

    	Up to this point, the agenda, the questions have been fairly easy to answer, but I think really what you are asking is the "should" questions rather than the "can" questions.  The "can" questions are obviously yes.  The "should" questions are should we pass on this cost without adequate reimbursement?  That's the real question.  	And for most of us, just by virtue of being who we are, we agree that we should not, that there should be some reimbursement down the road or we see a lot of bad things, like Melissa said, are going to happen to our blood centers or to our hospitals.

    	And not withstanding the current competitive environment that we find ourselves in, I think that our collegial past really had set a stage for some phenomenal things to happen in the blood banking community.

    	I think that for 50 years we did a remarkable job taking transfusion medicine to new heights, and it's really only recently with this imposed competitive, and I think it started out with friendly competition or whatever the Clinton-era word was, but competition is never friendly, and Deming even talked about that, and it's always destructive.  It's destructive in the real world, too.  Honda and Isuzu made a lot more money by building cars and trucks together than they ever did competing end on end.

    	I think we're kind of in that same situation.  I think we did a remarkable job addressing the AIDS crisis, regardless of what the media said.  I have never been put in a position, since I have been in blood banking, and I have been with several organizations, large, national organizations, where I was ever asked or ever intimated that I should put the patient at less than the top of our list, that safety and adequacy were always the most important, and that's all the time in the last 30 years.  I think it was unfortunate that we got the rap that we did, but I think we were kind of novices at the media game at the time.

    	I think the short answer is, yes, we should charge more if there is reimbursement downstream for the hospitals so that they can get the money for these new safety initiatives.

    	We heard yesterday about allocating costs, and there were some questions about allocating costs.  I think it's pretty easy in the cost allocation, and I think we suffer from that $10 aspirin example of years past.

    	When we started this, and actually I think I'm going to go back in just a minute and talk a little bit about history, but there was a sense that blood had a lot of costs in it that really didn't need to be there, that somewhere in this product that we were providing that we had, like the aspirin, put in about $9.90 worth of costs that really didn't belong because that's really what the DRGs are all about.  There was a lot of money in that aspirin, and what it was was just bad cost accounting.  They just threw a lot of costs in there because I don't think there were any really hospitals that were getting rich back in the '60s and '70s.

    	So what happened is we took this perception that there is cost in blood, and then we worked through that, and that's kind of where we find ourselves today.  There really isn't any extra cost, and I think most of us, we're all kind of in the same group purchasing organizations.  We all pay about the same thing for our raw material direct cost, and I think if you ask us would we accept just the vendor charge for the test, we would be ecstatic, and I think that's fairly easy to target; again, because we all pretty much pay the same, and the blood centers will work out the people side.

    	As Melissa indicated, that's usually the less-expensive side.  Now, we may negotiate with the hospitals, but in a lot of cases, as she mentioned, we already have the overhead of the infrastructure to accommodate a new test.  It's just that extra $5 that we have to pass along that is such a nuisance to us and to our hospitals.

    	If you looked at her charts, and I think most community blood centers, and the Red Cross included, are like this, you'll find that our revenue picture looks exactly the same.  We've tried, over the years, to be partners with our hospitals and not put these burdens on them that somehow they can't resolve, too, realizing that it's a continuum, it's a system that we have to protect.

    	Yesterday, we also heard, and I apologize, I didn't get the program down that Mr. Green noted yesterday.  It talked about a $100-million program, and I can't remember if it was instituted or cut, but I do remember that he said that it's a little more than our take-home salary, and I think we also suffer from a perception.

    	Now, that's probably true in this room, at least I would imagine to the people that I'm looking at, but about I guess it's been almost four weeks ago now, there was an article in USA Today that they noted the highest-paid CEO in the country.  His take-home pay is $116 million, and he just happens to run a chain of for-profit hospitals.

    	So it's really hard to come to Washington and say we're losing money, we're having these problems, when you see in USA Today that CEOs, and we know every CEO gets this $116 million, and that's before stock, by the way.  It was closer to $200 million if you add in the stock options.  Two hundred million is taken out of health care.

    	I was watching my wife a few weeks ago, and it became very apparent that you can say just about anything about anybody if you say, "Bless their heart," after.  You know, you can basically, you know, "That ugly baby, bless his heart."

    	[Laughter.]

    	MR. FULLER:  And I'm thinking about this CEO, and, well, you get the picture, and I'm thinking "bless his heart."  He's causing us an awful lot of problems, and people don't understand the difference between the nonprofit and the for-profit, and I'm not sure that it wouldn't happen in for-profit, but I think the motives are a little bit different.  In certainly the hospitals I deal with they are.

    	I think one of the alternatives, looking for solutions, is to maybe back up Medicare reimbursement and back it up to maybe our suppliers, the blood bank suppliers, the people who provide us bags, and tests, and bacterial detection devices, and let them go to Medicare and get reimbursement before they ever give us the product for free, and we pass it on for free.

    	They have more ability to work with Medicare to kind of generate that reimbursement right up front, and then we can just pass it on free, and there wouldn't be any charge to the hospitals, and the hospitals and blood banks would be much better off.  I got a sense they're not going to deal with 62 percent of the cost of doing business, though.

    	I don't think that any real-world company is going to do that, and somehow we have been plagued with that.  Again, I think it's perception and because we are individuals in this game.  I think we do have some collateral, and we'll talk about that in a minute.

    	I mentioned earlier we're dealing with some issues from the past.  I think we have leftover Reaganomics, bless his heart.

    	[Laughter.]

    	MR. FULLER:  And this is from 1978, when we really looked at things and the powers that be said there are too many physicians making too much money off of Medicare.  This was really the way the conversations were going, and so they said we're going to implement DRGs.

    	And actually it was a physician who was on Reagan's staff who had this idea of injecting a little market mentality into health care.  For what it's worth, years later he had the opportunity to be a victim of managed care, and I understand, legitimately, he planned on changing his mind.  He left a day surgery center, oozing blood and vomiting from a procedure that used to be an in-hospital procedure.  So I guess everything kind of comes around.

    	But I think at the time we were looking to try to penalize some physicians that had learned how to work the system, and what we've done, it seems, is taken the money that the physicians were making and actually give it to the administrators.  So I guess that's why Dr. Snyder yesterday was talking about physicians getting MBAs.

    	In my opinion, the market model just doesn't work by definition.  I think a lot of the business terminology just does not fit health care.  I'll try to give you some of the reasons why I believe this.

    	First, we provide funding on a macro level, and it's real easy to do.  You take the young lady that we just saw on Melissa's slide, you take her out of the picture, and you deal with a vast majority of data, and you make some decisions, and certain decisions can have phenomenal cost savings.

    	But then when you hear about two-year-old data that you use, I'm not sure that there's very many companies in a real-world market that are using two-year-old data to make decisions.  If you think about the airlines, they change pricing daily on specific flights, and many times a day on specific flights, and they have software that they'll sell you to do the same in your business, and we don't have the opportunity to do that.  So we actually pull that ability away.  So we're limited there.

    	Second, we provide service on a micro level.  It's the individual that gets the service.  It's not humanity that gets the service.  Too many times efficient health care is for somebody else.  That's for your family, that's not for my family.  When Aunt Bessie needs help, she needs the best there is.  Even though she's brain dead and hasn't spoken to us in a month, we want the best for her, bless her heart, and by the way, her heart hasn't beaten in a week, but we're going to do everything we can to keep her here with us as long as possible.

    	Third, I think we treat health care as an entitlement or a right, and we have never had that vote in the United States.  I'm not sure that's not the right thing to do, but we've never, as a country, said it is the right of everybody to enjoy a level of health care, but we fund it as a market commodity.

    	Now, I think these definitions I think are bad.  I don't health care, because of who you all are, I don't think it can ever be a commodity.  You cannot, because of your profession, treat it as a commodity.  It's just not possible.  You can't say no to somebody that you know you can help with it, and without the ability to do that, it's not a real-market model.

    	So this schizophrenic modeling, finally, is further complicated by the lack of substitution.  Time and place utility doesn't work real well.  I mean, you can't substitute a heart surgery for an appendectomy.  If you're bleeding out a couple units an hour, you can't wait around for the artificial stuff.  I mean, there's certain things that just don't work in a classic market model, and I don't think these are going to change.

    	I think we heard the economic models and the market examples yesterday.  I think another problem is kind of what I just mentioned is exclusion.  If you're working at Starbucks, and you're one of their, is it baristas, and I come in, and I don't have the $5 for a latte, you're probably not going to serve me.

    	And it's not the same in a hospital.  We treat people, regardless of whether they have insurance.  We kind of say that we don't, and we pretend that we are better business people than that, but in fact people do not die from a loss of blood because there isn't enough blood in the community or because they can't pay for that blood.  And I think it's been a long time, at least since I've been in blood banking, this has really never happened.

    	I go back to the ABC, before it was America's Blood Centers, when we were talking about regionalization and some other things, the last true national crisis, it seemed, was in the '60s, especially during the Vietnam War, and not being in blood banking at that time, I'm not even sure how much of a crisis that is today.

    	Our concern with having enough and the perceived crisis if we don't get enough I think is what drives us today, and I think that's appropriate, but the real crisis or people dying really hasn't happened.

    	We also heard that before 1984, there was really little incentive for hospitals to become efficient.  I have a real problem with the word "efficient."   I think health care, by definition, is inefficient.  It's the alternative that's efficient.  So it's difficult to come to grips with just being able to say you can be efficient in something that is inherently inefficient.  It just doesn't work.

    	Now, I think what we're really talking about is driving the waste out.  We want to make sure we use our resources properly.  But then when you look at waste, there are plenty of times in science where you're not really sure it's waste at the time that the experiment didn't work right.

    	I think, even in the real world, you can look at 3M and the adhesive that didn't work right when it was generated, and as they kept it around and worked with it a little bit longer, it turned out, obviously, not to be waste.  And so post-it notes are the rest of the story.

    	So I think we have to be careful with some of these classic business definitions and models.  I even believe, and I don't have data for this, and I apologize for that, I've had personal experience in two hospitals in the last six weeks.  One hospital, in a very high managed-care area, and in fact I think this particular hospital was 95-percent managed care, 95-percent under contract, obviously, in this hospital, health care was marginalized.

    	These nurses did not need MBAs to understand the business.  They had been beaten up with business for the last 15 years, and they understood exactly what they were doing, from a business standpoint.  In fact, it really was unsettling many times because you knew they were thinking about what they were spending on the patient more than they were thinking about what the patient needed to do to get going.

    	The other hospital, they were very focused on the patient.  That was in an area of the country that had a lot less managed care.  In fact, I'm not even sure it was more than 20 percent, but the focus was on the patient.  And the interesting thing is that the nursing ratios, patient ratios, were 8 to 1 in both hospitals.

    	And in one hospital it was different than in that other hospital; you had a sense that you were being taken care of, and in the business hospital, you were a customer, and they were going to try to get as much margin as they could because they needed to, to survive the day or to survive the quarter or whatever.

    	We know, to a certain extent, that our health care is basically you pay now or you pay later, and I think it's probably like that in a lot of other markets too.  If we postpone again, like Melissa's charts, we try to hold on to costs.  Ultimately, we're going to go broke if we don't pass them on, and if the hospitals don't get reimbursed, ultimately they're going to go broke.

    	Competition, I think, creates a very short-term mentality.  Even though we don't have quarterly stockholders meetings or dividends or things we have to create on a quarterly basis, you still think in terms of the next financial.  We actually were required by our board to get our financial reporting down to eight to ten days.  I'm not sure what difference that made.  Still, we didn't make any money, but they knew it quicker.  I guess they were happy about that.

    	So the short term is I think really a problem, and it's a problem for the long-term savings in health care.

    	I don't know how many of you saw this USA Today article the other day, but Sacramento is sixth in the most polluted areas in the country.  California, they said, hit four out of the top five, but they would have had five out of the top six if they'd have gone down one more.

    	We actually looked at changing our fleet of 60 vehicles over to clean air vehicles.  The cost was too much, even with the subsidies that you got from the agencies.  Now, that's the right thing to do.  You know that this is going to have a positive impact on community health in the future, but if we added that cost to our unit cost now, even though you could see the future benefit, we stand to lose customers, and if we lose customers, we lose revenue, we lose revenue.  You get the picture.

    	We are competing with a low-cost provider in our area, and it is on price only.  We have not had a shortage in over 20 years.  We actually resource share about 30 percent of our red cells.  So we have more than enough, and it's important to have more than enough.  Obviously, again, this is the choir sermon.  You have to have more than you need so that everything is available when you need it, and we've kind of gone by that, invested in recruitment and tried to be able to have that.

    	I'm sorry that I'm like Melissa's answer, it's just too difficult to really come down with what it costs to get that repeat donor.  And just going through in my mind, it probably is not a lot different because you spend different kinds of money and recognition on them to keep them repeating as you do for the first time.  So there's probably a fairly consistent price that you're paying to continually try and keep those people to repeat.

    	Our 10-gallon program this year had about 1,100 people attend, and these are all people that have donated more than 10 gallons, some of them up in the 65 and 70 range now, with ability to do frequent plasma.  And that event cost us about $90,000.  So that's just specifically those repeats.  So I don't know, it's really difficult to cut out those costs.

    	I think competition can definitely have a very negative impact on our organizations and on our hospitals.

    	The one thing we do, and I think probably all blood centers do this, is we try with our new employees to make sure they understand that safety and adequacy go hand in hand.  You can't have one without the other, and this is where I take exception to the FDA not responsible for the money part because the money part creates the adequacy part, and without the adequacy, you don't have safety.  You may have the safest unit, but if you need two of them, and you don't have enough, there is no safety.

    	I was also thinking, as I was thinking to everybody else, I think if the FDA actually had a role in adequacy, I think we probably would not hear as much about shortages.  So maybe there's a direction there that we could take it to.  But it is very important, and Melissa spoke about this, too, to take care of the safety part because we have to comply with the safety regulations because of the federal mandate.  We can be closed down very easily.  Adequacy is on our own.  So if we're going to divert resources, we're going to divert them from adequacy into the mandated safety part of our business.

    	I think a lot of future opportunities are also lost when we're diverting these resources.  The repeat donor, if we don't start today, we're probably not going to have those donors as we go forward.  And, again, as Melissa said, it's kind of getting to be very individual.  We've picked the low-hanging fruit.

    	The easy blood drives we're all doing.  It's now we're spending more per unit to get it in because it's harder, and harder, and harder, and you have to be more individual in the way that you go.  Anybody can go out, if you can find them, and do a 100-unit blood drive, but now we're going to have to find people, with the way we do business, in much smaller areas.

    	Just briefly, we had on our pricing list a couple of years ago two types of apheresis platelets.  One was a 3.0 times 10 to the 11th, and to the other was a 4.0 times 10 to the 11th, and our theory was that if we put more platelets in the bag, you could use less platelets, and we sold none of those.  We only sold the 3.0 because they were cheaper.

    	As Melissa said, it's price, price, price.  And I think that's mostly from the purchasing agents.  I'm not even sure that's from the lab any more.  Now, the CEOs can talk a good talk about utilization and everything, but somehow it doesn't trickle down.

    	Dr. Snyder talked about layoffs.  All of the hospitals in Northern California have gone through several rounds of layoffs, and we heard that two of our major hospitals are going to do this again because of some of the cuts that are coming out of the California budget because of the financial crisis that California is in.

    	I've probably done enough whining.  I think all of you know kind of the whys of all of this.  It's kind of where do we go.  I mentioned I don't think that the system really can get fixed.

    	It seems that when we talk about the GDP, in fact, we really are talking negatively when it's health care.  Now, if GM increases their part of gross domestic product, we're really happy that somehow they've done something miraculous, but if health care does that, it's in a negative context.  	I was thinking, why does that have to be?  I mean, we provide jobs.  We provide very high-level paying jobs, and by the way, we save lives.  I mean, we might make cars, but we save lives.  So you think some of these things just are not in a business mode.  They just don't meet those basic market models.

    	We have about one physician for every 30- to 40,000 units.  Those physicians sit on the Transfusion Committees by contract with our hospitals.  They are those people to say no that Dr. Snyder was talking about, only they're really not there to say no.  They're there to ensure appropriate utilization.  I think even with their efforts, there comes a threshold where you're going to use "X" amount of blood on "X" amount of patients regardless of how good you get if you're going to have a positive patient outcome.

    	We have saved a lot of money.  It's interesting.  I go back to the competition that I mentioned the other day with the low-cost provider.  One of the systems has put together a formula, and I apologize, I don't know all of the aspects, but it's an adjusted case mix on missiles or something like that.

    	Basically, what the bottom line is, even though blood source is a high per-unit priced product, we actually come out as a middle-cost provider for the hospital systems because we work with utilization.  Our utilization rates are less than the lower-cost provider.  If you think about that, those incentives are the way they should be.  All of us need pretty much the same amount of revenue to make it work.  It's the same way in pretty much anybody's institution.  It's just how you get there.

    	We charge a little more up front.  We pay the professionals to do the work, and we evidently are seeing that on the outcomes.  In a lower cost, you need to sell more to get your volume up because your margins are smaller, so the hospital pays more ultimately.  We hope we can show this in more cases as we go forward.

    	So utilization is a real key at this point.  A lot of our physicians in our area are going back to fee-for-service.  It's a rather novel idea to get paid for what you do.  It might be something that we need to look at.

    	I think we always need to look at the value that the dollars we spend provide for an enhanced patient outcome.  The focus needs to be a little different than perhaps it has with just a general we'll pay this much for this kind of a thing.

    	I mentioned aligning incentives from the vendors all the way through the patients, so that we all have the same outcome at the end.

    	One thing I just wanted to comment before I wrap it up.  Yesterday, if we could just provide the data--the data was good--if we could just provide the data that they would understand--it's kind of like if we build it.

    	We were at a legislative day about two years ago/three years ago, and a lobbyist, who is a retired Congressmen, said that all of the data in the world really didn't help HMOs.  In fact, the data show that HMOs worked.  It was a movie that actually caused more patient access or, in some states, Patients' Rights bills to be passed.  That movie was "As Good As It Gets."

    	And if you remember, those of you who saw it, the scene, it's Helen Hunt's ranting, and raving, and bashing the HMOs as she's talking to the physician that's going to treat her son in a better way than the managed care or the HMOs had.  And he actually said that this movie had more of an impact on getting people motivated in Washington and around the United States than any of the data because the data actually showed that more people were covered.  What that meant, I'm not sure, but for those of you who belong to HMOs, you can kind of take it from here.

    	I think advocacy is our answer.  I think we have about 8 million voters as our donors, and we need to turn--that's our political collateral--and we need to turn those donors into voters for what we see as the needs of health care and of transfusion medicine.

    	We have started that in Sacramento.  We've purchased software that actually helps us do that, and we're going to try to push ahead so that when we go to the state legislature, which we seem to do more and more now, or when we have to interact with our national representatives, they will know that there are votes that come along with us.  We don't have the dollars, and we're somewhat restricted on PACs, but we can turn our donors into our vehicle for change.

    	I think if we don't change, I think we're going to exclude those very people that Mr. Green said DRGs were intended to give better quality to.  Those Medicare beneficiaries are going to be ones that are ultimately excluded because there's no money in it, and the providers are not going to take--they're going to be more like Starbucks.  They're not going to take the people who can't pay.

    	Thank you.

    	DR. BRECHER:  Thank you, Mike.

    	Jay?

    	DR. EPSTEIN:  I just want to make a few comments.  A lot has been said about the FDA role, and a number of inaccuracies I think just need to be fixed.

    	First of all, the assertion that FDA ignores implications to supply.  Our mandate under the statutes is to assure that biologics are safe, pure and potent, and biologics, when they're drugs, need to be safe and effective.

    	However, the Agency has, for a long time, recognized that adequacy is part of safety, and I think that the record would support me in the statement that we have repeatedly with emerging issues considered the supply implications of policy alternatives and have been very mindful both of that role in policymaking and also proactive in trying to monitor the supply impacts of decisions both before and after the fact.  So it's simply not true that we don't recognize a responsibility to consider the supply implications.

    	Now, the issue of cost is a little bit more complicated.  It is certainly true, as many people have stated, that FDA policies have a major impact both on cost and availability.  However, it needs to be understood that the mandate of the Agency does not include considerations of cost except when they are part of rulemaking.

    	So when we are doing a product review, it's not within our purview or when we are establishing a policy outside of a rule, it is not within our purview to consider costs directly.  Now, we do consider risk, and to a certain extent many elements of risk may be derivative of cost implications, and we certainly can be aware of and consider risk, but we do not directly control costs, we do not set prices.  The only exception in that area is that we permit cost recovery and investigational studies.  And there are certain limits to what are allowed under the law for cost recovery.

    	Now, coming back to Dr. Penner's point.  We are not the agency that establishes reimbursement.  The Medicare system and Medicaid are managed by CMS, not FDA, and CMS then deals directly with the issue of reimbursement for products.  This brings back to my mind a statement that was made by I believe Dr. Klein at a symposium or a workshop that we had on NAT, at which he said, and correct me if I'm wrong, Harvey, "We don't have a cost problem here.  We have a reimbursement problem."

    	And I think that it's important to make that distinction.  Because many products that are safe and effective would not be approved if the only issue was whether they add cost.  Of course, they add cost.  So cost is part of the equation, and cost has its implications, but it should not be isolated from the larger issue of how do we pay for technology advancements.

    	So I would submit that much of the focus is misplaced saying FDA causes costs.  The issue really is are these affordable and how are they reimbursed, and that gets you into many, many larger social questions that are outside of the FDA purview and, in fact, are one of the chief reasons that this Advisory Committee was created.  Because unlike the FDA, this committee has within its charter the ability to consider directly issues of cost, issues of global public health impacts, issues of social choice and prioritization that may affect global health.

    	So I think FDA is an easy target in this domain, but it's not helpful because we're the wrong target.  We have a role in this, but that role cannot and should not be isolated outside of the larger context of our social system and our economic system, which is I think what the real issue is in front of this committee today and yesterday.

    	And then lastly I want to comment on the issue of mandates.  Certainly, the FDA is in the role of setting standards and, as everyone knows, we also have enforcement powers, which is not true of other public health service agencies.

    	However, there is a distinction to be made between requirements that are in existence as a result of statutes and regulations versus guidance.  And we have a regulation regarding guidance, and it leads to the following concept.  I'm just going to read you some standard, boilerplate language that's on every guidance document that we publish.

    	"This guidance represent statute Food and Drug Administration's current thinking on this topic.  It does not create or confer any rights for or on any person and does not operate to bind FDA or the public.  You--" that's the blood establishment "--can use an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations."

    	And this is, in fact, true, and the Agency deals on a daily basis with requests for alternative procedures.  So the bottom line is that it's the statutes and regulations which govern, that the regulations are established through a public process involving notice and comment.  They're not created in a vacuum.  And as issues emerge, the FDA does give the public advice.  You know, we do promulgate recommendations to the regulated industry.

    	Of course, it's true that we expect compliance.  Of course, it's true that we try to promulgate recommendations that we feel will be a basis for enforcement, but it's concurrently true that alternative approaches are acceptable when they satisfy statutes and regulations.

    	So I think that my main point here is that FDA has a major role to play and that we accept that and I'm not backing away from that.  But demonizing the FDA as the cause of the problem simply won't be helpful because we're a player in a much larger field where there are many other forces operating.  And one force that I would draw attention to coming from your own remarks is the issue of competition within the blood system.  And I would ask you whether you think that it is, in fact, the price competition that went on for over a decade among the blood organizations.  To what extent is that the underlying reason that hospitals have been able to essentially put the blood center under the squeeze?  Because, after all, the hospitals have an obligate need to purchase blood.  I mean, they cannot operate.  There won't be surgeries, there won't be chemotherapies, there won't be trauma care, et cetera.  So they must buy blood.

    	So how can it be that, whereas they must buy blood, they can keep telling you, well, we won't pay that?  And I'm not an economist, but it seems to me that part of the answer, at least, is that they've been successful getting it from other sources.  They can cause you to compete with each other, lower prices.  I mean, we saw the graph from Melissa Fisher that showed that, despite more than a decade of rising costs, blood centers were not charging more for blood.  This is not free market economics.  And you have to wonder:  Why did that happen and, you know, was that the fault of the increased cost of safety measures, which seems to be the contention?  I don't think so.  I think it shows other problems in the marketplace, and I tend to agree with you that it is evidence of the fact that the market model is not working in this sector of the society.

    	But, again--and I would appreciate your comments on the impact of competition among blood centers.  But my point here is that I tend to agree with Harvey, we have a reimbursement problem much more than we have a cost problem, and I think it's simply not helpful to say, well, you know, FDA is the root cause.

    	MR. FULLER:  First of all, I apologize if I indicated or in some way demonized the FDA.  Actually, we teach in our new employee orientation that the FDA is a customer and we have to satisfy that customer like any other customer.

    	I think initially when we--as novices, when we were learning the legislative game, our only contact had been with FDA, and we obviously are people that wear white hats, and so doing God's work, if we do the right thing, then everything's going to be okay.  We weren't quite exposed to Washington yet.

    	I think today I agree with you completely.  It is a funding issue.  I think that the DRGs and the whole market implications started the competition.  It started hospitals thinking that they could get something different and that--I'm not sure that you can separate any of that.  That certainly is part of it.  But if you looked at that same time, we have a time line that shows the implementation of new tests.  I'm not sure that's any different than General Motors when they're required to put in seat belts or air bags or anything, a new bumper that will withstand pressure.

    	The difference was on the end--and this has nothing to do with FDA, but the difference was on the end they're allowed to seek reimbursement for that.  When I go to buy a car, I've got to pay for those things.  But when we add them, the hospitals don't get any money.  And that's not an FDA issue.  That is a CMS issue, Medicare, MediCAL, those kinds of issues.

    	So, again, I apologize.  It's not the demon.  Sometimes I think if we named the demon, we can get power over it.  But it's not the FDA that's the demon.  It's the funding.  So it is a cost issue.  It's truly a business issue.

    	The problem is the focus is on those things that we need to do, and I would think any blood center--again, in my career, any blood center would not want to do everything that they possibly could do to make sure that it's the safest unit that goes on to comply with the regulations in the highest manner that they possibly can and go from there.  It's just that it gets very frustrating when that funnel gets so narrow at the end.  And you do have--you're absolutely right.  There is a lot of playing one center against the other.  They learned that very quickly, and actually I understand that it was some ex-blood bankers that were out consulting to tell them how to do it even better.  And that's all free market.

    	The problem is that, again, there are things that other markets you can do that we can't, and it really isn't an issue with the FDA; it's an issue with how we run our business outside of that.

    	DR. BRECHER:  We have to move along.

    	To Mike's defense, Jay, he never did say, FDA, bless their hearts.

    	[Laughter.]

    	DR. BRECHER:  We're going to go Harvey, Celso--we have three comments and questions.  That's it.

    	DR. KLEIN:  Yes, Mike, I still say that this is a reimbursement issue, not a cost issue; and for the record, I believe that blood is an enormous bargain in terms of what the health care system gets.

    	Now I'd like to ask you a variant of the question that Dr. Penner asked Ms. Fisher.  This is the Secretary's committee, and we're going to be making recommendations.  Obviously it's a given that we're not going to reform the whole reimbursement system, and we're probably not going to get out suppliers to give us their supplies free, as attractive as that seems, that concept seems.

    	Given that blood is a national resource, what should we recommend in terms of reimbursement?  You must have thought about this at some length, and I'm sure Ms. Fisher has as well.  What would you recommend if you were the Secretary's committee?

    	MR. FULLER:  I think the easiest and the cleanest thing to ask for at this point is, again, because we're all part of the same group purchasing organizations and pricing is virtually the same for our direct raw materials, that if you just ask for the cost that those safety initiatives are provided to the blood center; if it's $5 for a test, just the reagents, that we ask for that.  And then we'll let the blood centers and the hospitals negotiate the people part of that or the production part.  And in some cases, we can implement that with very little overhead and very little extra cost.  Other times, like NAT, it's a whole new lab and there's things.

    	But to begin with, that cost is an easy one to determine.  You can go to our vendors, and they basically--or to our associations, and they have that data right now.  And we all, for the most part, are paying the same.  So that's one amount that we can all agree on, I think.  That's not everything and it would be nice to have more, but I think that's the simplest.  There's nothing hidden in that.  It's a cost before we get it and manipulate it or allocate it, whatever the appropriate word is.

    	DR. BRECHER:  Celso?

    	DR. BIANCO:  Mike, thanks for all the thought, but I want to get a little bit into the issue of competition because we are going to get to the same point of both Dr. Penner and Dr. Klein.

    	You said competition is destructive.  Well, it's the heart of this country, bless their heart.

    	[Laughter.]

    	DR. BIANCO:  And so also, I can see destructive competition in other areas like airlines, that is, they're dying, every one of the big airlines is losing money, going bankrupt, and the prices of the tickets keep going down.

    	So what are the competitors trying to get?  You don't have as much O's as you need.  You have shortages.  What happened to competition last January, December, where there wasn't blood?  And how can these competitors--they are losing money--survive losing money?  What feeds the competition?

    	MR. FULLER:  To a certain degree, I think it's exactly what you said.  It's motherhood and apple pie.  It seems to be what we think we're made of, even though it's probably not true that we ever really had a free market economy because we've had government regulations almost from the beginning.

    	We actually did have competition during the time when nobody had any blood, but the one thing I think we move away from in this community--most of you have M.D. after your name--is you base everything on truth in data.

    	I'm an MBA, and I don't have those same restrictions.  I can tell you certain things and lead you to believe certain things like I have enough O's and I can do these certain things, and as a hospital administrator, again, perhaps, not being a physician, you might believe me.  And it's not until I can't perform that that price doesn't look so good.

    	But if you think about the same thing with the airlines, yes, I have a particular problem with Southwest, bless their hearts.  I think that they are undermining all of the real airlines in the world.  They don't provide the same service.  They'll take you just about any place in the country, but you've got to stop 16 times.  And they're not going to take you--I made a mistake yesterday and said Paris; I won't make that mistake again--to London.  They don't go across the Pond.

    	So it's not the same product.  And yet when you look at the television and you watch the people standing in line saying, well, you know, United and American have got to come down to the cost of running their airline like Southwest, it's a different product.  And a low-cost provider may not provide the same product.

    	It's incumbent on us to be better marketing our services, and so far we have maintained all of our customers.  We virtually have that monopoly that we're condemned for and that is not American, for the most part, but it works very well, that utility model.  It works very well in--coming from California, it works very well in utilities, too.  When the lights go off and you don't have enough energy, nobody really cares how efficient you are.  And I think that it's these misapplications of the market model that really come to grips.  You don't have some of those same advantages, and exclusion is one, being able to say no--and that is, again, I think by definition.  As a physician, you have real trouble saying no to a patient.

    	DR. BIANCO:  But they got money from the Federal Government to get out of the hole.  Is that the model we want?

    	MR. FULLER:  I think I'd go back to--I think the short answer is yes, but I think that I'd  go back to most--it seems to me most of the third-party payers look at the Medicare model, the DRGs, the contracted care, and modeling after that, what we need is when there is something put on top of that that CMS says, yes, we're going to pay for this safety initiative because we know it is the right thing to do and it's going to save money down the road, rather than waiting for two or three years and doing the equations.

    	So, yes, I think there is a certain amount.  I don't think it's a grant.  Obviously Melissa said they worked their way out of that shortfall of $800,000.  I think there are certain things in business and in health care that you have got to work your way out of.  But it's the implication of that new test or that new device that you've gotten to a certain point, you are doing, you are fulfilling your mission, and then you have this added on and it's the right thing to do, and the patient wants it, and I think that's really where the issue comes.

    	We have conditioned health care consumers in our country to expect everything free.  That's bad.  Health care has a cost.  I noticed today on television here in Washington, D.C., that physicians can't prescribe allergy medications until they send them to the drug store to try Claritin.  But that's not medicine.  That's business.  And I think when you pull the professional out of that, I think you destroy the system.

    	I think what's going to happen is you're just going to have a lot of lawsuits.  You know, somebody wants Allegra.  You know, I pay my money, I want Allegra.

    	And so I think that--and my request would be that when we have a safety initiative that is appropriate, that maybe a letter goes from FDA to CMS and says you guys ought to give these people an extra five bucks because this is a good thing to do; and, by the way, they're all doing it.

    	DR. BRECHER:  Paul?

    	DR. HAAS:  I'm an economist so I'll assume, and we'll move from there.  But there are a lot of things--and I won't go into a great bit of detail, but I wish--I would have Mike come to a class that I teach called Public Health Economics.  And I think an awful lot of what I heard throughout is that in our society, as good and as messy as it is, that--and we talk medical terms and now we can talk economic terms.  The language of economics, as it's typically discussed, does not fit the medical model that we're talking about, and I think that's very much the point that Mike is saying.  And we allow ourselves to get excited about the benefits of competition, which are wonderful.  Clearly you're not going to say a market model should be thrown out the window.  Yet when we have the nature of health care, which again says exactly as Mike has said, that no one gets turned away, the concepts of efficiency, the concepts of revenue, the concepts of quality all have to be looked at from a different model than what we're used to in the market sense.  And the general picture I think you painted is very accurate.

    	MR. FULLER:  Thank you.

    	DR. BRECHER:  Okay.  We're going to take a  break.  We're going to be back at 11 o'clock starting promptly.  Thank you.

    	[Recess.]

    	DR. BRECHER:  Okay.  Everyone take their seats.  We're going to start in 60 seconds.

    	We're running a little behind schedule, and so we're going to try to get us somewhat back on schedule.  We have two updates, one from the FDA and one by the CDC, and we're going to tow the line, 30 minutes for each presentation and discussion.  So, Paul, you have, say, 25 minutes, plus 5 minutes for discussions.  The clock is starting now.

    	DR. MIED:  Thank you, Dr. Brecher.

    	I've been asked as part of this update on HCV lookback to review for the committee exactly what is meant by HCV lookback and what FDA guidance and rulemaking on lookback is meant to accomplish.

    	As you know, multiple layers of safety, including donor screening and testing, are used to reduce the risk of transmitting infection through blood transfusion.  However, a person may donate blood early in infection during the period when the tests marker is not detectable by a screening test, but the infectious agent is present in the donor's blood.  This is known as the window period.

    	If a donor donates blood on a number of occasions and each donation tests negative for markers for HCV, but the donor subsequently returns and tests repeatedly reactive for antibody to HCV or reactive on a nucleic acid test for HCV RNA at a later date, prior collections from such a donor may have been during the window period, and they would be at increased risk for transmitting HCV.

    	In addition, a recipient of a transfusion of blood or blood components collected from such a donor during the window period would not know that he or she may have become infected with HCV through the transfusion unless notified.  Furthermore, prior collections that were never screened for anti-HCV from donors who later were found to be repeatedly reactive when screened for anti-HCV since 1990, when screening began, may have been at increased risk for transmitting HCV due to a prevalent chronic infection in the donor.

    	Now, chronic hepatitis due to HCV is a major health problem in the United States.  The infection is usually clinically silent until serious damage has been caused to the liver.  As a result, infected people usually are unaware of their disease until such damage has already occurred.  Advances in medical diagnosis and therapy have created opportunities for disease prevention or treatment many years after recipient exposure to a unit from a donor later determined to be increased risk for HCV infection.

    	Now, although transfusion-transmitted infections account for only about 7 percent of all HCV infections in the U.S., it is possible to identify and look back at prior donations that might have been collected during the window period.

    	FDA has recommended through draft guidance for industry that blood establishments perform HCV lookback activity prospectively when a donor currently tests reactive on a screening test for a marker of HCV infection.  This activity should include identification and quarantine of any prior collections from that donor that remain in inventory; notification of consignees that have received shipments of such blood or blood components so that they also may quarantine in-date units; further testing of the donor; destruction or labeling of potentially infectious prior collections; and notification of transfusion recipients, either through their physicians or directly, who may have received blood from a donor later determined to be infected with HCV so that those recipients can be tested for HCV and counseled if positive.

    	Now, these recommendations for HCV lookback are similar to the existing regulations for HIV lookback.

    	In addition, FDA has recommended through draft guidance for industry that blood establishments perform a historical or a retrospective records search to identify prior collections from donors who had tested repeatedly reactive for anti-HCV in the past and were deferred from further donations.  This retrospective records search should be of historical testing records extending back to January 1, 1988, or back indefinitely for computerized electronic records.

    	HCV lookback is part of a broad public health strategy to prevent advanced liver disease in persons with a chronic HCV infection.  The goal of HCV lookback is to enable persons who may have acquired their infection from transfusion to learn about their condition and to seek medical care.  The mechanisms whereby HCV lookback has been initiated include a public information campaign that I'll say a little more about and traceback from donor test records.

    	The rationale for targeted lookback is that it specifically identifies potentially infected transfusion recipients based on donor records, and, therefore, unlike educational efforts directed toward transfusion recipients in general, so-called general lookback, targeted lookback does not depend on the transfusion recipient to self-identify risk.  As a public health strategy, targeted lookback addresses both disease prevention, primary and secondary, and the recipient's perceived right to know.

    	FDA's initiative on HCV lookback is part of a broader departmental response to the HCV epidemic that includes research efforts by the NIH.  The current status of HCV lookback is a result of two initiatives:  a physician education program and the public information campaign conducted by CDC and the targeted lookback or recipient tracing program that was defined by FDA and CMS and is being implemented by blood establishments and hospitals under draft guidance issued by FDA.

    	In addition, CDC conducted and published an interim evaluation of the yield of targeted retrospective lookback for HCV, and CDC intends to perform additional outcome evaluations when the lookback effort is brought to completion nationwide.

    	So targeted lookback or recipient tracing is a joint initiative by FDA and CMS.  It's being conducted by blood establishments in accordance with draft guidance issued by FDA to specifically identify potentially infected transfusion recipients based on a search of donor records, followed by notification of transfusion services and hospitals and then notification of physicians and their patients, the transfusion recipients.

    	Now, since the decision by the Secretary of DHHS in January 1998 to engage in HCV lookback, FDA has issued three draft guidance for industry documents and the proposed regulation.  A draft guidance for implementation and comment was issued shortly after the Secretary's decision and later reissued for implementation and comment with technical corrections.  This guidance contained recommendations for lookback based on donor screening with multi-antigen tests for antibodies to HCV that became available in March 1992.

    	Another draft guidance was subsequently issued by FDA for comment that contained recommendations for lookback based on donor screening with the single-antigen test for antibodies to HCV that was in use between May 1990 and July 1992.

    	FDA also issued a proposed rule that addressed lookback based on donor screening with both the multi-antigen and single-antigen test for antibodies to HCV.  A companion proposed rule was issued concurrently by CMS to establish requirements for transfusion services and hospitals to notify physicians and/or patients in cases of a potentially infectious blood transfusion identified through lookback.

    	Now, FDA has reviewed comments on the draft guidance and the FDA proposed rule and has established consistency between these documents.  FDA is currently preparing a final guidance for implementation.  Final action in terms of rulemaking is currently under consideration within FDA, and this rulemaking initiative is being coordinated with CMS, who would issue a final rule concurrent with a final rule that would be issued by FDA.

    	As a result of comments received to the dockets of FDA's draft guidance for industry and proposed rule, FDA's current thinking is that the major changes that are called for to both documents include, first of all, limiting the scope of the search of records prior to January 1, 1988, to computerized electronic records rather than readily retrievable records.

    	Secondly, including a reactive nucleic acid test, or NAT, for HCV RNA as a trigger for initiating lookback both prospectively and retrospectively, and as an additional test that may be performed to help determine the HCV status of the donor.

    	And, thirdly, consideration of the results of unlicensed supplemental tests such as the Chiron RIBA I and the Abbott neutralization peptide assay when these tests were performed in helping to determine the HCV status of the donor.

    	Let's look at the current status of implementation of HCV lookback.  This lookback has been implemented voluntarily by the blood industry in response to draft guidance issued by FDA.  Prospective HCV lookback based on a repeatedly reactive test for HCV antibodies or a reactive NAT for HCV RNA is ongoing for all current donations.

    	According to nationwide estimates from the year 2000, the confirmed HCV antibody-positive rate for repeat blood donors was 0.007 percent, which corresponds to 736 donors.  Additionally, there were an estimated 30 repeat donors who were identified as HCV RNA NAT positive.

    	Now, since on the average each donation of whole blood is separated into 1.6 components, it is estimated that approximately 1,200 blood products were identified from prospective lookback triggered by antibody-positive and NAT-positive donations in the year 2000.  Conservative estimates are that approximately 1,000 HCV-tainted or potentially infectious blood products from prior collections are currently being identified each year by the prospective lookback.

    	Now, although FDA and CMS final action on HCV lookback has not yet been published, there has been significant progress toward completion of the retrospective records searches by the blood organizations.  Recent informal surveys on the status of the retrospective lookback within the American Red Cross and America's Blood Centers, whose centers together perform over 95 percent of all blood collections, revealed that searches of donor records and notification of transfusion services and hospitals is about 89 percent complete for results from multi-antigen screening tests, that is, tests available since March 1992.

    	CDC estimates that lookback based on the multi-antigen screening tests will result in approximately 36 percent of all case findings from the retrospective lookback.  The same surveys of the blood organizations indicate that searches of donor records and notification of transfusion services and hospitals is about 70 percent complete for results from single-antigen HCV screening tests, that is, for the test in use from May 1990 until March 1992.

    	However, a significant portion of the industry has not yet initiated lookback based on the single-antigen HCV screening test, which is expected to yield about 64 percent of case findings, of all case findings from the retrospective lookback.  If we combine these figures, we're able to estimate that at the present time the overall effort to date by the blood organizations represents completion of an estimated 77 percent of all records searches and notifications of transfusion services and hospitals that would be indicated under FDA's current draft guidance.

    	And so while they have made substantial progress on HCV lookback, blood establishments are awaiting the issuance of a final guidance or final action by FDA to complete the HCV lookback activity.

    	The American Red Cross estimates that when the retrospective lookback has been completed, they will have performed approximately 66,000 lookbacks for repeat donors who are reactive by serology or NAT.  The American Red Cross estimates that from these 66,000 cases, 106,000 implicated blood products will have been identified.  Since the American Red Cross represents approximately 47 percent of the U.S. blood supply, we could project the total yield of the retrospective lookback, when completed, to be approximately 226,000 HCV-tainted or potentially infectious blood products identified.

    	Also, as part of the retrospective lookback that has been implemented, hospital transfusion services that are under the jurisdiction of FDA have begun the notification of transfusion recipients as recommended in the FDA draft guidance.  However, the majority of U.S. transfusion services and hospitals which are under the jurisdiction of CMS rather than FDA are awaiting the issuance of final action on HCV lookback by CMS, which would be issued simultaneously with FDA final action on HCV lookback.

    	At this time we do not have an estimate for the state of completion of notifications of physicians and transfusion recipients by the transfusion services and hospitals.

    	In October 2000, CDC published an interim evaluation of the yield of targeted retrospective lookback for HCV.  An estimated 1,500 persons will have been newly identified an anti-HCV positive when lookback related to multi-antigen screening of donors is completed.  When retrospective lookback based on single-antigen screening has been completed, the additional yield is expected to be an estimated 3,500 individuals, for a combined total of all lookbacks of about 5,000 HCV-positive persons who did not previously know their HCV status.

    	In summary, targeted lookback is a joint initiative by FDA and CMS.  FDA has issued three draft guidance for industry documents and a proposed rule.  CMS has issued a companion proposed rule.  FDA is preparing final guidance for implementation, and final action is also under consideration.  CMS is preparing a final rule that would accompany any FDA final rule.  Prospective HCV lookback is currently ongoing for all current donations that are repeatedly reactive on an HCV antibody test or reactive on an HCV RNA NAT test.  And it is estimated that prospective HCV lookback is currently identifying approximately 1,000 potentially infectious blood products per year.

    	The retrospective lookback is about 77 percent complete in terms of total case findings, but the industry is waiting for final guidance and/or a final action from FDA as well as a final rule from CMS to complete the HCV lookback effort.  When HCV lookback has been completed, it is estimated that 226,000 potentially infectious products will have been identified and approximately 5,000 infected recipients will have been identified, notified, tested, and counseled who did not previously know their HCV-positive status.

    	I think I'll stop there and take any questions you might have.

    	DR. BRECHER:  Thank you, Paul.  Thank you for being on time, too.

    	Jeanne?

    	DR. LINDEN:  Just for clarification, these numbers that you're talking about of these, quote, tainted products, you're talking about ones that are actually infected with HCV.

    	DR. MIED:  Potentially infectious.

    	DR. LINDEN:  Well, what do you mean by potentially infectious?  You mean potentially infected, meaning they're from somebody who later was positive, or they're actually carrying HCV?

    	DR. MIED:  They're implicated prior collections that may have been in the window period.

    	DR. LINDEN:  Okay, that may have been.

    	DR. MIED:  Yes.

    	DR. LINDEN:  But aren't--so, I mean, they're not actually then tainted.

    	DR. MIED:  Well, tainted, as I say, rather than tainted, I'll refer to them as potentially infectious, because that's what they are.  We can't say that they are absolutely infectious without doubt.

    	DR. LINDEN:  That's a world of difference.  And I assume also you're talking about only components.

    	DR. MIED:  We're talking about whole blood, blood components, source plasma and source leukocytes.

    	DR. LINDEN:  What about recovered plasma?

    	DR. MIED:  In blood components, yes, as a blood--

    	DR. LINDEN:  Yes, but I mean derivatives made from source plasma.

    	DR. MIED:  From source plasma--

    	DR. LINDEN:  Excuse me, from recovered plasma.  I'm sorry.  I misspoke.

    	DR. MIED:  Only to the extent that they haven't been pooled for further manufacture.

    	DR. LINDEN:  Okay.

    	DR. BRECHER:  There was a summary of the first part of the lookback that CDC put together, and we'll make--there was an article in Transfusion that we'll circulate to members of the committee after lunch.

    	Keith?

    	DR. HOOTS:  In terms of the CMS role in this, is this to make sure that individuals not only get in for testing and counseling but also therapy if they're not eligible for any other, like private insurance?

    	DR. MIED:  Yes, their role is notification of recipients so that they can be tested, counseled if they're positive, and receive therapy if positive.

    	DR. HOOTS:  I think that's fantastic, and I think, you know, since that's kind of where we started with this committee, if we can encourage--and I hope this is part of the plan, you know, in terms of longitudinal follow-up of these individuals in terms of the outcome of their therapy and we can do--you know, you can easily model it.  If 40 percent of the people respond to therapy, then you could--you know, and you're adding 1,000 per year to the 5,000 you've already identified, then before long, the economic impact of doing this can be counterbalanced against the cost of actually doing it.  And I think it will be a very important piece of data to give to society at large about the importance of not only doing what's right but that, in fact, the long-term cost savings may, in fact, more than account for the up-front costs.

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  I think it's important to clarify that the FDA authority gets the information to the hospital.  The CMS authority ensures that the hospital blood bank or physician will notify the patient.

    	What happens from that point on is not under this regulatory scheme.  You then enter the general public health domain.  And a lot of people have pointed out that it would be nice to have ultimate outcome measures, but how feasible that will be to obtain is not clear at this moment, though there's no lack of interest within government in obtaining it.

    	DR. BRECHER:  John?

    	DR. PENNER:  It's impressive that it's only taken, what, six, seven years to get some guidelines, not yet out on this issue, so that one really can't worry a little bit about the fact that records really don't have to be kept more than ten years, I think, by our blood banks and hospitals, so that we've passed that issue of the '90-92 range of positives where we'll be able to extract all of that information and identify some of the patients who have been exposed.  So I think we've kind of run into a deficit here on our approach to at least attacking the problem.

    	The controversy and the contentiousness was really related to the single-antigen assay, which was '90 to '92, recognizing that probably culled out a fairly large number of individuals who were positive at that point, and so from '92 on when we had the multi-antigen assay, which was much more efficient, we were dealing with a smaller population, which, as you pointed out, means that if we were able to go back and now finish off much of that '90 to '92 single-antigen testing, we would pick up another several thousand patients, much more than we've had now, who had been exposed.

    	DR. MIED:  Quite so, yes.

    	DR. PENNER:  And I must admit that I'm still seeing an occasional patient who comes in with cirrhosis at age 45 or 50 and not understanding the fact that his blood transfusion back in 1988 was responsible for it and now he's just kind of left with the need for a new liver.

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  Just a comment that, in fact, the recordkeeping period is still five years, and it's in the proposed rule that we would extend it to ten.  So we have that problem of whether records did or didn't exist when this all started.

    	Despite that, though, what we've found is that most of the records do exist and that many of them are electronic and that they go back even before 1998--1988, sorry.  So, in actual fact, that has not proven to be the barrier to completion of lookback.

    	DR. BRECHER:  Mike?

    	COLONEL FITZPATRICK:  Paul, on the potential 5,000 cases--and I honestly don't remember the Transfusion article well enough whether it covered that or not.  But when CDC did their survey, they asked how many individuals were deceased, how many individuals that you discovered did not know they had hepatitis C.  And I know that DOD completed its retrospective survey and had gone clear back to single-antigen testing.  Our yield from that was two individuals who did not know that they had previously had HCV.  So is that 5,000 figure adjusted for deaths and for those individuals who already knew that they had HCV?

    	DR. MIED:  Yes, it's adjusted for all of those things:  recipients who have passed away; recipients who have moved and cannot be located, even after three attempts to locate them; recipients who get the word and refuse to see a doctor, or do see a doctor and then refuse to be tested; recipients who find out that they are, in fact, negative.  All those are taken out of it so that the bottom line is the 5,000 people who did not know they were positive.

    	We know that the efficiency of targeted lookback is low.  It's about 1 percent, and we always knew that to be the case right from the start.  But in the end, that's the bottom line, that people find out for the first time they're positive.

    	DR. BRECHER:  In the Transfusion article on the multi-antigen lookback, 69 percent of patients had already died prior to notification, and it was estimated that less than 1 percent of the estimated 300,000 HCV-positive persons in the U.S. would have been identified by the lookback.

    	Okay.  Thank you, Paul.  We're going to move on.  We're now going to hear about the CDC update on SARS.  Matt?

    	[Pause.]

    	DR. BRECHER:  Is this time for--do we have time for a joke?  I heard that if Bill Gates had a nickel for every time Windows crashed--oh, that's right.  He does have that.

    	[Laughter.]

    	DR. BIANCO:  While the computer is thinking, I didn't hear clearly, either from Paul or Jay, if there is a timeline for the issuance of this rule that is proposed, the joint or parallel rule by CMS and by FDA.

    	DR. EPSTEIN:  Well, I can't provide a timeline at this point except to say that both the final guidance at FDA and the rulemakings that FDA and CDC are under active consideration within parts of the government and we're hopeful that they'll move.  But I cannot put a timeline on them now.  It depends how these deliberations go.

    	DR. BRECHER:  I think the optimistic way to look at this is that most of the lookback has been completed, and that's a good thing.

    	DR. BIANCO:  I agree, Mark.  One concern that has been expressed is that the rule may contain--the draft guidance is where the basis for what has been done and is still being done is the concern that the rule may contain surprises and have people review a lot of the work that has been done.

    	DR. EPSTEIN:  No.  In fact, that's the reason that final guidance was not issued, was because of the recognition that if we were, in fact, going to engage in rulemaking, we had to avoid any scenario in which a final rule would create requirements that were different from final guidance.  So, you know, we could have issued final guidance a long time ago except for the fact that we concurrently engaged in rulemaking.  So the two need to correspond, and that's the point that Paul made, is that we determined that we needed to review concurrently comments to the draft guidance and comments to the proposed rule and ensure that the two would coincide fully.

    	So, to a certain extent, we can't issue the final guidance until we have clarity on final rulemaking.  But that's, you know, in your interest.

    	DR. KUEHNERT:  Maybe this would be a good time to plug government employees having faster computers.

    	What I wanted to do today is give a quick overview on the SARS investigation to date.  Thank you for inviting me to present this.  As new information helps our understanding of the epidemic more every day, we still don't know all the answers and probably won't be able to answer all your questions, but I'll hope to provide a framework for thought about what we know and about implications for blood safety.

    	It seems like last century, but it was just early February that China first reported a disease cluster to the World Health Organization.  The cluster was of more than 300 people with pneumonia of unknown etiology detected in Guangdong Province beginning in November of 2002.  And a report from ProMed, which is an infectious disease list serve, described in addition that approximately one-third of patients were health care workers, and this was a real tip-off that this was something unusual going on that was not your garden variety typical pneumonia outbreak.

    	Later in February, Dr. Carlo Urbani, who was a WHO official working in Hanoi, noted an unusual disease syndrome in a patient that was similar to that described in China, and that turned out to be the index case in Vietnam.

    	At the same time or nearly the same time, an outbreak of similar illness was reported among health care workers in Hong Kong.  That was associated with a patient who had also traveled to China.

    	Early in March, a cluster of ill health care workers in Hanoi was reported, including Dr. Urbani, who later died from SARS.  The disease spread to a large number of health care workers in Hong Kong, and WHO issued a global alert about cases of several atypical pneumonia in Hong Kong and Hanoi, and CDC offered assistance to WHO for a global investigation.

    	Soon after that, Canada reported cases from a patient who had traveled from Asia, and CDC initiated domestic surveillance, and soon after that the United States started to report cases.

    	I wanted to go through the case definition here.  The information we have about the clinical syndrome at the time was one of a prodrome of fever and respiratory symptoms which initially in many patients seems to be quite mild, followed by, after approximately a week, a progression of respiratory symptoms, often to pneumonia.  And so the case definition is based on the sort of clinical syndrome and also epidemiologic factors.  And, of course, it's been very difficult without a laboratory test.

    	The other aspect of this is that there are sort of two levels of case definition.  There's suspect case and probable case based on clinical severity, and from the start, I think we at CDC have really emphasized the importance of detecting suspect cases, being that they may be as important in transmitting disease as those that are probable.  And so initially we were reporting suspect cases to WHO while other countries wee asked to report probable cases.  And now those have been aligned as far as the WHO reporting, but I think it led to a little bit of confusion early on.

    	So, anyway, a suspect case is defined as a respiratory disease of unknown etiology, fever and respiratory symptoms such as cough, shortness of breath, and an exposure history defined as recent travel to an area with SARS transmission, and this is the so-called affected areas, or close contact with a suspected SARS case.  A probable case is all of the above, a suspect case with a chest X-ray or autopsy findings that are consistent with respiratory infection.

    	Early on, as I said, we felt that prompt infection control was critical, even in suspect cases, and we didn't know and we still don't know a lot about what the mode of transmission actually is.  And so early on we instituted infection control precautions in the health care setting that included really all possible transmission modes.  And that included possible droplet transmission, which many respiratory infections are transmitted by, which basically is transmission through large droplets that generally don't disseminate beyond a three-feet area from the patient.  And that's in contrast to airborne precautions or airborne transmission which you see in tuberculosis or measles, where you have dissemination throughout a contiguous air space and potentially throughout an area that has shared ventilation.  Contact transmission being spread through skin-to-skin contact, being direct contact, or indirect contact through the environment or fomites.

    	Based on the data that we have to date, droplet transmission appears to be the likely predominant mode of transmission of SARS, and the reasons for that briefly are that primarily what we've seen as far as transmission has been through close contact, either those who are health care workers or household members, and there's little evidence of transmission by casual contact or widespread person-to-person contact.

    	Now, that having been said, there are some exceptions to this.  There are some events that don't necessarily fit into that explanation, so we've sought to try to think about other potential transmission factors.  Certainly people who have gotten infected, a significant proportion of them have had underlying illness, immunosuppression.  But there are probably other issues as well because certainly many persons infected have been healthy individuals without prior medical illness.  The infecting dose may have some sort of effect on transmission as well as whether there are some persons who have increased transmissibility during certain stages of their illness or whether there are certain procedures, for instance, in the health care setting that can promote transmission and, for instance, promote aerosolization are matters of concern.

    	I'm not going to describe this entire figure here, but this was an important event.  This is the chain of transmission among guests in Hotel M in Hong Kong and basically serves to illustrate the complicated aspect of transmission and potential explosive aspect of transmission.  Briefly--I'm sorry this is not very readable, but basically the red here represents a professor from a hospital in China who traveled to Hotel M in Hong Kong, became ill, and then transmitted infection to a number of individuals in the hotel, including people who then went back to Vietnam, and that was the index case I was referring to, three people in Singapore, persons in Canada, who later went on to go to Canada and caused the cluster of infection there, and other countries.

    	In addition, persons who stayed in Hong Kong and sought treatment here and Hong Kong Hospitals, and you can't read this purple box here, but it basically says that there were 99 health care workers, including 17 medical students, who then became infected and passed infection along to their household contacts, which numbered about 150 people.  So this one event rapidly disseminated the disease throughout the world.

    	This basically is a map showing the number of countries, over 25 countries, that have reported probable cases to WHO.  As of May 1st, there were 5,865 probable cases.  Over 80 percent of those cases are in Mainland China or Hong Kong, and there are 391 deaths, for a case fatality rate of approximately 6.65 percent.

    	In the United States, we have had, as of April 30th, 289 cases.  Now, of those, 233 are suspect.  So that would not be reported in the global numbers that I just mentioned.  The ones that are reported are the probable cases, of which there 56 and no deaths.  And the epidemiology here is a little bit different from what we've heard elsewhere globally.  One, you don't see a rapidly increasing curve, there are no deaths, and over 90 percent of the individuals are travelers versus close contact such as household members or health care workers.

    	So obviously there was a lot of concern about the global spread.  If you can see here--you probably can't see very well--but this lady is not wearing a mask as you would recommend.  It sort of slipped down off her nose, and we don't recommend masks in public areas, but this is part of the concern that really has driven people to take action and seek information on what can be done to prevent transmission.

    	And we've tried to get, along with WHO, guidance out in a dynamic fashion, as we learn information about SARS, to the public and to health care providers, including updates on case definitions, infection control, which we feel is the most critical element of information, traveler notification, laboratory testing we'll get into in a bit, and treatment.

    	Certainly, a huge breakthrough was the discovery of a possible etiology for SARS, a novel Coronavirus, which was later corroborated by multiple labs globally in a remarkable collaboration amongst laboratories worldwide.

    	The Coronavirus is shown here by negative-stain electron microscopy, and it looks similar to other Coronaviruses, about 100 nanometers in diameter, with distinctive surface projections.

    	A little bit about Coronaviruses in general.  They are single-strand RNA-envelope viruses.  The envelope includes a spiked matrix in hemagglutin and proteins.  There are two known sero groups in humans, and in fact humans 229e and OC43, that are the cause of approximately one-third of all common colds and reinfections are common.

    	The novel Coronavirus, however, is distinctive, otherwise referred to as the Urbani strain, in honor of Dr. Urbani.  The genome has been sequenced.  It contains about 29,000 base pairs and has considerable genetic differences from both human and animal strains.  Although there are similarities to both human and animal strains, it's clearly in a phyllogenetic distinctive group.

    	The evidence for the novel Coronavirus as an etiology of SARS is becoming stronger, and basically, on the basis of multiple laboratory results, positive results have been obtained from SARS-infected patients based on polymerase chain reaction results on an array of specimens, including blood specimens.

    	Serology, there's been positive specimens, including seroconversion, and most importantly I think the Coronavirus has been cultured from lung and kidney tissue in SARS-infected patients.

    	In addition, identical genetic sequences in patient specimens from different outbreak settings have been obtained which is consistent with a single source, especially sine Coronaviruses are prone to mutate rapidly, and cytopathic features characteristic of Coronavirus has been noted microscopically in vero cells that are inoculated with specimens from infected patients, which I think is another important aspect in that most Coronaviruses don't grow well in vero cells, and this one happens to, and so that's I think another piece of evidence that this has different characteristics than known human Coronaviruses.

    	So just into more detail about laboratory tests that have been developed to detect this Coronavirus includes PCR, which is specific for viral RNA.  It's detectable in an array of clinical specimens, as I mentioned.  It has been positive in the first 10 days of onset of fever in some patients and not in others, and so that may be an issue as far as what the sensitivity is.  We don't know what the detection threshold is for viremia or viral-shedding otherwise by PCR.

    	Secondly, there's a serology which is a mixed immunoglobulin assay, but it's specific for antibody produced after infection.  Some are detectable during the acute phase, 10 to 14 days after illness, but definitive interpretation for negative result is really believed only after 21 days of illness onset.

    	Finally, cell culture is the gold standard.

    	So there are a number of challenges when thinking about how SARS relates to blood safety.  Certainly, the first question is are patients viremic.  To my knowledge, I don't think we've had a positive culture from blood, but certainly there have been PCR-positive from blood, indicating that there is a viremia.

    	As far as published results, there's published results from Germany in the New England Journal, describing one patient who was positive from plasma on day nine, while they were symptomatic.  We also have reports which are anecdotal at this point from Hong Kong on multiple patients whose blood was drawn and was positive by PCR.  And, finally, in Canada, there are three of twenty patients, at least three, who have evidence of viremia as well.

    	Secondly, a question is concerning, okay, there's going to be a donor deferral.  How do you decide who gets deferred, and especially in a dynamic situation, and that's difficult, certainly, basing it on affected areas and on close contact.

    	Other countries have had some issues about affected areas.  If you're in an affected area, then how do you define it, and they've turned to institutional definitions if you had been in contact with a certain hospital that's had SARS transmission or an area, and that's how they've dealt with that, and, finally, what is the length of donor deferral that's needed.

    	And other issues to consider is sort of the logistics for screening and, finally, the overarching consideration of how this all affects blood supply and availability overall.

    	Donor deferral guidance.  Because of these concerns, the guidance was published by FDA on April 17th.  Just in very brief summary, it describes, for those that are exposed, deferral for 14 days.  How do you define exposure?  There's a geographic component.  Have they had travel to affected areas, which is tied to the current CDC definition of which places are affected areas or if they've been in close contact, defined as direct contact with body fluids, such as respiratory secretions of a SARS-infected patient;

    	Secondly, for those who have suspect or probable SARS infection, that they be deferred for 28 days after symptom resolution;

    	And, finally, reporting of SARS symptoms in persons who have had exposure for 14 days post-donation.

    	Some unanswered questions which are certainly causing some discomfort:

    	Does viremia occur in asymptomatic persons?  We don't know.  Part of the problem is the case definition.  You are seeking out people who have symptoms.  So cohorts are being looked at, at persons who are exposed, but not symptomatic, to look at this issue.

    	Also, is the 14-day deferral period sufficient to capture all incubation periods?  There have been reports of longer incubation periods than 14 days, but it's based on the onset of fever, and the question is whether these individuals may have had other symptoms before the onset of fever.

    	The 28-day deferral period for those that are infected.  There are reports now in the last couple of days of relapsing infection, and are those people viremic?  Are they shedding virus?

    	And, finally, again, the deferral policy effect on availability.

    	I just wanted to go over briefly the investigations that are being conducted by CDC to try to answer some of these questions.  They include natural history of infection, a longitudinal follow-up of viral shedding and antibody response in those who are infected, and this will involve intensive specimen collection in order to answer some of the issues that I posed previously.

    	Secondly, household contact transmission, what are the factors for transmission, and also gets at some of the issues about asymptomatic infection and transmission.

    	Health care worker transmission, particularly concerning the use of personal protective equipment and other issues concerning transmission to health care workers, the Hotel M situation I mentioned, and also airline passengers, what transmission has occurred on flights known to have SARS-infected persons.

    	Again, I point you to the website for up-to-date guidance on SARS as we get more information on some of these issues.

    	Thank you for your attention.

    	DR. BRECHER:  Thank you, Matt.

    	We have time for one or two questions.

    	John?

    	DR. PENNER:  Just a couple of quick ones: 	One, can it be transmitted by blood?  Do we have any knowledge on that?

    	And then, secondly, is there an animal model that could be transmitted to for study?

    	DR. KUEHNERT:  The first question, do we know it's transmitted by blood, actually, that reminds me of an important point I meant to make, which is that we plan to include in our case report form for individuals who are suspected to have SARS to add additional questions on whether they have donated blood or received blood to try to get at that issue.

    	To my knowledge, we have not heard of any possible or suspected transmission through blood at this time.  It's all based on the possibility.

    	Your second question about animal models, there is a lot of activity on finding an appropriate animal model.  I believe there has been some work on macaque monkeys, where they've had some model for infection. There also have been some studies looking at intravenous inoculation in which there has been infection.

    	So there has been I think some progress on that, but I don't know if they've settled on one model yet, but they have had inoculation of animals and basically shown symptoms of SARS in those animals.

    	DR. BRECHER:  Harvey?

    	DR. KLEIN:  Matt, there's been some report in the popular press of disturbing reports of individuals who have recovered from the syndrome and then subsequently have relapsed.  Do we know anything about the virology in those subjects?

    	DR. KUEHNERT:  We don't really.  I think you're referring to some reports from Hong Kong, and we basically just have anecdotal reports at this time that there are individuals who, after infection, may shed for a long period of time from gastrointestinal tract or respiratory secretions, and in addition to that, having reappearance of symptoms.

    	It's been brought up in that context are people being reinfected or is this a relapse, and looking at the usual nature of Coronavirus infection, people can be reinfected, but that is usually the next season, not usually in the same season if they have an antibody response, but conceivably that could happen.

    	And so we don't really know what this actually represents, but it's certainly concerning that people have evidence of continued viral shedding after they're thought to be recovering from infection.

    	DR. BRECHER:  Two questions from Rick and then Keith, and then we're going to break.

    	DR. DAVEY:  Matt, thanks for the update.  A question, perhaps a little broader question, but it does affect blood centers.  I've had inquiries from my staff, who have had some staff members who have traveled to affected areas, and the position is, look, you're going to ask donors to stay away for 14 days or longer, should we say staff members stay away for 14 days or longer?  And is this a recommendation that you are having for us or for a larger audience?

    	DR. KUEHNERT:  Well, I probably think of those persons as health care personnel.  As that, I would say they should follow the health care guidelines, which currently do not recommend furlough for exposure.  Other countries are doing things differently.  Other countries have different epidemiology, and it may change here, but right now we would not recommend that persons exposed be deferred if they're health care personnel.

    	DR. DAVEY:  You can see the inconsistency there in the blood center, the way we handle staff and donors, to some extent.

    	DR. KUEHNERT:  I guess if you presume that the reason for the deferral policy for donors is because of viremia, then I don't think it's inconsistent.  If you're saying that the policy is because you're worried about shedding in the environment, then there is an inconsistency there.  But I think if it's due to concern over viremia, I don't think it's inconsistent.

    	DR. BRECHER:  Keith?

    	DR. HOOTS:  A clinical and a radiologic question.  Is it interstitial pneumonitis or more lobar?

    	DR. KUEHNERT:  Early on, I think it's interstitial.  You see bilateral infiltrates and progressing to multi lobar progression and then sort of an ARDS or white-out-type picture.  There's actually some good pictures up on the web on the X-rays.

    	DR. HOOTS:  And in that regard, when it gets to be lobar or consolidated, and is it purulent exudative component or is it more like a typical viral pneumonia, where it's not so exudative?

    	DR. KUEHNERT:  You mean as far as the--

    	DR. HOOTS:  Is it more like measles or is it more like, say, just pneumonia from influenza, for instance?

    	DR. KUEHNERT:  I'm not really sure if I can answer that.  Certainly, clinically, the cough remains dry.  It's a dry cough.  And as far as the pathophysiology, I mean, it's, as you would see with ARDS, it's hard to distinguish.  But in terms of the clinical manifestations, it's definitely a dry cough, not productive in most people.

    	DR. GOMPERTS:  I have a couple of questions.

    	DR. BRECHER:  Okay, last questions.

    	DR. GILCHER:  Thank you.

    	Two questions:  One correlates with mortality.  Certainly age seems to be a factor.  Is there anything else?

    	And the second question relates to the convalescent plasma antibody neutralization and titers, as well as the utilization on Hong Kong and convalescent plasma being used.

    	DR. KUEHNERT:  The first question about age, I think it's going to be very difficult to be able to make sense of sort of risk factors for infection until we can get a better handle on how good our case definition is.  I can say that of culture-confirmed cases right now, there are six of them, and none of them are suspect cases.  They're all probable cases, and in addition, I think out of nineteen probable cases that have been tested, only six are positive.  So I'm not sure I can really say much about the epidemiology at this point.

    	I will say that those that we're pretty sure really have, that have the real thing, for instance, in Hong Kong, I mean, there's a fair amount of young people without any previous medical illness, and so I'm ont sure I can really say anything about age, immunosuppression.  There have been a couple of people, women who have been pregnant, but as far as anything that really hangs together significantly, I don't think I can really say.

    	On the second issue about I think it was on plasma pheresis, on use of immunoglobulin.

    	DR. GILCHER:  Well, that was one facet, that the neutralization titers in the post-convalescent phase and then, out of that, the potential for utilization of such convalescent plasma and antibody titers.

    	DR. KUEHNERT:  Right.  I don't really have much information on that.  I've heard from Hong Kong that they are using it from recovered patients, but I'm not aware of a randomized trial that's being conducted on that.  I think that would be a good idea, an interesting scientific hypothesis that should be looked at, but I'm not aware of any data.

    	On the subject of treatment, we actually don't have a good lead on one at this point.  I mean, Ribavirin was talked about, but it doesn't have any in vitro activity, at least on the strain that was tested.  So there's really not much out there.  Steroids have been discussed.  So the idea of this would be of interest.

    	DR. BRECHER:  Okay, Jay, last word.

    	DR. EPSTEIN:  Well, the issue was raised about donor loss, and we did make the attempt to estimate it, and the estimate was that it would lie in the range of .1 to .2 percent, based on the deferral questions and be no worse than .4 percent as a worst case.

    	DR. KUEHNERT:  I just want to bring one follow-up to that.  That didn't include Toronto, presumably.  This is all based on affected areas.  So if there's bouncing back and forth between travel alerts and travel advisories, that doesn't matter.  There's been some confusion about that.  What matters is whether they're in an affected area, which means that there is community transmission, and that is clearly defined in our case definition.

    	DR. BIANCO:  Mark, I have a question that is very relevant to this subject.

    	DR. BRECHER:  For you, Celso.

    	DR. BIANCO:  Bless your heart.

    	[Laughter.]

    	DR. BIANCO:  Matt, in many of the discussions that we have, the blood-banking organizations asked the public health that instead of rushing to a deferral, we started adding to the yellow cards that are handed to every traveler that comes into the country from an infected area, a request that, an advice that they don't donate blood for a couple of years.  We wouldn't have gone through all of the--a couple of weeks, I'm sorry.

    	The problem here is actually a donor that is deferred for a day doesn't come back.  It's a very frustrating experience--not all of them, but about half of them, from published literature.

    	Could you give me an explanation of why this could not be the route, and actually the cards till today do not advise the travelers not to donate blood?

    	DR. KUEHNERT:  So you're saying to be used as a substitute for deferral or--

    	DR. BIANCO:  Whatever.  I would like to use it when we have still, I don't know 46 or so cases.  I don't see this as a measure that is needed to advise 14 million donors that we collect a year, a million donors a month, more than a million, that ask them three questions, when we could have focused on that small group of people that is traveling.

    	Now, even now that we have the guidance, and we are implementing the question, why isn't it still recommended to people that travel?

    	DR. KUEHNERT:  I think there's a number of reasons why they weren't put on the traveler cards.  One is the issue that it wouldn't be construed as a substitute for guidance, but even with the guidance, there are a number of issues.

    	One is that the purpose of the cards are to notify travelers that they may have been exposed to SARS and what symptoms to look for.  There are a number of possible messages that could be put on the card, which is of a finite length, but the purpose is really to notify them of illness.  So that's one reason.

    	The other is that these are distributed to hundreds of thousands of travelers, giving them the information not to donate blood, and there is some concern that that would present a sort of message that might linger with them longer than the 14 days.  The other--well, I think I'll just stop there.  Mary, I don't know if you had any more in addition to that.

    	DR. BIANCO:  The size of our donor history card is also finite.

    	DR. KUEHNERT:  Yes, I understand.

    	DR. BRECHER:  We're going to be handing out magnifying glasses with it next time.

    	We're going to take a break for lunch. We'll come back at 1:10.

    	[Whereupon, at 12:11 p.m., the proceedings were adjourned, to reconvene at 1:10 p.m., the same day.]

    A F T E R N O O N  S E S S I O N

    1:17 p.m.

    	DR. BRECHER:  We're going to begin.  We're now into the public comment portion of the meeting. I would request that anyone who comes up for a public comment, please try to keep it to three minutes.  if they have written material they would like incorporated into the transcript, we can add that separately, but if they could just hit the highlights.

    	I know Dr. Sherman had requested to comment from the CAP, so why don't we begin with him.

    	DR. SHERMAN:  Thank you, Dr. Brecher, members of the committee.  I'm Larry Sherman.  I'm an emeritus professor of pathology at Northwestern University and on the board of a local community blood center.  I won't say how long I've been in transfusion, but I started cross-matching from bottles.  I represent the CAP--you may not believe it, but it's true.

    	The CAP, I am a member of the Council of Scientific Affairs and the Transfusion Medicine Resource Committee.  Briefly, the CAP is a national specialty society of some 16,000 pathologists, many of whom are transfusion service directors around the country, and it also has accreditation and proficiency testing programs that reach the large majority of transfusion services in this country.  Of note, among our activities is finding the laboratory category with the greatest cost increases is blood.

    	The CAP endorses blood safety improvement, but is concerned when new technologies have unaccounted for costs and not uniformly supported by scientific evidence.  ULR is an example.  There are significant benefits for select patients.  However, recently presented in published papers indicate controversy still exists as to whether there will be substantive benefit for all transfused patients.  Jim AuBuchon editorialized on this issue in JAMA a couple of weeks ago.

    	We believe this committee should promote new studies to provide additional information about the clinical utility of ULR and its impact on availability and supply costs.  Any new therapy warrants ongoing reevaluation, and indeed leukoreduction was first thought to promote kidney graft survival, yet the opposite was true.

    	A key added problem in this debate is that the two sides have different underlying ethical premises with at times contributing unwarranted rhetoric.  Until there is full support for ULR, we believe these products should be used as a medical decision by a patient-physician.  We and other societies such as the AMA and the American Society of Hematology view the use of leuko-reduced products to be the practice of medicine, as is any medication.

    	We also believe the de facto monopoly aspects of blood supply in many parts of this country inappropriately restrict physician's options by requiring ULR, and this carries a substantive economic impact.

    	Previous testimony here and to the FDA indicated ULR would cost an additional $28 to $30 per red cell unit.  I'm aware of areas where the increased charge to hospitals has been in the $40 to $60 range.

    	Now, it's clear that some of this represented catch-up, but an additional part of it is a lack of transparency that often exists between hospitals and blood centers, and which accounts for many of let's say of the jaundiced views on the part of hospitals towards blood centers about this and other increased charges, as we've heard earlier.

    	Ed Snyder had a cost-neutral approach to instituting ULR by decreasing utilization in other areas.  However, transfusion services who had already reduce utilization some time ago by similar measures do not have this option available.

    	Yale illustrates some of these decision dilemmas in another way.  There are those who would say, rather than the step toward URL at Yale, they should have spent to save monies on all single-donor platelets, greatly decreasing the infectious exposure of the random donor platelets used in their four-unit doses.  Reasonable transfusionists can disagree on both these issues.

    	A major additional stress economically is the blood supply itself, with uncertain availability having hidden adverse effects on efficiency and cost in both centers and hospitals even before the extreme of cancelling surgeries. 	The added time for NAT testing has accentuated availability and cost issues, particularly for platelets.  We have a marginal supply, with the only predictable items being usual times of uncontrolled shortages.  This committee made a trial of gathering supply data through sentinel hospitals.  Much broader data is needed.  Pragmatically, we do not have systematic broad ongoing data on blood availability, particularly in smaller hospitals, and particularly in rural areas, and we only partially understand donor motivation and recruitment.

    	We even do not have definitions fully accepted of what is a blood shortage.  This is a field where long-term commitment of more information resources are needed.

    	In conclusion, the CAP's position are leuko-reduced products should be available for patient care, as medically indicated, and not limited by a patient's financial status.  Until there is a clear national medical consensus, leuko-reduced products should be left to the discretion of a patient's physician or an institution's attending medical staff.  The actual medical and economic impacts of leuko-reduced products should be reassessed by this and other groups.

    	Collection of data and costs and availability of the nation's blood resources must be more intensive and long-term.  The CAP hopes this committee will develop an extensive recommendation for collection and analyzing this data with an appropriate office within the Public Health Service capable of this task.  This may be in conjunction with an independent group, such as the National Blood Data Resource Center of the AABB.

    	Fifth, the low blood costs are stated as only a small percentage of hospital costs.  We still believe blood reimbursement should be taken out of DRGs or separately categorized and, in addition, one has to be working from up-to-date data, not two years old.  The continued and forecast increases in this area of true costs must be allowed for reimbursement in a timely fashion.

    	Blood safety, availability and cost and intertwined and warrant serious review, and we need to be sure public dollars are most effectively used for the greatest benefit and safety.

    	The one addition I would like to make, after listening to the discussion yesterday, it would also seem that it would behoove the CAP, the American Hospital Association, and other kinds of entities to make a strong push in institutions to get reimbursement of all currently available dollars.

    	When I was hearing the discussion that only half the hospitals apply for reimbursement for Medicare, apparently for Part A, for blood products, I was reminded of the fact about two years ago there was a paper in Transfusion from a well-known or prestigious hospital, where they noted that 17 percent of their blood products weren't billed.  And what was more interesting to me, on checking with that hospital some months later in connection with the workshop that I was doing, that no one seemed to know if they had found the problem or indeed if it had been corrected.

    	I would say that Ed Snyder, if he went to his administrators with a 17-percent increase in revenue, even though they're not telling him what revenue is, they would give him great kudos and perhaps--I guess he isn't here--but Ed might be made chief of staff or maybe even the governor from what I hear about what's happening in Connecticut.

    	[Laughter.]

    	DR. SHERMAN:  This, from the standpoint of hospitals and hospital transfusion services, this is an important area because I don't see how we can reasonably ask for tighter approaches to reimbursement and more timely approaches to reimbursement unless we actually go forward and bill.

    	Thank you for your consideration.  I'd be happy to answer any questions.

    	DR. BRECHER:  Comments or questions?

    	[No response.]

    	DR. BRECHER:  Other public comments?

    	Dave?

    	MR. CAVANAUGH:  Hi.  My name is Dave Cavanaugh.  I'm with the Committee of Ten Thousand.  We wanted to just thank the Committee for scheduling the HCV lookback update.  There haven't been too many of those as it's proceeded.  We've been quite concerned about the pace of it, and we see, because of our work with AIDS, the growing alarm in a more general population than just blood recipients of the prevalence of hepatitis, and the number now is estimated at 30 percent of all HIV positives are hepatitis infected as well.

    	So there's a lot of interest in co-infection management these days.  Certainly, we've been doing that for a long, long time.  We actually would use the term "glacial" for the pace of the targeted lookback, but to hear that it has produced the results of 5,000 even potentially infected persons, to us is very different than the previous presentation we heard two-and-a-half years ago, which is it's going to be a million dollars per person found.  They probably already know that most of them are already dead.

    	Mr. Mied gave a very professional presentation, and we're very appreciative of it.  It's just the delay.  I mean, when I got into this, it was six years after the 1992 date, prior to which we were trying to get this lookback done, and now it's over a decade.  And you know we're used to talking about things that happened 17 years ago, but we have a new Committee of Five Thousand here, growing at a thousand a year, we understand.  We're the Committee of Ten Thousand, and only have actually seven thousand.  So it's on that scale already in this population.

    	We're very appreciative of the prospective lookback that's built in now, and we trust that that will build interest, but the 23 percent of the single antigen test reviews that have not yet been done "pending the final guidance," we hope get done soon because that is where most of the meat of this lookback has been found and where the folks are that need this information.

    	Thank you.

    	DR. BRECHER:  Thank you.

    	Other public comments?

    	[No response.]

    	DR. BRECHER:  If not, we're going to move into our committee discussion.  We have basically until 4 o'clock, and if we could finish early for a change.  What I would like to do is discuss the meat of this particular meeting on the economics first, and then we can move into discussion of the response to the committee from Dr. Carmona.

    	There have been two recommendations for resolutions that have been put forward; one yesterday and one that was worked on by several committee members over lunch.  What I would like to do is put them both up on the screen because I think there was overlap, and maybe we can work through that.

    	[Pause.]

    	DR. BRECHER:  Dr. Klein, you were the principal author of this.  Do you want to walk us through this?

    	DR. KLEIN:  This is draft wording to try and address some of the issues that we've been discussing over the past two days, and I'll quickly read for you the first resolution, as it were.  There is, of course, an introductory sentence.

    	"Since blood for transfusion is accepted as a unique national resource, the Committee--" that should be "--recommends that CMS identify, separate from the marketbasket, the costs of blood and develop timely and adequate reimbursement mechanisms--" if we could remove the "S" "--to assure that improvements in blood safety can be concurrently implemented without sacrificing the financial stability of the Nation's blood supply."

    	And here the important points to those who went through this was, A, to separate out the costs of blood so that one can clearly identify them without telling the reimbursing agencies how to do it; ask them to timely and adequately reimburse for improvements in blood safety.  Someone had suggested direct costs, but I think this is probably sufficient; and, finally, to mention that without such reimbursement we might be sacrificing the financial stability of the nation's blood supply.

    	The second resolution is similar, but covers a slightly different area, and that is that the Committee recommends that "CMS consolidate and review reimbursement policy for all blood components and products, with particular focus on the status of IGIV."

    	DR. BRECHER:  Thank you, Harvey.

    	And now maybe if we could get the IGIV up on the screen, so we'll take a look at that, and then we can decide whether there's common ground or whether we need to do two separate proposals.

    	[Pause.]

    	DR. BRECHER:  Mark, do you want to talk us through this one?

    	MS. LIPTON:  I guess, isn't the IGIV problem an outpatient problem that you're trying to deal with?  And this really is an inpatient.  I think we lose the specific direction that we're requesting in the second resolution with this combined language.

    	I think you could leave it in there, but then you need to specifically state that what you, and CMS can do this by themselves, they can define what a blood and blood product is under the outpatient, and that's what you're asking them to do, and you're asking them specifically to treat it the same way.  So it's a little different than the thrust of this, which really is more inpatient focused, DRG focused.

    	DR. SKINNER:  I think that's absolutely correct.  I think they're dealing with two different issues, part of the global problem, but two separate, unique issues.

    	DR. BRECHER:  Would it be reasonable to suggest that CMS define blood and blood products as the FDA defines blood and blood products?  Does that get to sort of the bottom line of this issue?

    	DR. SKINNER:  I think that's certainly heading in the right direction.  We've talked about that as well.

    	DR. BRECHER:  So what's the Committee's pleasure?

    	MS. LIPTON:  Can I just ask a point of clarification?  So that includes, also, it wasn't just IGIV, but some of the other products we were looking at, would those be covered, also?

    	DR. SKINNER:  Yes.  I think by using the global definition, as we have a limited chance to talk about whether we should be trying to just add the missing piece or whether we should be talking about creating the resolution that wraps it all together, because hemophilia products, and because of the issue where alpha was able to address their carve-out, IGIV seems to be the lone issue that's sitting out there by itself.

    	So we could address IGIV separately or we could attempt to go back and say that we want them all treated equally.

    	DR. BRECHER:  Keith?

    	DR. HOOTS:  Actually, you could have the best of all worlds.  You could say that CMS reimburse based on definitions provided by the FDA of what constitutes a blood product, in particular, intravenous gamma globulin.

    	DR. BRECHER:  Shall we put that wording up there as an alternative?  Should we do that as a separate recommendation?

    	Keith, could you repeat that.

    	DR. HOOTS:  I didn't actually start with the verbiage that was there, so let me see.  Amend the definition of blood and blood products to make them congruent with FDA classifications and to include them, in particular IGIV, in reimbursement in order to provide access to plasma-based therapies used to treat chronic diseases and life-threatening conditions.

    	I'm kind of winging it a little bit, obviously, because I haven't written it down, but that's--

    	DR. BIANCO:  Keith, are you looking at these as a separate resolution or could it be a chapter on the prior resolution that Harvey suggested, replacing what Harvey--

    	DR. HOOTS:  Well, I think Karen's point is a good one.  This is Part B.  The other really emphasizes most Part A.  I don't know if it matters if we merge them or not, but we might at least want to make the distinction.

    	MS. LIPTON:  We just have to be careful that we are asking them really to focus in the inpatient prospective payment system, although part of it, when we're asking them to take a look across all lines, would involve the APCs and any home treatment.  But the big problem for blood and blood components is in the DRG, not in the outpatient APC.

    	DR. BRECHER:  Mark?

    	DR. SKINNER:  I did want to check one thing.  There is a potential unintended consequence of using the FDA language, although I still think it could work, and that is what we've started with on hemophilia and IGIV and alpha is we've talked about reimbursement in the outpatient setting for chronic diseases, and to the extent that we use a generic term across the spectrum, we may be asking for more than we did previously.  So I don't know whether that's  a good thing or a bad thing, but we may be broadening it and making too big of a jump.

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  Yes, I was actually rising to make a similar point, which is that for blood components in the outpatient setting, the standard under Medicare is that the fee schedule is based on reasonable cost.  Whereas, for certain derivatives, it's based on the average wholesale price, and then there's the split-out for the alpha 1-proteinase inhibitor.

    	So I'm a little bit concerned that if what we're asking for is to lump them all under one policy approach for a blood product as FDA defined.  We may be lumping too much because the FDA includes components and derivatives as blood products, and it's not clear whether it's a step forward or a step backward if they then come under one scheme because people have been pleased with the improved reimbursement structure for the outpatient component under the current scheme, and it will become unclear what scheme you're asking for.

    	Are you asking for the orphan scheme to apply to everything?  Are you asking for the cost greater than $150 scheme to apply to all derivatives overriding the orphan scheme?  Are you asking for that scheme to apply to a blood component?

    	In other words, I'm getting confused because we heard CMS tell us that there were four different schemes operating.  Now, it's true that IGIV is left out of the definition of blood and chronic disease care, but I don't think that's the whole story here.  I think what's really wanted is for all plasma derivatives that are not otherwise orphan designated to fall under the scheme current for HF.

    	DR. SKINNER:  I don't know whether the orphan designation goes to the disease or to the drug because I don't believe all of the drugs currently used in the community have orphan designation.

    	I'm wondering, given the complexity of what we've just tried to bite off, if it might make more sense to address the problem that we're currently educated on and then to look at a subsequent meeting whether we want to come back and make a global recommendation on how to address everything, but to add the piece, and then we have all of the pieces in place, to try to wrap it all together as we've done in other subsequent meetings.

    	DR. PENNER:  Mark, I really think it would be much more powerful if we had two separate resolutions than trying to fold into one.  Because if we make just one, it'll get doctored up, and I think it'll end up losing the impact.  Whereas, each resolution in itself is powerful if it hits it directly.

    	DR. BRECHER:  Let's bite off the IGIV resolution first then.

    	Are people happy with this wording or is there a recommendation to change it?

    	MS. LIPTON:  I think somehow you need to specify what you're dealing with, if you're dealing with outpatient reimbursement.  It doesn't say this in here, and I think you need to clarify that for the--because you don't want it to be blood and blood products in the DRG.  That's for sure.

    	DR. SKINNER:  And I'm wondering, I was not the original author of this, and unfortunately John couldn't be here with us today.  I do know that Julie is in the audience who helped draft it, and I'm wondering, since she was the original author, if it would be inappropriate to ask her to clarify that piece; is that okay?

    	Julie, I'm wondering if after CMS we could insert some reference to HOPPS or something in the first "whereas" that would tie it to the actual fee schedule or payment structure.

    	MS. BIRKOFER:  I guess you're asking if I recommend where it would be appropriate to insert it?

    	DR. SKINNER:  Correct.

    	MS. BIRKOFER:  The Advisory Committee recommends that, with respect to the Hospital Outpatient Prospective Payment System (HOPPS), that CMS amend.  So if after the top line here, "recommends that with regard or with respect to," you know, and just clarify it there, "the Hospital Outpatient Prospective Payment System," and that's all caps.  I could help to type it if you want, Medicare Hospital--thank you.

    	[Pause.]

    	DR. BRECHER:  Is everybody happy with this wording?

    	"Outpatient Prospective Payment System (HOPPS.)"

    	DR. KLEIN:  Mark, I may be the only one in the room that doesn't understand what it means by "parity of payment rates across different billing dosages."  Perhaps someone could explain that to me.

    	DR. BRECHER:  Julie, do you want to take a crack at that?  Do we need that?

    	MS. BIRKOFER:  The issue thee is that for immunoglobulin that treats the chronic diseases, it's billed under the APC structure by Judy Code.  You have the introduction of a new 10-milligram J1564 that I believe is reimbursed at 51 or 52 cents versus the 500 milligram code that's reimbursed at I think it's $43.46.

    	So the point is that there should be parity between a 10 milligram and a 500 milligram, that you know the 10 milligram should be the appropriate mathematical division of the 500-milligram rate, that people should not have any opportunity to game the system.

    	Are you with me?

    	DR. KLEIN:  Well, I understand what you're saying, but I suspect that no one who reads this will, unless I'm--

    	MS. BIRKOFER:  It's actually the 1 gram.  The 1 gram is in existence.  There's a 10 milligram, and the point is that if you do the math and divide things out, they should be equal.

    	DR. BRECHER:  So basically you're recommending that payment be based upon dose.

    	MS. BIRKOFER:  Yes, exactly, and there should be no opportunity for people to take advantage of any variances.  There shouldn't be variances in the payment rates.

    	DR. BRECHER:  So can we just insert the sentence, "Payment should be based upon dose"?

    	Jay?

    	DR. EPSTEIN:  I'm still back on the earlier sentence.  I'm not sure whether that sentence is calling for modification of the definition to address all derivatives for which there's a need for continuing access to plasma-based therapy to treat chronic condition or only IGIV.

    	The problem here is the sentence structure.  Is the intent here to say that they should amend the definition of blood and blood products to include all products for which there is a need to provide continuing access to plasma-based therapy to treat chronic infectious diseases, chronic disease and life-threatening conditions, including IGIV or is the intention to say that they should include IGIV because it is a plasma-based therapy for which there is a need for continuing access, et cetera?

    	Because it seems to say two things in the same sentence, and I'm not sure what the correct intent is.  And my concern is that if it's only IGIV, then there may be other plasma product users who, perhaps not today, but ultimately will have the same problem: antithrombin 3, activated protein C.

    	There will be other products for which these needs arise, and is the intent here to change the definition to include all chronic care products or is the intent here to include IGIV and stipulate that it be so identified as a chronic care product?

    	DR. SKINNER:  I think I can answer that, and correct me if I'm wrong.  I think the answer is your first piece.  We were attempting to get IGIV identified, but given the previous discussion we were having, in terms of picking up the global definition, I really like your alternative reading better because I think it does provide the more comprehensive approach, with perhaps a better degree of lasered specificity than just carte blanche carrying forward the FDA definition.

    	So, to the extent that it could be prospective, as well as addressing the specific problem, I think that would be preferable, but the original intent was to address the immune deficiency issue.

    	DR. EPSTEIN:  So I would submit that we change this language to say that we request that "CMS amend the definition of blood and blood products to include all plasma products for which there is a need to provide continuing access to plasma-based therapy used to create chronic disease and life-threatening conditions, specifically including IGIV."

    	DR. SKINNER:  I think that's perfect.

    	DR. BRECHER:  Do you want to say "specifically including" or just "e.g., IGIV"?

    	DR. EPSTEIN:  Well, I think it's more than example because there's a problem today with reimbursement for IGIV.

    	DR. HOOTS:  Just another way to kind of say it, which is what I was trying to work on when we hop back to just doing IVIGs is, "The BSAC recommends that CMS make their definition of blood and blood products congruent with the FDA definition for reimbursement purposes.  In particular, IVIG needs to be reimbursed," blah, blah, blah, blah.

    	DR. EPSTEIN:  Again, as I understand it, it's not just the definition of blood and blood products, it's the fact that the basis for the reimbursement of HF, in particular, is that it's recognized as a chronic therapy.  So you have these two pieces that you have to work.  It has to be within the definition of blood, and it has to be a chronic care product, and that's what triggers the scheme that you want in place.

    	Again, I'm no CMS expert, and others should correct me.

    	DR. SKINNER:  Although I do believe, and someone can correct me if I'm wrong, in terms of having to meet a specific chronic test, I think we have been successful in allowing for reimbursement for acquired hemophilia under this statute, as opposed to genetic hemophilia.  So I don't know that "chronic" is an absolute litmus test to get in or out of reimbursement because I think there may be some exceptions in that respect.

    	DR. BRECHER:  Let's change the wording.  Jay, I think you had some good wording.  Can you repeat it?

    	DR. EPSTEIN:  I believe that what I said was, "The Advisory Committee recommends that with regard to the Medicare Hospital Outpatient Prospective Payment System (HOPPS), CMS amend the definition of blood and blood products to include all plasma products for which there is a need to provide continuing access--" and I guess we don't have to say plasma based "--for therapies used to treat chronic diseases and life-threatening conditions, specifically including IGIV."

    	[Pause.]

    	MS. LIPTON:  Jay, why do we need for therapies?  Why isn't it just continuing access to treat?

    	"--need to provide continuing access to treat chronic diseases and life-threatening conditions, specifically including IGIV."

    	DR. EPSTEIN:  Again, I just thought access to care is one of their issues, but okay.  Again, I don't know how the statute is worded or the reg is worded.  So I think this really needs to reflect the language in the regular statute to be ideally worded.  I have no idea what it actually says.

    	MS. LIPTON:  I think with some of these, anything that we're going to be doing today, I think it needs to be vetted against what the enabling statute is.  And is there some way, Mark, that we could have a staff person do that for us so we're not--I mean, we're not expert here, and I'm looking up, and Chris isn't here any more.  So we really have a potential to create more problems for ourself than we want.

    	CAPT. McMURTRY:  Yes, Karen, I'll do that.

    	DR. PENNER:  If we could then vote on this and get approval, then it just could be handled without us having to redistribute it and get approval.

    	DR. BRECHER:  I think if we reword it, we can distribute it by e-mail for final approval, and the rewording will reflect the current CMS guidelines.

    	So all of those in favor?

    	Oh, that's right, we need to work on the second paragraph, I'm sorry.  Let's finish that.

    	COLONEL FITZPATRICK:  Based on what I heard, if you put a paragraph after "dosages" or  a period after "dosages," to me, that's much clearer, and then just drop the rest of it.

    	DR. BRECHER:  I think we can probably drop the word "billing" and just say "across different dosages."

    	MS. LIPTON:  But I think that there was a concern that they wanted some recognition that there were different safety levels of different types of products and that those that, in establishing, am I wrong, Mark?  I thought it was when you're establishing different rates, you want them to recognize that some, in fact, may be safer than other products.

    	DR. SKINNER:  And that is part of the global issue that's kind of been the thread of this whole meeting, and will be a subject of our letter discussion.  It addresses the safety component in terms of reimbursement.

    	So it could be a separate thought.  We would obviously like the committee to include it, but it could be handled separately later.

    	COLONEL FITZPATRICK:  So there's two issues:  One is the parity on reimbursement at dosage level; the other is not necessarily parity in reimbursement, but continued funding for the safest product.

    	DR. SKINNER:  I think that's the acknowledgment that this Committee has talked about across the board, that as advances in safety, reimbursement needs to keep up with advances in technology and requirements for enhanced safety.

    	COLONEL FITZPATRICK:  Can we do that separately?

    	DR. BRECHER:  Why don't we put a period after "dosages," and get rid of the rest of that sentence.  Yes, right there, a period after "billing dosages," drop the rest of the sentence.

    	Is everybody happy with that now?

    	Now, I think we can vote on this resolution in its entirety.

    	Voting members, all of those in favor?

    	All of those opposed?

    	This resolution carries.

    	Jay?

    	DR. EPSTEIN:  Are you voting also on the preamble language or only on the recommendation per se?

    	DR. BRECHER:  This would be including the preamble.  Do we want to wordsmith the preamble a bit, talk to the preamble?

    	Jay, the floor is yours.

    	DR. EPSTEIN:  Well, if the thrust of the recommendation is all plasma therapies needed for chronic care, then I think that the preamble should not be solely particularized to IGIV.  And I'm not sure that the focus should be on the fact that it's derived from pooled plasma if, in the end, that's not the criterion for inclusion or exclusion under CMS, it's the issue of how it's defined as a blood product.

    	So, once again, I'm a little bit stymied because I don't know what statute and regs say.  This is an effort to fix it, but is it the  right effort?

    	DR. SKINNER:  I don't know that I'm troubled by the preamble because I think that actually helps elaborate the "specifically" reference in the subsequent part, and I think that puts it in context, unless we want to indicate, add a preamble to say that "because IVIG is handled different than others right now," we could have a very long preamble to kind of wrap it all together again, but the whole thrust of this in the end is to get IVIG up to speed with the other products.

    	DR. EPSTEIN:  I think, at the very least, for example, shouldn't there be a third point then that IGIV is used to provide chronic treatment of life-threatening conditions?  Again, it's just incomplete, and it's, in my opinion, too particularized, although I have no problem fixing the IGIV problem.

    	DR. SKINNER:  I think that's a good point, and as I reflect on the comments that were made at the early presentations yesterday, I think that was actually one of the challenges was communicating that IGIV was used for a chronic disease.  So I think that probably helps the point that they were trying to make yesterday.

    	DR. PENNER:  That could be put after that first sentence, "Intravenous immune globulin is derived from plasma," and then at that point I think Jay's addition could fit in very easily.

    	DR. BRECHER:  I don't know that we need three separate sentences, but like subclauses of one sentence.  I think we can pool them all together.

    	DR. KLEIN:  Add it to the above sentence.

    	DR. BRECHER:  That's right, bring all three sentences into one sentence.  "Intravenous immune globulin, IGIV, is derived from pooled human plasma; is used to treat chronic disease; and is fractionated from the same source material."  Three subthoughts.

    	Jay?

    	DR. EPSTEIN:  This is a more generic point, but I think that ultimately we want to separate out a section of findings, and when we come to the Part A comments, we need to say the same thing, that basically the Committee finds that or whereas the following.

    	DR. BRECHER:  Instead of recognizes?

    	DR. EPSTEIN:  Well, no, it's just that we want to embody a set of findings of the Committee or a set of conditions.  You know, "Whereas, A, B and C, the Committee recommends, one, two, and three."

    	DR. SKINNER:  Instead of "therefore"?

    	DR. EPSTEIN:  I don't have a problem with "therefore."  I'm just suggesting that what we're trying to frame here is a set of committee findings that would come back to Part A.  We also want to highlight a set of findings.  And the question is whether you want to bundle all of your findings or you want your findings parsed out with your recommendations.

    	DR. BRECHER:  What's the Committee's pleasure?

    	Mark?

    	DR. SKINNER:  When I was drafting the resolution for the last meeting, I tried to look back to see if there was a template for this Committee, in terms of how it did its resolutions, and we have been all over the map in terms of how we do it.

    	And it might be logical just that at some point we define a template in terms of what we want to do, but I don't know that this is inconsistent with past practice.  If the Committee wants to spend the time reworking it into a different format, it's certainly appropriate, but I don't know that it's required, given our precedent.

    	DR. KLEIN:  Perhaps we don't have to do that today.  Maybe we could have something presented to us written before the next meeting.

    	DR. BRECHER:  We will do that.

    	CAPT. McMURTRY:  It's on the list.

    	DR. BRECHER:  So are we happy with the wording?

    	DR. SKINNER:  May I just make one other comment before we vote, just simply for the record, that the deletion of the last sentence of the second section was deleted simply as a recognition that we should handle this separately.  It wasn't a policy decision on the part of the Committee, that that wasn't an issue that they agreed with.  That's my understanding of why we did it, and with that I'm certainly fine that we'll pick it up at whatever the appropriate time is.

    	DR. EPSTEIN:  Could we just see it again?

    	DR. BRECHER:  Page down--scroll.

    	DR. SKINNER:  I'm not asking you to agree with it.  It's just simply that it was not a decision on the merits of that statement that it was deleted.

    	DR. BRECHER:  Well, I think we're going to talk about that topic when we get to the letter.

    	DR. GILCHER:  Because the word "derived" is used in the preamble, I think we should add the word "derived" in the context where it says, "plasma products," and change it to "plasma-derived products."

    	DR. BRECHER:  Let's vote.  All in favor of the preamble and the resolution, voting members?

    	All opposed?

    	That resolution carries.

    	Let's go to the other resolution which we had on the screen before.  If you would slowly scroll down so we can see the whole--

    	Do we need the IGIV?  So at that point we can take out the last two lines.  No, I'm sorry, period after "products."

    	DR. PENNER:  Mark, one issue that we really haven't dealt with on this one, and that comes down to, if we just recommend, and we don't advise or recommend additional funds or monies to cover those, then I think it'll get lost, and I think it would be to our benefit, as a committee, to be able to establish the fact that these additional costs are required to be or at least should be funded.

    	MS. LIPTON:  But the problem with that is that CMS cannot do that.  And so I think what we have to recognize in this is that if we're recommending to CMS they have an authorization, it's a congressional authorization.  They have no more money to deal with this.  It's like in every other game that we've been playing, it's reallocation.  And I think we have to say that, and then we have to decide whether we have a congressional component to this.

    	Their funding is what it is going to be, and--

    	DR. PENNER:  Can we say allocation of funds be provided?  They can reallocate it, but it has to be allocated.

    	DR. BRECHER:  Well, we can recommend to the federal government that additional funds be identified to initiate or to bring about these safety initiatives.

    	Lola?

    	DR. LOPES:  This definitely seems something we should be doing, that blood has been ignored in the DRGs, but I'm not sure that what we have here would change anything.  Even if there's more money that goes to the hospitals, there's nothing that would say it should go to the blood service.  There's nothing here that would help the blood-collecting agencies with their financial problems.

    	I mean, I think it's important to make blood a more visible part of the reimbursement scheme, but it doesn't seem like this is going to solve the problems we were hearing either from the hospital people or from the blood collection agencies.

    	MS. LIPTON:  I think you're right, but I don't think that CMS can change it because I keep going back to what, you know, and I'm not an expert in this, but if you go back to what Chris said, he said CMS cannot decide to reimburse for blood products separately in addition.

    	So we are dealing with the prospective payment system the way it is, and all we can do is make it more visible within the system and hope that hospitals pick up on the fact that it's more visible and take it as a message to, when they reallocate within their own institutions, otherwise we're talking about a congressional change here.

    	I mean, I think we need to be very careful and craft this answer so we don't get back the answer:  Well, we'd like to do this.  Sorry, but that would require some congressional action because--

    	DR. KLEIN:  It seemed to me, and I was responsible for most of the language here, that the first thing we want to do, step one, was to identify the issue, and then no one could say any longer, well, we don't know what blood is or what we're giving back to the transfusion service.  Hospitals can always say we know what it is, and we're not doing that, but that's sort of a different issue.

    	But this is something that could be done by CMS, and it would clearly elevate the status of blood and allow everybody to see what it costs, and also they would be able to see that what is being reimbursed back to the transfusion service, whether that's appropriate or not.

    	DR. BRECHER:  Celso?

    	DR. BIANCO:  I totally agree with what Lola just said.  And I think that following the point of recognizing the problem, I think that we can list a number of potential mechanisms, that would be to say that there is a need for infusion of new monies and that we hope that the Secretary can identify that money and provide, in a suitable way, to what, as you say at the end there, Harvey, to provide financial stability to the blood supply.

    	DR. BRECHER:  Keith?

    	DR. HOOTS:  I just had a contextual comment.  So if you want to have a philosophic--

    	MR. DALAL:  I just wanted to add to what Celso said because I heard comments about FEMA-like disaster, infusions of one time, infusions of money.  I heard other very good ideas about subsidies that might be targeted directly to the blood centers, and I think this is restrictive, and we need to be looking for funds outside of this restriction.

    	DR. HOOTS:  Actually, I was going to propose a separate one for that.  I don't know that it fits exactly here, just in terms of unanticipated loss from under actually the Homeland Security Act.

    	MR. DALAL:  So I think we're in agreement that the choice of the language could be more extensive.

    	MS. LIPTON:  But maybe it is a two-step.  In other words, Rajen, if what you say is we ask them to do this, and then in addition we ask the Secretary to identify additional funding to respond to the addition of these multiple safety initiatives, so whether that's in the form of a subsidy or, as you said, a sort of a disaster type, but what we're setting up there is that we're asking them, in addition, to identify money outside of the prospective payment system so that they can't use the prospective payment system allocation as being this is our cap.

    	Does that work?

    	DR. BRECHER:  Rick?

    	DR. DAVEY:  Again, just looking down the road a little bit, I don't think we're at this point, but we could look, again, at maybe some kind of redefinition of the structures that are involved in costs and reimbursements here.

    	And one thought I had, again, it's a little more bureaucracy, but we could propose, maybe not today, but after the response from the Secretary, something like a National Office for Blood Resources, with some authority to provide real-time data to CMS with some focus for funding distribution with composition of economics, of people with economic backgrounds, CMS and some key other participants.

    	Again, I don't want to propose more bureaucracy, but maybe that's--but we need a focus. If we need to reinvent the wheel, reinvent the box, we may have to start thinking of a new structure.

    	DR. BRECHER:  We need some wording.  It sounds like we need a--

    	DR. HOOTS:  That's what I was going to propose.

    	DR. BRECHER:  Go ahead.

    	DR. HOOTS:  Actually, a very mild modification.  Just to unsplit the infinitive and make it parallel, just say, "To instruct CMS to identify the costs of blood, to separate these costs from the marketbasket and to develop timely and adequate reimbursement mechanisms to assure," blah, blah, blah.

    	MS. LIPTON:  But also say that one of the issues is not just consolidate, but it's simplifying, you know, we could consolidate them all and still not have a clue as to what it means.  So if we could do that, and I also think just sort of, this is like a little idea on the preamble, we've said we've identified the blood supply is at risk, but we haven't said it's due to reimbursement policies, and maybe we want to add that as a--

    	DR. BRECHER:  Let's do that first.  Multiple cost-saving initiatives and reimbursement policies or lack of adequate reimbursement or inadequate reimbursement.  Let's make it inadequate reimbursement.

    	MS. LIPTON:  Except what you're complaining about or what we're complaining about is the policy of DRGs in patients.  So I think it would resonate with them more if you say it is the reimbursement policies themselves that are causing the problem.

    	DR. BRECHER:  "And reimbursement policies."  Just get rid of "inadequate."

    	CAPT. McMURTRY:  Don't you want "inadequate reimbursement"?

    	DR. BRECHER:  No, we want to be a little more general.

    	Now, we need a thought that additional monies need to be identified from somewhere to make this happen.

    	DR. SKINNER:  Can I say one other thing on the first paragraph first?

    	DR. BRECHER:  Yes.

    	DR. SKINNER:  We talk about blood components and products in the last sentence, and in the beginning we talk about blood supply.  This kind of relates to the section that we deleted from the last one.

    	I want to be clear, and maybe it is from this language, but, if not, we should clarify it, that the reference to the costly initiatives for the blood supply also relates to the initiatives for those therapies that are developed from the blood supply.  I don't know whether we need to add that or whether it's implied because of the concluding reference.

    	DR. EPSTEIN:  Yes, the same thing was bothering me because blood components are blood products.  We've only talked about blood for transfusion being a national resource.  It creates the ambiguity whether the scope of what we're talking about is blood products or blood components or only blood components for transfusion.

    	I'm not sure of the right answer; I'm just sure that this is unclear.  I think we ought to be talking in Part A about blood components for transfusion, but this is something that we may wish to discuss because the question is--I understand Mark's point--is we have the same problem within patient reimbursement for derivatives, but right now this is not clear.

    	DR. PENNER:  So you could just add "and blood components supply."

    	DR. EPSTEIN:  Or "blood products supply."

    	DR. PENNER:  Okay, "blood and blood products supply."

    	DR. EPSTEIN:  Or "the supply of blood components for transfusion and other blood products, blood and blood-derived products."

    	DR. BRECHER:  Ron?

    	DR. GILCHER:  If we don't like the word "inadequate," I think we do need a modifier, though, and I would make it "current," put the word "current" in there.  We can go back and--

    	DR. BRECHER:  "And current reimbursement policies"?

    	DR. GILCHER:  "And current reimbursement policies," because that is the issue.  If we're not going to call them inadequate, the problem is with current reimbursement policies.

    	DR. SKINNER:  I think the first sentence maybe should be, "The nation's blood supply and blood-derived products."  The word "supply" needs to be moved before the conjunction, and the "is" becomes an "are."

    	DR. LINDEN:  How about "stability of the products and stability of the supply."

    	DR. EPSTEIN:  I think it should best say that the nation's supply, "The stability of the nation's supply of blood and blood-derived products is at risk."

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  I would also like to suggest, coming back to my earlier remark, that we're making a series of findings here, and I think the most important first finding is that blood for transfusion is accepted as a unique national resource.  I think that needs to be statement one.

    	Statement two is that "The Committee finds that the stability of the nation's supply of blood and blood-derived products is at risk."  That's conclusory.  In other words, the first point is a well-accepted truth.  The second point is a conclusion or a finding of the committee.

    	DR. BRECHER:  Do you want to dictate that point, Jay.

    	DR. EPSTEIN:  Pardon?

    	DR. BRECHER:  Do you want to say it aloud so he can write it.

    	DR. EPSTEIN:  I'm sorry.  What I'm suggesting is that if you go down to the second paragraph and take the opening phrase that says, "Since blood for transfusion is accepted as a unique national resource," instead I would turn that into a first sentence that says, "It is accepted that blood for transfusion is a unique national resource."

    	DR. KLEIN:  Or just say "blood for transfusion."

    	DR. EPSTEIN:  Yes, that's fine too.

    	DR. BRECHER:  And then move that to the top, the very first sentence.

    	DR. EPSTEIN:  And then something along the lines of, "Nevertheless, the Committee finds that stability of the nation's blood supply is at risk."

    	COLONEL FITZPATRICK:  I think actually about a year ago we asked the Secretary to identify blood as a national resource.

    	DR. KLEIN:  Maybe we should assume that it did.  That is part of the 1973 national blood policy.

    	DR. BRECHER:  So then, Jay--

    	DR. EPSTEIN:  Now, do we want to broaden it to say, "blood for transfusion and related blood-derived products"?

    	DR. BRECHER:  Yes, "blood for transfusion and blood-derived products are--"

    	DR. PENNER:  Why do you need "transfusion"?

    	DR. BRECHER:  Yes, we don't.  We can say "Blood and blood-derived products are accepted as a unique national resource."  That's fine.

    	Now, we want to basically say the Committee--I think we can get rid of, "As a result of our recent two-day meeting," and we can just say, "The Committee recommends," and then we can just tick these off.

    	DR. EPSTEIN:  This part is a finding.  I think you need to say "However" or "Nevertheless, the Committee finds" or "recognizes."

    	DR. BRECHER:  "However, the Committee recognizes."

    	"Therefore, the Committee recommends."  Do you want to just do these by numbers?  How many do we have here?  I think we're going to have several, so I would say, "Therefore, the Committee recommends," and then I would go, "Number one, that the Secretary instruct CMS."

    	DR. PENNER:  Maybe instead of "in the face of," put "as a result of."

    	DR. BRECHER:  In the paragraph above, "is at risk as a result of," instead of "in the face of."

    	We don't want to throw it in their face.

    	CAPT. McMURTRY:  Mark, what is it you wanted?

    	DR. BRECHER:  The second paragraph--let's move away from that a second--the third line, where it says, "at risk in the face of," get rid of "in the face of," and say "as a result of."

    	Now, we can drop to the next paragraph.  "Therefore, the Committee recommends," and we're going to number these, so I would, after the word "recommends," I'd hit enter twice so it drops down.  Yes, put a colon after recommends.

    	Everyone remember to talk into the microphones.  I guess that means me, too.

    	DR. DAVEY:  A comma after "identify" would set up that clause.

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  I think where we say "the costs of blood," it would be better to say "the costs of blood products and services," first of all, because it's not clear whether you're encompassing blood and blood-derived products when you just say "blood" here and, secondly, because a major part of the cost is, in fact, the related service.  If they came back to you and costed out only the blood per se, you wouldn't end up happy.

    	DR. BRECHER:  Good point.

    	DR. PENNER:  Do you want to put "marketbasket" in quotes?  Isn't that kind of a distinctive term?  I don't know if--

    	DR. BRECHER:  Yes, we put quotes around marketbasket.

    	Jeanne?

    	DR. LINDEN:  But related to, as someone who didn't know what "marketbasket" meant until yesterday, I think it's confusing, then, because the marketbasket, my understanding, is the increase from year-to-year, and yet don't we want them, I mean, this implies that we're having them look actually at the costs, not the increase in costs or is it the increase in costs that we mean?

    	DR. LOPES:  I think the marketbasket is a sample of things that you buy.  So blood should be a separate element.

    	DR. BIANCO:  Yes, I think that the issue that we heard, we have actually, that's what we got from MedPAC was to include blood in the marketbasket for health care, but what we learned also yesterday is that it's peanuts.  It's "decimal dust" again.  And so the changes that we have in costs do not influence the overall outcome.  And so the excluding it, not excluding it, but considering it separately is being--

    	DR. LOPES:  I think on the issue of blood services, I was interested in the article we were given that the blood itself, which is our focus here, is a very small, even compared to the blood services, the costs of transfusion.  So if we really want to get the blood focused on, maybe we shouldn't have blood services included.

    	MS. LIPTON:  I think we need both.  I think that's the issue, that we don't want it just to be that the product--you want to make sure that the hospitals get adequate reimbursement for the administration, too.

    	DR. BRECHER:  Yes, storage fees really need to be figured in.

    	COLONEL FITZPATRICK:  I think Jay here or somebody suggested a little earlier that it be reworded to say "to identify the cost of blood products and services," right after "identify," as a key element that, first, identify the costs of blood products and blood services separately from the marketbasket, and then either include in the marketbasket or do the timely and adequate, but I think the way it's worded now to me is a little confusing.

    	I think if you said, "Instruct CMS to identify the costs of blood products and services separately from the marketbasket," or "separately," period, and then go on, that that clarifies that.

    	DR. BIANCO:  It could almost be, "One, identify the cost to developing timely and adequate reimbursement mechanism, and, three or four, we ought to--"

    	DR. BRECHER:  "Number one, the Secretary instructs CMS to identify the costs of blood products and services, separately from the `marketbasket.'"

    	DR. KLEIN:  You could say "to separate these from and to assure that, and to develop timely and--"

    	DR. BRECHER:  Well, I'd make that number two.

    	MS. LIPTON:  I'm concerned with the direction we're going because you're going to be instructing CMS to do something they cannot do.  They cannot separate it out entirely.  They can identify it, but they can't run a separate blood line in a DRG, in a marketbasket scenario, without getting a congressional change.

    	And that's why I just don't want us to phrase this in a way that they have an easy out.  So I think the way Harvey actually had it first is the safest way to say it.

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  Well, I'd like actually some clarification because my understanding is that for inpatient AHF, that's precisely what does happen; namely, that there is a separate cost and a separate reimbursement, and I need to understand whether that's in statute or that's--

    	MS. LIPTON:  That was by statute.

    	DR. EPSTEIN:  By statute.  So there's nothing else they can take out of the marketbasket, information act.

    	MS. LIPTON:  What they can't do is create a separate line within the diagnosis-related groupings inpatient prospective payment scheme.  By statute, they cannot do that.

    	COLONEL FITZPATRICK:  We seem to be absolve--yesterday, we heard a lot about how CMS does this, and I learned a lot.  And then we had presentations about can the blood centers charge more or not charge more.

    	To me, what I heard yesterday was that, over a period of time, blood centers have undervalued their products refused to raise the price appropriately as they have incurred recruitment costs, testing costs, all of those costs that we have heard about for the past years.

    	Your statements seem to absolve them from responsibility in this process.  And what we heard from CMS yesterday, I believe, was that if the blood centers were appropriately charging the hospitals over time, that the DRGs and the reimbursement would be adequately, maybe not adequately, but it would at last reflect some changes because of that.

    	And what I've heard is blood centers saying that they won't raise their prices, and I think that's because of the fear of competition, in that they would lose either hospital contracts or they might go out of business because someone would underprice them.

    	So I think, generally, just background information, that within this there is some responsibility in the blood center arena to appropriately price their product so that it is appropriately reflected in the patient costs.

    	And if you look at what's happened over the past two years, we have incurred variant CJD, with the specter of New York not being able to withstand that, and you lose Euro blood, but they did, and there was flexibility within the system for them to import more blood and to increase donor collection.

    	The Red Cross did universal leukoreduction and raised their prices significantly, and the hospitals incurred that cost or they found a different supplier, but the industry withstood that, also.

    	So I think there is some responsibility on the collection centers to reflect the appropriate price to the hospital and then to the hospital administrator for them to make those decisions about what they price or don't price, because, as it's been pointed out, they have to buy blood.

    	We have to provide blood to the patients, and as Melissa told us, they have found ways to do it.  It hasn't been easy, but part of this goes back to our basic economy.  You have to price the commodity at what it costs you to make it.

    	And I think, in fairness the blood collection centers, have to share some of that responsibility, along with asking the government to have an appropriate policy for reimbursement.

    	DR. KLEIN:  Mike, while I think that's absolutely true, that's not something the Secretary can fix.  I think our Committee is supposed to be recommending to the Secretary things that he might be able to fix.  I think the responsibility of others here and in the room may be to address that other issue.

    	COLONEL FITZPATRICK:  And I agree, Harvey.  I don't think we can address that with the Secretary, but I think we have to be careful in the wording that we don't absolve them from--

    	DR. BRECHER:  Jay?

    	DR. EPSTEIN:  I agree, Harvey, but I think that it could also be a finding of this Committee that competitive factors in the marketplace also are contributors to the instability.

    	DR. KLEIN:  I'd be happy to add that, especially if you wanted to add also irregularities in billing.  Again, we found that billing was irrational or nonexistent.

    	DR. PENNER:  If it gets too diffuse, though, I don't think the message will get across.

    	DR. BIANCO:  And also we don't want to give the impression that we are recommending price increases by the collecting facilities.  That's not our role.

    	DR. BRECHER:  Let's get back to number one.  Karen I think makes a good point that if by law CMS cannot remove it from the marketbasket, we shouldn't be telling them to remove it from the marketbasket.

    	MS. LIPTON:  I think, again, the way Harvey worded it the first way works for us, and then we have to again vet it against the statutory language.  But I'm just concerned that if we fiddle with this any more, we're going to create something that they can't deal with.

    	DR. BRECHER:  So is it the sense of the committee that we go back to the prior wording?

    	DR. LINDEN:  No, I don't think that's true.  All we're saying is "identify."  We're not saying pull it out separate and compensate it separately, which by law they cannot do.  We're not saying that.  We're just saying identify it so we know what it is.

    	MS. LIPTON:  Right, that's what I said.

    	DR. LINDEN:  And that's appropriate.

    	MS. LIPTON:  That's what he had.

    	DR. LINDEN:  Well, but that's still what we have--identify the costs separately.

    	DR. BRECHER:  So leave it in the marketbasket, but they'll track it separately.

    	DR. EPSTEIN:  In fact, it's the reverse.  It's to specifically identify the cost of blood products and services within the marketbasket.

    	DR. BRECHER:  You're right.  That's correct.  So take out the word "separately" and put in "within."

    	DR. KLEIN:  You have to have "to specifically identify."

    	DR. PENNER:  If you don't want to split the infinitive, you can just say "identify specifically," Harvey.

    	MS. LIPTON:  But you can now, John.  The rule is gone.

    	DR. PENNER:  Well, those of us who believe in classical English.

    	DR. KLEIN:  "This is the kind of errant pedantry up with which I shall not put," I think Churchill said.

    	[Laughter.]

    	DR. LOPES:  Would you prefer the commas after "services" and "basket"?

    	DR. BRECHER:  Then, I think we could probably break "Develop timely and accurate reimbursement mechanism as number two."

    	DR. EPSTEIN:  "Recommends that the Secretary" should be before the colon, and then you have the actions.

    	DR. BRECHER:  Yes, "The Committee recommends that the Secretary--"

    	DR. EPSTEIN:  Right.

    	DR. BRECHER:  "Therefore, the Committee recommends--"

    	DR. EPSTEIN:  "The Committee recommends that the Secretary," colon.

    	DR. LINDEN:  Do we want "instruct CMS," also in there?

    	DR. BRECHER:  "That the Secretary," colon, "Number one, instruct CMS."

    	DR. EPSTEIN:  Colon, paragraph, and then--

    	DR. BRECHER:  No, go back to Secretary and put a--no.  Get rid of that colon.  Put the colon after the word "Secretary," and then hit enter and make that number one and capitalize "Instruct."

    	Now, drop down to, where is it?  Yes, a period after "marketbasket," and that's correct.  Now, make it number two.  Capital "D" for develop.

    	And we can take the next paragraph and make it number three.

    	MS. LIPTON:  And, Mark, if we could ask somehow the concept of simplification in there, "simplify and consolidate review."

    	DR. BRECHER:  Yes, we can put that thought in there.

    	So make a number three, erase the words in the next sentence up until "instruct."  Now, that becomes number three.

    	There you go.  That's close.

    	CAPT. McMURTRY:  We'll get it.

    	DR. BRECHER:  The only thing you're missing is the bold.  Capitalize the "I."  	Committee, do you want to add the word "simplify" or shall we pass on that?

    	"To consolidate, simplify and review," on number three.  "Consolidate, simplify and review."

    	Karen, is that what you wanted?

    	MS. LIPTON:  Yes, thanks.

    	DR. BRECHER:  Are we pretty much happy with this?

    	We still need a section about identifying additional sources of money to make these safety initiatives happen.  Does somebody want to propose--

    	DR. PENNER:  To fit into two someplace after "to develop"?

    	DR. KLEIN:  I think they're separate.

    	DR. BRECHER:  Yes, I agree.  I think this is a separate thought because this is money outside of CMS.  So I think we need to make sure it's not lumped with CMS, per se.

    	Bring number three up and make it number two.  That's good.  I still think we need to have a--now, we're away from CMS, but we need a clause to say that additional sources of monies must be identified.

    	COLONEL FITZPATRICK:  How about "identifying sources outside the CMS system"?

    	DR. BRECHER:  That's the thought.  That is what we want to--

    	MS. LIPTON:  Well, so in order to accomplish this, you know, the Secretary should look outside of the, I don't know, for additional funding.

    	DR. EPSTEIN:  I think it should just say "both within and without the CMS structure."

    	DR. BRECHER:  That will do it.

    	MS. LIPTON:  Do you want to say, "Within and without the CMS appropriations," because it's really the appropriations that are the limiter.

    	DR. BRECHER:  So that would be a parenthetical or "Adequate reimbursement mechanisms, both within and without the CMS appropriation"?

    	DR. EPSTEIN:  Right.

    	DR. BRECHER:  Number three, "Both within and without CMS appropriations."

    	DR. KLEIN:  The alternative thought that I heard was that we would look at issues of reimbursement for safety, that we would look for additional funds for emergency issues which might actually sell a little bit better because it seems to me it might be a little more reasonable.  I would just toss that out.  That would be a number four.

    	DR. EPSTEIN:  Well, I think that thought is no embedded in three.  Now, we could make it more explicit, but I think it's right there.

    	DR. BRECHER:  We could say "including funding of emergency initiatives" or something.

    	DR. EPSTEIN:  "Including contingency funding."

    	DR. BIANCO:  Because that would fit in your FEMA, but it would fit with all of the bioterrorism, homeland security and all of these other--

    	DR. BRECHER:  Jay, where would you put the contingency funding?

    	DR. EPSTEIN:  I would say at the end of three, just comma, "including contingency funding."

    	DR. BRECHER:  Is everybody pretty much happy with this?

    	MR. DALAL:  Three is a pretty long paragraph, and there's several very pithy, important concepts there which I would prefer to see drawn out a little bit.  The points I'm talking about are timeliness in itself is an important point, particularly in the context of the two-year DRG corrections.

    	And I think a point that had an impact on me that was made by several people was that timeliness to a blood center means in this fiscal year, in this financial year, if not in this quarter.  I was tempted to suggest that we be more explicit, but I'm not willing to suggest that we go  that far.  But timeliness is an important element; that is, timeliness in the context of the timing of the introduction of new safety-related technologies.  The reimbursement has to flow in at the same time.

    	But "adequate" is sort of the gap between the current level of reimbursement and the level which is deemed to be appropriate.  I don't think we need to be more explicit.  That can be calculated.

    	But then this third point about non-CMS-related funding, I think is important enough to be identified separately because it opens up a whole new pool of financial resources and maybe some creativity as to how to address a point that we haven't explicitly mentioned here, which is not just the stability of the blood supply, but the structural element that results in blood supply, which is the stability of the blood center.

    	DR. BRECHER:  Keith?

    	DR. HOOTS:  Yes.  I kind of was working on some language for a separate one or an additional one as a footnote because I think it just depends on how much background information we want to specifically apply to each one, but if you want to explain what we're talking about by emergency, you have to give some pretty fundamental information, which is what I've been in the last five minutes trying to write.

    	Well, I didn't know if this was going be freestanding, so I'll put the first sentence in, which would be redundant if we were going to include it, which would be:

    	"Ongoing efforts to enhance safety of the nation's supply of blood has resulted in a significant cost and inventory pressures on regional and local blood collection facilities.  In particular, recent concerns about potential risks from West Nile Virus have resulted in necessitated destruction of frozen blood units by some of these facilities.  The costs and recruitment pressures to restore this important reserve has fallen fully on these establishments.

    	During the restoration of this reserve, transfusion services supplied blood by these facilities and their communities were vulnerable to acute supply shortages, such as those that might result from a catastrophic event.

    	Therefore, BSAC recommends that the Secretary work closely with other government agencies, for example, the Homeland Security Office, to indemnify financially blood collection facilities against untimely and uncontrollable loss of their frozen reserve that results from efforts to reduce new recognized pathogen risks."

    	DR. PENNER:  Couldn't that just be added to after, "including contingency funding," and then from there one, two, three, four, something like that, which would instead of--

    	DR. HOOTS:  Sure, absolutely.

    	DR. PENNER:  Because if we get too much in there, then I think it's going to lose the pressure.

    	MS. LIPTON:  And, Keith, I would hesitate just to tie it to frozen inventory.  I mean, we have to recruit new donors as a result of the SARS, and West Nile Virus and testing.

    	DR. HOOTS:  So what would be--

    	MS. LIPTON:  I just think we just need to say, "For safety initiatives, it must be immediately implemented--"

    	DR. HOOTS:  Sure.  Okay.

    	MS. LIPTON:  You know, that "the Secretary identify additional resources, including," and if you wanted to put in Homeland Security, that's fine with me.

    	DR. PENNER:  You just have to say "embedding" and that covers--

    	MS. LIPTON:  Embedded, yes, right.

    	[Laughter.]

    	MS. LIPTON:  But I think the notion is that when suddenly we wake up and we have something that was totally unanticipated that we have to implement, that we should have some sort of funding source that assists the blood centers in getting this off the ground.

    	DR. BRECHER:  Why don't we make a number four, that we stop number three at "nation's blood supply."  And then, number four, "Contingency funding should be identified for," and then you can tick off a couple of examples.

    	COLONEL FITZPATRICK:  Karen provided some good words there that were pretty generic.

    	MS. LIPTON:  Yes, but they just went out of my brain.

    	COLONEL FITZPATRICK:  I didn't write them down.

    	DR. BRECHER:  Well, let's make it number four.

    	MS. LIPTON:  I think they were new blood safety initiatives that require immediate implementation or something like that.

    	DR. BRECHER:  "Identify contingency funding for blood safety initiatives that require immediate funding"?

    	MS. LIPTON:  Implementation.

    	DR. BRECHER:  Implementation.

    	MS. LIPTON:  The sense is that you have it or you could say unanticipated, something about it that you can do all of your budget planning in the world, but it doesn't make any difference when these things come along,  unless we start budgeting in three new viruses a year just as a matter of course.

    	DR. BIANCO:  Can we ask that the transcripts be read in court so we can remember what you said?

    	DR. BRECHER:  Why not?  They're showing up as quotes in the New England Journal already.

    	"Identify contingency funding for blood safety issues--"

    	MS. LIPTON:  Initiatives.

    	DR. BRECHER:  "--initiatives that require immediate and unanticipated implementation."

    	MS. LIPTON:  Or you could actually say "unanticipated blood safety initiatives that require immediate implementation."

    	DR. BRECHER:  Yes, you could say that.

    	MS. LIPTON:  In fact, I just did say that.

    	[Laughter.]

    	DR. BRECHER:  And then we want to put "unanticipated" in front of "blood safety."

    	DR. EPSTEIN:  Could I ask whether you intentionally don't want contingency funding for anticipated initiatives?  Because you know there could be well-anticipated initiatives that are still impossible to fund.

    	MS. LIPTON:  But I think tissue gets back to sort of Mike's sense that if the cost of blood is going to go up, then we all need to recognize that, and we shouldn't be, at least to my mind, providing funding like this over time because we could still end up in 10 years with $153-unit red cell, which is not really the true cost of the unit.

    	So I guess in my own mind, I'm kind of hesitant.  Either you're going to totally subsidize this system or what you're going to say is, look, we're going to do some bridge funding for people, but ultimately it should get reflected in the cost of a unit of blood, I think.

    	COLONEL FITZPATRICK:  For example, when we implemented CJD deferrals, we had time to respond to that.  We have a finite budget, just like CMS, and it cost us $38 additional per unit to hire phlebotomists and recruiters and make up for the loss in donors in order to collect enough blood in DOD to make up for the CJD deferrals, but that was anticipated, and I was able to go to the administration and get the money to do that.

    	DR. BRECHER:  But throwing away the blood, and it was frozen, that were collected during the active West Nile Virus months was unanticipated.

    	I think we've gotten this about as far as we can.  Let's put "For unanticipated blood safety initiatives."

    	I'd like to bring this to closure because I think we have another big item.

    	Yes, Jay?

    	DR. EPSTEIN:  On item two, I don't think it should say "blood components and products."  We want parallel structure.  It should be "blood and blood-derived products."

    	MS. LIPTON:  Perhaps you could just add "conforming amendment," and they can take care of that.

    	DR. EPSTEIN:  I think that's the only spot that needs a fix.

    	DR. BRECHER:  "For blood and blood-derived products."

    	Voting members, all in favor?

    	All opposed?

    	It carries.

    	DR. BRECHER:  Why don't we take a five-minute stretch break, and then I think we're going to come back and talk about the response from Dr. Carmona.

    	[Recess.]

    	DR. BRECHER:  If everyone takes their seats, we can resume.  Everybody sit down, please, in their own seats.

    	We're now going to move to a discussion--oh, excuse me, one other quick point.  Rick wanted to make one comment.

    	Rick?

    	MR. DALAL:  I'm just wondering if the Committee would like to make a statement for the recommendation about the importance of having a CMS representative on the Committee.  My understanding is that this may be in the works, but just in order to reinforce that, just a brief sentence for your consideration worded:

    	"The Committee recognizes the importance of having a CMS representative as a nonvoting government representative on the Committee.  The Committee therefore looks forward to the appointment of this representative."  Something very crisp.

    	DR. BRECHER:  That sounds perfect to me.

    	DR. KUHN:  And do we want to add language that it is part of the charter, the new charter?

    	CAPT. McMURTRY:  It, in fact, is part of the charter, and I think that language, you might, I think you might want to include that language.

    	DR. BRECHER:  We'll pull that out of the transcript, and we'll put it together.

    	Let's move on to the discussion of this letter, and I'd like to make a recommendation that we keep this to a discussion at this time and not make any resolutions about the letter at this time. I think we need to discuss the message we want to get back to the assistant secretary, and then I will personally deliver that message to the assistant secretary.

    	Mark?

    	DR. SKINNER:  Mr. Chairman, thank you.

    	My comments are directed to the next-to-the-last paragraph of the letter.  So to the extent that they want to scroll to that on the screen, that's the part of the letter that I'll actually be referencing.

    	As the author of the resolution at the last meeting, I read this paragraph, and quite frankly, after reading it several times, I'm still at a little bit of a loss where to begin.  What started as a simple reaffirmation of the committee's past recommendations has clearly gone far astray.  I've had a range of emotions and thoughts as I have thought about this section and what best for me to communicate to the committee today.

    	There is no doubt that I'm very passionate about blood supply and the safety of the products that our community uses.  My position, and our community's position, of accepting zero risk is well-established, and I don't believe we should have to, I don't believe we should have to in the future.

    	No one has ever said that the course toward zero risk and removing pathogens from the products that we use was going to be easy, that it was going to be fast, that it was going to be immediate, that it was going to be without cost.

    	Throughout this process, and throughout the years that I've worked on blood safety, I've always tried to be very informed, analytical, thoughtful.  I've tried to separate my personal perspective from the global interests of the community, but there does come a time when one has to speak not only from their head, but also to express the emotions in their heart.

    	In making these comments, I actually do think that the personal comments are relevant because I think it reflects the global, social and ethical aspects of what this committee is actually charged with.

    	Our committee charter specifically charges us with taking a broad public health perspective to thinking about the ethical issues, the legal issues.  In short, it's the global perspective and the long-term view which is actually within the purview of this committee.

    	The first time I read the letter, the phrase "shock and awe" came to mind, but as I reflected on it, it really is more "shock and dismay."  In one short paragraph, it appears that the surgeon general has discounted basically 20 years of blood safety history of this country, that he's totally ignored the HIV and HCV tragedy that struck the bleeding disorders community and that he's discounted the hard work and very thoughtful consideration deliberations of this committee over the last six years.

    	I was thinking back to the title of the IOM study that was issued, "An Analysis of Crisis Decisionmaking," and it's eerily relevant today.  I believe that the result of the IOM study was a covenant between our government and the American public, and especially with the bleeding disorders community, that we were going to have and that we were going to achieve a pathogen-free blood supply and the products that we used were going to be pathogen free.

    	Don't think for a minute that each time that I roll up my sleeve and infuse that I don't remember the past.  At a time when we're fighting to ensure even access to care, it's just stunning to me that we're now having to go back and fight for the safest products.

    	Since the 1980s, there have been numerous new viruses that we faced: variant CJD, West Nile Virus, smallpox and SARS.  In an age of bioterrorism, and when we're living in a global family, we really don't know what's next.  We continue to have unanswered questions about some of the viruses that I just mentioned, and we really don't know what's going to follow.  I don't understand why I might be asked to go backwards.

    	We should be able to learn, and we should be able to remember from the mistakes of history, and we should not be forced to repeat ourselves.

    	I apologize for the emotion and the passion.  I hope you can appreciate how difficult it is to talk publicly about something so personal.

    	Anyway, I would urge the committee to not accept the Surgeon General's recommendation, to immediately request, as time is of the essence, a meeting with him to remind him of the negative global implications from this action, and to request his immediate reconsideration and retraction of the recommendation that he's issued.

    	Thank you.

    	DR. BRECHER:  Jeanne?

    	DR. LINDEN:  I have a question about really where he's getting this.  I mean, he says he's getting it from NHLBI.  I don't know if George Nemo or somebody can say what question was asked, given that there's discussion only of effectiveness and not safety.  What question was actually asked of NHLBI and what did NHLBI actually say?

    	DR. NEMO:  I think the only issue that was addressed, and actually this information was passed on to a group within the Division of Blood Diseases and Resources, who's expert in the area of plasma derivatives.

    	The only issue that was asked was the effectiveness of the various products, and safety was never an issue, never was addressed.  So it was really the effectiveness of the products.

    	DR. BRECHER:  Clearly, there are social, ethical, historical issues, and clearly safety, although some of those are theoretical, that he did not consider and that this committee will bring to his attention.  I think you cannot only look at cost-effectiveness, and that is the plan.

    	DR. HOOTS:  For one thing, the assistant secretary has no cost efficacy data that would support this position.  I think it's really important that when whomever approaches him or if he comes to speak before this committee that the facts are put out, what we do know and what we don't know, but, clearly, there are a lot of things that this committee has made strong statements about, for which there is no scientific data.  There is only theoretical risk.  You can start with variant CJD deferral and go right on down the line.

    	It was all made because cognitively considered propositions were put in the context of people and risk, and the decisions were made to minimize, as much as humanly possible, the risk, regardless of the cost.  There was no cost efficacy data.  There were cost implications discussed.

    	And I think it's very important for us to keep that in mind in order to prove that an extraordinarily safe product is inferior; to an extraordinarily safe product, the N required is beyond the population of this planet.  It will not happen.  You can't do it.  You have to really use reason and resolve, the same thing we've used every time.

    	And I think that's probably, you know, in terms of the passion of my point of view, I think that's what I find most disconcerting is that there was some--and I appreciate the elaboration from Dr. Nemo--because I think to put that in the context that it was efficacy, where clearly they're both, any product is efficacious, is really important because I think it suggests that there is not a complete picture being provided here.

    	I think we could go through a whole litany of rationale that would be supported by significant data, and I don't think we have to do that.  I think we've done that before, unless this continues to persist as a point of view.

    	But suffice it to say, as a treater of people with hemophilia, I think, as a personal treater, as the chair of a national organization that's responsible for a consumer community, and as a member of a world federation that oversees, I can't conceive, with that broad expanse of expertise available, that this kind of proposition could even be put out, particularly when this Committee spent an entire session, first of all, considering the data and now, in a second session, considered all of the implications, including cost, in making recommendation.

    	So I really think it's absolutely critical that whatever the context in which this was meant to be is refined and that the implications that are there be removed for the good of not only hemophilia patients in this country, but around the world, because I can give you actual instances where that would be negatively impacted were this to be implemented.

    	In addition, there is a naivete that is also problematic.  The very thought that were we to go back to a lower-generation product that had safety established, but it clearly might have a lower cost, there is every reason, based on more than four decades of experience with clotting factor concentrate to expect that market forces would almost immediately narrow the cost differential that might be somehow benevolently applied to CMS.  It would not stay.  It makes no sense.

    	DR. BRECHER:  John?

    	DR. PENNER:  I think we've already been on record on this in the past, and with the resolution advising that Factor VIII recombinant forms be employed as an alternative and recommend it to be used as soon as possible for patients who have hemophilia A.

    	So that simple statement I think from about, what, two years ago or three years ago, when we made it, ought to be enough to at least correct this.

    	DR. BRECHER:  Harvey Klein left, but he did leave me a few comments for him to say.  One was that we have to recognize that this is a select population that is exposed to enormous amounts of exposure and that places them at a particular risk.  Therefore, you have to look upon those recipients differently.

    	Also, many of the inactivation steps have known pathogen inactivation levels, but we don't know what the next disease that's coming along and whether it will be effective in inactivating be it a virus or a prion or who knows what else and that we have to go with things that we know, and we know that unknown viruses enter the blood supply.

    	Someone from the public would like to make a statement.

    	MS. HAMILTON:  My name is Jan Hamilton.  I'm executive director of Hemophilia Federation of America.  And like Mark, I hope I can get through this without breaking down.

    	We've been very thankful for what this Committee has done to help the safety of our product that our people depend upon for life.  And one of the things that I'm very, very concerned about right now, I mean, there's a whole litany, but one of the things that could really be a bombshell is that everybody knows what's happening in Medicaid today, and Medicaid dollars are being cut like crazy across the country.

    	And we have several states right now that are trying to mandate that there be no recombinant products used for people over the age of six.  This is just not acceptable, to say nothing of the fact that the companies cannot manufacture enough monoclonal product to keep up with the demand that would be made if this were to happen.

    	If you look back, and we can get the figures from PPTA, they have them month-by-month, if you look back to the horrible shortage that we went through two years ago when there was almost no recombinant product, and the patients had to use, a lot of the adult patients had to go back to using monoclonal.

    	The supplies of monoclonal going into that were enormous because very few people were using it.  Before we came out of that shortage, there was almost no monoclonal product.  So not only did we have a shortage of recombinant, we also had a shortage of monoclonal, and none of the companies are geared up to be able to supply that kind of product, even if it weren't as safe, I mean, even if it were as safe as the recombinant products.

    	We just cannot--we just cannot--go backwards.  That's like just taking the last 20 years and flushing it down the toilet, and I don't think any of us want to see that.

    	DR. BRECHER:  Thank you.

    	Mark, you gave me a list of possible problems with this, and with your permission, I'd like to have this entered into the record of the Committee.

    	DR. SKINNER:  It's fine.  It's certainly not a polished document.  It was written late at night, with the help of many people around this table, so I'm not the sole and primary author.  So take it for what it's worth.  It was simply an intent to summarize some of the flaws that we identified.

    	DR. BRECHER:  You might want to, just for  the benefit of the Committee that hasn't seen this, maybe summarize this in a couple of sentences or hit some of the highlights.

    	[Laughter.]

    	DR. BRECHER:  Hit some of the highlights.

    	DR. SKINNER:  Certainly, some of them have been mentioned.  Jan and Keith have mentioned some of the points:

    	The impact on supply, how this could be misinterpreted when state legislatures are in session and Medicaid;

    	The recent supply crisis, the lessons we learned from that;

    	The impact on the market and the companies that are advancing these products and what it does for their incentive and their ability to stay in the marketplace;

    	Young families;

    	The previous work of this Committee, and just simply the history of the Committee;

    	The evidence on outcomes from the CDC and the UDC that reflect that the courses of treatment that we've recommended are, in fact, sound and based in science;

    	The global impact on these issues, that actions here in the U.S. will have a ripple impact around the world as plasma supply has to be diverted back to the U.S. and will have untold impacts around the world;

    	The issue of indemnification.  The government has already paid $650 million for the first crisis.  Where is that in the cost analysis?

    	Other countries around the world are actually trying to catch up with us.  Ireland, the U.K, Canada have all recently moved to 100-percent recombinant policy.  Why would the U.S. go backwards?

    	I mentioned the pathogen du jour.  We don't know what's coming next and whether it will be inactivated.

    	The concept of theoretical risk, the precautionary principle.

    	An interesting comment in terms of NIH government funding . The government has made a commitment to double NIH funding which will produce a lot of new treatments, and therapies and outcomes, and we seem to have a disconnect in government that we're going to advance them and support them, but we aren't going to pay for them.

    	And then the final comment on the page is simply to urge that we request the Surgeon General to reconsider.

    	DR. BRECHER:  Mary?

    	DR. CHAMBERLAND:  I just have a couple of questions.

    	First of all, I don't recall the exact language.  I don't know if Mac or someone actually happens to have what was the recommendation that went to the Surgeon General regarding recombinant clotting factor.  That is the first thing I'm trying to recall.

    	CAPT. McMURTRY:  I suspect that, Mark, don't you have it over there?

    	DR. SKINNER:  I do.  I'll just simply read the whereas--well, let me just make one contextual comment.

    	We had identified some language in the CMS Carriers' Manual that is using outdated language about heat-treated and wet-treated products.

    	DR. CHAMBERLAND:  Right, I have a vague recollection of that.

    	DR. SKINNER:  Products that aren't even made and probably wouldn't even be licensed if they were made today.

    	And because at the time we felt it was being used inappropriately in the states to guide reimbursement and coverage decisions, that that language needed to be cleared up with some urgency.  	So the statement simply reaffirmed two previous resolutions, no new wording in terms of our statements on eliminating barriers and movement toward recombinant, and then specifically indicated that this was one identified barrier that we had found and asked that it be cleaned up consistent with our previous recommendations.

    	So the response actually, and the request, really don't connect.  They've come back with something completely different than what we asked for.

    	DR. CHAMBERLAND:  I guess that's what I'm struggling with is that, yes, exactly that, and so that's why I asked for a recollection of what the actual recommendation was because this just doesn't seem to fit as a response.

    	I guess the second question, and again this is I guess why it would be helpful to have a CMS representative on the committee is, is within CMS, are there certain requirements that they need to follow with respect or at least to process steps that need to be undertaken for them to do things like change language that would allow for reimbursement?  That I don't know, and so I didn't know whether this was language that was just forced, if you will, because of mandated process within CMS.

    	DR. SKINNER:  I actually did have an opportunity in another group with which I participate to meet with the CMS representative this week, and I specifically asked the question, "What is the process to change the guide book?"

    	Unlike many of their other requirements and recommendations, the guide books can be updated and changed at any time throughout the year and the opportunity for comment on them.  I am told that, in fact, they are actually currently going through a process of updating all of their guide books and transitioning them to an electronic format.  That may occur in the next six to nine months, where they would be available, and so incorporating this kind of updating change could be very easily done in that.

    	In fact, we may not even know.  It may be in process as a part of that because they're doing a comprehensive update and rewrite, but this clearly, if that was in there, it could even derail that existing effort.

    	DR. CHAMBERLAND:  So then I guess that brings me to my final question, which is do we know if in point of fact that this recommendation to CMS has gone forward?  Do we know that, Mark or Mac, if it's planned or has the recommendation to CMS to study cost-effectiveness gone forward or is that still language being drafted?

    	CAPT. McMURTRY:  This was just signed Monday, and I got it Tuesday.  I am not aware whether it has left the Humphrey Building, other than to Mark.

    	DR. BRECHER:  And to be honest, I haven't received it yet.

    	DR. CHAMBERLAND:  So it's conceivable that even though the letter indicates that Dr. Carmona's intention to recommend this to CMS, it's conceivable that the document actually hasn't or the request hasn't actually made its way yet.

    	CAPT. McMURTRY:  It's conceivable.

    	DR. BRECHER:  There are other problems with this letter, as I see it, too.  There were some references to bacteria on the first page and discussions at the BPAC, and I think that that's dated.  There have now been two recent BPAC meetings that discussed issues of bacteria, having to do with extending the shelf life and pre-pooling of random platelets.

    	And it was my sense of those meetings that the initial proposed FDA research proposals or actions were felt by the BPAC to be too costly, too complicated and generally unnecessary, but, Jay, you are free to comment on that.

    	DR. CHAMBERLAND:  I guess I'd just like to tie up this issue, though.  What are we going to recommend as a Committee in response to this?  Mark, we may have to work backwards.  I'm not trying to shortcut your comments about the second paragraph, but I guess I'm not sure, as a committee, what the committee would like to recommend in response to this.

    	Does the committee think that they want to discuss that and make some specific--it seems like these would be fairly urgent, they would have to be transmitted on a fairly urgent basis.

    	DR. SKINNER:  I agree there is urgency.  I  was following the chair's lead earlier.  My initial thought was to suggest something very strong, but the chair has asked for an opportunity to meet.  I think that should try to occur within the next 72 hours, at most, because I really do believe that the impact in the states, we may not be able to undo it for a couple of years, and they are moving very quickly.  States adjourn the end of May, a lot of them do.  So their budget cycles are wrapping up, and the harm that this could do could be irreconcilable for at least another calendar year if we don't get to this very quickly.

    	DR. BRECHER:  We will try to arrange that meeting as soon as possible.

    	Mary?

    	DR. CHAMBERLAND:  Isn't the first thing you want to try and do, if possible, is to try and at least identify if this document has gone forward to CMS and see if that can be pulled, if you will?

    	DR. BRECHER:  Well, I think even if it has gone forward, we can pull it back.

    	DR. CHAMBERLAND:  Absolutely, but that would, to me, be the first thing, if there would be a way to, on a very informal basis--

    	DR. BRECHER:  Well, I think the first thing that needs to be done is we need to explain to Dr. Carmona why we think that this was not the proper response to our recommendation and that there is a much bigger picture that you need to look at besides cost-effectiveness, and then we'll see what his response is.

    	DR. CHAMBERLAND:  I don't disagree, but maybe I'm thinking just a little bit too concretely, but I have some sense that there is a communication that potentially unroots somewhere that--no?  Okay.

    	DR. SKINNER:  Do we need to take some kind of formal action where you have the clear sense of the Committee, that the Committee doesn't concur with the conclusion that he's reached and requested that you go back and visit with him about the global implications and request a retraction or is the discussion enough for you to have that authority to communicate our feeling?

    	DR. BRECHER:  Well, actually, I was actually trying to pull people out so that we have many of these comments into the transcript, and we should have the transcript on Monday, and so then I can pull that out, as necessary.

    	DR. SKINNER:  Then, I'll let others add to it.

    	DR. BRECHER:  Other comments?

    	Jay?

    	DR. EPSTEIN:  Mark, my recollection of our Blood Products Advisory Committee meetings is that the Committee gave a strong endorsement to the general design of studies that FDA proposed as necessary to validate bacterial culture a pre-release criterion for platelets.  Now, the Committee--

    	DR. BRECHER:  We can go back and look at those transcripts.  My read, and what I heard at the last feedback meeting, was that was not my impression, but we can go back.

    	Unfortunately, there was not a firm recommendation.  They didn't ask the specific question what does the BPAC want us to do.  There was just a lot of discussion back and forth.

    	DR. EPSTEIN:  Well, we may need to discuss it further, but there were two different meetings on two different subjects, and at the last meeting there was not an explicit question about the design of studies because we were mainly talking about the issue of platelet pooling, prestorage pooling, and the only question was whether the studies that had been previously described to validate cultures or at least criterion needed to be then redone, stratified for the different circumstances of pooling and extension of dating.  That was not explicitly voted upon.

    	However, at the antecedent meeting, we did explicitly ask the Committee to vote on whether they supported FDA's proposed study design to validate the bacterial culture on the single-donor platelet, and that was very strongly endorsed by the Committee.

    	So I think it's a little bit of a mixture here of contexts.

    	DR. BRECHER:  Right.

    	DR. EPSTEIN:  There were different contexts at different mgs.

    	DR. BRECHER:  Although there were some aspects of that previous study that was brought up in the second BPAC because then there were some more firm answers as to what the "N" value was because there was a question of what the "N" value would be required in the first meeting; is that correct?

    	DR. EPSTEIN:  Yes.  The Committee was not asked to vote on the size of the study.

    	DR. BRECHER:  Further comments?

    	Mike?

    	COLONEL FITZPATRICK:  Because of what appears to be a very distinct disconnect between what was forwarded to Dr. Carmona and the response that comes back, I think the other, in your correspondence with him or however you request the meeting, it should be to clarify that the intent was understood, that there was not some miscommunication by someone between you and him in the preparation of this response.  He may be responding to something totally misunderstood.

    	DR. BRECHER:  I think that the intent was understood and that the entire background of the issue was appreciated.

    	Well, if there aren't any further comments, we might actually end early for a change.

    	COLONEL FITZPATRICK:  Could I just make one--

    	DR. BRECHER:  Yes, Mike?

    	COLONEL FITZPATRICK:  I just wanted to acknowledge that this is my last meeting as an ex-officio member.  My replacement has been nominated to Captain McMurtry, and it would be Lieutenant Colonel Ruth Sylvester who will be the DOD liaison, and I just wanted to say it's been a distinct pleasure and a privilege to be here, and I have appreciated--I've learned a lot, and I hope I've contributed in some manner.

    	Thanks.

    	DR. BRECHER:  Mary, your turn.

    	DR. CHAMBERLAND:  Well, not to make it sound like a trend, but I'm also--this is my last meeting as CDC's liaison.  Unlike Mike, I'm not old enough to retire, so--

    	[Laughter.]

    	DR. CHAMBERLAND:  I just have a few more months to go.  But I've actually accepted a new position within CDC, and Matt Kuehnert, who did the SARS presentation is actually going to assume CDC's responsibilities for coordination of blood safety issues, and I think, as most of you know, Matt has a strong background in bacterial contamination and has worked on West Nile.  So he will come, as opposed to myself, who came some years ago rather uninformed, I think ready to fit right in.

    	I, too, would very much like to thank the Committee for the opportunity to work with all of you, to get to know you.  I've learned an awful lot, and it really has been a privilege and a pleasure as well.  So thank you.

    	DR. BRECHER:  Well, on behalf of the Committee, we thank both of you for your years of service.

    	[Applause.]

    	DR. BRECHER:  Now, we can close.  This meeting is adjourned.

    	[Whereupon, at 3:41 p.m., the proceedings were adjourned.]