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What many donors don't know: Their blood is sold

A lawsuit between Oklahoma Blood Institute and a Minnesota blood broker reveals details of the valuable blood business.
by Jennifer Palmer Modified: July 5, 2014 at 10:00 pm •  Published: July 5, 2014
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“Technically, we like to say the blood is free, but they (hospitals) pay a service charge” for the blood bags and testing and drivers to get the unit there, Armitage explained. “It’s arranged, so it’s a service fee.”

Lawsuit

Bowman says at one time, OBI was spending $2 million annually with his company.

“They were running an efficient operation and had good pricing and for whatever reason ... they slowly stopped sending us product,” Bowman said.

On June 13, OBI filed suit against General Blood in Hennepin County (Minn.) District Court, asking a judge to award the organization the $426,302 it claims General Blood owes. Several bi-weekly invoices were included, each ranging from $21,000 to $101,000.

General Blood fired back in court filings, denying it had failed to pay its bills and instead accusing OBI of violating a confidentiality agreement, costing the company $15 million in a deal with a Utah laboratory.

Armitage says OBI is no longer doing business with General Blood.

“They essentially constructed an argument that we know has zero merit,” he said. “We think their claims are groundless.”

One reason OBI works with blood brokers is to avoid waste, something donors should appreciate, Armitage said. “If a unit of blood is about to expire, we try to find a home for it,” he said.

Red blood cells generally are considered expired after 42 days. More specialized products, such as platelets, last just five days.

Bowman explains why his company’s payments to OBI stopped. “It’s not like we ran out of money. ... We’re running a very robust business. But it was just, ‘Hey, if you really damaged us to the tune of over $14 million by breaching your agreement of confidentiality and non-circumvent, we want to see that play out before we cut any checks.’”

Misconceptions

Bowman says he wishes there was more transparency in the blood donation industry.

“The general public — 99 percent of Americans — don’t know that blood is sold,” he said.

Armitage said since blood banks can’t pay donors, they have to inspire them with the altruistic side of what they are doing.

“That’s why we spend so much time focused on the amazing, giving front end of what we do,” Armitage said. “On the back end, we are supplying an FDA-approved drug with all the traceability and trackability and quality parameters behind it out to hospitals who, in a lot of places, think of us as a specialty pharmaceutical product.”

by Jennifer Palmer
Investigative Reporter
Jennifer Palmer joined The Oklahoman staff in 2008 and, after five years on the business desk, is now digging deeper through investigative work. She's been recognized with awards in public service reporting and personal column writing. Prior to...
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