Plasma Supplies (Hansard, 18 December 2002)

§ Lord Hunt of Kings Heath

On the evening of Monday 16 December, the Department of Health completed its purchase of the largest remaining independent US plasma collector, Life Resources Incorporated. This will secure long-term supplies of non-UK blood plasma for the benefit of NHS patients, and ensure that the current global plasma shortage will not reduce the availability to National Health Service patients of life-saving plasma products. An independent option appraisal conducted by KPMG concluded that this purchase was the most cost-effective way of achieving these objectives.

Plasma is used to manufacture products for the treatment of a wide range of conditions. Every year the NHS uses:

5,000 kilos of albumin for the tens of thousands of patients treated for burns, shock and major trauma.

2,000 kilos of intravenous immunoglobulin for patients with immune disorders. This includes 1,800 patients with primary immune deficiency who require an injection every two to three weeks throughout their lives to protect them against infection. Thousands more patients are given intravenous immunoglobulin to treat neurological and other conditions.

120,000 bottles of Anti-D immunoglobulin to protect unborn children suffering from haemolytic diseases of the newborn. This affects roughly 64,000 pregnancies a year and, in a small number of cases, can cause stillbirth, severe disability or death after birth from anaemia or jaundice.

400,000 bottles of Factor VIII to treat around 3,000 haemophilia patients,

Around 45 per cent of the plasma products needed by the NHS in England and Wales are manufactured by the NHS-owned Bio Products Laboratory. The remainder are purchased by the NHS on the open market from third party commercial suppliers.

In 1998, the Government instructed BPL to stop using UK plasma to make these products because of concerns about the theoretical risk from variant Creutzfeldt-Jakob disease. Since then, BPL has purchased plasma from the United States. The US has no reported cases of bovine spongiform encephalopathy and is the only country able to supply the quality of plasma that BPL needs in sufficient quantity. The US collects 60 per cent of the world's 120WA plasma and supplies between 35 and 45 per cent of the plasma products used in Europe alone.

Up to now these supplies have been dependent on contracts with US plasma collection companies. Over the past two years most of these companies have been purchased by commercial manufacturers wishing to secure their own plasma supplies. This radically reduced the amount of US plasma that BPL could buy under contract and threatened our ability to supply sufficient non-UK plasma products to NHS patients.

Without continuing, secure supplies of US plasma, BPL faced shutdown by 2004 with a consequent removal of massive volumes of plasma products from the NHS market. Independent market analysis by KPMG demonstrated that commercial suppliers would not be able to provide sufficient, secure supplies of plasma products to the NHS if BPL closed. Immediate action was therefore needed to secure long-term supplies of high quality, US plasma for BPL.

The Department of Health has purchased the trade and assets of Life Resources for an up-front payment of £48.8 million with a further £21 million tied into the performance of the company up until the end of 2006. The department has paid a commercial price for the business assets based on same analysis as a private sector purchaser would have undertaken.

Life Resources has supplied BPL with plasma since 1999. It has extremely high quality and safety standards overseen by the US Food and Drugs Administration and the UK Medicines Control Agency. All the company's collection centres are inspected by BPL on a rolling two-year programme. BPL's team also inspected every centre prior to the purchase.

An effective corporate governance regime has been established for the ongoing management of Life Resources. The company will be run by its existing US management team and report to a US parent company, DCI Biologicals Incorporated. DCI Biologicals will report to a UK parent company. Plasma Resources Ltd. The board of Plasma Resources Ltd is chaired by Richard Douglas, the Department of Health's director of finance and investment.

The Government have appointed Mr Philip Cushing as non-executive chair of DCI Biologicals. Mr Cushing is highly qualified for this role. His previous positions include chief executive of Inchcape (1996–99) and chief executive of Vitec Group PLC (2000–01). He is also currently chairman of Paragon Print and Packaging Limited, Spalding, Lincs, and a non-executive director of Ikon Office Solutions Inc, Philadelphia, USA. He was appointed to chair DCI because of his extensive international business experience, including a career involving American operations since 1977. He also has extensive international acquisitions experience built up over 20 years.

This deal is a logical extension of the existing relationship between the NHS and an established US plasma supplier, Life Resources, and is a pragmatic solution to the problem of securing supply.