Does the Red Cross sell blood?

Answers to your questions about the news.
Sept. 11 2006 6:20 PM

The Business of Blood

Does the Red Cross sell your frozen plasma?

Download the MP3 audio version of this story here, or sign up for The Explainer's free daily podcast on iTunes.

The American Red Cross will have to pay a $4.2 million fine for violating blood-safety laws, the Food and Drug Administration announced Friday. A spokesman for the nonprofit said that revenue from the sales of blood products will be used to pay the fine. Does the Red Cross really sell our blood?

Yes. All the centers that supply blood for transfusions—whether they're part of the American Red Cross or not—sell their products to cover operating expenses. Local hospitals work out contracts with regional suppliers or their local Red Cross facility. In general, they'll work with a single vendor, but they may shop around a bit to find the best prices. Regional suppliers provide about half the nation's blood supply, and the Red Cross kicks in 45 percent. Hospitals generate the remaining 5 percent through their own blood drives.

Daniel Engber Daniel Engber

Daniel Engber is a columnist for Slate


All blood suppliers are nonprofits, and the prices they charge follow the cost of production. Personnel costs make up half the price hospitals pay "at the pump"—labor can be very expensive, since staffers must be brought on to recruit donors, collect their blood, and then process it and test it for contamination. The cost of the testing procedures themselves contributes about 25 percent to the final price of blood. Most of the rest goes to administrative overhead—rent payments for buildings that house the blood centers, for example. (Most blood banks also mark up a few percent extra so they can keep a little cash on hand.)

The exact price of a unit of blood varies from place to place. As a rule, coastal blood is more expensive than the stuff in the heartland. (California has the biggest tags.) That's because the higher cost of living translates into higher labor costs, which get passed on to the hospitals. It's also more expensive to rent office space and secure advertising time in large urban areas.

Blood centers in Middle America can harvest a lot more blood than they need since it's so much cheaper for them to run their operations. (The centers in Iowa, for example, are able to collect from 12 percent of the population, compared to a national average of 3 percent.) That means they can ship off their surplus at premium rates to blood-starved cities like Los Angeles and New York City. The extra money they get from these sales further subsidizes the local prices. This effect can be dramatic: The same unit of red blood cells might cost $220 in Los Angeles but only $150 in Des Moines.

The system of blood distribution hasn't always relied on volunteer donors. Until the 1970s, a major portion of the nation's blood supply came from paid donors. But a government study found that volunteered blood was much less prone to hepatitis contamination. From then on, blood banks had to label their packages "paid" or "volunteer," which had the effect of eliminating paid-donor blood from the national supply. (Pharmaceutical companies still purchase blood plasma from for-profit firms that hire paid donors. The nonprofits also sell off surplus plasma to the drug companies at market rate.)

Bonus Explainer: Will the Red Cross fine push up the cost of blood? No. The $4.2 million doesn't amount to very much in terms of the organization's operating budget, which amounts to several billion dollars for its blood service alone. Safety requirements from the FDA constitute the single biggest factor affecting blood prices over the longterm. If the government asks centers to test for, say, West Nile virus, the added cost of those tests pushes prices up across the board.

Got a question about today's news? Ask the Explainer.

Explainer thanks Ryland Dodge of the American Red Cross and Jim MacPherson of America's Blood Centers. 


Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Two Damn Good, Very Different Movies About Soldiers Returning From War

The XX Factor

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.


Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Sept. 20 2014 11:13 AM -30-
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
Brow Beat
Sept. 20 2014 3:21 PM “The More You Know (About Black People)” Uses Very Funny PSAs to Condemn Black Stereotypes
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 20 2014 7:00 AM The Shaggy Sun
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.