Profits on Factor 8 deal loomed large in BTSB's decisions

What has been learnt from Mr John McStay's evidence over the past two days?

What has been learnt from Mr John McStay's evidence over the past two days?

First, the BTSB was in dire financial trouble for much of the 20-year period up to 1990, particularly in the early 1980s just before the HIV crisis struck.

Second, these problems, as the accountant said, "couldn't but" have permeated the decision-making process within the board.

Third, as the money problems mounted the board became more dependent on its main cash-generating activities, such as the sale of commercial concentrates for haemophiliacs.

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On the crucial question, however, of whether the board ever put profit ahead of safety in deciding what products to supply to haemophiliacs, Mr McStay's evidence was inconclusive.

All he could say was that he had examined an enormous amount of documentation and nowhere did he see any reference to finances overriding medical considerations. Nor, he remarked, was there any minute recording a view like "Wow! We're making a lot of money from Haemofil", the commercial concentrate which the BTSB distributed at a profit on behalf of the drugs company Travenol.

Mr McStay, who has been hired by the blood bank to give evidence on its financial history, is probably right that such a stark statement is absent. But what the documentation does convey is that financial considerations had a large bearing on all the board's deliberations, particularly those relating to commercial concentrates.

In February 1983, for instance, the board - in considering future product supplies - agreed that it was economically more "prudent" to sell imported commercial concentrates than to try to make its own Factor 8. The previous month, the BTSB's national director, Dr Jack O'Riordan, noted that such a home-made product would make the board's financial condition worse rather than better.

The tribunal has heard that if the BTSB had introduced homemade concentrates it might have stopped a number of haemophiliacs from becoming infected with HIV and/or hepatitis C. Imported concentrates have been blamed for infecting most of the 220-plus haemophiliacs who contracted either or both diseases.

Mr McStay conceded yesterday there was no evidence that the board had sought funding for the home-production project from bodies such as the IDA or EEC, suggesting the board was not really serious about its introduction.

The project was abandoned in 1984 in favour of a contract with Travenol to make Factor 8 for the BTSB using Irish plasma. The arrangement provided the board with a double benefit: a payment for plasma and free Factor 8 which the board sold on to hospitals.

The financial gain from this arrangement was undoubtedly apparent to the BTSB. One financial record from 1986 noted that "more purchases (of Factor 8) = more sales = greater profits (in general)". Similarly, a handwritten note from June 1986 recorded a comment by former chief technical officer Mr John Cann apparently at a board meeting, about Factor 8 sales "being a good thing".

It had been hoped that Mr McStay, in helping to shed light on the issue, might have been able to calculate what profits the BTSB made from distributing commercial concentrates as well as from contract arrangements such as that with Travenol. However, the insolvency expert said insufficient documentation was available from the BTSB to make an accurate calculation.

As a result the tribunal was presented with a rather academic study of estimated profits on concentrates based on a margin of 2p, 3p and 4p per unit.

The board's "take" on such concentrates appears to have varied significantly. A mark-up of 3p is noted in documentation from 1974.

Four years later, however, Prof Ian Temperley, the head of haemophilia treatment services was recorded as complaining that he was being charged 18p per unit, 8p more than his counterparts in Northern Ireland. The BTSB subsequently agreed to reduce the price to 14p.