UK blood plasma company sale to Bain Capital 'endangers NHS supplies' Former health minister criticises government's 'mind-boggling' decision to sell Plasma Resources UK to US private equity firm.
A former health minister has warned that the sale of a UK blood plasma company to a US private equity firm endangers the supply of life-saving products to the NHS.
Lord Hunt, Labour's health spokesman in the Lords and who oversaw the UK's purchase of the company in 2002, described the deal as "too risky". Patient groups also fear that the sale could harm health service provision in the UK.
The government announced last month that it had sold Plasma Resources UK to Bain Capital, the private equity firm accused during the US presidential elections of moving US jobs abroad.
Plasma Resources UK (PRUK) turns plasma, the fluid in blood that holds white and red cellsin suspension, into life-saving treatments for immune deficiencies, neurological diseases and haemophilia. Since 2002, all plasma has been collected from US donors because of the theoretical risk of contamination with variant Creutzfeldt-Jakob disease, the human form of BSE, which cannot be reliably tested for.
"Once you sell on to a company that could easily sell on to another company, where is the security of the supply?" Hunt asked. "I don't see how [the Department of Health] can guarantee supply in the future."
"It is mind-boggling that they thought it is appropriate to sell to a private equity company that will presumably sell on at some stage if they can. The distance between the National Health Service and its requirements for these blood products and the company becomes ever distant. Ownership is confused and there are no guarantees for the future. It just seems too risky."
The warning comes after Lord Owen, the Labour minister who created the system to make the NHS self-sufficient in blood products in the 1970s, described the sale as the worst possible outcome.
Roy Lilley, a health services expert, said private sector suppliers can carry additional risk for the NHS, citing Southern Cross, which closed hundreds of care homes for elderly people when it was unable to pay its bills. "[The Bain deal] is privatisation of an essential part of the NHS supply chain." he said. "I have never seen any deal conducted in this way with so little public scrutiny."
Bain has paid £90m upfront for an 80% stake in PRUK, with a promise of a payment "expected to be worth £110m" in five years' time. The Department of Health, which keeps 20% of the company, said that PRUK's Elstree lab faced closure without Bain's promise to spend £50m upgrading its facilities.
The department declined a freedom of information request from the Guardian to see the contract and the triggers for the £110m payment, citing commercial confidentiality.
Hunt said such confidentiality clauses were a growing issue for the NHS.
"In terms of transparency and accountability we are really moving away from what has always been a transparent service," he said. "Governments have notoriously not been very successful in these large contracts with the private sector."
The Guardian's analysis of PRUK's accounts reveals that at the time of the transfer the business was valued at £148m .
As well as the PRUK's lab and plasma-harvesting company in the US, Bain is also buying a piece of a booming industry. Worldwide sales of plasma products hit $10.4bn (£6.7bn) in 2012, up from $6.2bn in 2005, according to the US market researchers Kalorama Information.
Analysts expect the industry to grow at 9% a year, as demand for better healthcare accelerates in Asia, while scientists race to develop new plasma-based treatments for conditions such as Alzheimer's disease.
"The sector generally is considered to have very high profit potential," Lucy Reynolds, an accountant at the London School of Hygiene and Tropical Medicine said. "[PRUK] is not being bought as a lame duck. It is being bought as a prospective money spinner."
Lilley, who has chaired several NHS bodies, said "the dark arts" of company valuations made it impossible to judge whether the taxpayer had got a good deal on the sale, although it "looks like a steal".
Campaign groups are more concerned that the sale endangers the supply of less profitable treatments for rare conditions.
The Haemophilia Society, which does not oppose the sale in principle, asked the Department of Health for guarantees that PRUK would continue to make a rare blood-clotting concentrate to treat people with a deficiency of factor XI in their blood, and continue to research drugs for those with an even rarer factor X deficiency.
The department referred them to Bain, a response that Bernard Manson, the chair of the society, described as unacceptable. "The government ought to be taking some steps to protect the patient and its own costs," he said. "If you have one of these conditions, you are very sensitive to the supply chain of this product that keeps you alive."
Eric Watts, a retired haematologist in the Keep Our NHS Public campaign, is worried the company will aim to maximise profits, rather than provide a public service. "It is privatisation. It is giving control over to a private company which we don't have sufficient say in," he said.
Bain Capital declined to comment, referring requests to PRUK, which issued a statement.
"PRUK has committed that it will continue to honour its contractual obligations to the NHS. The company has also committed to take all reasonable steps to pursue any NHS tender or re-tender opportunities.
"Furthermore, PRUK will work closely with the NHS to ensure continuity of supply of drugs where PRUK is the sole NHS supplier (e.g. Factor XI). PRUK has also significantly invested in development of such drugs to date (e.g. Factor X) and intends to continue investing in the future. PRUK believes that the UK market will continue to be a cornerstone of its strategy going forward."
The Department of Health said the sale would "ensure we continue to have a secure, safe supply of blood plasma products for years to come and that has always been our priority". The Guardian
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