De-mystifying the Cost of Quality

Over the past decade, the cost of quality has been a significant factor in the rapidly increasing price of blood products. Understanding and managing those costs is integral to continuing blood safety improvements while increasing operational efficiency and controlling price increases.

Total costs of quality in blood product manufacturing come from four activities: prevention, appraisal, internal failure (production error) and external failure (distribution of non-conforming product). Typically, internal and external failures are most costly for an organization. And the more spent in prevention, the lower failure costs can become. The Food and Drug Administration’s (FDA) cGMP regulations and ISO 9001 quality system standards address all four areas, but both focus strongly on prevention and appraisal activities.

Unlike other types of manufacturing, Bonfils deals with a complex, living compound. As such, quality assurance activities center on risk mitigation and controls. Traditional material and process controls are important but secondary.

Overall, Bonfils spends approximately $70 per donation on quality costs. Bonfils’ investments in quality system improvements and technology minimize the incidence and cost of non-conforming products or failure. In fact, Bonfils spends more than three times the dollars in proactive quality costs for every dollar of reactive quality costs. (Figure 1 – quality costs at Bonfils) Unfortunately, the largest contributors to these costs are Appraisal Activities, which are primarily donor and product testing. These tests are either mandated or recommended by regulatory and clinical bodies and are, for the most part, outside of Bonfils’ control. Although new technologies may help reduce testing costs, it’s a certainty that additional testing requirements will be imposed in the future. The rate of increase of these costs historically has outpaced other economic indices. 

The liability and impact to our hospital partners of a non-conforming blood product can range from inconvenience and inefficiency (market withdrawal) to devastating patient outcomes (transfusion-related adverse event). To patients, a non-conforming product can be life-threatening.

Therefore, the safety and quality of our products continues to be Bonfils’ highest priority and we will continue to work with our healthcare partners to ensure good outcomes while recognizing cost-effectiveness.

Figure 1

The biological nature of blood products precludes producing zero non-conforming products. Detecting non-conforming products early in the production process prevents unnecessary expense. Proactive quality activities help us continuously improve our operational efficiency and reduce the costs and risks associated with distributing non-conforming products. (Figure 2 – Proactive Quality Activities)

Figure 2

At Bonfils, every employee is responsible for quality. Our quality system exists to enable employees to succeed in this charge. The system is not exempt from review of effectiveness and efficiency: In 2007 this review catalyzed a reorganization of our quality division and a redesign of our document control and training programs. Our investments in technology and tools to assure product safety will continue in 2008 as we evaluate and implement automated donor screening and new testing systems. Our aggressive quality assurance practices upstream reduce liability for us and our healthcare partners, ultimately assuring positive patient outcomes.

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