Performance by business line

Transcription

1 Performance by business line Transfusable Products Transfusable Products includes all activities related to the supply of fresh blood products to hospitals, including donor recruitment, collection of whole blood, plasma and platelets, manufacturing, testing and distribution of products to hospitals, as well as various support services. The financial performance of the transfusable products line of business is linked to supply and demand of our products. Red Blood Cells (RBCs) RBC demand: Shipment growth of RBCs was flat this year totalling 832,178 units, an 842 unit decrease from the 833,020 units shipped in 2008/2009. Demand trends vary across regions and blood groups, adding complexity to ensure that the right products are available when needed. Canadian Blood Services continues to work with hospital customers to better understand the nature of demand for blood products and to improve inventory management methods to minimize product losses due to outdates. Although we have seen a recent softening in hospital demand, the long-term outlook and underlying trend of RBC shipments remain at an estimated annual growth rate of 1.8%. Whole blood collections: In 2009/2010, whole blood collections increased by 0.7% to 922,628 units compared to 915,858 units in 2008/2009. The effect of softening demand and strong collections resulted in an increase in RBC inventories, which grew to 31,610 units by the end of the fiscal year. Additionally, the organization was proactive in increasing inventory levels across the country in advance of any negative impacts of the uncertain flu season as a result of the H1N1 pandemic. The organization now faces the delicate balance of holding a suitable amount of inventory. In order to meet our projected annual growth in demand for RBCs of 1.8%, we are developing programs to increase whole blood collections. Canada s active whole blood donor base has increased to approximately 423,000 or 3.4% of the population that we estimate is eligible to donate. This is an increase of 5% from 2006 when it was about 405,000. With nearly 423,000 whole blood donors, Canadian Blood Services saw a decrease of 0.5% compared to last year. Apheresis plasma donors decreased by 3.4% and apheresis platelet donors decreased by 11.6% as a result of large-volume-platelets (LVP) collections requiring fewer donors to provide the same number of products for transfusion; this new collection method was implemented in 2009/ report to canadians 2009/2010

2 whole blood collections/rbc shipments (Units) 1,000, , , , , , , , , , % 91.5% 91.0% 90.5% 90.0% 89.5% 89.0% 88.5% 88.0% 87.5% (Ratio Shipment to Collections) 05/06 06/07 07/08 08/09 09/10 10/11 11/12 (a) (a) (a) (a) (a) (b) (p) Whole Blood Collections Red Blood Cell Shipments Ratio Shipment to Collections A = actual B = budgeted P = planned Ratio of red blood cells (RBCs) shipped to whole blood collected: The ratio of RBCs shipped to whole blood collected was 90.2% in 2009/2010 compared to 91.0% in 2008/2009. During the process of collecting blood, manufacturing blood components, and maintaining a product inventory, a number of units are discarded for a variety of reasons such as units required for quality control, positive test results, post-donation information (e.g. a donor informs Canadian Blood Services after the donation of something requiring a deferral), equipment problems, and process non-conformances. Canadian Blood Services continues to develop processes to further reduce the number of discards and, therefore, increase the proportion of red blood cell units issued from the whole blood units collected. The decrease in the ratio this year is largely explained by the increase in the yearend inventory of RBCs, which increased by 8,628 units from levels recorded in 2008/2009. Future-year projections show collections increasing at approximately 1.8% and an improved ratio of red cells shipped to whole blood collected. report to canadians 2009/

3 Platelets Demand: Total platelet shipments include platelets collected through our apheresis program and those derived from whole blood collections using either the Buffy Coat production method or Platelet Rich Plasma (PRP). A dose is considered equivalent to one apheresis platelet, one Buffy Coat platelet or five PRP platelets. Shipments of platelets increased 4.1% to 111,403 doses compared to 106,985 doses in 2008/2009. Doses collected through the apheresis program represented 35% of the shipments, with the remaining doses derived from whole blood collections. Because they are sourced from a single donor, apheresis platelets are often preferred during the treatment of sensitized patients by enabling more precise matching and avoiding multiple donor exposures. Although sometimes preferred for specific medical reasons, apheresis platelets are much more expensive to collect than a platelet dose manufactured through the Buffy Coat production method. All platelets doses derived from whole blood collections will be manufactured using the Buffy Coat production method in 2010/2011 as we complete the national implementation of this production method. platelet doses shipped by collection/production type 140, ,000 (Doses Shipped) 100,000 80,000 60,000 40,000 20, / / / / / / /2012 (a) (a) (a) (a) (a) (b) (p) Buffy Coat Production Platelet Rich Plasma Production Apheresis A = actual B = budgeted P = planned Collections: Platelet apheresis technology allows for the collection of a single dose or, if the donor qualifies, the collection of large-volume dose, which is equivalent to twice the volume of a single collection. Increasing the proportion of large volume apheresis collections allows for twice the collection volume using a reduced number of collection appointments. The overall number of platelet equivalent doses collected increased by 1,844 (4.5%); however, the appointments required to collect those doses decreased by 5,309 (13.4%) as the large-volume procedures are leveraged. The large-volume procedures drive efficiencies by reducing the amount of labour and the number of collection kits required. In 2009/2010 approximately 24% of platelet apheresis collections were large-volume. In future years we are planning to increase this split rate to 34%. 26 report to canadians 2009/2010

4 platelet apheresis collections (Litres) (# of Apheresis Collections) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 A = actual B = budgeted P = planned Plasma Demand: Plasma shipments for transfusion and fractionation are derived through the apheresis program and whole blood collections. In 2009/2010 Canadian Blood Services met the 6.4% increase in demand for plasma and shipped 181,152 litres of plasma for fractionation and 56,269 litres of plasma for transfusion. litres of plasma shipped 250, , , ,000 50, /06 06/07 07/08 08/09 09/10 10/11 11/12 (a) (a) (a) (a) (a) (b) (p) Single Apheresis Large-Volume Apheresis % Large-Volume Split 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% (% Large-Volume) / / / / / / /2012 (a) (a) (a) (a) (a) (b) (p) Fractionation Transfusion A = actual B = budgeted P = planned Collections: Collections of plasma apheresis increased 2.0% to 56,367 units in 2009/2010 from 55,244 units in 2008/2009. Future plasma apheresis collection volumes are linked to the demand for plasma for transfusion as well as the plasma sufficiency objectives in the Plasma Protein Products program. report to canadians 2009/

5 Collections total collections whole blood collections 1,100,000 1,050,000 1,000, , , , ,000 over 1 million 0.9% 1,000, , , , , , , , , % 2006/ / / / / / / /2010 apheresis plasma collections apheresis platelets collections (doses) 60, % 50,000 55,000 45, % 50,000 40,000 45,000 35,000 40,000 30,000 35,000 25, / / / / / / / /2010 Active Donors all donors whole blood 490, , , , , , , , % 450, , , , , , % 2006/ / / / / / / /2010 apheresis plasma apheresis platelets 7,000 6,500 6,000 5,500 5,000 4, % 7,200 7,000 6,800 6,600 6,400 6,200 6,000 5,800 5, % 2006/ / / / / / / /2010 Canadian Blood Services exceeded its target for all three blood products, collecting one million units in total for the second consecutive year. 28 report to canadians 2009/2010

6 Product Recalls errors and accidents and post-donation information resulting in recalls per 10,000 collections / / /2010 errors and accidents 2007/ / /2010 post-donation information Health Canada Audits Health Canada conducted inspections of 28 Canadian Blood Services sites with each site deemed to be compliant and in a state of control. Out of the 130 observations (down from 143 observations in the previous year), two were critical, 18 were major and the remaining 110 were minor. All observations were satisfactorily addressed. Order Fill Rate rbc all types o neg rbc 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 1.8% 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 2006/ / / / / / / / % cryoprecipitate platelets 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 4.5% 100% 99% 98% 97% 96% 95% 0.9% 2006/ / / / / / / /2010 report to canadians 2009/

7 The Order Fill Rate is the percentage of orders filled on the same day. RBCs and O Neg The order fill rate for RBCs was above target at 98.9%, a 1.8% increase from 2008/2009. This is attributed to the 2008 appeal, which increased inventory, in turn creating higher order fill levels. Cryoprecipitate The increase of 4.5% from 2008/2009 for Cryo is a reflection of our continuous improvement of our management practices. Platelets Platelets increased by 0.9%. As with Cryo, this increase is a reflection of our improving management practices, especially around statutory holidays when operations are reduced. Consolidated Financial Performance The financial performance of the Transfusable Products business line is shown below Adjusted Adjusted % Total NFRP* Total Total NFRP* Total Change Revenue: Members contributions $468,019 $13,384 $454,635 $481,921 $37,230 $444, % Federal contributions 5,000 5,000 5,000 5, % Less deferred amounts (34,399) (13,384) (21,015) (59,838) (37,230) (22,608) -7.0% 438, , , , % Amortization of previously deferred contributions: Relating to property, plant and equipment 18,490 18,490 18,364 18, % Relating to operations 8,593 1,784 6,809 9, , % Total contributions recognized as revenue 465,703 1, , , , % Investment income , , % Other income % Total revenue 467,188 1, , , , % Expenses: Staff costs 276,350 1, , , , % General and administrative 91, ,977 85, , % Medical supplies 78,601 78,601 80, , % Depreciation and amortization 18,340 18,340 17,061 17, % Total expenses 464,905 1, , , , % Excess (deficiency) of revenue over expenses $2,283 $ $2,283 $3,549 $ $3, % *NFRP National Facilities Redevelopment Program 30 report to canadians 2009/2010

8 Revenues The core driver of activity in transfusable products is supply and demand for red blood cells, platelets and plasma. In order to meet the demand for our products, Canadian Blood Services held more than 22,000 collection events and shipped more than 1.2 million products to hospitals across Canada. Revenue for the transfusable products business line includes funding related to the facilities redevelopment plans in southern and central Ontario and the Atlantic regions. The Provincial and Territorial Ministers of Health have elected to fund this program over three different time horizons. In order to depict relevant year-over-year comparisons, the results of the facilities redevelopment program have been removed from the table above resulting in a net year-over-year increase in Member contributions of 2.2%. Other revenues continue to be affected by falling interest rates, which averaged 0.5%, a drop of 1.9% from the average rate of 2.4% in 2008/2009. As a result, investment income declined to $0.8 million from $4.0 million in 2008/2009, reducing the overall increase in yearover-year revenue to 1.4%. Expenses The transfusable products business line includes the activities in the following broad areas: Transfusable Products excluding Projects, R&D and Corporate costs: includes activities such as recruitment, collections, production and hospital services and testing, as well as groups such as facilities, logistics, quality assurance, talent management, information technology, medical, scientific and research affairs, and finance and supply management. Research and Development: includes activities related to the management of the research and development function. Further details on this function can be found in the Research and Development section of this report. Projects: includes activities related to larger projects, which this fiscal year included our Appointment Management System and conversion to ISBT 128 labelling. Corporate costs: includes items such as amortization and expenses that are corporate in nature. % of total cost by function 92% Transfusable Products excluding Projects, R&D and Corporate costs 5% Corporate 2% R&D 1% Projects Expenses incurred by the transfusable products program include staff, medical supplies, general and administrative costs, as well as depreciation and amortization. In 2009/2010 total expenses increased 1.7% to $463.0 million from $455.4 million in 2008/2009 after the results of the National Facilities Redevelopment Program (NFRP) are removed. report to canadians 2009/

9 % of total expenses by cost category 59% Staff 20% G&A 17% Medical Supplies 4% Depreciation Staff costs: Staff costs make up approximately 59% of total transfusable products expenses and are largely influenced by product demand and collective agreement obligations. The overall increase after removing the expenses related to the NFRP (see table on page 30) was $2.4 million, a 0.9% change from prior years. While this is an increase, it is significantly lower than the previous year where year-over-year staff costs increased by 4.9%. Staff costs are affected by two drivers: the rate per hour and the number of labour hours we consume, which is influenced by the demand for our products and how efficient we are in our various processes. Much of the organization s cost reduction efforts have been directed to making our processes more efficient, which directly influences our staff costs. While it is difficult to influence our labour rates (nearly 75% of our workforce is unionized) and demand for our products, we do have the ability to improve our process efficiency. The total labour hours for the entire transfusable products group were approximately 7.2 million hours, a 0.4% increase from the prior year, where our collections of whole blood, the main driver of labour hours, increased 0.7% from the prior year. As we continue on our efficiency journey, the number of labour hours required to collect, test, manufacture and ship our products will decrease. General and administrative: General and administrative expenses include those other than staff, medical supplies and depreciation and amortization and include a significant portion of energy-related costs for freight, transportation, and utilities. The total increase after removing the impact of the national facilities redevelopment program was 6.3%. When comparing year-over-year trends, it is often relevant to exclude the results of research and development, projects and corporate costs as these areas can fluctuate based on their annual activities. The resulting general and administrative costs associated with the Transfusable Products excluding projects, R&D and corporate costs groups decreased by approximately $0.4 million even with inflationary pressures related to utilities and fuel required to maintain our facilities and manage our logistics infrastructure. This reduction was achieved by our continued focus on efficiencies and cost reductions. Medical supplies: Medical supply expenses decreased $1.5 million in 2009/2010. Medical supplies are materials used in the collection, production and testing processes and, as with staffing costs, are influenced by the demand for our products. Efficiencies have been gained in the platelet apheresis program as we continue to increase the capacity of our large-volume platelet collections, which allows for the collection of twice the volume during the same collection event; therefore fewer supplies are required. There have also been efforts to reduce the cost of other consumables used in our collection processes by standardizing and consolidating consumable items as well as the management and cost of our donor testing supplies. 32 report to canadians 2009/2010

10 Cost per Unit / / / / /2010 Cost per Unit Shipped Upper Lower Cost per unit (CPU) is a ratio of total expenses to shipments of all products and represents an integrated measure of the transfusable products business line performance. Costs include all expenses related to the blood operations functions, strategic projects and research and development; however, they exclude those expenses related to the NFRP because they are temporary in nature. Our shipments of fresh blood products are categorized into five broad groups: red blood cells, plasma for fractionation, plasma for transfusion, other plasma-derived products and platelets. 2009/ /2009 % change Total Transfusable Products expenses $462,960,000 $455,388, % Plus inventory adjustment (see below) 2,807,000 5,416, % Adjusted Transfusable Products expenses $465,767,000 $460,804, % Total units shipped 1,245,728 1,221, % Cost per unit shipped $ $ % Total red blood cells 832, , % Total plasma for fractionation 181, , % Total plasma for transfusion 56,269 59, % Total other plasma-derived products 64,727 58, % Total platelets 111, , % Total units shipped 1,245,729 1,221, % During our previous fiscal year, a change in our accounting policy required a movement of direct costs and associated overheads related to the collection of fresh blood products to inventory. This amount has been excluded in the CPU calculation. Even with weighted inflationary cost increases of 3.8% (see table page 34) the consolidated CPU for the year ending March 31, 2010, decreased 0.9% to $ compared to $ in 2008/2009. This decrease was a result of process efficiencies and general cost reductions. report to canadians 2009/

11 weighted inflationary increases Budget Line Item Inflation Weighted 2009/2010 as % of total on line item Inflation Staff costs $271,024, % 5.0% 2.9% General & administrative 83,169, % 3.0% 0.5% Medical supplies 80,206, % 2.0% 0.3% Amortization 18,177, % 0.0% 0.0% Strategic and R&D 20,365, % 2.0% 0.1% $472,943, % The CPU variance from 2008/2009 was driven by: Volumes shipped: Shipments of all transfusable products increased 1.9% in 2009/2010 to meet continued increases in demand. Shipments of RBC decreased 0.1%, shipments of platelets increased 4.1%, and shipments of plasma-related products increased 7.2%. Variances in expenses: Adjusted transfusable products expenses increased by 1.7% to $463.0 million from $455.4 million in 2008/2009. Canadian Blood Services is committed to maintaining the CPU constant for 2010/2011. Our intention is to identify further efficiencies based on benchmarking data. Since demand is expected to steadily increase, achieving our commitment will require enhancing operating efficiencies. It also assumes: No new major safety measures requiring new tests will be introduced; No sudden or sustained increase in demand beyond current levels for RBCs and platelets; The renewal of the facilities full program will proceed as planned; No major change in economic conditions that could cause significantly higher than forecasted price increases in specific sectors, such as oil and gas or utilities; No extraordinary pay equity settlements; and No events requiring the need to implement contingency measures, such as disasters or a flu pandemic. Research and Development During 2009/2010 funding for Canadian Blood Services research and development program remained stable. The provincial and territorial governments contributed $5 million to the program, as did the federal government. Expenses related to this program were $11.3 million with future-year commitments of approximately $7.4 million. Because the research and development program has federal funding that is deferred, expenses may not reflect actual funds received. The research and development program supports every line of business at Canadian Blood Services by providing strong, in-house scientific support and driving innovation. An effective research and development (R&D) program is intrinsic to the safety and security of the blood system. The program s goal is to make continuous improvements, foster an innovative culture and focus on knowledge creation and problem-solving. 34 report to canadians 2009/2010

12 Our integrated research and development program focuses the efforts of teams of expert researchers on specific areas within transfusion. In 2009/2010, Canadian Blood Services scientists continued to focus on enhanced blood and blood product safety and quality, the use of genotyping to identify donors with rare blood types, solutions to problems related to blood conservation and utilization, and minimizing blood system risks. Our research and development program concentrates on five areas of research, and is accomplished in five centres, each focused on a specific theme: vancouver: blood product processing and storage, modified cellular blood products and blood substitutes. Vancouver is also the site of the NetCAD (Network Centre for Applied Development) development laboratory, which provides an authentic environment for process validation and development that is unique in the public blood industry. Edmonton: frozen blood program, bone marrow stem cells, and nanotechnology. Toronto: transfusion immunology, IVIG, and adverse events. Hamilton: clinical use of blood products and plasma products. Ottawa: blood-borne infectious diseases and quality monitoring. Additionally, through its partnership with CIHR (Canadian Institute of Health Research) the research and development program has supported research studies such as the development of new blood bags and stakeholder perception of pathogen reduction technologies. Blood-Borne Infectious Diseases A primary area of research for Canadian Blood Services is blood-borne infectious diseases. Research includes investigations of bacterial contaminants of blood products and methods to avoid contamination. Viruses and parasites are also a focus for R&D. Research work is continuing on the usefulness of screening tests for Chagas disease and the investigation of pathogen inactivation/reduction methods. Recent infectious disease research efforts have yielded: an assessment of the ability to detect bacterially contaminated platelet products in the presence of additive solutions; and the determination of the effectiveness of our bacterial screening strategy for platelets and its potential to support seven-day platelet storage. Our national testing laboratory provides a critical link between confirmatory testing, research and development and quality control. It collaborates on several projects involved in assessing new serological tests for existing and emerging pathogens such as WNV, hepatitis C virus, Chagas disease and malaria. Additionally, its nucleic acid amplification testing (NAT) laboratory is involved in the evaluation and development of new NAT tests. Transfusion Immunology Canadian Blood Services scientists are working to understand the immune response to blood products and their effect on the immune response of the recipient through transfusion immunology research. Patients can develop antibodies against unfamiliar molecules (antigens) on the surface of blood cells, as can pregnant women who are exposed to their babies blood cells. Similarly, patients who receive multiple platelet transfusions can develop antibodies that accelerate the destruction of the transfused platelets. These patients require blood transfusions of blood that is matched for a wider collection of antigens in order to be compatible. Canadian Blood Services scientists have developed and implemented a genotyping technology to facilitate the identification of compatible blood for these patients. Ongoing research efforts are also addressing the use of Ig, a front-line therapy for immune disorders that is prepared from donated plasma. report to canadians 2009/

13 Transfusion Clinical Research & Epidemiology Clinical research provides the evidence to indicate whether a medical practice is appropriate, whether or not a new medical procedure or drug therapy is beneficial to a patient, and how the information obtained from clinical research studies can be used to guide the formation of health policy. It also focuses on the patients receiving blood or on blood donors by studying areas such as the effectiveness of screening questions for Chagas disease risk and the study of donor characteristics, behaviours and donation patterns. Canadian Blood Services researchers in this area have recently: evaluated the impact of changes to hepatitis B risk reduction with the implementation of anti-hepatitis B core antibody testing; and assessed the impact of the Buffy Coat production method on adverse reactions to transfusion products. Nanotechnology & Cryopreservation for Blood and Stem Cells Storage of frozen blood products is important to the maintenance of an inventory of rare blood types and the storage of stem cells for transplantation. Research in cryobiology focuses on understanding how freezing affects the viability of cells. Canadian Blood Services and University of Alberta researchers continue to investigate opportunities presented by nanotechnology to analyze samples from blood donors. Opportunities such as the consolidation of blood donor testing onto a single chip would revolutionize the process of ensuring the compatibility of blood products and the reduction of the risk of infectious disease transmission. Blood Product Processing, Storage and Substitutes Research in this area is aimed at improving the processing and storage of blood components to produce a better quality of blood products for patients. Ongoing research is focused on understanding the aging phenomenon that takes place in stored red blood cells and platelets; evaluating new methods for preparing blood components from whole blood donations; and determining whether current transfusion medicine practices and products can be improved, including research on blood products. In fact, technology for the assessment of platelet quality, developed by a Canadian Blood Services scientist has become the core technology of a new British Columbia-based start-up biotech company called Light- Integra. Utilizing this technology, the company is investigating the effects of donor characteristics on product quality, developing nanotechnology to mask RBC blood groups to increase transfusion compatibility and conducting extended analysis of blood components in order to develop better manufacturing standards to ensure product quality. R&D scientists also support programs to recruit and train scientists and physicians. Each scientist holds an appointment at his or her local university, and all are expected to take on some responsibility for training graduate students, medical fellows (where appropriate), and undergraduate students. Over the past year, several Canadian Blood Services trainees have won competitive awards for their research work. Plasma Protein Products Plasma protein products are used to treat particular illnesses including hemophilia and immunodeficiencies. Canadian Blood Services is responsible for contracting with third-party suppliers for the purchase of plasma protein products manufactured from commercial plasma sources and for the manufacture of select products (albumin and Intravenous Immune Globulin (IVIG)) from plasma collected from Canadian donors. 36 report to canadians 2009/2010

14 Product Demand Demand for plasma protein products has grown steadily since our inception, particularly for Ig, the largest component of the Plasma Protein Products annual budget. The overall Ig market grew by 7% in 2009/2010, which is consistent with the average growth in the past three years. year-over-year plasma protein product units shipped 2008/ /2010 Increase/ Actual Units Actual Units (Decrease) % Albumin (25 g equivalents) 235, ,783 17,969 8% Starches (500 ml equivalents) 258, ,114 7,604 3% Ig (g) 2,898,081 3,106, ,678 7% Recombinant FVIII (IU) 125,311, ,422,210 8,111,034 6% Recombinant FIX (IU) 26,207,717 29,108,109 2,900,392 11% Recombinant FVIIa (mg) 32,488 28,381 (4,106) -13% RSVIG-Synagis (each) 22,302 4,903 (17,399) -78% IVIG made from Canadian plasma had declined over the years, however this trend continues to be reversed with the implementation of the Buffy Coat production method (which yields a higher volume of plasma per donation) and improved purification technology used by the plasma fractionators. In 2009/2010, Plasma Protein Products undertook a review of a 2003/2004 recommendation to increase its self sufficiency mandate. One of the primary reasons for the review was that several initiatives from the strategic plan had been implemented, included the addition of a second fractionator and the diversification of the product offerings that increased the number of suppliers of commercial products from two to three, and also better balanced the supply of products among the suppliers. Canadian Blood Services purchases the balance of hospital requirements for plasma protein products from both Canadian and international suppliers, exposing the program to fluctuations in costs due to variances in exchange rates. To manage costs more effectively we continue to hedge a portion of our currency requirements. Plasma Protein Product Program Shipments and Costs Total Plasma Protein Product program expenses increased 14.7% to $489.1 million in 2009/2010 compared to $426.5 million in 2008/2009. These expenses include both the cost of product shipped as well as the administrative overheads of the program, which include gains or losses on foreign exchange related to the purchase of inventory. Members are charged for the actual cost of plasma protein products used by the hospitals in their jurisdictions. Administration costs are allocated to provinces based on the dollar value of the product used. The following table provides a comparison of program costs between 2008/2009 and 2009/2010. report to canadians 2009/

15 2009/2010 versus 2008/2009 plasma protein product program cost 2009/ /2009 Price Volume Total Expenditure Variance Details Actual Actual Variance Variance Variance Albumin $17,708 $15,982 $(495) $(1,231) $(1,726) Starches 13,443 13, (392) (130) Ig 192, ,830 (13,702) (13,762) (27,464) Recombinant FVIII 129, ,316 (5,746) (7,266) (13,013) Recombinant FIX 24,390 20,179 (1,977) (2,233) (4,211) Recombinant FVIIa Niastase 30,717 34,447 (624) 4,354 3,730 Other 48,743 38,768 (1,965) (6,348) (8,312) Cost of Plasma Protein Products Before Synagis 456, ,836 (24,248) (26,877) (51,125) RSVIG Synagis 7,303 33,202 (277) 26,176 25,899 Cost of Plasma Protein Products 464, ,038 (24,524) (701) (25,225) B19 Testing 3,080 3, Total Cost of Plasma Protein Products 467, ,512 (24,524) (307) (24,831) Program Administration Staff Costs 1,780 1, Freight 1,315 1,460 (144) (144) Interest & Other 1,284 1, Program Administration Costs 4,380 4, Total Foreign Exchange Losses (Gains) 16,380 (20,310) (36,689) (36,689) Cost of Issues to Other Customers 1, (679) (679) Total Costs $489,118 $426,510 $(61,141) $(307) $(61,448) This table presents additional detail and groups expenses in a different manner to that shown in note 14 of the notes to the Consolidated Financial Statements (on page 68). The cost of plasma protein products increased $25.2 million, of which $24.5 million reflects price increases and $0.7 million due to increased volumes. It is important to note that RSVIG Synagis is no longer administered by Canadian Blood Services. When the year-over-year effects of RSVIG Synagis are removed, the total increase in cost of Plasma Protein Products was $51.1 million, of which $24.2 million is a result of price increases and $26.9 million is related to volume increases. A significant proportion of Plasma Protein Product inventories are purchased in U.S. dollars. The fiscal year budget for Plasma Protein Products in 2009/2010 was set using a foreign exchange rate of 1.22 and during 2009/2010, the U.S. dollar/canadian dollar exchange rate continued to be very volatile and ranged between and Since the average foreign exchange rate was lower than our budgeted rate, the cost of our products fell, resulting in lower cost of goods sold. Management s foreign exchange risk mitigation strategies include a hedging program which generated losses of $16.4 million (disclosed as part of general and administrative expenses) since hedges held in the first quarter were purchased at rates closer to our budget rate and the Canadian dollar appreciated for the majority of the fiscal year, generating hedging losses. When compared to the previous year, the Canadian dollar depreciated in value for the majority of the year, and as a result hedges purchased in the first quarter of that year generated foreign exchange gains. Additional details on the objectives of the foreign exchange risk mitigation strategies can be found on page report to canadians 2009/2010

16 Working Capital The total value of Plasma Protein Product inventories on March 31, 2010 was $96.4 million compared to $118.8 million in 2008/2009, and represented approximately 75% of total inventories held. Members provide $5.0 million in working capital annually to fund the Plasma Protein Product inventory. As of March 31, 2010, total working capital received for the Plasma Protein Product inventory was $62.6 million, leaving a working capital shortfall of $33.7 million. In order to address any future working capital requirements, an operating line of credit of up to $50 million is in place specifically for inventories. The Plasma Protein Products group has conducted a risk management-based review of target inventory levels and is working toward reducing the level of inventories held over the next fiscal years. Diagnostic Services The Diagnostic Services business line includes services provided for prenatal testing, reference red blood cell serology (antibody investigations), Human Platelet Antibody (HPA) testing, stem cell processing, therapeutic apheresis, autologous collections, and pre-transfusion (crossmatch) compatibility testing. The activities differ from one province/territory to another based on their unique customer requirements. Most of the services are provided in Western Canada and Ontario with a small volume of referral work and autologous activities completed for other provinces and territories, excluding Prince Edward Island. diagnostic services procedures BC AB SK MB ON 08/09 09/10 08/09 09/10 08/09 09/10 08/09 09/10 08/09 09/10 Red cell serology 65,194 66,056 88,269 87,304 19,082 18, , ,564 Platelet immunology 1,574 2,147 Platelet serology 759 Immunohematology 871 1,304 Stem cell Therapeutic apheresis Autologous ,703 1,949 65,241 66,117 88,594 87,548 19,222 19, , ,783 5,401 4,338 Components of Ontario s Platelet Serology program were assumed by the Immunohematology program in the 2009/2010 fiscal year. Funding by members matches the cost of Diagnostic Services received. For the year ending March 31, 2010, Diagnostic Services revenues and costs were $16.8 million compared to $15.0 million in 2008/2009. Expenses include staff, general and administrative charges and medical supplies required to complete patient laboratory and patient therapeutic services as well as costs associated with the implementation of a new laboratory information system in the Western provinces. All expenses are charged on a per-procedure basis and include direct costs as well as overhead. Diagnostic Services is currently implementing a new blood bank software product that will replace the current laboratory information systems (LIS) at the Diagnostic Services laboratories in the Western Canada sites. Phase 1 of the project will be completed in December Phase II of the project, which includes expanding the software to 18 hospital sites in Manitoba, will begin in Implementation of this new LIS system will provide a common and consistent platform for managing patient test records across the Diagnostic Services laboratories, electronic interface of automated testing equipment to the new LIS system to reduce errors as a result of manual data entry of test results and the automatic faxing of prenatal reports to the requesting physican, resulting in a marked decrease in turnaround time. report to canadians 2009/

17 Stem Cells Canadian Blood Services operates the OneMatch Stem Cell and Marrow Network to find and match volunteer donors for patients who require stem cell transplants. OneMatch coordinates the search on behalf of patients, manages all logistics related to the collection and ensures transport of the stem cell product to the transplant centre (hospitals) and/or the international registry. Unlike transfusable products, stem cell donations must come from donors who have been genetically matched (through HLA typing) to specific patients. OneMatch supports stem cell transplant programs in Canadian hospitals, as well as registries throughout the world, in their search for donors and/or umbilical cord blood units who match patients in need. Approximately 30% of patients will find a match within their family. The remaining 70% of patients will rely on finding a match through the Canadian Blood Services OneMatch Stem Cell and Marrow Network. The OneMatch Stem Cell and Marrow Network is comprised of several distinct scenarios that are managed by case managers as well as a HLA typing laboratory. The scenarios are outlined below: Canadian patient matched with a Canadian donor: In this scenario, case managers administer the search of the donor database and work with the various collection and transplant centres located in Canada if a successful match is found. International patient matched with a Canadian donor: In this scenario, case managers administer the search of the donor database on the behalf of international registries and if a successful match is found work with the various Canadian collection centres and the international transplant centre. Canadian patient matched with an international donor: In this scenario, case managers administer the search of the various international donor databases on the behalf of a Canadian patient and if a successful match is found work with the international collection centre and the canadian transplant centre. The program is funded by the provinces and territories as well as revenues generated from services, including search activations, and products provided to international registries. Revenue increased to $19.3 million in 2009/2010 from $17.3 million in 2008/2009 while expenses increased to $19.7 million from $18.0 million, generating a deficit of $0.4 million for the year compared to the $0.7 million deficit in 2008/2009. Many of the expenses charged by international registries for products are rebilled to the transplant centre requesting the services and are recorded as revenue; thus there is often a correlation between increased revenues and expenses. Expenses not recovered include international search activations, HLA laboratory expenses and various administrative expenses. Since the OneMatch Stem Cell and Marrow Network operates in an international environment it is exposed to foreign exchange fluctuations. All of its products are priced in U.S. dollars and as a result its revenues are affected by the appreciation of the Canadian dollar. In April 2009, OneMatch implemented the European Marrow Donor Information System (EMDIS). EMDIS allows participating international registries who are capable of sending communication using the defined protocol to request and obtain search results, and to request or cancel Extended HLA and Confirmatory Typing in an automated format. The search results returned to the international registry are in real time, providing the most current typing available of matched Canadian donors. As result of EMDIS, we activated 1,011 searches for international registries, a 62% increase from the prior fiscal year. 40 report to canadians 2009/2010

18 number of registry searches by scenarios 14,000 12,000 (# of searches) 10,000 8,000 6,000 4,000 2, /08 (a) 08/09 (a) 09/10 (a) 10/11 (b) 11/12 (p) International Patient/Canadian Donor A = actual B = budgeted P = planned Canadian Patient/Canadian Donor Canadian Patient/International Donor The stem cell program continues to build the Canadian donor database with an ethnically diverse base, which not only enhances the success rate of a match for Canadian and international patients but also reduces cost to the Canadian health-care system if the success rate of Canadian matches is increased. As a result of continued efforts the donor base grew by over 5% or 13,000 donors in the past year. In future years there are plans to build the base by 6% per year. stem cell donor base 300, ,000 (# of donors) 200, , ,000 50, / / / / /2012 (a) (a) (a) (b) (p) A = actual B = budgeted P = planned report to canadians 2009/

19 Canada continues to receive approximately 80% of its supply of stem cells from international sources, as can be seen in the graph below. Our reliance on international donors increases the cost to the Canadian health-care system as these transactions cost more than obtaining stem cells from Canadian donors. Reducing this reliance is a key part of the strategy by improving the quality of the registrant database to more readily satisfy Canadian patient needs. source of canadian unrelated transplants (# of transplants) / / / / /2012 (a) (a) (a) (b) (p) Canadian Donor International Donor A = actual B = budgeted P = planned Organ and Tissue Donation and Transplantation Canada is one of the only developed nations in the world without a national coordinating body responsible for the oversight of organ and tissue donation and transplantation (OTDT). Presently, provincial and territorial governments support a variety of services for OTDT that are unique to each province. Today inter-provincial sharing of organs and tissues has minimal patient input, poor audit capability, antiquated technology and limited agreement for accountability or authority to implement broad inter-provincial improvements for patients. Recognizing that the system would be significantly enhanced for patients if some services were integrated, the federal government provides Canadian Blood Services $3.58 million for each of the five years beginning in the 2008/2009 fiscal year administered through a Health Canada Grants and Contribution agreement. The provinces and territories matched this funding for a total of $7.16 million annually for 5 years. Canadian Blood Services is initially focusing its efforts on developing a strategy for OTDT, promoting and supporting inter-provincial improvement with integration of leading practices, public and professional awareness and enhanced opportunities to measure features of the current system towards quality improvement. As well, a major focus is on the development of real-time patient registries that will expedite organ allocation and provide necessary data for audit and tracking of patient outcomes. Leading Practices A number of initiatives are underway to support implementation, enhancement or development of leading practices for OTDT in Canada including understanding what factors may impact a citizen s intent to donate, opportunities to improve living donation including a living donor reimbursement policy, and an analysis of the Canadian tissue system. Knowledge transfer is a key mechanism by which Canadian Blood Services supports professional education and implementation of leading practices using the collaborative approach, a process successfully used in the U.S. to improve OTDT and in Canada to improve clinical practice. 42 report to canadians 2009/2010