Factsheets

The Pricing of Blood Products in Australia

How are blood products priced in Australia?

All blood products supplied in Australia are purchased under contracts negotiated and managed on behalf of all governments by the National Blood Authority. The cost of these contracts depends on the volume of products supplied and the price of those products.

There are a number of factors to consider when negotiating prices for the supply of blood products in Australia and it comprises more than just the cost of raw materials and production costs for each unit of product.

For example, direct manufacturing costs (including raw materials, labour etc.) typically comprise about 70% of the production costs in plasma fractionation. Raw materials (principally plasma for fractionation) comprise 40-45% of costs.

Agreed services in any blood supply contract can affect the overall pricing of the cost per unit. These services can include:

Delivery to certain localities within certain timeframes;
Maintenance of in-country reserves;
Guarantees of supply of the products;
Financial guarantees to enhance security of supply;
Indemnities;
Provision of certain reporting and information;
Product support services;
Inventory management to avoid expiry of product;
Product storage and handling;
Preferred supplier arrangements;
Other items required to be included with the product (known as a giving
set); and
Other inventory management services

All of these things must be considered as well as meeting demonstrated value for money to meet government accountability requirements. The NBA’s assessment of value for money has regard to market intelligence on international pricing.

The prices for imported products also has regard for foreign exchange rates.

It is important when comparing contract prices to understand what is or is not included in the price, which includes the cost of raw materials. For fractionated plasma products, whether or not the indicated price includes the cost of starting plasma, which is used as one of the raw ingredients to manufacture the product, would need to be considered.

Plasma Products produced in Australia

In Australia, the Australian Red Cross Blood Service (ARCBS) is funded by governments through the NBA for the provision of a fresh blood service and ARCBS also supplies starting plasma to CSL Limited (CSL) free of charge.

CSL is paid a price by Australian governments to manufacture products from the plasma provided by the ARCBS, and for agreed services provided under the terms of the Plasma Products Agreement (PPA). Consequently the prices paid to CSL do not include the cost of plasma.

Imported plasma products

For imported plasma products, the cost of starting plasma comes into account. Starting plasma comprises roughly 40-45% of the cost of a product. Prices for starting plasma in the international market can vary widely from $US80 to $US135 per kilogram. This depends on many factors including what country it is purchased from and the level of competition within that country.

What else does the NBA consider when negotiating?

The NBA when considering the procurement of blood products and services also takes into account specific government policies and Australia’s commitment to self-sufficiency.

Feedback | Privacy | Copyright | Disclaimer | Contact Us