JAD ABUMRAD: Three, two, one. Hey, I'm Jad Abumrad.
ROBERT KRULWICH: And I'm Robert Krulwich.
JAD: This is Radiolab. And today, blood.
WOMAN: I'm told we're gonna get some pretty cool donors today. So here we go.
JAD: All right. So there are places in the country where people give a lot of blood, like Minneapolis, Minnesota or Columbus, Ohio.
MAN: All right. That one goes in the paper bag here.
JAD: Where if you go to a blood drive—and we did ...
MAN: Hey.
WOMAN: Hey.
MAN: And today's date and a phone number on there is all.
JAD: ... you'll find a really comforting scene.
MAN: We got a ...
JAD: People with busy lives taking a moment to walk into a cubicle room, sit down with some nurses.
NURSE: Allergies to iodine at all?
MAN: No.
JAD: Stick out their arms.
NURSE: All right. You ready for the fun part here?
MAN: Yes.
JAD: And ...
NURSE: And then I'll just mark your vein just to make sure I know exactly where I need to go. Stick it in, and save some lives. How about that?
WOMAN: I'm super excited.
JAD: And ...
NURSE: Now's the time to look away if you do not like to watch. Beautiful.
WOMAN: Okay. That kind of hurt.
NURSE: It did hurt?
WOMAN: Yeah.
NURSE: Oh, I'm sorry!
WOMAN: It's okay.
JAD: And one by one, they drain their own blood. Sometimes a double dose ...
WOMAN: You give double the amount?

MAN: Yeah.
JAD: Like this guy.
MAN: I do feel a little woozy.
JAD: All to help strangers they will never meet. And if you ask these folks ...
WOMAN: Why do you donate?
JAD: ... you'll get the answers you expect and that you hope for. Well, because ...
MAN: Why wouldn't you? It's selfish not to.
JAD: ... it's the right thing to do.
MAN: Being healthy, I have a responsibility.
MAN: I thought about a person in need in the hospital.
WOMAN: My mom used to work in neonatal ICU. She always tells stories about the babies that needed blood transfusions, and it always just made me think of, like, if I had a kid, I would really want blood to be there, for them to have blood.
JAD: I mean, the simple point is that giving blood is a gift, right?
WOMAN: It's the most selfless thing you can do. It's the most loving thing you can do.
JAD: It's the gift of life.
WOMAN: You can't give any greater gift than that.
JAD: That's the message we've gotten in PSAs for the last half century. But if you poke into it, as if with a big, long needle ...
SOREN WHEELER: And if that long needle is named Molly Webster. [laughs]
JAD: And Soren Wheeler. You will find that the reality is way more ...
SOREN: Complicated.
MOLLY WEBSTER: Way more complicated.
GIL GAUL: Okay. This is them. This is Gil Gaul.
SOREN: We should just say first of all that this whole story started for us with this guy. Gil Gaul, he's a longtime newspaper reporter.
GIL GAUL: And now I'm retired, and I write books.
MOLLY: Gilbert Gaul, retired newspaper man.
GIL GAUL: Right. I worked 40 years in newspapers.
SOREN: And the story that Gil ran into actually started back in the late 1980s.
GIL GAUL: What happened was the Red Cross would come to our office ...
SOREN: To do blood drives.
GIL GAUL: And I literally was giving blood one day ...
MOLLY: Sitting in the chair with the needle in his arm ...
GIL GAUL: ... and the blood was draining out of my arm into the bag.
SOREN: And a very simple question popped into his head.
GIL GAUL: I wonder what happens to this stuff after it gets into this bag? Who knows why I was thinking this? I certainly don't remember, but I suggested to Craig Stock, my editor, hey, why don't we just do a little explainer about blood for a Sunday piece?
SOREN: Just a short little thing about what happens to the blood, how it's processed, where it ends up.
GIL GAUL: He said "Sure, go ahead." And so I called up the local Red Cross, set up an interview with the executive director of the blood center there. And I went up to see this guy, and the strangest thing happened. Before I could even ask any questions, he started in at me wanting to know why I wanted to know this stuff, what was the purpose, why was I coming after Red Cross? [laughs] And he was just extraordinarily defensive. And for me, as a reporter, I mean, my antennae are going up. And that's how it all started.
SOREN: At that point, what was supposed to be a nice little Sunday piece about the gift of life turned into a crazy story filled with ...
SCOTT CARNEY: Hospital contracts.
GIL GAUL: Money and salaries. Strategic business and economics.
SCOTT CARNEY: Pharmaceuticals.
GIL GAUL: Production.
SCOTT CARNEY: Verbal assaults.
GIL GAUL: Competition.
SCOTT CARNEY: Enterprise.
GIL GAUL: I absolutely had moments when I would sit back and say, "Oh my God, I can't believe this is going on."
JAD: What? What is he talking about?
MOLLY: We're gonna tell you in one second, maybe two minutes. But first, you should know that historically, there's always been a tension in the way we think about blood.
JAD: Tension?
MOLLY: Yeah. So I'm gonna rewind.
SCOTT CARNEY: When blood was first being used, it was during war times, during World War I.
MOLLY: That's Scott Carney. He's the author of the book The Red Market.
SCOTT CARNEY: And it hit big business in the Battle of Pembrey.
MOLLY: And that was the very first time medics realized they could use preserved blood, have it on the battlefield at the ready anytime they wanted it.
SCOTT CARNEY: So you could keep your troops alive longer if you had blood available.
MOLLY: Still, the blood didn't last very long, and the process of giving blood was pretty gruesome and painful. But by World War II and into the Korean War, we'd gotten much better at storing and transporting blood. And giving blood was less painful, which meant people back home could get involved.
SCOTT CARNEY: What happens is there are these massive ramp-ups ...
[ARCHIVE CLIP, advertisement: You can give these men the gift of life, a pint of your blood.]
SCOTT CARNEY: ... to get blood to the battlefield.
[ARCHIVE CLIP, advertisement: The Department of Defense is calling for all Americans to roll up their sleeves. There is no ...]
DOUGLAS STARR: For the first time, you saw these amazing magazine advertisements, showing a soldier on one knee holding his rifle, and it says, "He gave his blood. Will you give yours?"
MOLLY: That's Douglas Starr, author of the book, Blood.
DOUGLAS STARR: An epic history of medicine and commerce.
SCOTT CARNEY: In Britain, there was this idea, you know, we're being bombed. We want to do anything we can do to help the war effort. Now in the United States, there was a voluntary donation system, but there was also this thing. "Hey, we're Americans. Let's make some money on it as well." So what happened in the States is that you had these two systems. You had the voluntary sort of Red Cross model, and you also had these places that would pay you ...
MOLLY: Anywhere from 15 to 40 bucks.
SCOTT CARNEY: ... for your blood.
JAD: Really?
DOUGLAS STARR: Yeah. All over the country, usually in the skid rows ...
SCOTT CARNEY: These skid row, shanty towns.
DOUGLAS STARR: People were setting up these for-profit blood centers, and they're paying people for their blood. People called them "Booze for Ooze," because they were often set up next door to liquor stores, and sometimes instead of in money, they would pay in chits redeemable at liquor stores. So you could imagine the population they attracted.

MOLLY: According to one eyewitness account ...
SCOTT CARNEY: There were worms on the floor. It was a dirty, dirty business. You know, like your first college apartment, it was just a really, really bad place. And ...
SOREN: Actually, probably worse than my first college apartment.
MOLLY: Yeah. I know. I was like worms on the floor? I don't know where you were living, Scott, but worms weren't really the problem. I mean, on the one hand, these paid places ...
SCOTT CARNEY: Got a lot of blood. The volumes were quite high.
MOLLY: But pretty quickly, doctors and hospitals, they started to notice that ...
SCOTT CARNEY: That paid blood is lower quality than altruistic-given blood.
MOLLY: Because you're attracting people who are down and out.
SCOTT CARNEY: Might have disease.
DOUGLAS STARR: A lot of infections. A lot of hepatitis.
MOLLY: And if they were sick, they'd still want to get paid, so they'd lie about it.
SCOTT CARNEY: Prisoners were giving blood. The state of Arkansas funded its whole prison system on blood sales.
DOUGLAS STARR: And of course, everybody from the blood bankers to clergypeople are saying this is obscene. There is something sacred about blood. It's not a commodity. It's a holy substance.
MOLLY: And so by the late '60s, the early '70s, people were saying no more paid blood. We need to get rid of it. All blood should be donated. It should be given freely. And it was partly about making blood safe, but it was really about more than that.
SCOTT CARNEY: In addition to just being safer, an altruistic blood supply brings the society together, because when you're giving blood out of altruism, you are saying ultimately, "I'm doing this for the society in general. I'm doing it for the war effort. I'm doing it because I'm an American." And that it has this other effect that brings a whole nation together.
JAD: So today, there's no more paid blood?
MOLLY: No paid blood.
JAD: So no money involved.
MOLLY: Well ...
SOREN: Kinda. Which brings us back to Gil.
GIL GAUL: You know, I want to know a little bit more about how this works. And so what happened was ...
SOREN: After his conversation with the Red Cross guy, Gil went out, he got a list of all the blood banks in the country, and he just started going down the list.
GIL GAUL: I would call one a day, or call two a day, and ask them what do you charge for a unit of blood?
JAD: What do you charge?
GIL GAUL: Yeah.
MOLLY: Yeah. This was one of the surprises. It turns out right after they draw the blood ...
WOMAN: It feels kind of—the tube feels warm.
NURSE: Mm-hmm. Because it's coming right out of your body. [laughs]
MOLLY: ... right after, they'll put it in a bag.
NURSE: Keep it on ice. Package it up.
MOLLY: And they will sell that pint of blood to a local hospital.
NURSE: Yep. So we do have different contracts with different hospitals, different blood centers.
SOREN: I believe right now, it's like almost $300 a pint is what they sell it for.
MOLLY: What?
SOREN: That's ...
JAD: 300 bucks a pint!
MOLLY: That's—I was thinking five.
SOREN: Dollars?
MOLLY: Yeah.
SOREN: No. We should say $300 is actually kind of like a rough average for most major cities.
MOLLY: Right. And theoretically, the price that the hospitals pay the blood center, it's just to cover costs. And there are a lot.
GIL GAUL: The salaries, the bags, the testing, the distribution, business office, public relations.
SOREN: That's just a partial list that one former blood banker gave us, but that's really what Gil wanted to understand: when someone donates a pint of blood, what does it cost to process that blood? And then what do you turn around and sell it for?
GIL GAUL: And some of the places were shocked by the questions. Some of them would say "There's no way on Earth we're gonna tell you." Some of them would say, "Oh, we charge $48 a unit."
SOREN: So he made a list ...
GIL GAUL: On a legal, yellow pad.
SOREN: ... of all the different prices the blood banks would charge their local hospitals.
GIL GAUL: You might see, at that time, as low as the low 30s and as high as 70 bucks.
SOREN: And he wondered, you know, why the variation?
GIL GAUL: Some of it was explainable. Labor costs are higher in Los Angeles, New York. So that made sense, but where that got interesting was ...
SOREN: He says he just happened to be talking to some blood banker, probably a guy from the Midwest.
GIL GAUL: Maybe about prices.
SOREN: And the guy just casually mentions that his blood bank actually gets way more blood than it needs.
GIL GAUL: Yeah.
SOREN: They had a surplus. And they told him ...
GIL GAUL: What we do is we take that blood ...
SOREN: And we sell it to other blood banks.
GIL GAUL: We sell it to somebody who can't collect enough. And I probably reacted like, "What?" [laughs]
SOREN: And that led him to call up a blood bank in a little town called Appleton, Wisconsin.
GIL GAUL: In Appleton, they ...
SOREN: That blood bank, at the time, was pulling in plenty of blood, way more than they needed.
GIL GAUL: Oh yeah.
SOREN: Locally.
GIL GAUL: I knew that Appleton had no trouble collecting plenty of blood.
SOREN: And yet ...
GIL GAUL: Around the holidays ...
SOREN: The director himself was quoted in the local paper saying, like ...
GIL GAUL: "Oh gosh. We can't collect enough blood. You know, we're pleading with you to come in. We've never had it so tough."
SOREN: And Gil basically asked the guy, "Why are you saying this? You're doing fine."
GIL GAUL: I did what any reporter would do. I began to press him on some numbers. He acknowledged that half of the blood they were collecting in Appleton was actually being sold to other blood centers.
SOREN: Appleton was taking a chunk of that blood, marking it up $10 a pint, and selling it to ...
GIL GAUL: To—I think it was Lexington, Kentucky. I called Lexington, Kentucky.
SOREN: They were taking that blood and taking out the platelets, and then selling the red blood cells ...
GIL GAUL: To Broward.
SOREN: Broward County, Florida.
GIL GAUL: So I then called Broward.
SOREN: And he found out that Broward was marking it up $20 more a pint and selling it ...
GIL GAUL: To New York City, which is always looking for blood. They could never collect nearly enough blood.
SOREN: Basically, what he discovered was that the whole gift economy of blood, that was only on the bottom level.
NURSE: I'm just feeling the direction at the vein right now. It's nice and plump.
SOREN: It was only down there.
NURSE: You have an absolutely gorgeous vein in here. Absolutely gorgeous.
WOMAN: I do?
NURSE: You do.
SOREN: As soon as you moved up a rung ...
GIL GAUL: It was a market.
SOREN: ... blood was being bought and sold and marked up.
GIL GAUL: At every step of the way.
JAD: And this was—so we're talking late '80s here. This is ...
SOREN: Yeah. Late '80s. '88, '89.
JAD: And is this still going on?
GIL GAUL: Oh yeah.
SOREN: And it's huge, huge business.
GIL GAUL: I looked at the Red Cross tax return yesterday just to refresh my memory. When I was writing about them, their blood business was a $500-million-a-year business. It's now a $2.1- or $2.2-billion-a-year business.
MOLLY: And it's not just the Red Cross. I mean, the Red Cross does half of the blood collections in the United States, but there are small independent blood banks all over the country. And we pulled some of their tax forms, and they have revenues of $30 million over there. There's $70 million over there. Some of them are $50 million.
CHARLES ROUAULT: When I left the blood center, we were at the time about a $90-million-a-year blood center.
SOREN: So this is Charles Rouault.
CHARLES ROUAULT: I have been in blood banking actually since about 1973.
SOREN: And more than any other guy we talked to, he really gave us a feeling for the business side of the blood business, especially ...
CHARLES ROUAULT: In South Florida.
SOREN: In South Florida in the '80s and '90s, you had kind of an unusual situation, because you had a bunch of different blood banks.
CHARLES ROUAULT: There was a program in Miami-Dade. There was one in West Palm Beach.
SOREN: All these different programs competing for the same donors.
GIL GAUL: You might anticipate there would be some competition, but you didn't think that you could ever see anything like South Florida.
CHARLES ROUAULT: Things—things became quite heated.
SOREN: The heads of the blood banks attacked each other in the press.
GIL GAUL: In the press, in the local stories. Yeah.
MOLLY: They got into crazy bidding wars over access to high school students.
CHARLES ROUAULT: The great school board war. Yes.
SOREN: They accused each other of ...
GIL GAUL: Stealing donors, underpricing their products in order to gain market share.
PETER TOMASULO: One morning, I would go to work ...
SOREN: That's Peter Tomasulo. He was one of Casey Rouault's competitors.
PETER TOMASULO: ... and I would find that one of our hospitals had been visited by Casey and his team, and they had given us notice that they were gonna switch to Casey. That feels horrible.
CHARLES ROUAULT: Well, it's business.
MOLLY: At a certain point, the competition, says Casey, got so intense ...
CHARLES ROUAULT: That I got a number of ugly phone calls from people.
JAD: Saying what?
CHARLES ROUAULT: We're going to bury you.
JAD: We're going to bury you?
CHARLES ROUAULT: Mm-hmm.
SOREN: In that case, the call came from a New York blood bank. Casey decided that the only way he could compete in Florida and the only way he could keep his blood from going bad was to take his blood up to New York, sell it to New York hospitals at way below market value.
CHARLES ROUAULT: So we were undercutting the blood supplier in New York at that time.
JAD: And they didn't like that.
CHARLES ROUAULT: No, but ...
SOREN: It worked.
CHARLES ROUAULT: We became known sort of as the golden arch to New York.
SOREN: He eventually figured out that he could buy blood on the cheap from a place like, say, I don't know, Iowa, and sell it up the chain to New York.
JAD: So you really did become kind of a ...
MOLLY: A blood runner.
CHARLES ROUAULT: Well, we called it arbitrage.
JAD: Arbitrage. Yeah. It's exactly arbitrage, isn't it?
CHARLES ROUAULT: We were arbitraging the units.
JAD: I mean, that's—on Wall Street, that's the most cut-throat of the cut-throat are arbitragers.
CHARLES ROUAULT: [laughs] Yeah, but we're talking here about blood. And do you throw it away or do you find a home for it?
SOREN: Casey says if he hadn't done that, he would have had to pour that blood down the drain.
CHARLES ROUAULT: If you're running a blood center, you have an obligation to make sure that the promise that you made to that donor is fulfilled, that your unit is going to go to take care of somebody who is sick. Throughout the blood banking industry, I have yet to bump into somebody who wasn't motivated by that promise.
JAD: Even the guy on the other end of the phone call, who said "I will bury you?" You think he had the same motivations as you?
CHARLES ROUAULT: Yeah. Actually, it was a she.
JAD: Oh. Really?
SOREN: And here's the thing. Like, at a certain point—I mean, Molly, I think you'll agree, that we started to feel differently about this whole blood business, blood system kind of stuff.
JAD: Molly, do you agree with that?
MOLLY: I do agree.
SOREN: I mean, we've talked to—how many blood bank people have we talked to?
MOLLY: Oh God.
SOREN: Tons.
MOLLY: Yeah.
SOREN: I have to say, like, these guys are not—you know, they're not that cut-throat Wall Street person. Like, talking to them, they're not like that. I mean, they're stuck with the reality that demands that they act in business-like ways.
JAD: But not to be intentionally naïve here, like, I know businesses have to run like businesses, but there's some part of me that just doesn't want blood to be a business. It shouldn't be a business.
SOREN: Well, I mean maybe you need to let go of that idea.
MOLLY: Yeah. I found—like, I kept reporting this, and I kept saying, "Why did everyone keep telling me it was a gift if it's kind of this commodity that everyone's shuttling around? Why don't we just call it what it is?" We keep hiding behind this idea of a gift. I would still donate. I don't think I care.
SOREN: You know, maybe we need to let a little bit of that gift image go.
DOUGLAS STARR: I mean, there is something wonderful about giving. And I think one of the touching things to see was how after 9/11, so many people rushed to give blood. And after the Boston Marathon bombing, so many people rushed to give blood. Unfortunately, especially after 9/11, that was based on an old-fashioned idea that no longer is valid.
MOLLY: And it may actually be harmful, according to Douglas Starr. Take 9/11.
DOUGLAS STARR: What happened after 9/11 is all the politicians said, "Give blood." The Red Cross kept saying giving blood, but the people in the know, the other blood bankers were saying, "No, no. Stop. Stop. We can't use it!" You know, I spoke to the head of the Blood Bank of New York, ground zero. He said, "As soon as I saw the plane hit the building, I thought, 'We're not gonna be able to use that blood.'"
JAD: Wow.
DOUGLAS STARR: They had huge lines, all the facilities got overwhelmed all over the country.
MOLLY: A lot of the facilities ended up having to pour a lot of blood down the drain.
DOUGLAS STARR: Blood went bad, but there was this other rebound effect. And that is if you've stood online to give blood, and they came out and said, "You know what? Go home. We don't need you," psychologically, you feel that you've done your thing. So six months later in the winter season, during Christmas when they usually have lows, they had historic lows because nobody would come out to give.
MOLLY: Oh, because they were like, "Oh, we gave blood. They were full."
DOUGLAS STARR: Yeah. "I did my civic responsibility." So the final stage is we really do have to understand that this is a pharmaceutical.
SOREN: That might be another way to think about blood. I mean, it's a drug. It's not simply a gift that I can choose to give or not give. It's a precious raw material, and I'm the only one who—well, we are the only ones who have it. And when it comes out, yeah, some people make some money on that. And yeah, they could definitely be more upfront about that.
GIL GAUL: I wish they were a little more transparent.
SOREN: Definitely. But I'm the only one who has this stuff. And when I stop to think about how powerful this drug, this pharmaceutical really was, I kind of decided maybe I should give.
SOREN: That is a big one. That is a really big one.
NURSE: So make a fist and hold. You're going to turn your head on the other side if you don't want to look. And you're gonna feel a pinch, okay? Don't move your hand. Take a deep breath. Open your hand.
SOREN: Thank you for being my first nurse.
NURSE: You're welcome.
SOREN: Donor nurse.
NURSE: All righty.
JAD: Producers Soren Wheeler and Molly Webster. Special thanks to Rachel Quimby and Anna Weggel. And also, Edward Scott and Jeff Mikula. And before we go, we actually had the Brooklyn band Lucius play a couple of blood songs that we used in this episode. You might have heard one earlier. Here it is.

[music]

JAD: Well, you can get that blood song from Lucius plus one more on our website, radiolab.org. It's a free download. Thanks for listening.
[SCOTT CARNEY: Hi, this is Scott Carney.]
[DAN TRACY: This is Dan Tracy.]
[SCOTT CARNEY: And I'm calling to leave a message about you guys for you guys on the radio.]
[DAN TRACY: So here you go.]
[SCOTT CARNEY: Radiolab is produced by Jad Abumrad.]
[DAN TRACY: Our staff includes Ellen Horne, Soren Wheeler, Pat Walters.]
[GIL GAUL: Tim Howard, Brenna Farrell, Molly Webster.]
[SCOTT CARNEY: Malissa O'Donnell, Dylan Keefe.]
[DAN TRACY: Lynn Levy and Andy Mills.]
[SCOTT CARNEY: With help from Matt Kielty, Kelsey Padgett, Derek Clements and Sruthi Pinnamaneni.]

[DAN TRACY: Special thanks to Anita Burgess, Amy Wagers, Francesco Loffredo.]
[SCOTT CARNEY: Stephen Anderson and Barbara Johanson.]
[DAN TRACY: And Joe. Stake through the heart. Love it. Goodbye, Radiolab. Goodbye.]

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