Trafficking in Human Blood: Titmuss (1970) and Products Liability

This article first revisits law-and-economics literature in the 1970s dealing with tort rules governing hepatitis communicated through blood transfusions. It supports the scholarly consensus at the time that the legal policy reflected in so-called “blood-shield” statutes essentially created a caveat-emptor regime for blood and blood products and was therefore probably responsible for numerous patient injuries that would have been prevented under a rule of strict liability. The paper’s original contribution is a review, based on documents discovered in personal injury litigation, of the plasma-fractionation industry’s response to the emerging HIV/AIDS crisis in the early 1980s. The point of view taken is that of an antitrust lawyer reviewing the record for evidence of concerted action violating the Sherman Act, evidence that might justify imposing joint-and-several or market-share liability on industry members under state law. The industry’s questionable performance in addressing the AIDS problem resulted in part from its four firms’ engaging (with the FDA’s tacit approval) in concerted, rather than independent, action. The article suggests the possibility that many deaths of hemophiliacs and recipients of blood transfusions from HIV/AIDS might have been prevented if the usual strict-liability rule had been in place. The article also comments on the need for antitrust enforcers to scrutinize competitors’ collusive conduct for bad effects on the quality, not just the price, of an industry’s goods or services