The Case of Diag Human

In 2008 a lengthy arbitration between the Czech government and the blood plasma trading company Diag Human came to an end. The arbitration panel found in favour of Diag Human, founded by the enigmatic and highly successful Swiss-Czech entrepreneur Josef Stava (Josef Šťáva). Damages of over CZK 8 billion were awarded and it seemed that Josef Stava's patience had finally paid off.

At the age of nineteen, Josef Stava left communist Czechoslovakia after the 1968 Soviet-led invasion. He studied chemistry in Switzerland, later receiving Swiss citizenship, and forged a stellar career as a global salesman for Johnson and Johnson. For several years he was awarded the best salesman of the year prize and for two decades he crisscrossed the world, becoming a wealthy and respected businessman with personal contacts to the CSU political party in Bavaria.

On the way he participated in organizing a Bavarian Red Cross initiative that helped to negotiate the release of 27 Czechoslovak hostages from UNITA in the civil war in Angola in 1984. He was tasked to organize Bavarian Red Cross aid to the former GDR.

Stave was often accused of being an arms dealer in the 1980s, but Czechoslovak archives show a very distinct contradiction. Stava did indeed take part in many contact conversations with Communist Czechoslovakia state arms export companies, but no-one has ever produced one document that would confirm even one completed arms transaction. Intelligence analysts claim that Stava might have been a part of Western intelligence information gathering network working in the countries of the Communist bloc trying to extract arms export information including technical data.

Stava's main business became a lucrative blood plasma and plasma derivates trade. In the 1980s this global business was in the hands of a close knit group of private traders operating heavily from Zurich, Switzerland. Stava and Diag Human had, through their GDR operations, developed a unique model devised specifically for communist countries short of hard currency. It allowed them to barter expensive blood derivates produced only in the West for blood plasma produced in these countries on Western equipment brought in by Diag Human and by trained medical staff. The whole system was devised to conform to stringent US donor screening and quality norms – an important element at a time of widespread fears over HIV infection. In the late eighties the entire global blood plasma business went through dramatic consolidation. In ten years the number of plasma fractioning companies shrunk by ninety percent. With the 1989 collapse of communist regimes in Central and Eastern Europe the competition for taking over of the market of more than 300 million population with donors' that was blood free of antibiotics and residual medication on one hand, and hungry for modern derivates on the other, was severe and far from fair.

Josef Stava came back home to Czechoslovakia and immediately took advantage of its non-existent market economy. He invested more than CZK 190 million and built the blood plasma production market from scratch. His company signed contracts with around thirty hospitals, financing their blood plasma collection centres' equipment purchases and training their staff in exchange for future blood plasma deliveries. Blood plasma would then be transported to Danish company Novo Nordisk fractionation plant and produced derivates brought back to Czechoslovakia. The same model was discussed in Poland, Yugoslavia, the Soviet Union, Hungary and other former Communist countries. Stava forged an estimated eighteen month lead over his potential competitors and held the entire market in Czechoslovakia and the GDR markets.

At this point, as already the third delivery of deep frozen plasma was transported from Prague to Denmark, a small group of Czech Health Ministry officials intensified their slanderous media campaign, resulting in the then Health Minister sending a personal letter to Novo Nordisk threatening to cut all business contacts unless they rethought their collaboration with the "suspicious blood trader" Josef Stava. Never before and never since has ministry tried to impose its opinion on market competition in this manner. Novo Nordisk, which was just starting what is now annually its CZK 3 billion insulin business in the Czech Republic, closed its business with Josef Stava – thereby destroying it forever. The Czech Health Ministry gave the market that Stava had built to two competitors, who at that time, as confirmed by the arbitration panel in its 2008 ruling, did not have necessary licences, storage areas or qualifications.
The simple reason for getting rid of Josef Stava was in the fact that he was becoming too strong a player and thus a possible obstacle for privatisation of Czech pharmaceutical industry. This was taken over by a relatively small group of Czech officials. All of the industry simply disappeared – one part quickly resold to Western companies, another sold to developers for lucrative real estate, mostly in Prague. It is estimated that the Czech Republic lost more than twenty billion crowns just through this wild privatisation process, involving falsified government documents, arson of property and misused government bank guarantees. Stava would have been an obstacle. In this sense it does not matter whether he was an angel or a devil, Communist secret police or CIA agent, arms dealer, adventurer or philanthropist. The goal approved the means.

Now, with the Czech government still stubbornly refusing to admit its mistakes and fulfil its legal obligations toward Josef Stava and Diag Human, the truth behind this saga is beginning to emerge for the first time.


SOURCE: All Voices