They weren't "prevented" and the government did not "deny AIDS existed." We need to be careful to not look at history through lenses of 20/20 hindsight. Medical professionals, the blood providers, the FDA, CDC, NIH were all involved and working the problem and funding steadily increased to do so as the scope of the problem became understood.

But it wasn't as if the medical community -knew- from day one what was going on. It took several years until HIV was identified and then more time for a usable test to be developed. Recall that prior to the identification of effective or even surrogate HIV screening based on asking donors about known lifestyle risk factors was opposed by many advocacy groups and parts of the industry for political reasons even as others in the industry and government were pushing for them.