The Market For Human Tissue

Katherine M. SauerUniversity of Southern Indiana

kmsauer1@usi.edu

April 3rd , 2008 MBAA – ABE Annual Conference Chicago, IL

In the news…

On March 19, 2008, Michael Mastromarino plead guilty to stealing human body parts, enterprise corruption, and reckless endangerment.

- Biomedical Tissue Services (BTS) $4.6m

- pay funeral directors for access tobodies- resell the tissue to biotech firms- falsify records

Body Part Price Range

Brain $500-$600

Torso $1,200-$3,000

Hand $350 - $850 (each)

Knee $450 - $650 (each)

Cervical Spine $835 - $1,825

Whole Cadaver $4,000 - $5,000

Source: Body Brokers: Inside America’s Underground Trade in Human Remains By Annie Cheney 2006

Background

What is human tissue?

- bone, skin, corneas, ligaments, tendons, dura mater, heart valves, ova, semen, cells from biopsies, etc…

- not vascularized organs (e.g. kidney, heart, liver)

Human Tissue Uses

1.allografts (over 1million in US per year)

transplanted tissues are used extensively for:orthopedics neurosurgery burn victimsgeneral/plastic surgery dental procedures

Cornea transplants can restore an individual’s sight.

reproductive medicine

2. research

basic research pharmaceutical testing (liver toxicity) diagnostic tests

In 2000, there were an estimated 300 million samples of human tissue being stored with an additional 20 million being added each year.

- military facilities, forensic DNA banks,government labs, diagnostic pathology,commercial, hospitals, universities

Tissue Transfers

donate (25,000 per year)- living (research, reproductive)- cadaveric (legit donation or stolen)

medical waste- diagnostic purposes- commercial purposes

Regulations

Human cell, tissue, and cellular and tissue-based products (HCT/Ps) are regulated by the FDA’s Center for Biologics Evaluation and Research (CBER).

Code of Federal Regulations 21–1270,1

- establishment registration- screen and test donors- procedures and records

1947 – 1968: statutes in 40 states allowing anatomical donations from cadavers for transplantation or scientific research

1968: Uniform Anatomical Gifts Act- all 50 states and DC adopted- two witnesses required- right to donate organs, eyes, tissues

1984: National Organ Transplantation Act- outlaws transfer of “any human organ

forvaluable consideration”

- allows for “reasonable payments” associated with the removal

transportation implantation processing preserving quality control

storage of human organs

1987: revised UAGA- prohibited organ sales- streamlined donor registry- medical examiners/coroners can provideorgans from autopsies- 26 states adopted

2006: revised UAGA- facilitates donation- modernizes the Act- 20 states enacted in 2007

To What Extent is there a Market?

In the United States

allografts: $1billion industry

research: $700 million market

Human tissue is valued at $5000/gram.

Producer Price Index

Series Id:  PCU621991621991Industry:   Blood and organ banksProduct:    Blood and organ banksBase Date:  0606

YearJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann.

2006           100.0 101.1 101.0 100.9 100.9 100.9 101.0  

2007 102.3 102.3 102.6 102.8 102.7 103.0 103.7 103.8 104.1 104.3104.5(P)

104.3(P)

103.3(P)

2008105.9(P)

105.2(P)

                     

P : Preliminary. All indexes are subject to revision four months after original publication.

With the exception of ova and sperm, donors do not receive compensation.

Donors are encouraged to conceptualize their donation as a “gift” to the recipient.

Non profit tissue banks are heavily involved. - LifeNet … LifeCell ($190.5m revenue)- Musculoskeletal Transplant Foundation

Previous Work

solid organs – efficiency of markets, ethicstissues – property rights, ethics (medicine, law)

Charo (2002) “Skin and Bones: Post Mortem Markets” Nova Law Review

Mahoney (2000) “The Market for Human Tissue”Virginia Law Review

Harrison (2002) “Neither Moore nor the Market”American Journal of Law and Medicine

What’s missing?

- treatment in the economic literature

Research Question:

What determines the number of HCT/P establishments?

FDA/CBER registration data:- name- location- function

screen, recover, process, distribute, etc- product

bone, ligament, heart valve, etc

2001 to present

state distribute label package process recover screen store test AL 8 1 1 0 3 2 6 0 AK 2 0 0 0 1 1 2 0 AZ 13 3 3 3 3 2 13 1 AR 4 2 2 0 2 2 4 1 CA 44 9 8 5 10 10 42 2 CO 9 3 3 2 2 3 10 1 CT 5 2 2 1 3 3 4 0DE 0 0 0 0 0 0 0 0 FL 19 16 10 4 14 12 26 5 GA 17 5 3 4 6 6 17 3

                 Total 368 103 88 50 135 127 372 46max 44 16 10 5 14 15 42 5min 0 0 0 0 0 0 0 0

mean 7.2 2.0 1.7 1.0 2.6 2.5 7.3 0.9

Number of Firms by State and Function (bone)

Source: FDA/CBER HCTER database

state distribute label package process recover screen store test AL 1 1 4 1 4 1 4 1 AK 1  0 0 0  1 1 1 0  AZ 2 2 2 2 4 3 2 1 AR 2 2 2 1 2 2 2 1 CA 10 5 5 6 7 9 9 1 CO 2 2 2 3 1 2 2 1 CT 1 1 1 1 1 1 1  0DE  0  0 0 0  0  0  0  0 FL 3 2 3 2 9 5 3 2 GA 6 3 2 3 3 3 5 2

                 Total 100 92 92 90 123 113 111 39max 10 8 8 8 11 11 10 4min  0  0 0 0  0  0  0  0

mean 2.6 2.4 2.4 2.4 3.1 2.8 2.8 1.6

Number of Firms by State and Function (cornea)

Source: FDA/CBER HCTER database

Potential determinants:

- population (density, death rates, age)- registered organ donors- research institutions, medical facilities- industry profits- presumed consent laws (corneas)- income (reproductive medicine, cosmetic surgery)- religion

Comments? Questions?

Katherine M. SauerUniversity of Southern Indiana

kmsauer1@usi.edu

April 3rd , 2008 MBAA – ABE Annual Conference Chicago, IL