The Market For Human Tissue

Katherine M. SauerUniversity of Southern Indianakmsauer1@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

Source: Body Brokers: Inside Americas Underground Trade in Human Remains By Annie Cheney 2006

Body PartPrice RangeBrain$500-$600Torso$1,200-$3,000Hand$350 - $850 (each)Knee $450 - $650 (each)Cervical Spine$835 - $1,825Whole Cadaver$4,000 - $5,000

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

allografts (over 1million in US per year)

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

Cornea transplants can restore an individuals 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 Transfersdonate (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 FDAs Center for Biologics Evaluation and Research (CBER). Code of Federal Regulations 211270,1

- 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:PCU621991621991 Industry:Blood and organ banks Product:Blood and organ banks Base Date:0606YearJanFebMarAprMayJunJulAugSepOctNovDecAnn.2006100.0101.1101.0100.9100.9100.9101.02007102.3102.3102.6102.8102.7103.0103.7103.8104.1104.3104.5(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 TissueVirginia Law Review

Harrison (2002) Neither Moore nor the MarketAmerican Journal of Law and Medicine

Whats missing?

- treatment in the economic literature

Research Question:

What determines the number of HCT/P establishments?

FDA/CBER registration data:- name- location- functionscreen, recover, process, distribute, etc- productbone, ligament, heart valve, etc

2001 to present

Number of Firms by State and Function (bone)Source: FDA/CBER HCTER database

statedistributelabelpackageprocessrecoverscreenstoretest AL 81103260 AK 20001120 AZ 1333332131 AR 42202241 CA 449851010422 CO 933223101 CT 52213340DE00000000 FL 19161041412265 GA 1753466173Total368103885013512737246max44161051415425min00000000mean7.22.01.71.02.62.57.30.9

Number of Firms by State and Function (cornea)Source: FDA/CBER HCTER database

statedistributelabelpackageprocessrecoverscreenstoretest AL 11414141 AK 10001110 AZ 22224321 AR 22212221 CA 105567991 CO 22231221 CT 11111110DE00000000 FL 32329532 GA 63233352Total10092929012311311139max108881111104min00000000mean2.62.42.42.43.12.82.81.6

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 Indianakmsauer1@usi.edu April 3rd , 2008 MBAA ABE Annual Conference Chicago, IL