1. The Market For Human Tissue Katherine M. Sauer University of Southern Indiana kmsauer1@usi.edu April 3 rd, 2008 MBAA – ABE Annual Conference Chicago, IL

2. 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 to bodies - resell the tissue to biotech firms - falsify records

3. Body PartPrice 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

4. 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)

5. Human Tissue Uses 1.allografts (over 1million in US per year)  transplanted tissues are used extensively for: orthopedicsneurosurgery burn victims general/plastic surgery dental procedures  Cornea transplants can restore an individual’s sight.  reproductive medicine

6. 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

7. Tissue Transfers donate (25,000 per year) - living (research, reproductive) - cadaveric (legit donation or stolen) medical waste - diagnostic purposes - commercial purposes

8. 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

9. 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

10. 1984: National Organ Transplantation Act - outlaws transfer of “any human organ for valuable consideration” - allows for “reasonable payments” associated with the removal transportation implantation processing preserving quality control storage of human organs

11. 1987: revised UAGA - prohibited organ sales - streamlined donor registry - medical examiners/coroners can provide organs from autopsies - 26 states adopted 2006: revised UAGA - facilitates donation - modernizes the Act - 20 states enacted in 2007

12. 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.

13. Producer Price Index Series Id: PCU621991621991 Industry: Blood and organ banks Product: Blood and organ banks Base Date: 0606 Year JanFebMarAprMayJunJulAugSepOctNovDecAnn. 2006 100.0101.1101.0100.9 101.0 2007102.3 102.6102.8102.7103.0103.7103.8104.1104.3 104.5 (P) 104.3 (P) 103.3 (P) 2008 105.9 (P) 105.2 (P) P : Preliminary. All indexes are subject to revision four months after original publication.

14. 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

15. Previous Work solid organs – efficiency of markets, ethics tissues – 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

16. What’s missing? - treatment in the economic literature Research Question: What determines the number of HCT/P establishments?

17. FDA/CBER registration data: - name - location - function screen, recover, process, distribute, etc - product bone, ligament, heart valve, etc 2001 to present

18. statedistributelabelpackageprocessrecoverscreenstoretest AL81103260 AK20001120 AZ1333332 1 AR42202241 CA4498510 422 CO933223101 CT52213340 DE00000000 FL19161041412265 GA1753466 3 Total368103885013512737246 max44161051415425 min00000000 mean7.22.01.71.02.62.57.30.9 Number of Firms by State and Function (bone) Source: FDA/CBER HCTER database

19. statedistributelabelpackageprocessrecoverscreenstoretest AL 11414141 AK 1 000 1110 AZ 22224321 AR 22212221 CA 105567991 CO 22231221 CT 1111111 0 DE 0 000 0 0 0 0 FL 32329532 GA 63233352 Total 10092 9012311311139 max 1088811 104 min 0 000 0 0 0 0 mean 2.62.4 3.12.8 1.6 Number of Firms by State and Function (cornea) Source: FDA/CBER HCTER database

20. 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

21. Comments? Questions? Katherine M. Sauer University of Southern Indiana kmsauer1@usi.edu April 3 rd, 2008 MBAA – ABE Annual Conference Chicago, IL