Newsletter - September 2012

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Why is Cord Blood Banking so Expensive?

Dennis Todd, PhD

Dennis Todd, PhD, CEO of Community Blood Services & Frances Verter, PhD, CEO of Parent's Guide to Cord Blood Foundation

You've just visited the doctor and the good news is that you're going to have a baby and everything looks good. Thirty years ago, your doctor may have given you a baby book and information about products that sponsors want you to buy for your new addition. Today, along with pretty much the same materials, you'll be asked to consider saving the blood of your newborn that's left over in the umbilical cord and placenta after the delivery. Another big decision, and possibly a costly one.

So what are your options? You have three choices. One is to store the cord blood with a private company at a cost to you ranging from $1,500 to $2,500 and an annual storage fee in the ballpark of $125. Secondly, you can donate the cord blood to a public bank, if there is one working with your hospital, and your doctor is on board with the idea. There are also public banks that accept mail-in donations, if you register during your second trimester and your doctor is willing to take a short training class on-line. Zero cost to you. The third option is to do nothing and have the cord blood, umbilical cord, and placenta destroyed as medical waste.

Why should you consider donating the cord blood to a public bank? Simply because, besides bringing a new life into the world, you could be saving an individual whose best chance at life is a stem cell transplant with your baby's donated cord blood. This can only happen if you donate and if your baby is a close enough match for a patient in need. If you chose to reserve the cord blood for your family, then siblings who have the same parents have a 25% chance of being an exact match.

Are public banks and family banks the same, except for who may use the cord blood and the cost to the parents? No. Public banks are subject to much higher regulatory requirements, and compliance with regulations carries costs. At a family bank you pay the bank enough to cover the cost of storing your baby's cord blood, plus they make a profit. When you donate to a public bank, it costs you nothing, but the bank pays more on processing each blood collection than at a family bank. Let's look at the steps that take place in the laboratory.

Both public and family cord blood banks must register with the US Food and Drug Administration (FDA), and since Oct. 2011 public banks also need to apply for an FDA license. All cord blood banks are required by federal law to test the blood of the mother for infectious diseases. At public banks the screening is usually more extensive, similar to the tests performed when you donate blood. The typical expense to a public bank is $150 per unit.

The next step at either a public or family bank is to process the cord blood to separate the blood component holding stem cells. The final product has a volume of 25 milliliters and includes a cryoprotectant which prevents the cells from bursting when frozen. Typical cost, $250 to $300 per unit.

Prior to freezing the cells, samples are taken for quality testing. Banks measure the number of cells that are positive for the CD34 marker, a protein that is used to estimate the number of blood-forming stem cells present. Typical cost, $150 to $200 per unit. They also measure the number of nucleated cells, another measure of stem cells, both before and after processing to determine the cell recovery rate. Typical expense, $35 per unit. A portion of the sample is submitted to check that there is no bacterial or fungal contamination. Typical expense, $75 per unit. Public banks will also check the ability of the sample to grow new cells by taking a culture called the CFU assay. Typical expense, $200 to $250 per unit.

When all the processing and testing is complete, the cord blood stem cells are frozen in cryogenic nitrogen freezers at -196° C until they are requested for patient therapy. Public banks are required to complete the entire laboratory processing and freeze the cord blood stem cells within 48 hours of collection. This is to insure the highest level of stem cell viability. The accreditation agencies allow family banks a window of 72 hours.

To save money, public banks will not even process a cord blood donation unless they know in advance that they are going to keep it. When the collection first arrives at the lab, it is passed through a cell counting machine. Only collections that have at least 900 million nucleated cells are kept. As a result, over 60%-80% of cord blood donations are discarded. The public bank must absorb the expense of the collection kit and delivery charges for discarded blood; typically $100 per unit.

An additional cost that is borne only by public banks is the "HLA typing" that is used to match donors and patients for transplants. This is an expensive test, running about $75 to $125 per unit. Family banks always defer this test until it is known whether a family member might use the cord blood for therapy.

After all is said and done, the cost to collect, test, process and store a donated cord blood collection at a public bank is estimated to be $1,200 to $1,500 dollars for each unit banked. That does not include the expense for the regulatory and quality systems needed to maintain licensure, or the cost of collecting units that are discarded because they don't meet standards.

When you consider that public banks can only expect to ship 1-2% of their inventory for transplant, you can quickly understand why most public banks are struggling to make ends meet. That struggle means that fewer collection programs are staffed, and there are fewer opportunities for parents to donate to the public good. We said earlier that public banks only keep cord blood donations over a minimum of 900 million cells, but today most public banks have raised that threshold to 1.5 billion cells. The reason is that the largest units are the ones most likely to be used for transplants that bring income to the bank. Family cord blood banks do not need to impose volume thresholds because they have a profit margin on every unit banked.

Dennis Michael Todd, PhD, joined Community Blood Services as its President and CEO in 2000. Community Blood Services operates the NJ Cord Blood Bank and The HLA Registry bone marrow donor center, both of which are affiliated with the National Marrow Donor Program (NMDP). In 2012, the blood center expects to distribute over 85,000 units of red cells and 20,000 platelets to hospitals and medical centers throughout northern NJ and Orange County, NY. Dr. Todd is presently a member of the NMDP Executive Committee and Chairman of the Finance Committee. He is a member of the International Society for Cellular Therapy (ISCT), the International Society for Stem Cell Research (ISSCR), the AABB, the American Association of Bioanalysts, and the New Jersey Society of Blood Bank Professionals.
Frances Verter, PhD, founded the Parent's Guide to Cord Blood in 1998 and has been a Scientific Advisor to Community Blood Services since 2007. In 2011 the NMDP presented her with their Lifeline Award in recognition of her efforts to improve public education about cord blood donation.

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Save The Cord Foundation

flyer for Save The Cord Foundation's Young Artists Program

contributed by Charis Ober, co-founder of Save The Cord Foundation

Save the Cord Foundation is working to make the collection of cord blood the standard of public health education and care in hospitals throughout the nation.

Save the Cord Foundation is a 501c3 nonprofit organization established to advance cord blood awareness, education, research and legislation, and to provide free, unbiased, factual information to expectant parents and the public surrounding the medical value and life-saving benefits of umbilical cord blood and its storage options.

The Foundation offers cord blood education in English, Spanish and 60 other languages on its web site and is active in creating cord blood collection / donation programs and cord blood education and awareness programs in communities, hospitals and cities across the nation.

Save the Cord Foundation now has educational programs for children, parents, families, teachers, schools, teens and young men and women, expectant parents, health professionals and the public:


Save The Cord Foundation logo thumbnail Young Artists Program brings the message of saving cord blood to the younger generation. Parents, teachers and schools can enter their children's and students' art work that will be displayed on the YAP gallery page. It's free and participants ages 2 to 8 learn simple information and facts about saving umbilical cord blood. Visit www.youngartistsprogram.org.
Save The Cord Foundation logo thumbnail Cord Blood Girls A fun and fresh place for teens and young women to share ideas, exchange thoughts, ask questions and receive factual information about all aspects of umbilical cord blood. Visit cordbloodgirlsblog.wordpress.com.
Save The Cord Foundation logo thumbnail Save the Cord Foundation Blog A forum where individuals of all ages can share and exchange current information, events, research, and banking and public donation questions. Learn how you can bring non-commercial, unbiased cord blood education to your community! Visit savethecord.wordpress.com.
Save The Cord Foundation logo thumbnail Save the Cord Foundation DVD An informative, educational DVD that explains why saving umbilical cord blood is so very important. Used by physicians, health professionals and birth educators to explain public and private options for saving cord blood. Now available in Spanish! To view the DVD visit www.savethecordfoundation.org/video_scf.php.

The founders of Save the Cord Foundation are Charis Ober and Anne Sarabia of Tucson, AZ, USA.

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Umbilical Cord Blood Stem Cell Scams: They're pulling your cord

Doug Sipp

Doug Sipp is the founder of the Stem Cell Treatment Monitor.

Great hopes and anticipation have surrounded umbilical cord blood-derived cells since their first clinical use in the 1980s. They represent a relatively rich source of hematopoietic stem cells (HSCs), which are capable of restoring the blood system following disease, chemotherapy, or radioablation. Today HSCs from cord blood are widely used in the treatment of diseases of the blood system. Various other cell types derived from perinatal tissues, such as placenta, amniotic fluid, and Wharton's jelly, are also being examined for potential clinical uses. But the great excitement surrounding these sources of stem cells has also led to the rapid and uncontrolled development of an industry that markets unsupported and outright dubious "stem cell treatments" direct to patients and their families, charging thousands to tens of thousands of dollars for these unproven interventions.

At present, dozens of clinics around the world are making scientifically unfounded, and in many cases implausible, claims about umbilical cord blood-derived stem cells. They often target the parents of children with intractable diseases, such as autism, diabetes, optic nerve hypoplasia/septo-optic dysplasia, and cerebral palsy. While some of these conditions have been or continue to be the focus of well-designed, randomized clinical trials of stem cell interventions, to date there is no rigorous evidence of the efficacy of stem cells in the treatment of these conditions. That notwithstanding, the Internet abounds with unsupported claims to the contrary.

As early as 2002, the now-defunct company Biomark was promoting what it claimed to be a cord blood-based therapy for neurodegenerative disorders, including Parkinson's disease and ALS (amyotrophic lateral sclerosis). This briefly earned the principals, a businessman and his runway model girlfriend, a spot on the FBI's Most Wanted List, after which they set up shop in several European countries and, subsequently, South Africa and The Seychelles, all while resisting extradition for fraud.

Also about a decade ago, a group of osteopaths and medical doctors centered around David Steenblock began promoting so-called "umbilical cord stem cell therapy" for a broad spectrum of neurological, endocrine, immune, ophthalmologic, and cardiovascular conditions. Steenblock was disciplined by the Osteopathic Medical Board of California for "gross negligence, repeated negligent acts, excessive treatments, failure to maintain adequate records, and falsely representing his credentials" in 2009.

Frank Morales, a former associate of Steenblock, gained national notoriety in 2010 with a separate scheme in which California-based Larry Stowe attempted to persuade an ALS patient to undergo a series of stem cell injections in Mexico for over $100,000. Thanks to the hidden camera that captured this transaction for the TV program 60 Minutes, both Morales and Stowe were arrested and are now facing charges of fraud.

In a separate 2012 investigation, 60 Minutes also uncovered how Dan Ecklund, an American who lost his license to practice medicine in the US, was shipping vials of dead cellular fragments direct to patients for use in treatments for which even living stem cells have not been demonstrated to be efficacious.

Perhaps the most famous and financially successful purveyor of dubious cord blood stem cell treatments was Beike Biotechnology, located in Shenzhen, China. This company was notorious for its aggressive use of online and social media marketing strategies. They provided free blogging services to their patients, which were selectively featured on a separate website to present an image of China as a premier destination for patients seeking cord blood-derived and other stem cells. By its peak in 2010, Beike claimed to treat nearly 100 diverse medical conditions using donated cells and to have treated nearly 10,000 patients. A stricter regulatory climate enforced in China in recent years has led the company to remove many of the more egregious therapeutic claims from its website.

Parents who seek to preserve the stem cells of their newborn in a private cord blood bank should be wary of companies that make unfounded claims for their healing powers, and should investigate the alternatives available in their area, such as public or hybrid cord blood banking programs. In many parts of the world cord blood banking is a "buyer beware" market. Parents need to check with independent and authoritative sources to find out what diseases can really be treated with which cells, and what is the current state of clinical trials on new therapies that utilize perinatal stem cells.

The clinics described here are just a small subset of the shadowy grey market for so-called "stem cell therapies" that has emerged over the past decade or so. To learn more about stem cell pseudo-medicine, visit my blog: Stem Cell Treatment Monitor, at sctmonitor.blogspot.com.

Doug Sipp studies regulatory and ethical aspects of stem cell clinical applications at the RIKEN Center for Developmental Biology in Japan. The views and opinions expressed in this article are his own, and do not necessarily reflect those of any organization with which he is affiliated.