It’s the morning before your C-section, and someone wants you to donate your placenta

Background

Placenta donation is a form of organ donation¹. After birth (pun intended), the placenta and other birth tissues that are no longer needed to support the baby are expelled by the mother’s body and would typically be discarded. But birth tissues contain valuable cells, including stem cells, as well as proteins, exosomes, etc. They can be sent to laboratories for processing into medicinal products. Currently in the United States, donated placentas are routinely used for drug testing, disease studies, and wound dressings. Registered clinical trials are studying additional applications of birth tissues for a wide variety of diagnoses, including arthritis, autism, coronavirus, and more^2-8.

Placentas from planned Caesarean section deliveries (C-sections) are the most desirable. During labor, the placenta is subjected to hormonal changes in the mother’s body. During a vaginal birth, the placenta often gets exposed to bacteria on the mother’s skin. Whereas, when the placenta is removed by C-section before labor, in a sterile operating room, it is more pristine. Some pharmaceutical companies have developed placenta products that incorporate cells or tissue sourced from C-section placentas. Because the FDA has approved their product testing based on this method of preparation, the manufacturer must continue to obtain placentas from C-sections in order to prepare their product^9,10. Another reason that companies approach mothers having C-sections is because they offer the opportunity to harvest amniotic fluid, which is usually lost during a vaginal birth.

Hence, an expectant mother who enters the hospital for a planned C-section is often approached, before her surgery preparation, by someone that wants to get her medical history and consent for placenta donation. The questionnaire requested is officially called a Donor Risk Assessment Interview or DRAI. 

The organizations that ask mothers for permission to take their birth tissues are called Birth Tissue Procurement Organizations (BTPO).

Parent’s Guide to Cord Blood Foundation has been investigating the BTPO industry for most of 2020. It is a very complex, mainly hidden, and poorly regulated industry that is rife with questionable practices. This investigative report is targeted at both healthcare professionals and expectant parents. We give an overview of how this industry currently operates and where reforms are needed.  We sum up with two types of recommendations: a call for professionals to improve supervision of placenta donation and advice for new mothers.

Birth Tissue Value by the Numbers

When we say “BTPO”, we mean organizations that approach expectant mothers and obtain consent to collect their donated birth tissues. We are not counting laboratories that test or work with birth tissues but do not procure them, we are only counting organizations that are active in procurement. These BTPO should not be confused with banks that ask for donated cord blood that will be stored for patients in need of stem cell transplants. There are very few BTPO in the United States that also collect for cord blood banks. The main business of BTPO is collecting placentas.

There are currently 3.8 million births per year in the United States, and nearly 32% of them take place by C-section^11,12. The founder of one of the largest of the BTPO estimated that, prior to the coronavirus pandemic, roughly 30% of mothers having C-sections were approached for donation consent, and then roughly 30% of those consents yielded qualifying placenta donations. That adds up to over 100 thousand donated placentas per year, just from C-sections.

At the beginning of 2020, Parent’s Guide to Cord Blood Foundation counted more than 3 dozen organizations in the United States that were collecting birth tissues. These ranged from small operations that worked with one local hospital to companies that worked with dozens of hospitals across a region. We will say more about their business models in the next section.

The primary medical application of donated placentas is for the laboratory study of drugs and diseases. Placentas are routinely used as a surrogate for humans in toxicology testing of drugs and other chemicals^13,14. A 2017 survey of placenta clinical trials found that 49% were studies that used placentas for test calibration, as a diagnostic tool, or to measure drug efficacy⁵. Placentas are even used to train dogs that detect human remains¹⁴. Only 4% of the clinical research with placentas involves producing cellular therapies⁵.

Tissues from the placenta have been used as wound dressings since ancient times, and this has been documented in the medical literature for over a century¹⁵. Currently, the use of birth tissues as wound dressings may impact a million patients per year in the United States alone. We estimate that one million patients per year receive advanced wound dressings for diabetic foot ulcers^16-18, and 34,000 patients per year are treated for corneal ulcers^19-21.

There is also legitimate medical research testing the use of cellular therapies derived from birth tissues in registered clinical trials. Over the past decade, the number of clinical trials utilizing birth tissues has tripled^2,3,6. The leading types of diagnoses treated in recent clinical trials with birth tissues are auto-immune disorders, lung disease, infertility, orthopedic problems, and cardiovascular conditions⁷. During the first half of the 2020 coronavirus pandemic, 48% of the cell therapy clinical trials for COVID-19 used cells obtained from afterbirth sources⁸.

Unfortunately, there are also dozens of illegal stem cell clinics in the United States that offer to treat paying customers with therapies that allegedly contain live stem cells from birth tissues. These clinics are “illegal” in the sense that the FDA has not approved the therapies that they market. A database published in 2016 found 570 direct-to-consumer stem cell clinics in the United States, and 20% of those clinics offered treatments derived from birth tissues or amniotic fluid²².

When BTPO distribute placentas to a processing laboratory, their reimbursement is between $1,200 to $2,000 per placenta. Raw amniotic fluid goes for between $15 to $25 per milliliter. Please note, we must not use the word “sell” when placentas change hands, because under the National Organ Transplant Act of 1984 it is prohibited to sell donated human organs and tissues²³. We must say that the tissues are “distributed”, not “sold”, and the procurement company is “reimbursed”²⁴. The majority of the reimbursement received by BTPO goes towards their operating expenses: salaries, supplies, and infectious disease testing. In the time of coronavirus, operating expenses include a new set of Personal Protective Equipment (PPE) for each patient encounter. Compared to highly valued transplant organs, such as a heart which is worth over a million dollars, a placenta does not have a high profit margin and BTPO need to procure them at a steady rate in order to stay in business¹.

In the article, What is your Placenta Worth?, Russ Schweizer of AmnioChor estimated that the various tissues from a single birth can have a final value around $50,000²⁵. By comparison, Dr. Chris Centeno of Regenexx placed the value of donations from a single birth at over a half million dollars, by also including $480,000 for the value of the amniotic fluid, which is very popular with commercial clinics²⁶. Bear in mind that this final “street value” is the end result of processing the birth tissue into multiple doses of clinical treatments. Thus, after a placenta has been processed into treatments, it is worth about 25 times more than when it left the hands of the BTPO.

Structure of the Birth Tissue Procurement Industry

A magazine article published in May 2019, titled Birth Tissue Profiteers, was an expose of how well-meaning donations end up fueling commercial stem cell clinics^27,28. It was a collaboration between ProPublica and The New Yorker. Despite the months of interviews that went into the article, Birth Tissue Profiteers was highly misleading. The author sensationalized the topic by focusing only on birth tissues that end up in illegal clinics. Also, by focusing only on bad actors, the article did not provide any insight on how the birth tissue industry actually works.

The BTPO industry has many layers, with a variety of business models in action at each layer. Since placenta donation is a form of organ donation, some of the nation’s organ procurement organizations (OPO) that collect organs for transplant have started to also collect placenta donations. These organizations have in-house laboratories to process any tissues that they collect. A few of the companies which are the leading manufacturers of medical products made from placenta have their own collection programs.

Despite the above examples, the majority of BTPO do not own laboratories. Their business model is strictly procurement: they approach mothers for consent and then collect their birth tissues. The BTPO then recoup the costs of collection by distributing the tissues to laboratories which manufacture products. The labs then distribute their cell and tissue products to hospitals and medical practices. Finally, prescribing physicians distribute the therapeutic products to patients, and are paid either through their health insurance or directly. Most BTPO do not like to reveal which labs receive their placentas, and the labs do not like to reveal which clinics receive their products.  There are no national regulations designed specifically for BTPO, and there is no central clearinghouse of information. Even people who work in this industry are not sure what their competitors are doing.

The need to approach large numbers of expectant mothers to ask for donation consent motivates BTPO to form partnerships with selected hospitals. Almost all BTPO are secretive about the hospitals where they collect. We do have the impression that the overwhelming majority of hospitals working with BTPO are located in rural areas. These hospital partnerships do not require publicity and BTPO prefer to “fly below the radar”. Their internet presence usually consists of a single web page with vague statements about giving life via donation. 

Among BTPO, there are four different tactics for approaching mothers to obtain donation consent. One is for the BTPO to directly employ staff and send them into hospitals. During the coronavirus pandemic, this approach has run into some limitations on the presence of non-essential personnel in hospitals. A second tactic is for the partner hospital to designate members of their own staff to obtain consent. A third approach is for the BTPO to partner with medical practices that obtain donation consent from their patients.  And finally, an increasing number of BTPO are turning to remote consent models, where mothers respond to a questionnaire that can be presented on an iPad, or through a website, or over the phone. Each of these approaches to informed consent have their own practical problems, while some have ethical and legal pitfalls.

An informed consent questionnaire to donate both cord blood and birth tissues is about 60 questions long, because it goes into a great deal of detail about maternal health history and lifestyle. Although standard versions of this document are available from several national agencies, they are not universally adopted. Some BTPO like to customize the wording of the health history questions on the consent form. On the other hand, some laboratories require BTPO to use their exact form for any tissue donations that are collected for that laboratory.

Ironically, while the informed consent for donation goes into great detail about maternal health, it does not spell out the end uses of donated birth tissues. The potential applications of the donation are usually covered by a single sentence that includes both “non-profit and for-profit organizations” that may use the tissue for “transplantation, therapy, or research purposes”.

Problematic Practices of Birth Tissue Procurement Organizations

The pathway from placenta to therapeutic product begins with mutual trust. The expectant mother is asked a series of questions about her health history and lifestyle. The BTPO must trust that the mother is giving honest answers, because these questions determine whether it is safe to use her birth tissues in medical products for patients. In turn, the mother is expected to trust that the BTPO are being honest about the end uses of the placenta donation. An expectant mother may not understand all the potential medical uses for a placenta, but a reasonable person would not donate their placenta if they knew it would end up in an illegal commercial clinic.

Accountability is an underlying problem in the birth tissue procurement industry. The layers of middlemen involved in the creation of placenta products makes it hard to trace the pathway from donor to patient. Is it fair to hold a BTPO accountable for actions by a laboratory or a clinic that receives the placentas they procure? How can a BTPO reassure expectant mothers that they can trust the donation process? These are open questions and there are no easy answers.

The FDA has numerous regulations which apply to BTPO. The BTPO should be registered with the FDA as an establishment that handles human cells, tissues, and cellular and tissue-based products (HCT/Ps)²⁹. The FDA registration is free, but it comes with surprise inspections every two years. In order to pass the FDA inspections, BTPO must maintain satisfactory records of disease testing, patient chart completeness, employee training, etc. Sometimes the owners of BTPO have multiple connected companies, and only some of them are registered with the FDA as an HCT/P establishment, which enables the others to avoid scrutiny.

The FDA has two different pathways for regulating products made from birth tissue, and this distinction matters for the BTPO that obtained the birth tissues. The pathways are called “FDA 361 products” versus “FDA 351 products”, named after two sections of the Public Health Services Act^30,31. Very simply, 361 products do not have to be licensed or approved by the FDA. For example, wound dressings made from birth tissues generally can be marketed under this category. But 351 products are regulated in the same manner as biologic drugs, and must undergo a series of clinical trials before the FDA will approve them for patient use. Any stem cell injections sourced from birth tissue would likely fall into this category. This matters for BTPO because the entire chain of entities manufacturing a 351 biologic must follow all FDA regulations on current good manufacturing practices for drugs, and that chain starts with the BTPO³².

In recent years, BTPO are distributing more and more birth tissues to laboratories producing 351 biologics that should be heavily regulated by the FDA, but most BTPO continue to operate as if all their clients manufacture 361 products. For example, 351 biologics should have the donor health histories stored in electronic health records that can be inspected or audited, but some BTPO continue to keep their donor consent forms on paper in filing cabinets. When the FDA catches a laboratory manufacturing a 351 product from birth tissue without following all of the rules for biologic drugs, they typically issue one of their infamous Warning Letters³³. But so far, no BTPO have faced consequences for assuming that they are still operating in a 361 regulatory environment.

Some BTPO may not be in full compliance with regulations regarding medical supervision. Both the BTPO that procure birth tissue and the laboratories that process birth tissue are often too small to hire their own medical director. Instead they pay a monthly fee to retain a consulting medical director. There are only a few medical directors serving this specialty industry, so multiple companies are sharing the same medical director. But there are legal requirements for consulting medical directors that are often overlooked. One is the Sunshine Act, which requires that corporate payments to consulting medical directors must be reported to a national database^34-36. Parent’s Guide to Cord Blood Foundation looked up several BTPO and their consulting medical directors in the Open Payments database, but failed to find any records. The responsibility for reporting these payments rests on the BTPO, not the medical doctor. Another issue is violations of state laws for medical licensing. For example, New York state says that a single medical doctor may not serve as director of more than two clinical laboratories, within or outside New York³⁷. Hence, when multiple BTPO and their labs rely on the same consulting medical director for NY licensing, that is a violation of NY law, and in this situation the liability rests on the medical doctor.

The biggest legal liability we have seen in the BTPO industry is violations of Anti-Kickback Statutes. Both federal and state laws prohibit payments to physicians in exchange for referring patients to a specific laboratory^38-41. For example, if BTPO pay obstetricians to have their nursing staffs consent all of their C-section patients for birth tissue donation, that is an illegal kickback. The anti-kickback statutes ascribe criminal liability to parties on both sides of the kickback arrangement. In this situation, the obstetrician has an incentive to refer mothers for unnecessary C-sections, simply so that he can make extra money by collecting their placentas and amniotic fluid. If that is the case, he would be committing medical malpractice^42-44.

Hospitals that form partnerships with BTPO may not appreciate that birth tissue donation is not exactly the same as collecting organs from deceased donors. For example, in early 2020, a mother gave birth at a U.S. hospital and donated both her birth tissues and her baby’s cord blood “for transplants”. Months later, her older child became sick with a disease that could be treated by cord blood transplant. The mother contacted the hospital to try to find her donated cord blood. It turned out that her cord blood was collected by a BTPO that did not have any contract with the hospital, but had a relationship with the labor and delivery staff. Moreover, that BTPO did not collect for a bank that saves cord blood for transplants; they distributed the cord blood to laboratories and it was gone. This story illustrates a crucial difference between expectant mothers and cadaveric donors: deceased donors will never contact the hospital to find out if they can get their eyes back.

Hospitals can be exposed to legal liability when their staff enter into relationships with BTPO without consulting the hospital legal counsel, or when hospitals do not pay enough attention to the activities of BTPO that operate in their labor and delivery space. From the perspective of the hospital’s labor and delivery department, each placenta that is discarded after birth represents over a pound of biohazard waste that must be incinerated^45,46. Those hospitals that deliver thousands of babies per year can save substantial disposal costs when their placentas are collected by BTPO. Well-meaning hospital staff see the BTPO relationship as a win-win, where the hospital saves money and supports medical research at the same time⁴⁶.

Potential Supervision of Birth Tissue Procurement Organizations

We reported that currently there are no national regulations designed specifically for BTPO. However, there are a several organizations at the national and state level that could potentially take over supervision and accreditation of the activities of BTPO.

The Joint Commission, formerly known as the "Joint Commission on Accreditation of Healthcare Organizations", is the most powerful provider of healthcare accreditations and certifications in the United States. Most states require hospitals to be accredited by The Joint Commission in order to receive reimbursement from federal health programs⁴⁷. In theory, The Joint Commission has a couple of standards that might apply to hospital relationships with BTPO. One is Standard LD.04.03.09 regarding the duty of hospital leaders to supervise contractors⁴⁸. Another is Standard TS.03.01.01 regarding tissue transplants⁴⁹.

In practice, The Joint Commission is not paying attention to the BTPO industry. The focus of The Joint Commission is on the care of patients, so they tend to ignore hospital activities which are not perceived to impact patient care. For example, they only require hospital leadership to supervise contractors for “contracted services that are directly related to the care, treatment, or services of the hospital’s patients”⁴⁸. Since tissue donations have traditionally been from deceased donors, The Joint Commission has not yet developed standards for birth tissue donations from expectant mothers. In fact, some BTPO reported to Parent’s Guide to Cord Blood Foundation that their contracts with hospitals are “grandfathered” under the contract template used for organ procurement organizations.

The American Association of Tissue Banks (AATB) has created a voluntary accreditation for any organization that procures or processes any human tissues. As of Dec. 2020, 46 organizations in the United States are accredited by AATB for “birth tissue” activities⁵⁰. However, according to the investigation by Parent’s Guide to Cord Blood Foundation, these companies are almost entirely laboratories. Only 3 of the 46 companies accredited by AATB for birth tissue are active in procurement, while the majority of the three dozen BTPO that are active in procurement do not carry AATB accreditation. We talked to representatives from both AATB and the BTPO industry to learn more about this situation.

AATB is aware that birth tissue procurement is a growing market and more oversight is needed. The AATB tissue bank accreditation is an all-or-nothing approval of bank activities; if the bank handles any birth tissues, then the bank must carry the birth tissue label as part of its AATB accreditation⁵¹.  About a year ago, AATB assembled a committee to revise its standard donor consent form, which was originally designed for deceased donors, into a new template that is appropriate for birth tissue donors. This effort is ongoing and the standard birth tissue consent form should be released in 2021.

So far, the majority of BTPO that actively procure donations have not been willing to engage with AATB, because they feel that the added expense of accreditation and membership does not give them any advantage in conducting their businesses.

The lack of overlap between AATB and BTPO may gradually change because AATB is actively working with state legislatures to develop standards for BTPO that include AATB membership. When an organization applies for a business license to operate a tissue bank in one of these states, they will automatically become subject to state laws regulating tissue banks, which will require compliance with state standards and possession of accreditation⁵².

The state of Florida is a good example: Florida is one of the top three states that holds the most clinics and laboratories that handle birth tissues^22,50. The Florida Statute section 765.541 requires the establishment of a certification program for entities engaged in the procurement of organs, tissues, and eyes for transplantation⁵³. The certification standards are substantially based on the existing standards of several relevant organizations, which include AATB. In order to legally procure tissues in the state of Florida, an organization must be certified by the Florida Health Care Administration, must pay an application fee of $1000, and must pay the state annual fees which are the greater of $1000 or 0.25% of total revenues from procurement and processing activities in the state of Florida. Moreover, section 765.543 of the Florida Statute appoints a 14-member advisory board, yet none of the positions on this board is reserved for an expert in birth tissue procurement⁵³. Hence, while Florida is one of a handful of states that impose standards on tissue banks, it seems that the Florida Dept. of Health does not fully grasp that there is a booming birth tissue industry in its state.

Recommendations for Reforms

We hope that this article triggers conversations among healthcare professionals, and eventually leads to committee meetings to propose guidelines for BTPO. So long as BTPO can continue to fly below the radar of public scrutiny, they will not be motivated to participate in reforms. After investigating this industry, we realized it was necessary to write this article to expose BTPO to more scrutiny so that there will be industry-wide calls for reform.

Parent’s Guide to Cord Blood Foundation is not seeking a role for ourselves in this process. Our Foundation maintains an international clearinghouse of information about cord blood banks on our Parent’s Guide to Cord Blood website. We cannot construct a similar database for BTPO, because it is very difficult to find BTPO and verify their operations. At present it is not possible to provide a website for parents to look up trustworthy BTPO. Instead, we believe that actions to police BTPO are best conducted on a local level, at the hospitals where procurement takes place.

Parent’s Guide to Cord Blood Foundation recommends that hospitals take on the responsibility of investigating and approving the practices of any BTPO that operate in their facilities.

Legally, it falls on hospitals to protect themselves from liability for activities that take place inside their facilities. When expectant mothers agree to donate birth tissue, this can impact patient care, so The Joint Commission for hospital accreditation should get involved in setting standards for this activity. But without waiting for those standards, each hospital can take action immediately to review their partnerships with BTPO.  Hospitals should only approve BTPO after a deep look into their business practices and the end uses of their tissue donations.

Parent’s Guide to Cord Blood Foundation would like to see some form of accreditation play a stronger role in the birth tissue procurement space. Our Foundation has spent over 20 years encouraging parents to only do business with cord blood banks that have a relevant accreditation. However, in the cord blood industry, there are two competing accreditations, from the organizations AABB and FACT. In the birth tissue industry, the only accreditation agency in the United States is AATB. We are concerned that inserting AATB accreditation into every state statute and BTPO approval will create a de facto monopoly where AATB can charge the BTPO whatever it wants regardless of services provided. Perhaps a new category of quality assurance should be created specifically for standalone BTPO, instead of combining them with organ procurement organizations that own laboratories and have budgets in the tens of millions of dollars¹.

Advice to Expectant Mothers

We hope that expectant mothers will continue to donate their placentas for medical research. The media is swirling with misinformation about placenta donation and birth tissue profiteers. It is still fundamentally a good thing to donate your placenta, but new mothers need to be wary of scams in this area. If someone shows up on the morning before your C-section seeking your consent for placenta donation, confirm that this person has an official relationship with your hospital before proceeding.

Expectant mothers should know that the primary use of donated placentas is for safety testing of drugs and other chemicals. Donated placentas also supply wound dressings that are essential for diabetic ulcers and for eye surgery, and they support research and development of advanced cell therapies. It is not true that placenta donations are just fueling an illegal industry of commercial stem cell clinics. Also, birth tissue procurement organizations are not getting fabulously rich by selling donated placentas.

Placenta donation supports approved and legitimate medical applications and research that save and benefit patient lives. Placenta donation is a gift of life.

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