The Preferred Biotech Resource in Asia-Pacific
Vol 19, No 07, July 2015
Biotech in China
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Cord Blood Banking - To Go Public or Stay Private

Vivek Tanavde (Bioinformatics Institute, Agency for Science Technology & Research (A*STAR), Singapore)

Banking cord blood is increasingly becoming popular in many countries in the world. Cord blood banks are set up as public banks or private banks that provide these services for a fee. Parents are often faced with the dilemma of whether to choose a public bank or a private bank for storing their child’s cord blood. This issue has been hotly debated, often with proponents of both public & private banks opposing the other’s model. However both public and private banks can co-exist as it is impossible for governments to fund public cord blood banks to meet the growing demand. This is especially true in Asia which is home to a growing population and demand for cord blood banking. This article explores the commercial aspects of cord blood banking including the necessity for private banks and hurdles faced by them.

Cord blood is a rich source of stem cells that is often discarded. Since cord blood can only be collected at the time of delivery, it has to be ‘banked’ or cryopreserved for future use. Cord blood banks are either funded by public money, where the cord blood is stored at no cost to the donor or are run by private companies where the donor pays for the processing and storage of cord blood units. Parents deciding to store cord blood must choose between public or private cord blood banks. Since public banks are funded by public money, they are limited by the number of units they can successfully store. Public banks accept cord blood units as donations to be used for transplantation of patients without the possibility for the donors to choose their recipient candidate. Once the blood is donated, it loses all identifying information after a short period of initial testing, so that families will not be able to retrieve their own blood units later. Since many parents may want to reserve their child’s cord blood for his/her own use or for their siblings, they may opt to use a private cord blood bank and pay for banking their baby’s cord blood. This need has given rise to a number of private cord blood banks in different parts of the world and many of them are getting incorporated and publicly listed on the various stock exchange.

Is Private Banking Necessary?

The larger obstacle facing banks funded by public money are the costs required to run and maintain them. This has prevented more than a handful from opening worldwide. Because public banks do not charge storage fees, many medical centers lack the funds required to establish and maintain banking operations. Due to donation patterns, different racial groups have different likelihood of finding a match through a public cord blood bank. For example in the New York Blood Center, the largest bank in the US, Caucasians will find a match 70% of the time (5-6/6 HLA match) [1], while the probability of finding a match is considerably lower for ethnic minorities. This encourages people to store their child’s cord blood for his/her own use.

A number of private-for-profit companies have been established that encourage parents to bank their children’s cord blood for their own autologous use or by a family member, should the need arise. Parents have been encouraged to bank their children’s cord blood as a form of “biological insurance.”

Physicians, employees, and/or consultants of such companies may have potential conflicts of interest in recruiting patients because of their own financial benefit. Annual disclosure of the financial interest and potential conflicts of interest must be made to institutional review boards that are charged with the responsibility of mitigation of these disclosures and risks. Families may be vulnerable to the emotional effects of marketing for cord blood banking at the time of birth of a child and may look to their physicians for advice. No accurate estimates exist of the likelihood of children to need their own stored cord blood stem cells in the future. Available estimates range from 1 in 1,000 to more than 1 in 200,000 [2]. Moreover, currently, the strategy for children receiving their own cord blood stem cells for future autologous use is controversial [2]. There is also no evidence for the efficacy of autologous cord blood stem cell transplantation for the treatment of malignant neoplasms later in life [2]. On the contrary, there is evidence demonstrating the presence of DNA mutations in cord blood obtained from children who subsequently develop leukemia [3]. Thus, autologous cord blood transplantation might be contraindicated in the treatment of a child who develops leukemia. Many organizations like the American Academy of Pediatrics explicitly discourage private cord blood banking if there is no family history of genetic disorders or familial cancers.

Hurdles of Private Banking

High costs for customers: The high cost coupled with lack of knowledge about the use of cord blood stem cells is the single largest deterrent to widespread adoption of cord blood banking. However many cord blood banks are developing innovative financing schemes to solve this problem.

Operational Issues: Private cord blood banks face some unique operational issues that are not faced by public banks. The biggest decision is when to bank a cord blood unit. Public banks have reasonably defined criteria for determining if a cord blood unit is bankable or not and units which do not meet these criteria are simply discarded or are used for research. However, for most private banks, this decision is usually taken by the client.

Legal and Ethical Issues: There are also some unique medical and legal issues facing private cord blood banks. Do the parents, the child or the cord blood bank own the cord blood unit? What are the rights of the clients in case of total loss, or loss of quality of their cord blood unit due to poor storage, considering the life-saving value of cord blood stem cells, particularly with foreseeable expansion of cord blood use in non-hematological applications? These issues need to be addressed by the cord blood banks.

Long term storage: Since cord blood units cannot be duplicated and backed up, the storage facility should have multiple redundancies built into their systems to ensure uninterrupted functioning of the facility over the long run. The other problem that clients face is the fate of their cord blood units if the company goes out of business. Many banks now offer parents the option to transfer their cord blood units to other banks in the event that the existing bank ceases operation.

However in spite of these issues, private cord blood banks are being established in many countries. Most parents who preserve their child’s cord blood see this as an investment in their child’s future. Although currently cord blood cells are therapeutically used only for blood disorders, there is potential for cord blood cells to be used for other disorders in the future. Autologous transplantation of cord blood cells may be used therapeutically in the future for diseases such as Parkinsons & osteoporosis. Since cord blood cells can only be collected at the time of birth, banking these cells at the time of delivery is the only way to ensure that these cells will be available in the future. Since public banks cannot guarantee that the child’s cord blood will be preserved for autologous use, parents who can afford cord blood banking will demand for the opportunity to bank their child’s cord blood in a private bank. As the price of banking decreases with increasing numbers of private banks and ensuing competition, more parents will be able to afford banking cord blood. The lowering costs of banking cord blood will also reduce the financial burden of banking on the family.

Therefore, although private banking is still expensive, the expanding therapeutic uses of cord blood will make them more attractive in the future and private cord blood banks will likely continue to co-exist with public cord blood banks.

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