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I’ve covered the shady world of birth tissue “stem cell” clinics and tissue suppliers many times. However, a new guide out for expectant mothers covers the procurement of these tissues. As I dug deeper into how that works, I found non-profits acting like for-profits. Let’s dig in.

The Birth Tissue Game

You’re a new mother about to deliver in a planned c-section and are admitted to the hospital. Someone shoves some papers in your direction to sign. You’re miserable, so the last thing on your mind is reading the fine print. So you sign them. Thus begins the process whereby your birth tissue waste including the placenta, umbilical cord, amniotic membrane, and amniotic fluid will eventually fetch six figures. Some of these tissues will also be used by predator clinics to defraud hundreds of customers. Let’s dig in.

Where it All Begins: The BTPO

Frances Verter PhD is a birth tissue industry pro on the good side of the ledger. She has worked with companies who are trying their hardest to follow all of the applicable laws and regulations and who generally use these tissues to supply research labs. However, as an avid reader of this blog, she has also seen how her industry has developed serious issues. Hence, she wrote this piece on placental donation. From her piece:

“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.”

What the heck is a BTPO? This is a Birth Tissue Procurement Organization. These are the organizations that source the tissue.

The Good Guys

As Fran brings up in her article, there are BTPOs that are good organizations that mostly sell their tissues to research organizations and pharma companies for testing and FDA approved drug products. However, this industry remains largely unregulated. Hence, there is a fine line between small non-profit connecting researchers to tissue and a non-profit that looks much more like it’s making a profit. For example, in the latter case, many companies sell quickie FDA 361 registered tissues that are really classified as 351 drugs by the FDA and require clinical trials and approval before sale.

“Sell” is a Dangerous Word

From Fran’s Article:

“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 tissues.”

So we have a largely non-profit industry that can’t use the term “sell” because it’s really collecting stuff that legally can’t be bought and sold. However, in performing my research through the years for various blogs, I have found numerous BTPO’s that process tissue and operate much more like a for-profit business than non-profits. Let’s review a big one today. This is a company called MTF (Musculoskeletal Transplant Foundation).

MTF

MTF is a company located in New Jersey that both procures, processes, and sells birth tissue. It claims to be the world’s largest tissue bank. They also sell a wide variety of human-derived orthopedic implants.

So how big is this behemoth? Their 2018 revenues on their publically available tax returns were 422 million. Let’s dig in here on MTF as this is a good example of how, IMHO, the shady side of “Do you want to buy a placenta? works.

Tax Returns

Based on 2018 returns, we’re dealing with a half-billion-dollar company here. Somehow I doubt that mothers who see this website…

…understand that they are donating their placenta and birth tissues to a company with 422 million in 2018 revenues and 254 million in assets. They likely would be shocked that the President/CEO of this company in 2018 made 859K! To put that salary in perspective, right now the mean salary for a non-profit CEO is 172K (50th percentile). The 90th percentile is 267K.

The vice-president and treasurer clocked in at a cool 620K and 588K. In addition, three people on the executive team made more than 400K, and six made more than 300K. You may be wondering like me if this company looks anything like any local non-profit you know.

Marketing Expenses

A really interesting part of the MTF Biologics tax return is the 58 million paid to Blackstone Medical, the 41M to Depuy Synthes, the 30 M to Conmed, 7M to Mentor, and the 6 M to the Donor Network of Arizona. These were all listed as payments made for “Tissue Promotion”. Meaning, we have a not-for-profit company with almost a half-billion in revenue paying about 142 million to various companies to market its products. Huh? IMHO, again, that looks much more like a for-profit company.

Grants

The MTF tax returns list numerous grants to the following organizations:

• UCLA Orthopedic Surgery-50K
• Clemson-50K
• Cedars-Sinai-75K
• Rhode Island Hospital-50K
• University of Missouri-50K
• HSS-50K
• Orthopedic Research and Education-140K
• Mass. General-100K
• Case Western-100K
• Johns Hopkins-100K
• U of Pittsburgh-25K
• U of Texas-50K
• UC-100K

In fact, I got tired of typing after that, but suffice it to say that another dozen or so organizations are listed on the 2018 MTF tax return getting about another half million. It should be noted that on MTF’s board of directors and trustees are multiple physicians and scientists from organizations that received donations.

Why is this important? Investigative journalists have reported on how Pharma pours millions into medical schools to influence policies. In addition, former New England Journal of Medicine editor in chief and Harvard senior lecturer Marcia Angell relates how drug companies and academic medicine are connected in her lecture: Drug Companies and Medicine: What Money Can Buy.

Payments to Doctors

ProPublica has a nice series about how drug companies grease doctors with payments and gifts to get more business. Based on the ProPublica Dollars for Docs website, MTF paid 1.29 million in 1,376 payments to 456 physicians in 2018. Huh? Again, IMHO, this looks more like a for-profit drug company than a not-for-profit tissue company.

Press Releases

MTF is interesting in that, like publically traded companies, it puts out periodic press releases. Here’s one from 2017 where it “rebranded” itself as “MTF Biologics”:

“The organization’s new name was intentionally chosen. “MTF” is a nod to its history and rich legacy of leadership in tissue science. “Biologics” underscores the tissues and products it develops and will continue to create, refine and advance.

… to develop new biologics that improve patient healing and outcomes.”

Again, is this a not-for-profit tissue bank or a for-profit drug company? Using phrases like “Biologics”, “healing”, and “outcomes” in my opinion push the proverbial regulatory envelope as this is a company that sells 361 registered tissue products and has no FDA approval for its “biologic products”. The words above, when applied to allogeneic tissue, are all associated with 351 drugs.

For-Profit Players

While we have a huge company like MTF that’s a not-for-profit that to me sure looks like every for-profit medical company I know, there are also BTPO’s which are for-profit. ProPublica did an expose on this industry in 2019. What they exposed was a web of for-profit companies and tissue banks that collect, process, and sell these tissues to distributors who then convince doctors that they are “stem cell” treatments. If you read this blog, you know that’s not true.

More Transparency

Mothers need to know that their donated tissues can be sold and can fetch big bucks in a private marketplace. In my opinion, based on the data I dug up, even not-for-profit companies like MTF operate just like for-profit pharma players. They have huge revenues, huge marketing budgets, many products, highly compensated executives, donate money to universities and other organizations, and routinely pay hundreds of doctors a year.

The upshot? BTPOs are where the birth tissue game begins. While some are just small companies supplying researchers, IMHO some are behemoths that act much more like for-profit ventures. In particular, I doubt the average mother knows that her birth tissues are getting donated so that someone can pay huge salaries to big-time execs.

Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications. View Profile