Why Did a Major University Sell Amniotic Fluid to a Fraudster?

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This week’s blog on the Missouri woman who is being charged for fraud by selling Amniotic fluid brought up an interesting question. She bought this fluid from the University of Utah. Huh? Let’s dig in.

The Missouri Case

The feds this week brought criminal charges through a grand jury against a Missouri woman who was selling Amniotic fluid as a “stem cell” treatment. The complaint says that this woman bought the fluid from the University of Utah. So let’s explore that purchase.

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NOTA

Can you buy or sell an organ, body part, or human tissue? The short answer seems to be no, but you can pay somebody for their costs in obtaining it. Let’s dive into this topic a bit.

The National Organ Transplant Act was passed in the 1980s and it states, “it shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” In 1988, Congress also added that any subpart of an organ is covered.

Does that law cover the Amniotic fluid our Missouri woman bought? It’s clear from my reading as a doctor that Amniotic fluid is covered under NOTA (2,3). Hence, the university would only be able to recoup its costs on harvesting and processing the fluid.

NOTA does allow for the university to charge for its costs in procuring, processing, and distributing the tissue. The law states, “valuable consideration” does not include the reasonable payments associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of a human organ”. So did this woman buy this fluid “at cost”?  The answer to that question is a VERY big deal.

Gold Plated Rooms or Instruments?

Based on the criminal complaint, the University of Utah charged the Missouri woman $244.00 for 1.0 ml and $438.00 for 2.0 ml of Amniotic fluid. If we take the lower price of $219 a ml and consider that the average volume of amniotic fluid at birth (50th percentile) would be 500ml, that’s $109,500 per delivery (4). So how much would it cost to process that fluid?

I have a cGMP class cleanroom in my practice so I have direct experience in how much it would cost us to do this in my lab (I am purposefully over-estimating these costs):

  • Procurement – Going into a hospital OR to perform a sterile collection of the amniotic fluid from a caesarian section procedure – $500
  • Donor Communicable Disease Screening – $500
  • Filtering and aliquoting the fluid in a cGMP class clean-room with a 0.22-micron filter – $500
  • Amortizing a several hundred thousand dollar clean-room for this job – $1,000
  • Supervisor time to establish and maintain QA and sterility systems – $500
  • Bottling the fluid into 1-2 ml sterile containers – $500
  • Adding labels to same – $500
  • Paying some fat cat executive to oversee all of this – $1,000

So how much could the processing have cost? I’ll estimate it at a max of $5,000. That means we still have to make up $104,500! Meaning, by law, under penalty of 5-years in federal prison per offense, our processing can’t cost more than we charge because we can’t show a profit.

In reaching out to experts in this industry, I was told that it’s possible that the University didn’t procure the fluid and that this may have been done by another company. So let’s add another 5K to the total for a ridiculously expensive procurement fee. That still leaves $99,500. In fact, IMHO, either the university is using gold plated instruments in gold plated clean-rooms, or IMHO there is just no way to justify the cost of $219 per ml of amniotic fluid.

The University of Utah is NOT Alone in This

The ENTIRE birth tissue industry is playing this game. The BTPOs (Birth Tissue Procurement Organizations) legally can’t charge more than their costs and are supposed to be non-profits. Some try to get around this by never using the word “sell”. However, I’m not sure that really fits into the spirit of NOTA.

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The BIG Elephant in the Missouri Case

If we put aside the ridiculous cost of the Amniotic fluid, there’s an even bigger problem here. In fact, IMHO it’s like an elephant lurking in the corner of the criminal complaint. Let’s explore.

In the Missouri case, we have a woman who never completed her medical training who becomes a distributor of Amniotic fluid that she buys at the University of Utah. Which begs the question, “What the heck is a publically-funded university doing selling Amniotic fluid for what appears to be a HUGE mark-up to a company called ” Regenerative Biologics”? Meaning what part of that company name wouldn’t tip you off as a seller that what you’re selling is NOT for research purposes? In addition, in the complaint, that woman is emailing the university likely from a physician trade show in Vegas, and asking them how best to competitively market this product to physicians. Again, IMHO, at some point, the university has to know that it’s selling fluid that’s being resold to physicians as a regenerative medicine product.

I called the Unversity of Utah Regenerative Medicine Department to get clarifications and left two messages. At the time of this writing, I’ve had no response.

The upshot? Why is a public university selling Amniotic fluid to a private party that is reselling that to physicians as a “stem cell” product? Is the university profiting from this sale? If not, I would love to check out those gold plated clean rooms!

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References:

(1)  42 U.S.C. 274e(c)(1)

(2)  Organ Transplant Amendments of 1988, Pub. L. 100-607, section 407, 102 Stat. 3048, 3116 (Nov 4, 1988)

(3) Parents Guide to Cord Blood. What is your Placenta Worth? Accessed 2/3/21 https://parentsguidecordblood.org/en/news/what-is-your-placenta-worth#:~:text=NOTA%20made%20it%20illegal%20to,carries%20stiff%20punishment%20for%20violation.

(4) The Global Library of Women’s Medicine. Amniotic Fluid: Physiology and Assessment. Accessed 2/3/21 https://www.glowm.com/section_view/heading/Amniotic%20Fluid:%20Physiology%20and%20Assessment/item/208

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