The Cord Blood Controversy

When Tracey and Victor Dones's 4-month-old son was diagnosed with osteopetrosis, a potentially fatal disorder that affects bone formation, the panic-stricken couple was relieved to hear that a stem-cell transplant could save his life. "We'd paid to store Anthony's umbilical-cord blood in a private bank in case he ever needed it -- and I thought we were so smart for having had the foresight to do that," says Tracey.

The Doneses were shocked, however, when doctors told them that Anthony's cord blood couldn't be used because the cells contained the same genetic defect that caused his condition. "The materials provided by the bank said this was Anthony's life insurance and could save him if he needed it. They never mentioned that the cells could be diseased. We felt duped," Tracey says. The Long Island, New York, couple has since filed a lawsuit against the bank alleging false advertising and consumer fraud.

They aren't the only ones questioning the business practices of private cord-blood banks. Both the American College of Obstetricians and Gynecologists (ACOG) and the American Academy of Pediatrics (AAP) issued statements in the late 1990s opposing the use of for-profit banks -- and criticizing their marketing tactics. Instead, they recommended that parents donate cord blood to public banks, which make it available for free to anyone who needs it. Globally, other organizations have done the same. Italy and France have banned private cord-blood banking altogether.

"Raising a family is expensive enough," says Jeffrey Ecker, MD, director of obstetrical clinical research at Massachusetts General Hospital, in Boston, and a member of ACOG's ethics committee. "There's no reason for parents to take on this additional financial burden when there's little chance of a child ever using his own cord blood."

Once considered medical waste, the blood left in the umbilical cord after a baby's delivery is now known to be a rich source of stem cells similar to those in bone marrow. It's been used in transplants to treat more than 70 different diseases including leukemia, lymphoma, sickle-cell disease, and some metabolic disorders. Unlike with marrow, which is obtained through a painful medical procedure and replenished by the body, there's only one chance to collect this seemingly magical elixir: immediately after a baby's birth.

Since the first successful sibling-to-sibling cord-blood stem-cell transplant was performed in 1988 to treat a genetic disorder called Fanconi's anemia, more than 20 private banks have opened. And they seem to have the address of every expectant couple in America -- whose mailboxes bulge with brochures encouraging them to take advantage of this once-in-a-lifetime opportunity. "Cord-blood banking is like insurance to protect your family against unforeseeable events," says Stephen Grant, cofounder and senior vice president of Cord Blood Registry, a large California-based private bank. "You do it out of love and responsibility for your family. Sure, you hope you'll never have to use the blood, but if you do, it'll be there."

Not surprisingly, this emotional pitch is working -- especially because the seemingly unlimited potential of stem cells has dominated the news in recent years. From 2003 to 2004, for example, the number of couples opting to use a private bank increased by 55 percent to 271,000. The three biggest companies -- who have the majority of the approximately $250 million market -- are vying for business.

Like any insurance, cord-blood banking isn't cheap. Banks initially charge from $1,000 to $2,000 to collect and process the stem-cell units, which are stored for a family's exclusive use. When you factor in additional costs for shipping (about $150 for a medical courier), the doctor's collection fee (prices can range from $150 to $500), and annual storage fees averaging $100 per year for 18 years, parents can expect to pay up to $4,000 in expenses not covered by insurance.

But considering the average cost of a new car or top-of-the-line stroller these days, many expectant parents feel it's not an unreasonable price to pay to give their child the best chance in life. "Ultimately, my conscience wouldn't let me not do it," says Merilee Kern, of San Diego. "We could afford it, and the blood could someday save my daughter."

Certainly, there are plenty of doctors who have high hopes for stem-cell advances and advise patients to consider cord-blood banking. When private banks first started sending him informational packets, Jordan Perlow, MD, a maternal-fetal specialist in Phoenix, assumed they were just trying to profit from parents' anxieties. But after attending medical conferences and scrutinizing studies about developments in stem-cell therapies, Dr. Perlow now encourages his patients to privately bank if they can afford it because he's convinced that it might save their child's life or the life of another family member. "If private banking had been available when my children were born, I would have done it," he says.

There are no hard numbers on a child's risk of needing a stem-cell transplant: It's anywhere between one in 1,000 and one in 200,000, according to studies cited by ACOG and the AAP. But private banks' marketing materials often place the odds at one in 2,700 and note that these numbers don't factor in its potential future use for diabetes, Alzheimer's, Parkinson's disease, and spinal-cord injuries in adults. "Researchers are constantly discovering new treatments using stem cells," says Gerald Maass, executive vice president of corporate development for Cryo-Cell, a private bank in Clearwater, Florida. Another major bank's Web site claims incredible odds: "Should cord blood prove successful in treating heart disease, the lifetime probability of being diagnosed with a disease treatable by cord blood will increase from one in 100 to one in two."