Unethical Practices in Private Blod Banks: How Families are Misled for Profit

Families across the country invest thousands of dollars to store their newborns’ umbilical cord blood in private “blood banks” run by for-profit corporations. The ostensible purpose of storing the umbilical cord blood is to harvest stem cells to treat serious illnesses that the donor children may develop in the future. The blood banks’ marketing practices mislead unsuspecting parents to believe that the storage of cord blood will secure a healthier future for their children. However, a recent New York Times article has uncovered substantial evidence showing that such parental hopes are based on misleading information and false promises.

The Promise of Cord Blood Banking

According to the Cleveland Clinic, umbilical cord blood banking involves collecting and storing the blood from a newborn’s umbilical cord. This blood is rich in stem cells. These stem cells are valuable in treating a variety of medical conditions including certain cancers, blood disorders, and immune deficiencies. Cord blood banks collect and store these stem cells. There are two primary types of cord blood banks: public and private. Public banks store donated cord blood for use by anyone in need and for medical research, while private banks, often for a substantial fee, store cord blood for personal use by the donor's family.

The Reality: Rarely Useful and Often Contaminated

The most significant issue presented by private cord blood banks is that they charge parents exorbitant fees to store their newborns’ umbilical cord blood based on deceptive claims about the likelihood that the stored blood is medically useful.

Advances in medicine have made it easier to transplant adult stem cells. As a result, doctors rarely use cord blood for stem cell transplants anymore.

According to The New York Times, "Around 2008, researchers discovered that, with the right drugs to suppress the immune system, patients could safely receive stem cells from the blood or bone marrow of relatives who were only partial matches. Many doctors found those cells preferable to umbilical stem cells."

The New York Times investigation revealed that the few parents who try to withdraw their cord blood samples for use often find that the samples are unusable because they have been contaminated with microbes or the sample volume is too low.

The private blood banks did not inform families that their cord blood samples were unusable and continued to charge them hundreds of dollars in annual storage fees for years after the banks discovered the problem.

The Misleading Marketing Tactics

The success of cord blood banking companies in marketing their services to pregnant women often relies on the companies’ relationships with doctors and healthcare providers. Some companies offer kickbacks and incentives to healthcare providers to recommend their services.

Many parents are persuaded by marketing that emphasizes potential medical breakthroughs and emotional appeals to protect their children's future health. However, these companies often downplay or omit critical information about the limited use and risks associated with stored cord blood.

The marketing seems to have worked. According to The New York Times investigation: "More than two million umbilical cord samples sit in a handful of suburban warehouses across the country."

These cord blood companies charge families several thousands of dollars upfront and hundreds more every year after.

Legal and Ethical Implications: What are Your Rights?

The practices of cord blood banks raise significant legal and ethical questions. Expectant parents are making decisions about banking umbilical cord blood based on incomplete, deceptive or misleading information. The cord blood banking companies have persuaded nearly one million parents to spend thousands of dollars on a service that is unlikely to provide the promised benefits of providing viable stems cells for medical treatment should a child develop a serious illness.

While cord blood banking was based on sound science more than two decades ago when it was believed that it could be used to harvest viable stems cells, the practice has been rendered obsolete by advances in medical science that enable the use of harvested stem cells from relatives and marred by the private cord blood banks’ deceptive marketing tactics and ethically questionable claims. The private blood banks’ misleading claims about the usefulness of stored umbilical cord blood, their concealment of the microbial contamination of samples and other quality control issues, and their financial incentives to doctors to recommend cord blood storage to their patients has created the situation where profit takes precedence over patient welfare. But patients who have been deceived by the private cord blood banks into paying thousands of dollars for the storage of useless umbilical cord blood are not without a remedy for these deceptive medical practices. Among the available remedies are lawsuits to recover damages for civil fraud, violations of state deceptive business practices laws, and violations of state consumer fraud laws.

The Jacob Fuchsberg Law Firm specializes in holding companies accountable for unethical practices and can help you seek compensation for any harm caused. By standing up against these misleading practices, you can contribute to a more ethical and transparent healthcare system.

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