Monday, July 19, 2010

Commercial Markets Created by Abortion

This article may be long, but it is absolutely worth reading.

Commercial Markets Created by Abortion

Abortion is commonly viewed from an ideological perspective. Little is publicly known about the abortion industry’s role as a supplier of aborted fetuses to industries that exploit them for economic gain. In fact, abortion provides the foundation for a fetal distribution chain where profits grow with each link. Can human body parts be bought and sold? Technically, they cannot. But money can change hands to reimburse for “reasonable” expenses associated with securing human tissue. The question is at what point trafficking in fetal parts violates the law.
In 2000, Congress became concerned about this distinction. The House of Representatives began hearings on the marketing of body parts obtained from fetuses killed in elective abortions. The information at the heart of the hearings was based on a thirty-one-month undercover investigation by Life Dynamics, Inc., a nonprofit pro-life organization in Texas founded by Mark Crutcher in 1992. Information was provided by employees of Comprehensive Health for Women, a Kansas affiliate of Planned Parenthood.1

Sellers and Buyers

The undercover Life Dynamics report describes a system devised within the abortion industry to financially profit from the growing market in fetal tissues, parts, and organs. The system circumvents legal restrictions on buying and selling human bodies and body parts. Three participants are commonly involved—the seller, the buyer, and the wholesaler. The wholesaler (or middleman) enters a financial agreement with an abortion clinic (the seller) to pay a monthly “site-fee” to the clinic, comparable to rent. In exchange, the wholesaler is allowed to position a retrieval agent inside the clinic, where he is given access to the dead fetuses and a workspace to harvest their parts. In some cases, the retrieval agent may be a clinic employee who was trained by the wholesaler. The buyer is usually a researcher working for a medical school, pharmaceutical company, biotechnology company, or government agency. When orders are received by the wholesaler from the buyer, they are faxed to the retrieval agent at the clinic, who harvests the requested parts and ships them to the buyer via common carrier.2
On the surface, this system does not appear to violate the legal prohibitions against trafficking in human body parts since, technically speaking, no one is buying or selling anything. The loophole is that site fees and retrieval reimbursement amounts are unregulated. The law requires that such payments be reasonable and reflect the actual cost of securing the parts, but there are no state or federal laws which establish guidelines or set limits regarding these payments. Additionally, no governmental or law enforcement agency is charged with overseeing the system. This means that the wholesaler is free to set site fees and retrieval fees at any amount.3
The fundamental legal question is whether site fees and retrieval reimbursements are used as proxy payments to circumvent state and federal laws making it illegal to buy or sell human body parts. For the transfers to be legal, the fetal parts and tissue must be donated, not sold. Only reasonable costs associated with the retrieval process may change hands.
There are three entities in a position to profit from the fetal parts industry: (1) the abortion provider, who supplies fetuses from abortions performed; (2) the wholesaler, who fills researchers’ orders by procuring the fetal parts, preserving them, and preparing them for shipment, thus facilitating their transfer; and (3) the researcher, who is the end user of the fetal parts. Technically, the abortion provider is permitted to receive only reasonable reimbursement for retrieval costs incurred. This amount is easily augmented through negotiation of favorable contract terms with the wholesaler, along with the application of some accounting ingenuity.
Wholesalers’ profits can be substantial. There is a material difference between the costs of harvesting fetal parts—consisting of wholesalers’ financial obligations to the abortion providers plus administrative overhead expenses—and the amount they can realize from researchers. The most significant profit potential, however, rests with the end users, the ­researchers, who work in educational and governmental institutions and in the product-development departments of pharmaceutical, biotechnology, and cosmetics companies. The prospects for profit here are virtually unlimited.

Adding Up the Numbers

The Life Dynamics report illustrates these arrangements with concrete numbers. During the undercover investigation, it was determined that the Comprehensive Health for Women clinic received monthly site fees or rent supplements of $600 per month. In addition, they were paid $10 an hour for each hour the retrieval agent used work space at the clinic. The abortion clinic received these payments without having to incur any additional costs, “just because [the wholesaler’s] technician walked in the door.” 4 Calculations based on this information show that during the period under review, the clinic would have netted additional income of approximately $1,200 a month from this arrangement.
Traveling up the fetal distribution chain, profits of the company acting as wholesaler were calculated to be much higher. The wholesaler paid the clinic an average of $1,200 per month. It also incurred costs for salaries of its retrieval agents, administrative overhead, amortization of equipment (instruments, hood/dissection table, etc.), and disposable supplies. These costs were generously estimated to be approximately $5,500 per month. Total costs, including the payments of $1,200 to the clinic, were thus about $6,700 per month.5
To calculate the wholesaler’s monthly net profit, gross revenue received from the researchers was first computed. Payments for specific fetal parts and harvested tissues were based on a price list called “Fee for Services Schedule A” published by wholesaler Anatomical Gifts Foundation Inc. (AGF).6 The fee schedule purports to estimate the reimbursable cost allocable to retrieval of a particular body part, organ, or tissue. If the laws against trafficking were being observed, the fees for providing the fetal parts ordered should essentially correspond to the wholesaler’s costs of $6,700 computed above.7
According to logs detailing tissue shipments by AGF, 155 “specimens” were shipped in a representative month. These included 47 livers, 11 liver fragments, 7 brains,
21 eyes, 8 thymuses, 23 legs, 14 pancreases, 14 lungs, 6 arms, 1 kidney/adrenal gland, and 3 intact specimens for purposes of securing the blood.
8 When priced out according to the fee-for-service schedule, the shipments of parts for the month would have generated gross revenues of between $18,700 and $24,700, depending on whether the parts were shipped fresh or frozen.
Based on these transactions, the calculated monthly profit to the wholesaler was between $12,000 and $18,000 (gross revenues of $18,700 to $24,700 less monthly costs of $6,700).
The profits being earned by these middlemen are so significant that it now appears that some researchers are cutting out the middlemen to deal directly with abortion clinics. In these cases, the site-fee and reimbursement system is replaced with a bartering system. One bartering example involved a medical school that traded pathology reports for fetal cadavers or parts. “However, if an abortion clinic is trading baby parts for services which it would otherwise have to pay for, and the school is trading services for baby parts it would normally have to buy, both are still in violation of those statutes which prohibit trafficking in human body parts.” 10 Continue Reading.

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