A complete ban on the donation of eggs as a way of payment should be enforced

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A complete ban on the donation of eggs as a
way of payment should be enforced
Inhoudsopgave
Introduction
3
The current situation of the egg-donation industy
3
Supply, demand and current regulations
5
The consequences of different regulations
7
Conclusion
7
References
8
2
Introduction
Egg-donation is a concept that was founded in the second half of the 20th
century, approximately 40 years ago. The first child that was born from an eggdonation was reported in 1983 in Australia and not long after, numerous pregnancies
by egg-donation followed. The applied technology is called IVF. This is a medical
procedure where the fertilization of the egg by sperm takes places outside the body,
for example in a lab (https://en.oxforddictionaries.com/definition/ivf). Many people
benefited from this technology. For example, the women who were infer-tile and the
couples who could not have a child, like gay couples and single men. They did not
have the opportunity to have a baby other than adopting one. Besides the bene-fits,
this technology requires egg-donations. Payment in return for egg-donation as a way
of payment has caused an enormous debate over the last years. The question whether
to apply a partial or complete ban on the compensation plan for egg-donation as a way
of payment or not has been asked numerous times.
This paper discusses the advantages, disadvantages and consequences of a
partial or complete ban on the donation of eggs as a way of payment and whether
restrictions need to be applied to regulate the market.
Firstly, this paper describes the current situation of the market for eggdonation in the United States. Secondly, this paper explains the concept of supply and
demand applied on the market of egg-donation and the current regulations in that
market. Finally, this paper clarifies the advantages and disadvantages of a
complete/partial ban on egg-donation for payment.
The current situation of the egg-donation industy
Since the first pregnancy as a result of the IVF treatment in 1983, the number
of babies born where the egg was donated increased exponentially the next decades.
In 2011, approximately 18,000 pregnancies were reported with the help of ART,
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Assisted Reproductive Technology, in the United States involving the IVF treatment.
This is only 13,9% of the total ART treatments performed in 2011 (US Department of
Health and Human Services, 2013). This is an increase of 73% in comparison with
1995, where only 8% of all the ART treatments involved the use of egg-donation
(Klein, JU. Sauer, MV., 2010). This new way of pregnancy was formed by new
discoveries and research in the biological and medical sector. However, the increase
of IVF treatments has resulted in an increase in demand for eggs immensely which
led to an increase in price due to the demand.
The market that is closest to a complete free market of trade in eggs is the
market of the United States. In an article published in the American Sociological
Review, Rene Almeling, associate professor at Yale University, explained that
OvaCorp, one of the leading companies in the US market for egg-donation,
compensates first-time donors around $4.000. For each additional donation, the fee
with grow exponentially and when a donation is followed by a pregnancy, OvaCorp
will increase this compensation even more (Almeling, 2007). Not only will the price
per egg increase when more successful donations have been made but the fee will also
increase when a donor is of a ‘higher’ ethnic or academic background. These donors
receive a higher fee because a highly educated donor is extremely difficult to find and
thus the fee is higher. The agencies try to bind the donors because maintaining a good
relationship between the donor and agency is hard but if done correctly there are
major benefits as the Donor manager of OvaCorp explains, “We have the largest
donor database. The reason is we treat them like royalty. They are women, not
genetics to us. A lot of times a couple doesn’t meet them, so we want them to feel our
warmth, feel the reality that we’re so grateful for what they’re doing for us, as well as
because they’re making our couple happy.” (Almeling, 2007). Furthermore, the
agencies try to make the comparison with a normal job in order to maintain their
donors. As the director of Creative beginnings describes, “You get paid really well,
and so you have to do all the things you do for a normal job.” (Almeling, 2007). Her
assistant elaborates on that. She explains, “…it’s $4,000 for six weeks of work, and
it’s maybe a couple hours a day, if that. And to know that you’re doing something
positive and amazing in somebody’s life and then getting compensated for it,…”
(Almeling, 2007).
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Supply, demand and current regulations
The market for egg-donation is enormous throughout the world. The market
value of the egg industry in the United States alone is approximately 75 million
dollars. Similar to all markets, the theory of supply and demand is also applicable to
the egg donation market. Eggs required for donation are requested globally, thus the
demand for eggs is immense. However, the supply is not sufficient for the demand.
Therefore, according to the law of Demand and Supply the price will increase because
of the shortage of supply (Acemoglu, Laibson, List, 2015). Figure 1 explains the
current situation in an unrestricted market. The demand and supply curve intersect in
the ‘Equilibrium price’, the average market price.
As mentioned before, the egg market is divers. Each egg donated is unique and
has its own characteristics, so every transaction is unique. The price of, for example,
an egg from a highly educated, Asian or another minority group female is
significantly higher than one from an average white woman. This is because the eggs
of a highly educated person are extremely rare and hard to find. Thus, its price will
increase. Because this market is so unique, it is extremely non-transparent.
According to the CDC, the Centre for Disease control and prevention,
approximately 15% of the women between the age of fifteen and forty-four are
infertile and therefore cannot reproduce or can get pregnant (CDC, 2015). The wish of
these people to have children is usually gigantic. Consequently, they tend to use all
their capabilities to have a child even though the price for some eggs is high because
of the limited supply for the bigger demand. These factors contribute to an exclusion
of some customers for this market. They might not have the adequate financial
recourses or their wishes are too specific.
All these factors serve as a basis for the egg-donation market where supply
and demand are hold equal and where a market equilibrium is established. If one of
these factors would change for any reason, the market will react to that. If the supply
decreases, this could be the result of a price ceiling assigned by the government to
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limit the increase of the price, the price will, according to the Law of supply and
demand, increase since the good becomes more scarce. This price increase will affect
the demand for the eggs as well. This will cause a decrease in demand because less
people can afford the increase in price.
On the other hand, an increase in supply would result in an increased
satisfaction of the demand. Thus, the price decreases and more people with different
levels of income will be able to afford the price of an egg. Nonetheless, in the long
run, this decrease of pricing will have consequents for the fee the donors receive. The
fee will reduce which will eventually lead to a decrease in supply.
Undoubtedly, the results for a disruption on the demand side would be
comparable. An increase in demand would influence the satisfaction of the supply.
This would result in a price that will slightly increase or stay the same. The contrary
will happen if the demand decreases. A decease in demand means that the price will
decrease. The market for the ‘high-end’ donors is not similar. Since these types of
eggs are luxurious goods, the demand will not react as heavily on a change of price.
This is due to the fact that the people with a higher income will usually be able to
afford this increase in price if their desire for this type of offspring is high.
The market would be disrupted if the government would plan to implement a
ban or partial ban on the sale of eggs for donation. There are multiple ways to
implement a ban or partial ban. The first would be to implement a price ceiling. This
means that the government enforces a maximum price for an egg sold. This would
mean that the supply of eggs would decrease immensely. For example, the
equilibrium price in a perfectly equilibrated market is 30,000$. The government
would imply a price ceiling of 20,000$, this would result in a decrease of supply and
there will be an excess in demand because there will be less donors. This results in
non-optimal functioning of the market where the loss for the consumers and
producers is called the Dead Weight Loss. This is shown in the picture at the end of
the paper.
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The consequences of different regulations
As previously mentioned, the market for egg-donation differs immensely, so
do the regulations in different markets. During the research on the human egg trade in
different countries multiple views came up. In America, the market is completely
unregulated and the demand with the corresponding equilibrium price are thus
determined by the market. On the other hand, in Germany, the donation of eggs is
prohibited since the "Embryo Protection Law" passed in 1990 (Schaefer, 2017). The
Federal Association of German Centers for Reproductive Medicine was of the opinion
“…that both the genetic mother and the woman bearing the baby were presumed to be
responsible for the child's existence…” (Schaefer, 2017), therefore a ban was
enforced. The other members of the European Union have other milder regulations.
The majority of the countries use a policy that donors receive a compensation only for
the loss of wages and their travel expenses. The egg itself ought to be donated and no
fee should be received (European Communities, 2006).
These different regulations all hold different advantages and disadvantages.
First, countries who strive for a completely free market experience an equilibrated
market where supply meets demand at a certain price. Nonetheless, because of the
free market, the prices are extremely high. Second, countries where the market is
partly regulated have a considerable satisfaction of supply and demand. However, the
governments in this type of legislation try to maintain a lower price to satisfy more
demand, this price ceiling will lead to a loss of supply. Third, the complete ban on the
donation of eggs for ART treatments will result in customers performing the
treatment in foreign countries where ART treatments are allowed.
Conclusion
The economical discussion on egg-donation as a way of payment is
complicated. Since the first pregnancy in the second half of the previous century the
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market has grown exponentially and the question on how to regulate the market has
been asked numerous times. The implication of a complete ban would result in
citizens finding a clinic in a foreign country where the procedure is performed. This
would increase the price and demand in foreign nations, whereas the supply does not
increase. Enforcing a partial ban would allow the government or a NGO to regulate
the market and ensure the safety of the donors and steer the price of the market. The
drawback of a partial ban is that with a price ceiling, less women are willing to donate
an egg because of the decreasing compensation fee. The final option is a completely
free market where the price is determined by the law of supply and demand. This, in
combination with small restrictions or regulation by a government or NGO would be
most beneficial for the market.
References
Acemoglu, D., Laibson, D., List, J., (2015) Microeconomics (1st edition), Essex,
Pearson Education
Almeling, R, (2007), Selling Genes, Selling Gender: Egg Agencies, Sperm Banks,
and the Medical Market in Genetic Material, American Sociological Review,
University of California, Vol. 72, 319-340.
Centers for Disease Control and Prevention, American Society for Reproductive
Medicine, Society for Assisted Reproductive Technology. 2011 Assisted
Reproductive Technology National Summary Report. Atlanta, GA: US
Department of Health and Human Services; 2013. Available from:
http://nccd.cdc.gov/DRH_ART/Apps/NationalSummaryReport.aspx.
Centers for Disease Control and Prevention, (2016)
https://www.cdc.gov/nchs/fastats/infertility.htm
Downie, J., Baylis, F. (2013), Transnational Trade in Human Eggs: Law, Policy, and
(In)Action in Canada, The Journal of Law, Medicine & Ethics
Vol 41, Issue 1, pp. 224 - 239
European committee, (2006). Report on the Regulation of Reproductive Cell
Donation in the European Union
https://ec.europa.eu/health/ph_threats/human_substance/documents/tissues_fre
p_en.pdf
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Klein JU, Sauer MV. (2010), Ethics in egg donation: past, present, and future.
Semin Reprod Med.;28(4):322–328
Spar, D., (2007), The Egg Trade — Making Sense of the Market for Human Oocytes,
The new England journal of medicine
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