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Research Questions

  1. What are the current trends and challenges to public cord blood banks as perceived by key stakeholders?
  2. What are the economic characteristics of the public cord blood market?
  3. What is needed for financial sustainability? What is the market equilibrium?
  4. What future developments might change the market?
  5. What is the government's role in sustaining the cord blood banking industry and meeting society's needs?

Hematopoietic stem cells (HSCs) — from bone marrow, peripheral blood, or umbilical cord blood — are used to treat patients with cancers such as leukemia or lymphoma, disorders of the blood and immune systems, severe aplastic anemia, sickle cell disease, and certain inherited metabolic diseases. In addition to cord blood's direct therapeutic value to patients, it is also used for basic research on blood, blood stem cells, and immune cells.

In recent years, the U.S. government (through the Health Resources and Services Administration) has endeavored to increase the overall national inventory — which currently contains over 200,000 units — as well as the number of high-quality units and the number of units from racial/ethnic minorities. Despite the important clinical and research roles of cord blood products and a clear public health need for increasing and diversifying our national inventory, little is systematically known about the economics of the industry, including what banks' costs and revenues are, cost structures and determinants of financial health, successful collection efforts for cord blood banks (CBBs), whether the market is competitive or similar to a public goods market, and the role of the government in the market.

In this report, we aim to fill these knowledge gaps by (1) describing the existing public CBB system, (2) assessing current trends and economic relationships from the perspective of key stakeholders in the public CBB system, and (3) providing recommendations to improve the economic sustainability of the public CBB system.

Key Findings

Demand Has Stagnated, Costs and Competition Have Increased

  • The national program has significantly increased the publicly available inventory, but the proportion of HSC transplants using cord blood has been declining from about 12 percent of all HSC transplants to about 8 percent from 2010 to 2015.
  • Obtaining higher–TNC count units increases costs because CBBs have to collect more units to get a useable or bankable unit. Banks lose money on the collection of low–TNC count units, however, as they are very unlikely to be used.
  • Domestic and international CBBs are competing, and the number of U.S. CBBs and their inventories continue to grow. If the number of CBBs and CBUs rises while demand remains stagnant or falls, CBBs will face financial pressure.

Relative Clinical Effectiveness Remains Unclear

  • Some interviewees said that CBUs are used only as a last resort, whereas others mentioned a preference for CBUs, particularly for certain types of patients. Thus, any comparison of patients using different HSC sources suffers from a significant selection bias.
  • The majority of the literature follows patients for only a short time period. Because cord blood transplants take longer to engraft, such a truncation will bias results toward more-favorable outcomes for other sources.
  • Higher–TNC count CBUs have been shown to offset some amount of genetic mismatching, which is important for minorities.

Cord Blood Transplantation Is Not a Panacea Treatment, But Has Significant Societal Value

  • We estimated the annual societal benefit of having a national inventory to be around $1.7 billion relative to an annual cost of maintaining the inventory at about $60–70 million.
  • CBUs are not the answer for every patient, but their availability is crucial for hundreds of patients every year who have no alternative, especially for pediatric and minority patients.
  • Access for minorities can be increased by incentivizing banks to collect more minority units or to collect larger CBUs from all donors.


National Cord Blood Inventory (NCBI) Program

  • HRSA should focus on efforts to increase the diversity of the national inventory by (1) providing funding that encourages banks to either add collection sites where more minority cord blood units (CBUs) can be collected, or increase subsidies for minority units, and (2) considering increasing the minimum total nucleated cell (TNC)–count threshold, especially for nonminority units. HRSA should also explore ways in which CBBs might specialize in the collection of different types of CBUs.
  • HRSA should consider the trade-offs between increasing the TNC-count threshold and revising the way in which subsidies are paid in conjunction with program objectives and modify the program so that CBB efforts better align with program goals. There are advantages and disadvantages to each approach, but the current system incentivizes the banking of lower–TNC count units despite these units being the least profitable for banks and the least likely to be used by patients.
  • HSRA should standardize and consistently fund NCBI contracts to the extent possible. The uncertainty both in how the contracts will be funded and in the frequency of funding results in market instability.

Public Cord Blood Banking

  • Stakeholders can work together to strengthen different aspects of the industry by making changes to payment, research funding, and knowledge sharing. We found a strong societal benefit to banking cord blood — quantified annually at about 2.5 times the cost of maintaining the system — and, as a result, we recommend continued federal support for cord blood stem cell research. The advantages for sharing knowledge in the industry include avoiding the loss of all clinical and technical knowledge specific to cord blood and cord blood transplantation.

Table of Contents

  • Chapter One


  • Chapter Two

    Overview of the U.S. Cord Blood System

  • Chapter Three


  • Chapter Four

    Trends Affecting Public Cord Blood System Sustainability

  • Chapter Five

    Trends in Public Cord Blood Banking and Shipping

  • Chapter Six

    Economics of Cord Blood

  • Chapter Seven

    Cord Blood Bank Financial Sustainability

  • Chapter Eight

    Factors Shaping the Public Cord Blood Sector's Future

  • Chapter Nine

    Government Intervention in the Public Cord Blood System

  • Chapter Ten

    Themes, Recommendations, and Conclusion

  • Appendix A

    Interview Protocols

  • Appendix B

    Economic Modeling

  • Appendix C

    Donor Race/Ethnicity Matches

This research was sponsored by the U.S. Department of Health and Human Services, Office of the Assistant Secretary of Health and conducted by RAND Health.

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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