Markets, Subsidies, Regulation, and Trust: Building Ethical Understandings into the Market for Fertility Services

Author:June Carbone; Paige Gottheim
Position:Professor of Law, Santa Clara University;Professor James Childress at the University of Virginia

I. Introduction II. The Market For Fertility Services III. The Intersections Of Markets And Ethics A. Jurisdiction Shopping: Prohibition and the Creation of Black MarketB. Jurisdiction Shopping: The Race to the Bottom 1. Jurisdiction Shopping: Corporate Location and Gamete Supply 2. Jurisdiction Shopping: Individual Consumers and International Demand 3. Classic Jurisdiction Shopping: Competition... (see full summary)


    June Carbone, Professor of Law, Santa Clara University. I would like to thank Alexander Weddle for his assistance with this research.

Paige Gottheim, I would like to thank the Center for Undergraduate Excellence and Professor James Childress at the University of Virginia, as well as Professor Anita Stuhmcke of the University of Technology of Sydney, for their support of this research.

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I Introduction

Our research began with an unusual advertisement reported by the British Broadcasting Corporation (BBC). The online headline read Sperm Donors Rush for Australia Holiday Offer.1 The article reported that the Reproductive Medicine Centre in Albury, Australia, was offering Canadian males a two week, all expenses-paid trip to Australia in exchange for a bi- daily donation of sperm.2 The article suggested that "Australian donors had been put off by an imminent change of law that will entitle all children to find out the identity of their parents when they are older."3 We immediately formed a hypothesis. The new Australian law would prove misguided. The effort to build a new ethical principle into Australian fertility services would cause shortages that would either drive artificial insemination underground into more informal practices, or spur fertility tourism abroad.4 Sweden illustrated this supposition after it adopted a similar measure with the result that the majority of children born through artificial insemination by donor Page 510 among Swedish women used Danish sperm.5

It turns out that the understanding we formed on the basis of the BBC article was wrong in all respects but one.6 First, we assumed that the sperm shortages to which the article referred were caused by the law mandating disclosure of sperm donor identity. In fact, sperm shortages preceded the new requirements, and were caused to a much greater degree by the fact that the Australians ban payment for sperm. Second, we assumed that the "change of law" in the story was the result of either national or state legislation about to take effect. In fact, it was the product of ethics guidelines adopted in the face of growing sentiment in support of mandatory disclosure. Finally, we expected the new law to fail; that is, we expected that the net effect would be to encourage practices designed to circumvent the requirements of the new law, such as what occurred in Sweden on a wholesale basis. It is on this last point that our research becomes most complex.

The Australian efforts to mandate disclosure of sperm donor identity when the child comes of age represent an attempt to build a new ethical principle into an existing system of fertility services. Those services were already hard pressed to supply sufficient sperm in part because of the law banning payment for gametes.7 The unfolding story of Canadian recruitment involves an effort to reconcile competing ethical principles (disclosure of donor identity and the ban on payment) without driving participants underground or abroad. We believe that this case study offers an opportunity to examine how normative understandings can be constructed within the context of market processes.8

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The regulation of fertility services involves the creation of norms about a new and rapidly growing technology.9 While artificial insemination itself is hardly new,10 the creation of a global industry supplying fertility services is. This new industry involves decentralized, easily moveable services catering to a growing global demand.11 While the birth of children has historically attracted intense efforts to forge and enforce moral understandings based on the intersection of sex, marriage, and procreation,12 the use of medical services to create children from multiple donors, who may or may not be connected to each other, is a different matter.13 The process is new, untested, rapidly changing, and hard to control.14

This Article proposes that, as with the principle of sperm donor identity disclosure, ethical understandings in the fertility context, to the extent they can be successfully forged at all, must occur within the interstices of market mechanisms. Accordingly, this Article identifies four axes to examine in determining the efficacy of efforts to instill new ethical understandings. The first axis involves the relationship between above ground and underground markets. If regulations are too onerous, too easy to circumvent, or too at odds with accepted practices, they may spur underground markets or fertility Page 512 tourism that simply bypasses them, as in the case of the Swedes.

The second axis is comparative regulation. Standard accounts of corporate governance describe a "race to the bottom" or competition in laxity by which jurisdictions compete to attract new industries by providing a favorable regulatory climate. With easily mobile fertility services, providers might seek to specialize in accordance with the background law of the jurisdiction in which they are located, as the Danes become known for their willingness to supply a worldwide trade in sperm, or California becomes identified with surrogacy services.

The third axis is subsidization. Greater financial support of fertility services might overcome disadvantageous regulations. The background condition for fertility services in Europe and Australia is the generous state subsidization of medical care. If the state health care system offers financial advantages over those services available abroad, the state may be in a better position to lock in its ethical preferences.

Finally we consider the factor of trust. With disclosure of sperm donor identity, for example, the issue is not just the provision of information, but also the consequences. Can a known donor exercise parental rights? Could he be held liable for child support? Security about the arrangements is likely to influence the construction of markets.

These factors could be described largely in terms of charts showing changes in supply and demand as these factors change. This Article, however, focuses on charting more than the supply and demand for sperm. Instead, this Article considers the ability to generate acceptance of new ethical principles. The intersection of markets and ethics involves something more than simply raising or lowering the effective price. In addition, while the imposition of ethical standards is often described in terms of the success or failure of government fiat, the inculcation of such principles often occurs in private places. For-profit clinics that cater to their customers¥ values or stake out value-driven practices may also influence the creation of widely shared norms.

Accordingly, this Article begins with a description of the market for fertility services and its impact on the Australian clinic mentioned at the beginning of the paper. The Article then examines the four axes identified for the creation of markets.15 It considers Rainbow Health Services as an alternative approach and radically different model for the creation of shared understandings.16 Finally, the Article will end with consideration of the implications for statutory efforts in the United States.

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II The Market For Fertility Services

The desire to procreate generates a strong demand for fertility services that has increased in recent years.17 People are choosing to have children later in life, which often complicates reproduction, and forces a reliance on assisted reproductive technologies.18 Researchers have focused more attention on male infertility, an issue that historically received less attention.19 In addition, with the relaxation of the traditional restraints on unconventional parents, gay and lesbian couples and single parents are also seeking assistance in creating families on their own terms.20 New technologies are expanding the possibilities available to consumers while challenging governments to regulate such technologies to ensure an ethical framework for their functioning.21 The market for fertility services now clearly extends beyond nation-state boundaries, compromising the ability of governments to effectively regulate provisions of fertility treatments.22

A major ethical issue in the provision of fertility services has been the terms for the acquisition of gametes. The simplest form of assisted reproduction is artificial insemination, that is, the insertion of sperm into a woman through means other than sexual intercourse. Artificial insemination is neither new,23 nor necessarily technologically complicated. The "turkey baster" can allow women who have secured a sperm donor to conceive Page 514 children without the assistance of a physician.24 The more controversial issue is the acquisition of sperm. Artificial insemination first won acceptance as a means to allow women who could not otherwise conceive naturally to become pregnant with their husbands¥ sperm.25 Artificial insemination with donor sperm, however, quickly became an alternative for couples where the husband¥s inability to produce viable sperm was the cause of infertility.26

While women seeking artificial insemination could arrange the procedure with a known donor, most preferred anonymity, and sperm banks arose to meet the demand.27 Where payment is permitted, supply has not been a problem.28 Australia, however...

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