National Cord Blood Inventory: Practices for Increasing Availability for Transplants and Related Challenges
Published: 2011-10-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Every year, many people diagnosed with diseases such as leukemia and lymphoma require transplants of stem cells from umbilical cord blood or other sources. The Stem Cell Therapeutic and Research Act of 2005 authorized funding for banking 150,000 new units of high quality and genetically diverse cord blood and directed the Department of Health and Human Services (HHS) to contract with cord blood banks to assist in cord blood collection. HHS, through the Health Resources and Services Administration (HRSA), established the National Cord Blood Inventory (NCBI) program to support banking of cord blood units and contracted with 13 cord blood banks to bank these units. The 2010 reauthorization required GAO to report on efforts to increase cord blood unit collection for the NCBI. As of May 2011, HRSA had reimbursed banks for over 41,000 units banked for the NCBI. In this report, GAO describes (1) practices identified to increase banking of cord blood units for the NCBI and related challenges and (2) practices cord blood banks are using to lower costs and improve the efficiency of cord blood banking and associated challenges. To do so, GAO reviewed relevant regulations and documents, and interviewed officials from pertinent organizations. These included officials from HRSA, the Food and Drug Administration (FDA), which is responsible for regulating cord blood used in transplants for patients who are not related to the donor, the National Marrow Donor Program (NMDP), which operates a national registry of cord blood units and other sources of stem cells, and the 13 banks with contracts to bank cord blood units for the NCBI..
section_title: What GAO Found
paragraphs: The 13 banks with NCBI contracts reported various practices that could increase the number of cord blood units banked at existing and new collection sites, as well as increasing the diversity of the units collected. However, challenges to increasing collection for these banks include resource limitations, as well as competition from other cord blood banks, which collect units for use only by family members of the donor, and slowing growth in demand for U.S. cord blood units. Cord blood banks reported that increasing staff at collection sites, providing feedback to those who collect cord blood, and lowering the age for those donating could increase the number of units collected for the NCBI at existing sites. Expanding the number of collection sites could also increase the number and diversity of NCBI units. However, the banks in our review reported financial challenges related to increasing the number of units collected at existing or new collection sites, such as a limited ability to address the costs associated with hiring additional staff to cover more hours of collection or to support bank and hospital staff salaries at new sites. These banks identified additional practices for increasing the diversity of the units collected for the NCBI, but also reported that the units collected from some racial groups have lower volumes or cell counts compared to other groups, making such units less likely to meet standards for inclusion in the NCBI. Further, growth in sales of U.S. cord blood units, banks' primary source of funding, has slowed and could challenge banks' efforts. Demand for cord blood could increase or decrease depending on a number of variables, such as whether new research identifies ways to increase the benefits of cord blood or conversely, the development of alternative treatments to cord blood transplantation. Most of the 13 banks with NCBI contracts reported adopting practices to reduce costs and improve the efficiency of cord blood banking, but also reported some uncertainty about the effect on costs and revenues of complying with FDA licensure regulations that now apply to cord blood. These banks reported practices such as using an early screening process to identify units that do not meet NCBI or the bank's own requirements prior to incurring the costs of processing these units. Further, banks with NCBI contracts reported that efforts to comply with applicable FDA regulations could increase the costs of banking cord blood. For example, some banks reported hiring external consultants or additional staff, reorganizing staff duties, beginning building renovations, or purchasing new processing equipment in attempts to comply with FDA regulations regarding cord blood manufacture and licensing. Some banks also said they were uncertain whether these efforts would comply with FDA requirements or if their collection sites would have to register with the FDA as an establishment that manufactures cord blood. However, FDA officials told GAO that neither individuals nor collection sites that have agreements with banks to collect units will be required to register, though banks must ensure the collection sites comply with FDA regulations. Further, some banks also reported that they were uncertain whether potential increased revenue from licensed units will offset their costs of cord blood banking. HHS provided additional information regarding our findings, which was incorporated as appropriate.

section_title: Letter
paragraphs: Every year, thousands of people are diagnosed with diseases such as  leukemia and lymphoma, which damage their blood-forming cells. Many  of these patients require transplants of stem cells from umbilical cord  blood or the bone marrow or bloodstream of an adult donor to supply  healthy blood-forming cells. While the best match for such a transplant is  cells from a sibling or other family member, the majority of patients will  not find a matching donor in their families and must rely on stem cells  from other sources, such as those from unrelated adult donors or  umbilical cord blood. In 2005, the number of usable cord blood units in  the United States available to the public for transplant was estimated to  be about 44,000 units, according to an Institute of Medicine report. In  recognition of the need for high quality and genetically diverse units to  help those who need a cord blood transplant, Congress passed the Stem  Cell Therapeutic and Research Act of 2005 (Stem Cell Act).
The Stem Cell Act directed the Secretary of Health and Human Services  (HHS) to enter into contracts with cord blood banks to assist in the  collection and maintenance—known as banking—of 150,000 new units of  high quality and genetically diverse cord blood. The act directed that  these units be made available for transplantation and authorized the  appropriation of $60 million in federal funds through fiscal year 2010.
HHS, through the Health Resources and Services Administration (HRSA),  established the National Cord Blood Inventory (NCBI) program, which  supports the banking of stem cells derived from umbilical cord blood for  use in transplantation.
The Stem Cell Therapeutic and Research Reauthorization Act of 2010  (Reauthorization Act) changed the number of cord blood units that are to  be available from the NCBI from a total of 150,000 to “at least” 150,000  cord blood units and placed new emphasis on actions such as exploring  innovations in cord blood collection and increasing the number of  collection sites. The Reauthorization Act authorized additional federal  funds to support the growth of publicly available cord blood units and in  meeting the inventory goal of the Stem Cell Act to increase the genetic  diversity of the supply to improve the probability that all racial and ethnic  groups might find a suitable cord blood unit.
Since fiscal year 2007, HRSA has entered into contracts with 13 cord  blood banks (banks) to contribute cord blood units to the NCBI. Each  contract specifies goals—by racial and ethnic group—for the number of  cord blood units to be banked for the NCBI under that contract. As of  May 31, 2011, HRSA had reimbursed these banks $45.7 million for more  than 41,000 cord blood units that were banked under contracts for the  NCBI. One condition of contracts with HRSA for the NCBI is that the  banks will list the units banked for the inventory on a registry maintained  by the Cord Blood Coordinating Center, which is operated by the  National Marrow Donor Program (NMDP) under a contract with HRSA.  NMDP’s registry is the largest registry worldwide, where physicians and  others can search for a stem cell match for patients who need  transplants.
The Reauthorization Act required GAO to submit a report reviewing  efforts to increase cord blood unit donation and collection for the NCBI to  ensure a high quality and genetically diverse inventory of cord blood  units. In this report, we describe (1) practices identified to increase  banking of cord blood units for the NCBI and related challenges, and   (2) practices cord blood banks are using to lower the costs and improve  the efficiency of cord blood banking and associated challenges.
To describe the practices identified to increase banking of cord blood  units for the NCBI and related challenges, we interviewed officials from  HRSA, NMDP, and the 13 banks that have contracts with HRSA for the  NCBI. We also attended meetings of the Advisory Council on Blood Stem  Cell Transplantation (Advisory Council) and reviewed Advisory Council  meeting minutes and reports. We obtained and analyzed reports,  publications, and other documents, including those about studies,  demonstration programs, and outreach efforts conducted in response to  the 2005 Stem Cell Act that focused on efforts to increase the NCBI. We  analyzed the NCBI contracts and NMDP data to identify information about  goals for collecting cord blood from various racial and ethnic groups, the  numbers of cord blood units in this inventory, and HRSA reimbursement  rates for cord blood units stored in the NCBI. To assess the reliability of  NMDP’s data about cord blood units and adult donors listed in NCBI and  NMDP’s registry, we reviewed relevant documentation about the data and  interviewed officials about how the data were compiled. We determined  that the data we used for our report were sufficiently reliable for our  purposes.
To describe the practices banks use to lower costs and improve the  efficiency of cord blood banking and associated challenges, we  interviewed representatives from the 13 banks that have HRSA contracts  for the NCBI, along with HRSA and NMDP officials. We also attended  relevant NMDP and Advisory Council meetings that focused on the  financial components of cord blood banking. We reviewed guidance  promulgated by the Food and Drug Administration (FDA) in October 2009  that provides recommendations for how to comply with applicable  regulatory requirements for licensure of cord blood units, including  required activities such as testing, processing, and storage of units. We  also reviewed the applicable FDA regulations and interviewed FDA  officials. We also reviewed scientific literature about stem cell  technologies.
For each of our interviews with the 13 cord blood banks, we used a  question set that included open-ended questions about cord blood  banking activities. These activities included increasing the number of cord  blood donors from various racial and ethnic groups, expanding the  number of cord blood units collected at existing collection sites, lowering  costs and improving efficiency when collecting and processing cord  blood, and complying with regulatory and administrative requirements  associated with cord blood banking, including FDA requirements. The  open-ended questions asked banks to consider the cord blood banking  activities and, for each activity, to describe (1) challenges or barriers the  cord blood bank experienced related to this activity; (2) practices,  innovations, or incentives used successfully or heard of by the bank; and  (3) any other practices, incentives, or technology that could increase the  number and genetic diversity of cord blood units in the NCBI. The cord  blood bank officials we interviewed provided varying levels of detail when  answering our open-ended questions, and may not have provided an  exhaustive list of all challenges or barriers cord blood banks have  experienced, or all practices, innovations, or incentives that cord blood  banks have used or identified.
We conducted our work from March 2011 through September 2011 in  accordance with all sections of GAO’s Quality Assurance Framework that  are relevant to our objectives. The framework requires that we plan and  perform the engagement to obtain sufficient and appropriate evidence to  meet our stated objectives and to discuss any limitations in our work. We  believe that the information and data obtained, and the analysis  conducted, provide a reasonable basis for any findings and conclusions in  this product.
subsections: section_title: Background
paragraphs: Stem cells from healthy, unrelated donors have been used to treat  patients with a variety of diseases, and are considered an appropriate  course of treatment for numerous forms of leukemia, lymphoma, and  other blood, metabolic, and immune-deficiency disorders. The first source  of stem cells used for transplant was bone marrow, but now stem cells  from the bloodstream and cord blood can also be used. The success of  stem cell transplants depends, among other things, on the extent to  which certain blood cell proteins that are part of every donor’s genetic  make-up—human leukocyte antigens (HLA)—match those in the  patient. In general, the more closely related two people are, the more  likely it is that their HLA will match. The HLA of members of different  racial groups are typically less likely to match one another.
There is evidence that cord blood may not require as exact a match as  stem cells from bone marrow or the bloodstream because the antigens in  cord blood are less mature. This characteristic means that transplants  involving HLA-compatible stem cells from cord blood are less likely to  result in graft versus host disease because the donor’s cells are less  likely to perceive the patient’s cells as foreign bodies and attack them.  This makes cord blood especially valuable to patients for whom a  complete match cannot be found. Persons for whom a complete match  may be difficult to find include those from communities with greater  genetic diversity, such as African Americans and persons of mixed ethnic  heritage. A broad selection of cord blood provides persons with rare HLA  types greater access to stem cell transplantation.
In the event that a patient cannot find a sibling or other family member to  donate, an HLA match may be sought among the stem cells donated and  listed in transplant registries. While there are over 60 stem cell donor  registries worldwide, NMDP operates the largest registry, which is a  database of information about cord blood units and adults who are  willing to donate stem cells from their bone marrow or bloodstream (adult  donors). As of May 31, 2011, NMDP’s registry included more than   6.5 million U.S. adult donors and nearly 135,000 cord blood units  collected in the United States, of which almost 41,000 are from the  NCBI. In January 2011, NMDP estimated that at least 86 percent of  most racial and ethnic groups have a close match using all available  sources of stem cells listed in its registry. Transplant centers may also  find a suitable match through other U.S. and international registries.
Table 1 provides a breakdown by racial and ethnic group of the U.S. cord  blood units and adult donors in NMDP’s registry. The NCBI is more  diverse for some racial and ethnic groups compared to the inventory of  cord blood units not in the NCBI or adult donors in NMDP’s registry. For  example, 14 percent of the NCBI units are from Black/African American  donors, compared to 6 percent of those U.S. cord blood units not in the  NCBI, and 10 percent of adult donors registered in the United States.
Of all the U.S. cord blood units listed on NMDP’s registry, between  January 2005 and May 2011 NMDP facilitated the shipment of 5,554 units  throughout the world for use in transplants. About 28 percent of these  units were sent to transplant centers outside the United States. Similarly,  U.S. transplant centers import cord blood units from outside the United  States. As illustrated in figure 1, among U.S. cord blood units listed on the  NMDP registry, and for which NMDP facilitated shipment, those from the  NCBI represent a growing percentage of cord blood units shipped for use  in transplants. In the first 5 months of 2011, 52 percent of the U.S. units  in the registry that were sold for use in transplants were from the NCBI.
A challenge associated with cord blood as a source of stem cells is the  small number of cells contained in a typical cord blood unit, which may  not be sufficient for a heavier patient. The higher the number of stem cells  infused into a transplant patient, the better the outcome. The median  number of blood cells in a typical cord blood unit listed in the NMDP  registry is 1.07 billion cells, which is sufficient to provide a patient  weighing 94 pounds or less a minimum therapeutic dose. An adult bone  marrow or bloodstream donor, on average, would provide the same  patient with a dose of cells that is many times that which is provided by a  single cord blood unit with a median number of cells.
subsections: section_title: Cord Blood Banking for the NCBI
paragraphs: Thirteen banks are currently under contract with HRSA to contribute cord  blood units to the NCBI and list the units on the NMDP registry. Each  contract specifies goals—by racial and ethnic group—for the number of  cord blood units to be banked under that contract. Some of the banks with  HRSA contracts are engaged only in cord blood banking while others are  subsidiaries of larger organizations such as a university, hospital, or  community blood center. Eleven of the 13 banks under contract with  HRSA are nonprofit organizations. As a part of their banking activities, the  cord blood banks recruit donors, collect cord blood, process and store  units, and distribute the units for transplant and research.
Initial education about cord blood donation may be provided by the  mother’s obstetrician, or from communications from radio, TV, or print  sources. Recruitment of a potential donor mother is often done by cord  blood banking staff at the hospital upon her arrival to deliver her baby but  prior to active labor. Recruitment includes informing the mother about  cord blood donation and the benefits of public donation, conducting  eligibility screening by administering a maternal questionnaire and a  family medical history, and obtaining the donor mother’s informed  consent. Under NCBI requirements, donor mothers may not give  informed consent during active labor.
The 13 banks under contract with HRSA collect cord blood at 114  hospitals—referred to as collection sites—in 24 states. NCBI banks  have written agreements with collection sites permitting bank staff,  hospital staff, obstetricians, or midwives to collect the cord blood. The  collection methods vary by site and can include an obstetrician collecting  during a cesarean section; an obstetrician, midwife, or nurse collecting  during a vaginal delivery in the second stage of labor; a member of the  bank’s staff collecting after the placenta has been delivered; or any  combination of these practices. Once collected, the cord blood is placed  into a tamper-proof, temperature-monitored container for ground or air  transport from the collection site to the cord blood bank.
Upon receipt at the bank, lab personnel check the paperwork and integrity  of the cord blood unit. The cord blood is weighed and evaluated for any  exposure to extreme temperature changes since collection and then  processed. Processing includes various steps such as separating the  stem cells from the cord blood; testing the stem cells for potency, viability,  and for infectious disease; identifying their genetic characteristics; and  freezing and storing the unit. The bank enters data about the cord blood  unit, the mother, and the family medical history into an NMDP database  for inclusion in NMDP’s national registry. The unit will be searchable on  the NMDP registry after its sterility is confirmed. If the unit meets HRSA’s  criteria for the inventory and the bank has not yet met its collection goals  under its contract, the unit becomes part of the NCBI.
section_title: HRSA Pilot Project for Remote Collections
paragraphs: In 2009, HRSA initiated a pilot project for remote collections—that is,  collections at sites other than those with which a bank has a written  agreement. Remote collections through the pilot are performed by  physicians or midwives using a cord blood unit collection kit that was  provided to eligible mothers by one of the banks participating in the pilot.
The pilot provides HRSA with data to evaluate the feasibility and utility of  the remote collections and inform future decisions to potentially expand  the program as a national model for remote collections. It might also  provide opportunities to donors who otherwise would be unable to donate  because there is no collection site in their area; however, units that are  remotely collected cannot currently be added to the NCBI. HRSA officials  have said that they are uncertain about whether these units will meet FDA  requirements for licensure. In commenting on a draft of this report, HHS  noted that HRSA would be willing to revisit the exclusion of these units  from the NCBI if they are able to be licensed.
section_title: HRSA Contracts with Cord Blood Banks
paragraphs: HRSA has awarded contracts to the cord blood banks, based on  requirements set out in the Stem Cell Act, through a competitive request- for-proposal process. The act required that the contracts be for 10 years  and required HRSA to ensure that no funds would be obligated under the  contracts 3 years after the contracts were entered into. HRSA requires  banks to make NCBI cord blood units available for transplant indefinitely,  or for as long as they are determined viable by HHS. The  Reauthorization Act authorized HRSA to obligate funds under new  contracts for up to 5 years and to extend the contract period to 10 years  past the last date the bank received funds under the contract. HRSA  incorporated these changes into its most recent request-for-proposals for  new contracts issued on June 15, 2011. HRSA officials said that they are  modifying their existing contracts to reflect this change.
As part of the competitive award process, each bank proposes the  number of units, by racial and ethnic group, that it will place into the NCBI  annually. HRSA uses collection and banking of cord blood units within  these racial and ethnic groups as a means of increasing the genetic  diversity of the NCBI. The banks’ proposed racial and ethnic targets are  then subject to negotiations with HRSA and become part of the contract  between HRSA and the bank. Since HRSA began contracting for cord  blood units for the NCBI, it has indicated to prospective banks that when  awarding contracts, special consideration would be given to banks that  demonstrated a superior ability to collect and bank large numbers of cord  blood units from underrepresented populations, especially African  Americans. In addition, in 2009, HRSA began to negotiate reimbursement  rates that varied depending on the racial and ethnic status of the unit.  HRSA now pays banks higher rates for units collected from minority  groups compared to the rates HRSA pays for units collected from the  non-Hispanic Caucasian group.
HRSA’s reimbursement rate for each cord blood unit banked for the NCBI  is negotiated with each bank. HRSA and NMDP estimate that a bank’s  cost for each cord blood unit placed on the registry is between $1,500  and $2,500. Once awarded a contract, a bank submits invoices to HRSA  for payment for units placed on NMDP’s registry during the invoice period.  Only cord blood units that meet HRSA requirements may be reimbursed  by HRSA and placed in the NCBI. HRSA requirements include having a  minimum blood cell count per unit of 900 million, a special procedure for  wrapping the unit prior to freezing, and a 48-hour deadline for collection,  processing, and freezing.
Since the first contract became effective in November 2006, per unit  reimbursement rates negotiated by HRSA have ranged from $648 to  $1,637 with an average payment of $1,110 per unit. HRSA does not pay  the complete costs of banking the unit in order to encourage the bank to  seek out other sources of revenue. The largest source of revenue for the  banks comes from the sale of cord blood units for transplantation.  According to a limited financial analysis of the public cord blood banking  industry conducted by NMDP in 2010, 81 percent of the industry’s  operating costs are covered by sales of cord blood units for  transplantation. As of August 2011, banks received payments ranging  from $22,800 to $35,000 for cord blood units used for transplantation,  with a median payment of $30,000. Other sources of revenue include  charitable contributions, excess revenues from other lines of business  engaged in by the bank or its parent organization, and HRSA  reimbursement for units banked for the NCBI.
section_title: Advisory Council on Blood Stem Cell Transplantation
paragraphs: The Advisory Council was created by the 2005 Stem Cell Act and advises  the Secretary of HHS and the Administrator of HRSA on how to carry out  activities associated with managing the NCBI. The council consists of up  to 25 members, including cord blood and bone marrow donor centers,  banks, transplant centers, and recipients. The members participate in  workgroups that cover specific topics related to stem cell transplantation,  such as cord blood collection. The workgroups then develop and present  the entire Advisory Council with recommendations that could be made to  the Secretary of HHS and HRSA about how the NCBI should function.
section_title: The Food and Drug Administration’s Regulation of Cord Blood
paragraphs: The FDA regulates cord blood for use in transplants when the patient is  not related to the donor. FDA requires, among other things, that public  cord blood banks register with FDA, screen potential donors for certain  diseases according to FDA eligibility criteria, and comply with Current  Good Manufacturing Practice, Current Good Tissue Practice, and  applicable regulations. Until October 20, 2011, banks can voluntarily  distribute cord blood units for use in transplants—when the patient is not  related to the cord blood donor—as an investigational new drug (IND).
Effective October 20, 2011, all cord blood units, including those currently  in cord blood bank inventories, will have to be approved for use by the  FDA as an IND or under an FDA-approved license. As of August 2011,  none of the banks had an approved license for cord blood, though many  were using their own or NMDP’s existing IND approvals. Two cord blood  banks have submitted license applications, and eleven banks have either  completed or scheduled meetings with FDA to discuss the license  application process.
section_title: Banks Reported a Number of Practices and Challenges Related to Increasing Units Banked
paragraphs: Banks reported practices that they believe could increase collections at  existing sites, but noted that increased expenditures and other factors  could present challenges to banking cord blood. Expanding the number of  collection sites could also increase the number and diversity of cord blood  units in the NCBI, but banks reported funding challenges related to  establishing new sites. Banks also reported additional practices to  increase the genetic diversity of the NCBI, but certain characteristics of  the cord blood units collected from various racial groups may limit the  number of units banked. Remote collection of cord blood units is under  consideration. Finally, sales of cord blood units have slowed and could  challenge banks’ efforts to increase the NCBI.
subsections: section_title: Banks Reported Practices That Could Increase Collections at Existing Sites, but Increased Expenditures and Other Factors Could Present Challenges
paragraphs: Ten of the 13 banks that we interviewed told us that the following  practices could increase the number of cord blood units collected at  existing collection sites:    Adding more staff at collection sites during more hours of the  day and/or more days of the week. For example, one bank said that  they are currently losing the opportunity to collect from 25 percent of  the women who deliver on the weekends because they do not have  staff working 24 hours a day on weekends.    Providing recognition or feedback to motivate medical staff  about their cord blood collections. Eight banks told us that they  use this practice, and several of these banks noted that this has  resulted in increased collections or improved the quality of collection  practices, which results in better cord blood units with high volumes  and cell counts. Such feedback can also include letting collectors  know if the units that they collected did not meet the bank’s standards.    Lowering the age of consent for donating cord blood. For  example, one bank said it could collect more cord blood units if the  age of consent was lowered, particularly at one hospital that serves  many women under the age of 18, which is HRSA’s current age  requirement. In May 2011, the Advisory Council recommended that  HRSA broaden the definition of the minimal eligible maternal age for  consenting to donate cord blood to reflect the law in each state. As a  result, the age of maternal emancipation could be used, which in  some states is lower than 18. HRSA officials told us that they are  implementing this change in their fiscal year 2011 contracts and in  modifications to existing contracts.
Resource limitations, as well as competition from private cord blood  banks, could make increasing collections at existing sites challenging.  Three of the five banks who discussed adding staff to increase collections  noted that they have limited ability to address the increase in  expenditures associated with hiring additional staff to cover more hours of  collection. Some banks said that they receive additional funds from  donations and financial support from parent organizations—in addition to  HRSA’s reimbursement and cord blood sales—to cover their total cost of  operations. Four banks also reported that competition from private  banking at the hospital where they are collecting reduces their opportunity  for collections as some mothers choose to privately bank their cord blood.  For example, one bank said that at hospitals with more affluent patients,  the loss of available cord blood units to private banking can exceed   20 percent of the deliveries.
Another challenge reported by four banks was that bank staff must  provide continuous opportunities for hospital staff to learn how to collect  cord blood due, in part, to turnover of the medical staff collecting cord  blood units. For example, residents who are trained to collect cord blood  may later move to their next medical rotation or to another hospital.  Additionally, one bank said having bank staff routinely conduct training  about cord blood collection at the hospital helps ensure the proficiency  levels of trained collectors in collecting high quality units by reinforcing  proper methods. However, these continuous training requirements force  banks to dedicate staff hours to training and reduce their ability to use  them to expand hours to support cord blood collections.
section_title: Expanding the Number of Collection Sites Could Increase the Size and the Diversity of the NCBI, but Banks Reported Challenges Funding New Sites
paragraphs: Another way to increase the number of units in the NCBI, and the  inventory’s diversity, is to expand the number of collection sites,  especially if banks can identify collection sites that will add to the racial  and ethnic diversity of their collections. When considering new collection  sites, most of the banks we interviewed reported focusing on those sites  with a large number of deliveries or those with significant racial and ethnic  diversity among their deliveries. Eight of the 13 banks reported using one  of the following practices related to expanding collections to sites with a  high number of minority births. These include:    Using hospital census data to target hospitals with a high  number of minority births. Some banks try to ascertain the ethnic  composition of the deliveries at a hospital before approaching the  hospital as a potential collection site.    Building on existing relationships with collection sites served by  the bank’s parent organization. For example, some banks are also  part of a community blood center. Hospitals that use the community  blood center’s services may be encouraged to also operate as a cord  blood collection site.    Working with advocacy groups that support cord blood banking  to encourage collection sites to participate. One cord blood bank  said that it has added collection sites as a result of their relationships  and networking with advocacy groups and foundations.
Twelve of the banks we interviewed identified at least one of the following  challenges to adding new collection sites. First, banks reported that they  must finance the costs for new collection sites, including bank and  hospital staff salaries, supplies, and expenses associated with  transporting cord blood, because HRSA does not provide specific funding  to defray these costs. Some banks reported being contacted by hospitals  that are interested in becoming cord blood collection sites, but the banks  say they are limited in the number of sites they can add because of the  expense of adding new sites. HRSA officials agreed that it is expensive to  add new collection sites. They reported that the agency is encouraging  efforts to increase collections in the most efficient manner, consistent with  available resources. HRSA officials also said that as long as capacity for  additional cord blood collections remains at current collection sites, the  agency believes that increasing activity at those sites may be the most  efficient means of increasing annual collections. HRSA officials said they  do not plan to estimate the number of collection sites to meet the NCBI  goal of at least 150,000 units because there are multiple variables to  consider when trying to estimate the number of collection sites needed.  Instead, the agency is encouraging efforts to increase collections at  existing sites. The 13 banks providing cord blood units to the NCBI have  agreements with between 2 and 33 collection sites, depending on the  bank, for a total of 114 collection sites. A second challenge banks  reported was the amount of time they spend developing agreements to  collect at sites because of multiple reviews, such as the site’s agreement  having to be approved by different departments within a hospital.
Finally, one bank reported that a challenge that is specific to expanding to  a new collection site with a large number of racial and ethnic deliveries is  that these sites are more likely to be understaffed; therefore, nurses and  physicians have less time to participate in cord blood collection. The bank  reported that when they approach the administration of such hospitals the  administration is less likely to agree to participate in cord blood collection  because of the additional workload collecting cord blood will place on  their staff.
Whether the bank is trying to increase cord blood collection at an existing  site or by adding a new site, the banks reported the following practices:  identifying a “champion” associated with the collection site, such as a  doctor or administrator, to support the site’s collection efforts and to  motivate staff to collect cord blood; providing bank staff or paying the  salaries of hospital staff to carry out some or all of the collection activities  at each site; contributing to the nurses’ education fund at the site; or  paying for space to use for collection activities.
section_title: Banks Reported Additional Practices for Increasing the Genetic Diversity of the NCBI, but Characteristics Associated with Some Units Pose Challenges
paragraphs: In addition to adding new collection sites with diverse populations, 6 of  the 13 banks that we interviewed reported specific practices to recruit  donors and bank cord blood from various racial and ethnic groups in  order to increase collections that enhance the genetic diversity of the  NCBI. For example, some of the banks have tried to reach more African  American donors through outreach to community groups such as  churches, health fairs, schools, and support groups, such as Mocha  Moms, Inc., rather than through events that are conducted in concert with  medical practices. As another example, some banks use bilingual  recruiters and educational materials to recruit Hispanic donors. One bank  reported that the use of bilingual cord blood collectors combined with a  targeted public relations effort that included radio advertising and a  telethon decreased their refusal rate among the predominantly Spanish- speaking patient population at one hospital from 25 percent to 2 percent  within a 48-hour period.
While a few of the banks reported challenges related to the willingness of  mothers from racial and ethnic groups to donate cord blood, most banks  reported that certain characteristics of the cord blood collected from  various racial groups present challenges to banking units that meet HRSA  standards for inclusion in the NCBI. Specifically, four banks said issues of  medical mistrust, including concern about how units may be used for  research, could present a barrier to increasing the number of donors from  certain groups. Seven of the banks reported that the cord blood they  collected from certain groups, such as African American donors, has a  lower volume and total cell count especially when compared to units  collected from Caucasian donors.
Of the seven banks that reported differences in collections from African  Americans compared to others, two of the banks reported collecting more  units from African American donors in order to collect one unit that can  meet their banking standards relative to the number of units collected and  banked from Caucasian donors. In addition, some banks use different  volume or cell count thresholds when deciding whether to process cord  blood collected from different racial and ethnic groups. One cord blood  bank reported that it was able to establish a higher volume threshold to  process cord blood from Caucasian donors than cord blood from African  American donors because it is easier to collect large-volume units from  Caucasian donors. For this bank, cord blood collected from Caucasian  donors must contain at least 80 milliliters to be processed further, while  cord blood collected from African American donors must contain at least  60 milliliters of blood. Another bank reported that it raised the cell count  threshold for units from Caucasian donors to 1.25 billion cells while  holding the cell count threshold for units from African American donors at  900 million cells, while for a second bank its cell count threshold to  process cord blood from Caucasian donors is 1.5 billion and 1.1 billion  cells for other groups. According to some of the banks, this allows them to  add cord blood units with higher cell counts, while increasing the number  of units from African American donors in the inventory. While some banks  reported difficulty in collecting and banking cord blood units with at least  900 million cells from African Americans, the median cell count of such  units in NMDP’s registry is 1.05 billion cells per unit.
Those banks whose HRSA contracts were effective September 2010 are  paid more for cord blood units collected from some minority groups who  have historically had difficulty finding a cord blood or adult donor match.  HRSA identifies alternative ways federal funds could be distributed to  cord blood banks, in part to encourage the collection of diverse cord  blood units, in its Interim Report on How Federal Funds are Distributed to  Cord Blood Banks Participating in the National Cord Blood Inventory,  which was provided to Congress on August 11, 2011. The report  describes options for modifying the existing methods for distributing funds  to cord blood banks, including providing a small amount of up-front  funding to cord blood banks to defray start-up costs associated with  initiating collections at new sites, providing payment for cord blood units  collected remotely at hospitals in which the cord blood bank does not  have a written agreement, or providing higher per unit reimbursement  rates for cord blood units contracted by HRSA. The report notes that  specific recommendations relating to NCBI funding will be included in  HHS’ next annual Report to Congress on stem cell issues.
section_title: Remote Collection Is under Consideration for Increasing Cord Blood Units in the NCBI
paragraphs: Another potential approach for increasing the NCBI is to use remote  collections. Remote collections involve sending a cord blood collection kit  to a mother who plans to deliver her child at a site that does not have a  written agreement with a public cord blood bank to routinely allow  collections. The kit is then used by the mother’s physician or midwife to  collect the cord blood unit, which is then transported to the sponsoring  cord blood bank. Currently, cord blood units collected remotely cannot be  added to the NCBI because HRSA requires banks to have a written  agreement with the collection site in order for units collected at the site to  be included in the NCBI. Additionally, HRSA officials have said that they  are uncertain about whether these units will meet FDA requirements for  licensure.
HRSA, through a contract with NMDP, has begun a pilot program with  three of its contracted cord blood banks to remotely collect and bank 500  cord blood units to determine whether cord blood donation using a kit- based model can increase the opportunities for public cord blood  donation. As of March 2011, the three banks had collected 758 units. Of  the 758 units, 68 had been banked—that is, processed and stored; the  major reasons that units were discarded and not banked were units  arriving at the lab after the allowed time for processing, low volume of  cord blood collected, and required labels or documents associated with  units being missing.
Two of the three banks participating in the HRSA pilot identified some  practices to address challenges identified during the pilot. Some of the  lessons learned by one cord blood bank included (1) only initiating remote  collections with mothers who start the process no later than 35 weeks  gestation; (2) screening mothers for eligibility before sending out a  collection kit; and (3) obtaining the doctors’ agreement to participate and  complete training on cord blood collection. Another bank reported working  to develop a web-based training program targeting the physician  collectors participating in remote collections that emphasizes the  importance of collecting a large-volume cord blood unit. This pilot is  scheduled to end September 2011 and the results will be analyzed by  HRSA and NMDP at that time.
section_title: Increase in Demand of U.S. Cord Blood Units Has Slowed and Could Challenge Banks’ Efforts to Increase the NCBI
paragraphs: Worldwide demand for U.S. cord blood units has slowed compared to the  demand that existed when the NCBI was created. According to a GAO  analysis of data from the World Marrow Donor Association, worldwide  sales of cord blood units by U.S. banks rose 13.6 percent between 2005  and 2006 and 38.4 percent between 2006 and 2007. In contrast, sales  rose only 0.2 percent between 2007 and 2008, 10.4 percent between  2008 and 2009, and only 0.4 percent between 2009 and 2010. According  to the Advisory Council and HRSA, the slowing increase in demand for  cord blood units may reflect factors that affect the demand for cord blood  specifically, or stem cells in general. These factors include the medical  community’s questions about what diseases are best treated using stem  cell transplantation, coverage limitations by health insurers for stem cell  transplants, and alternative types of treatment for blood-related cancers  that stem cell transplants are used to treat. Because banks rely heavily on  cord blood unit sales to finance their operations, slowdowns in demand  could adversely affect the banks’ ability to finance efforts to expand  collections at current collection sites or to expand the number of sites.
According to presentations at Advisory Council meetings, stem cell  transplantation is an evolving area of medicine in which questions exist  about the diseases that are best treated by blood stem cell  transplantation or about treatment protocols. Questions related to the  practice of stem cell transplantation that are still under active clinical  investigation include criteria for stem cell source selection, patient  pretransplant preparation regimens, and ways to treat acute and chronic  graft versus host disease. In May 2010, the Advisory Council  recommended that the Secretary of HHS convene an expert panel to  develop consensus regarding an evidence-based list of diagnoses for  which stem cell transplantation is an accepted standard of care. The  panel has been formed and is in the process of conducting its work.
Insurance coverage for treatment for stem cell transplantation varies.  According to an Advisory Council working group, coverage varies  because the use of stem cell transplantation as an effective treatment  against certain diseases is not well understood by physicians, the  insurance industry, or the public. The working group found that public and  private insurers may not cover blood stem cell transplantation and if they  do, they may cover the procedure only under limited circumstances or  may exclude ancillary costs such as costs associated with searching for a  donor. For example, the Medicare program covers stem cell transplants  from donors for the treatment of certain diseases, and, in some cases,  only if the beneficiary receives the transplant as part of a clinical trial.
Alternative treatments to cord blood transplantation may also affect the  demand for cord blood. Alternative treatments can include chemotherapy  or stem cell transplants from sources other than cord blood. According to  HRSA, advances in a drug used in the treatment of some types of  leukemia have been successful in achieving remission for some patients,  who might otherwise have been treated with a transplant, thereby  reducing the demand for cord blood units for this particular group.  However, according to at least three banks, it is too early to know whether  advances in other types of treatments will reduce the future demand for  cord blood.
Alternatively, other potential factors might increase the demand for cord  blood. In 2010, a clinical researcher at the Fred Hutchinson Cancer  Research Center successfully expanded the number of blood stem cells  in cord blood units up to 164-fold. This could be beneficial because a  higher number of stem cells in a cord blood unit could more quickly  reconstitute a patient’s immune system with new stem cells, thereby  lowering the risk that a patient would acquire life-threatening infections  during this recovery period. Researchers are also examining other types  of stem cells contained in cord blood for possible future clinical  applications including tissue regeneration. If such advancements lead to  future increases in demand, it would also increase banks’ ability to  finance their efforts to expand collections and more quickly reach the  NCBI goal.
section_title: Most Banks Have Adopted Practices to Reduce Costs, but Are Uncertain about the Effect of Regulations on Costs and Revenues
paragraphs: Most banks reported that they had adopted practices to reduce the costs  of cord blood banking, but some expressed concern that one proposed  practice could reduce the genetic diversity of the NCBI. Some banks also  reported uncertainty about the effect of FDA regulations on costs and  revenues.
subsections: section_title: Banks Reported Practices to Lower Costs, but Also Concerns that One Practice Could Adversely Affect the Genetic Diversity of the NCBI
paragraphs: Banks reported using a variety of practices to reduce the costs or to  improve the efficiency of some of the activities associated with cord blood  banking. One cost-saving practice reported by 11 of the 13 banks we  interviewed is to use an early screening process to identify units that do  not meet the NCBI cell count threshold of 900 million cells or the bank’s  own volume or weight requirements before incurring the costs of  processing these units. This practice of establishing a preprocessing  threshold eliminates the costs of processing units unlikely to be  reimbursed by HRSA or to be desirable for use in stem cell  transplantation. Preprocessing thresholds reported by the banks ranged  from 900 million to 1.5 billion cells. Some of these banks reported lower  thresholds for units from African American donors and other donor  groups.
However, a proposed practice could reduce the genetic diversity of  collections, including those for the NCBI. A limited financial analysis of  public cord blood banking conducted by NMDP in 2010 found that raising  the preprocessing threshold for all public cord blood units to at least   1.25 billion cells would allow the cord blood banking industry (but not  necessarily individual banks) to gain enough excess revenue within   2 years to cover their annual operating costs. According to NMDP’s  analysis, increasing the percentage of higher cell count cord blood units  in the public inventory, including those units in the NCBI, would respond  to the increasing demand for higher cell count cord blood units. However,  some of the cord blood banks have expressed concerns about NMDP’s  analysis, including that the industry averages used did not adequately  account for bank variations in overhead and operating costs, that the  model’s assumptions about future demand were too high, and that NMDP  did not take into account the potential effect of raising the cell count  threshold on some groups’ access to transplants. An official from NMDP  acknowledged that, at higher thresholds, banks would process fewer  units, particularly in some minority populations, which could reduce the  genetic diversity of cord blood inventories, including the NCBI. According  to HRSA, the Center for International Blood and Marrow Transplant  Research is currently analyzing whether matching cord blood across  ethnicities is as effective as matching cord blood between donors and  recipients of the same groups.
Some banks reported other practices for reducing their costs by  increasing collaboration with organizations that have activities that are  related to those of the bank.    To lower the cost of transportation, two banks rely on their local  community blood bank to transport cord blood units collected at  regional hospitals.    To lower its costs of donor recruitment and ongoing staff support to  collection sites, one bank has developed partnerships with two  nonprofit organizations dedicated to increasing patients’ access to  cord blood transplants. The two organizations have assumed some of  the responsibilities normally assigned to bank staff, including  monitoring collection activity at the site, ensuring an adequate supply  of collection kits, and answering questions from site staff about cord  blood collection. One of the organizations also pays for the collection  kits at a collection site.    To lower the per unit cost of processing and storing cord blood units,  two banks reported that they also process and store units for  companies that market cord blood collection to expectant mothers for  future use by the baby or other family members.    To lower the bank’s costs of donor recruitment, one bank reported  that it has entered into an arrangement with a neighboring state. The  state is paying for staff to screen potential donor mothers and to  obtain their informed consent, to pack and transport cord blood  collected by physicians, and to administratively support the program.  Upon receipt of the cord blood, the bank will then process and store  the units. If a unit is sold for transplant, the bank will share the  revenue with the state.
In other efforts to reduce costs, one bank shifted recruiters’ time that was  spent obtaining informed consent from nonhospital settings to the  hospital. Initially, bank staff obtained consent from potential donor  mothers at clinics, health fairs, and birthing classes weeks and months  prior to delivery. However, the bank noticed that many of these women,  upon arrival at the hospital to deliver their babies, forgot their paperwork  or did not inform the hospital staff of their desire to donate. To increase  the effectiveness of the staff’s efforts, the bank shifted the informed  consent process to the hospital where the time spent in this process could  ensure a greater number of mothers actually donating. Finally, to improve  the efficiency of processing cord blood, two banks reported moving from  manual to automated cord blood processing systems. According to one of  the banks, the new system will allow the bank to increase the number of  units processed threefold without changing the number of laboratory  technicians.
section_title: Some Banks Reported Uncertainty about the Effect of Complying with FDA Licensure Regulations on Costs and Revenues
paragraphs: Five of the 13 banks reported that their efforts to apply for FDA licensure  have already increased their costs or noted that the total cost burden of  operating as an FDA licensed bank is unclear. For example, two banks  reported having to hire external consultants or reorganize staff duties to  complete the application for licensure. Two banks reported that they have  already incurred significant expenditures to make building renovations,  buy new equipment, or hire additional staff in attempts to comply with  FDA regulations.
Further, banks reported uncertainty in how to meet some of FDA’s  regulatory and administrative requirements for licensure, which could  result in increased expenditures to meet these requirements. Nine of the  13 banks reported that these concerns related to whether the spaces and  equipment currently used by banks to collect and process cord blood will  satisfy FDA licensure requirements or whether the banks will lose  collection sites if licensure requirements force collection sites to register  with the FDA. Some banks questioned whether FDA would require a  “clean room” for processing units, which not all banks currently have.  Banks also expressed concern that collection sites will no longer want to  participate in public cord blood collection if FDA requires the sites to  register with FDA. According to FDA officials, establishments that  manufacture certain products, which include cord blood, are required to  register and list their products with the FDA. These establishments are  subject to FDA inspection. Some banks are concerned about the  additional burdens that this will impose. If banks lose collection sites  because of concerns about possible FDA inspection, the banks would be  subject to the additional costs of adding new sites, which would include  training site staff, providing collection materials, and transporting the units  from the site to the bank. However, FDA officials told GAO in a July 2011  interview that they are taking the approach that neither individuals nor  hospitals that have agreements with banks to collect cord blood will be  required to register separately with FDA. FDA officials said that such  entities are required to comply with product requirements applicable to  their collecting activities, and the cord blood bank is responsible for  ensuring that these entities under contract with the bank comply with FDA  regulations.
FDA officials have said that the benefits of cord blood licensure include  greater assurance among doctors and patients of the quality and efficacy  of cord blood units. Additionally, with licensure, cord blood banks will be  able to sell cord blood units without IND pricing restrictions. However,  some banks also reported that they were uncertain whether potential  increased revenue from licensed units will offset their costs. In addition,  the Advisory Council has expressed concerns about the potential for  FDA’s licensure requirements to result in increased cost and decreased  availability of public cord blood units without necessarily increasing the  safety, stability, potency, or purity of the units. In November 2010, the  Advisory Council recommended that the FDA meet with the banks  applying for licensure to share and resolve specific concerns regarding  licensure. FDA officials have been meeting individually with cord blood  banks to discuss the specifics of each bank’s licensure application and  circumstances. While FDA officials have stated that they could not  confirm, for example, that a certain facility design would be acceptable in  all situations, they said that they could provide clarification of the  manufacturing regulations for individual banks.
section_title: Concluding Observations
paragraphs: Since 2005, HRSA has contracted for about 30 percent of the minimum  statutory goal of at least 150,000 new units of high quality cord blood.  While not yet meeting the statutory goal, the NCBI has increased the  number of high quality, genetically diverse units available for  transplantation in the United States. This inventory, along with other  sources of cord blood stem cells, contributed to making nearly 135,000  U.S. cord blood units available in the NMDP registry. In 2010, about  1,200 patients had received cord blood transplants from units identified in  the registry. However, although there are nearly 135,000 cord blood units  in the registry, members of certain racial and ethnic groups will continue  to have more difficulty finding a closely matched unit than other groups.  This disparity would be reduced, though not completely eliminated, if the  number of units available were expanded.
Cord blood banks contracting with HRSA are taking steps to increase  collections and make their operations more efficient and cost-effective,  but continuing advances in medical science make it difficult to predict  future demand for cord blood stem cells and the resulting level of  collections that should be undertaken. Based on current science, cord  blood appears to present some advantages over other stem cell  sources—such as bone marrow—both in terms of health benefits and in  being already collected and readily available for use when listed in public  registries. These advantages may increase in future years if factors that  could increase the quality of cord blood units are realized or they may  diminish if alternatives to cord blood are developed or improved.
section_title: Agency Comments
paragraphs: In commenting on a draft of this report, HHS provided additional  information concerning several content areas of the report, including  demand for U.S. cord blood units, HRSA’s pilot project for remote  collections of cord blood units, and efforts to increase the diversity of the  cord blood units collected for the NCBI. We included that additional  information where appropriate. HHS’s comments are printed in   appendix I. HHS also provided technical comments, which we  incorporated as appropriate.
We are sending copies of this report to the Secretary of Health and  Human Services and other interested parties. In addition, the report will  be available at no charge on GAO’s website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or at crossem@gao.gov. Contact points for our  Office of Congressional Relations and Office of Public Affairs can be  found on the last page of this report. Other major contributors to this  report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Health and Human Services
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Karen Doran, Assistant Director;  Carrie Davidson; Cathleen Hamann; Toni Harrison; Natalie Herzog; and  Monica Perez-Nelson made key contributions to this report.