Agreements between competitors to establish a collective price or a set of shared rules for establishing pricing are considered to be illegal price fixing under the Sherman Act. A recently filed lawsuit suggests that price-fixing is taking place in a field where some would not even consider price-fixing to be applicable.
Lawsuit Alleges Price Fixing
The class action lawsuit in question was filed against the American Society for Reproductive Medicine (ASRM) as well as the Society for Assisted Reproductive Technology (SART) and the Pacific Fertility Center. The suit filed by two egg donors alleges that the approximately $10,000 cap placed on human egg donors for each donation cycle constitutes illegal price-fixing, and that the donors were denied a true market value for their donated eggs.
The ASRM, a non-profit group composed mostly of doctors who pay to join the organization, was concerned that rising prices for donated eggs could create greater incentive for women to donate their eggs without full consideration of the consequences, or possibly even hide disqualifying health conditions in order to donate. In 2000, ASRM suggested $5,000 per donation cycle as a generally accepted limit without further justification, and that payments over $10,000 are “beyond what is appropriate.”
Egg donors receive approximately half of the amount that fertility clinics charge to the recipient. The amount may vary between $5,000 and $10,000 and depends on factors like the profile match and whether the donor has successfully donated in the past.
According to the plaintiffs’ lawyer Michael McLellan, the ASRM guideline constitutes “naked, illegal price-fixing.” Duke University Law Professor Kimberly Krawiec agrees, noting that in her opinion, the guideline is a per se violation of the Sherman Act —in other words, the legality of the agreement has nothing to do with the amount of damages suffered by the plaintiffs. Professor Krawiec added that if the subject matter were anything except human eggs, “We wouldn’t be having this conversation.”
This lawsuit is different from many price-fixing suits in one fundamental way. In this case, it is hard to argue that the plaintiffs are benefiting from the price-fixing. In pure economic terms, instituting a cap is not in the best interests of the clinics.
The presence of the cap brings up valid questions
What is the value of a human egg and who should be allowed to set that value? On what criteria should the value be set? The values of $5,000 and $10,000 seem to be arbitrarily set by ASRM. Further, the male equivalent of sperm donation does not have a price cap and is a process that involves far less risk to the donor, compared to the invasive process of egg donation.
Another concern is pricing based on selectivity. Is it economically and morally acceptable as a society to allow mothers to shop for eggs from donors with superior qualities such as beauty and intelligence — or exclude based on race or ethnicity? Professor Krawiec dismisses these concerns, saying, “Fertile people have been screening for beauty and intelligence for years and years. It’s called dating.” Even so, some clinics do not abide by the ASRM price cap and cater to those who can and will pay a premium.
While not all clinics follow the ASRM guideline, most do — over 90% of US clinics, according to the Wall Street Journal. The guidelines are not mandates, but adherence to the guidelines could certainly be interpreted as collusion even though the individual clinics did not directly conspire to fix the prices.
No doubt, there is a motivated market for human eggs. According to SART, in 2013, over 9,500 babies were born as a result of donated eggs.
If the price cap were ruled illegal, it remains to be seen what would happen to donor numbers and the payments that they would receive. It’s also possible that lower-income women could be priced completely out of fertility assistance. Either way, the ramifications of the ruling will ripple throughout the entire reproductive services industry, from egg donors to fertility clinics to happy new mothers.
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