Cord blood banking in Bulgaria: problems of control and continuing insurance

Background
The long-term storage of umbilical cord blood (UCB) has gained traction and is increasingly regarded as a form of partial ‘blood insurance’. It involves the storage of blood present in the umbilical cord at birth and of tissue left over from the umbilical cord and placenta after birth. 
Such blood and tissue tend to contain pluripotent haematopoietic stem cells (HSCs). These can potentially be used to treat some serious blood and immune system diseases both in the donor (later in life) or in related or unrelated individuals (allogeneic transplantation).  Otherwise, HSCs can be collected from the bone marrow (in an invasive procedure involving general anaesthesia) or from peripheral blood (in which case they are found in a much lower circulation).

Cord blood and placentae were historically discarded after birth and indeed in the absence of UCB banking they mostly still are disposed although of course certain cultural practices such as ingestion etc, are applied. 

Cord blood can be stored long-term at the temperature range of the liquid phase of nitrogen, generally for up to 25 years - and that’s what many private cord blood banking companies (BloodCos) encourage parents to do.

Public storage programmes have been available on a more limited scale since the 1990s, and the blood donated to them is usually controlled by the healthcare provider.

BloodCos promise the parents to retain control over the blood and use it for future treatment, generally of the donor or related family members.
The number of BloodCos operating in Bulgaria is rising; 11 licensed private BloodCo offerings were marketed as at January 2020; approximately 20 980 bulgarian families have stored cord blood in BloodCos (*1) (compared to 7 licensed cord blood banks operating in the UK).

This leads to a lot of options to choose from and can be confusing. Parents are often persuaded to sign up by a desire to guarantee the future well-being of their children.

Giving blood and tissue for storage to a BloodCo is costly: a one-off fee between EUR 2,000.00 and EUR 3,500.00, with additional annual fees typically around EUR 100.00.

Given the importance and hope parents attach to the idea of protecting their children’s future health and the relatively large sums of money involved, families who decide to store blood and tissue in a BloodCo must consider how protected their investment is and in what ways are they entitled to control the stored material.

Legal grounds to store blood and tissue from the umbilical cord and placenta

Bulgarian legislation 

Pursuant to s. 28 of the Bulgarian Organ, Tissue and Cell Transplantation Act, to be able to store cord blood and tissue legally, a BloodCo must receive informed consent from the child’s mother. The consent of the biological or future legal father (if known) is neither sufficient nor required.

However, once whole blood from the placenta is collected, there may be no objection for other parties to enter into a contractual agreement concerning the now removed blood. At this stage, another parent (e.g., the father) or perhaps another relative (e.g., a grandparent) could become a contractual party in relation to a contract dealing with the storage and disposal of cord blood.

Parents often themselves approach a BloodCo in advance of an expected birth and enter into a cord blood storage agreement (often labelled Stem Cells Storage Agreement) (Storage Agreement) which contains the mother’s informed consent to the storage. This allows the BloodCo to lawfully extract blood from the umbilical cord and placenta when the baby is born and store it.

Storage Agreement
To achieve its advertised or assumed purpose, the Storage Agreement must guarantee that the donor child (when adult) and possibly the parents will be able to use stored material and will have control over it at their discretion within the law. 

Example clauses

Control Rights

The Storage Agreement must set out clearly who can control the stored material containing the UCB. This needs to include the right to deal with all or some of the stored material by for example providing it to a treatment provider to develop a treatment; making it available for research; discarding it; requiring its removal or handover (including to other BloodCo). Where appropriate, it ought to detail who has ownership rights over the material. It ought to be clear whether these rights exclusively belong to the

Right to remove and hand over

Given that the Bulgarian market for UCB is small, it may not be able to sustain as many BloodCos purely domestically as are currently offering their service. Mothers giving birth in Bulgaria may then use cross-border providers, typically from elsewhere in the EU. These providers are more likely to have the scale to survive in the market but may either operate facilities in Bulgaria permanently or only intermittently with enough facilities to collect and possibly store but with bigger or more important parts of their business being located elsewhere.

The right to require relocation of the material is therefore especially relevant to a small market such as Bulgaria. Recently, one of the BloodCos, incorporated in Switzerland and operating in Bulgaria, was declared insolvent.

This provoked a lot of questions and confusion about what will happen with the stored material and where it will be relocated, respectively stored.
This confusion can be limited if on entering into a Storage Agreement, a parent demands a clause which expressly allows them to relocate the stored material at their discretion.

Provisions by the BloodCo

It is highly advisable that the Storage Agreement contains express provisions on use of the stored UCB. Key protections concern:

  • Insolvency of the BloodCo;
  • Its merger with or demerger from another BloodCo;
  • Continued identifiability of the stored blood;
  • Technical protections (e.g., against unfreezing).

For example, one of BloodCo operating in Bulgaria provides that in case of its insolvency, storage will be taken over by a separate independent company. This still needs to be investigated (e.g. is the second BloodCo truly separate or may it be threatened by the insolvency or financial difficulties of the first company). This can be done by the parents or, if they decide, by an experienced lawyer.

Conclusion

The storage of blood and tissue left over in the umbilical cord and placenta is a common occurrence and typically governed by a contractual agreement. Before entering into a Storage Agreement parents should be aware of the risks which arise.

Since the decision to bank cord blood is a form of insurance (i.e., it is intended to deal with a future risk), it is important to make sure that at least basic steps are taken that the agreement is effective. At the same time, in the case of cord blood, these can be dealt with purely contractually, with interesting questions of cross-border insolvency and title also arising. 

If parents want the Storage Agreement to serve them well, they must make an informed decision on its terms which also probably requires legal analysis.
New Balkans Law Office often advises on medical and healthcare law and will be happy to assist parents, providers or insolvency practitioners with the relevant issues.

For more information, please contact us via our website form or at sofia@newbalkanslawoffice.com.

Authors: Petro Tyufekchiev and Kamen Shoylev



Recent work:

Acquisition of City Center Sofia by Heitman Investment fund for €101.5m Acquisition of CCS

NBLO advised the investment fund Heitman European Property III on the €101.5m acquisition from Equest of the 'City Center Sofia', the most established and profitable urban shopping centre in Bulgaria. Since then, NBLO has been the sole provider of ongoing legal services to the Center, involving a variety of largely commercial property issues.

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