The Hidden Market for Babies


Surrogates. Fertility clinics. Egg donors. Adoption. It's time to recognize (and perhaps regulate) the huge market being created by reproductive technologies, says HBS professor Debora L. Spar. She discusses her new book, The Baby Business.

by Manda Salls

"It is difficult to conceive of a child as commerce," writes Harvard Business School professor Debora L. Spar in her new book, The Baby Business: How Money, Science, and Politics Drive the Commerce of Conception. In fact, baby selling is prohibited across the world. But each day infants and children are sold via fertility clinics, sperm banks, women selling their eggs, surrogates, and adoption services.

We don't couch these transactions in terms of profit-making businesses. Orphans aren't sold—they are "matched" to adoptive parents, Spar says. Yet "advances in reproductive medicine have indeed created a market for babies, a market in which parents choose traits, clinics woo clients, and specialized providers earn millions of dollars a year. In this market, moreover, commerce often runs without many rules."

Spar doesn't argue that this market is good or bad, just simply that it exists, and that society needs to understand how it works. Ultimately, she concludes, government has a regulatory role to play in the baby trade.

We asked Spar to discuss her research.

Manda Salls: Why did you want to write this book?

Debora L. Spar: Four years ago, I published a book called Ruling the Waves. It was an examination of the Internet, and looked in particular at the politics that surrounded this technology. Unlike most other books about the Net, I tried to examine it in historical perspective, tracing out a whole line of other technologies (the compass, the telegraph, the radio, and so forth) that had been every bit as radical in their time as the Internet had become in ours. I argued that all of these technologies had gone through cycles of commercial expansion and political response and that, in the end, most participants in what had seemed like a "brave new world" had actually wanted governments to come in and regulate the market that technology had created.

For about a year after the book's publication, I gave speeches about it. And inevitably, someone would ask what the next cycle was going to be; in other words, what would be the next technology that would unleash this cycle of market creation, market exuberance, and then, eventually, demands for regulation. After giving this question a great deal of thought, I became convinced that the next great cycle of technology would be in the area of biotechnology, and particularly in those areas of biotechnology that dealt with the basics of human reproduction. So I started to look into this field, and quickly realized just how radical the technology was and how vibrant commercial activity had already become.

At the same time, coincidentally, my husband and I were also in the process of thinking about possibly adopting a third child (we already had two through old-fashioned means). And as I was doing personal research into adoption, it struck me one day that adoption was really just the flip side of reproductive technology: Both had become ways for acquiring children through what were essentially market means.

Because no one likes to think of children as existing in a market, we have been very wary of discussing cost.

Q: Can you briefly outline the types of industries you see as part of the baby business?

A: Sure. The market basically breaks down into a series of discrete industries. First, there's in vitro fertilization, probably the most obvious piece. This is a service industry, like medicine in general, which caters to infertile couples. Then there are what I call the component industries, which provide the missing "pieces" in some cases of infertility: eggs, sperm, and wombs. Sometimes, these components are sold along with IVF treatment—when a couple purchases eggs, for example, they are subsequently used for an IVF procedure—but they are often provided by individual brokers. Then there are the pharmaceutical firms that provide fertility drugs, a key and very expensive piece of the market. And then there is adoption, which basically exists completely separately from the world of high-technology baby making.

Each of these market segments has also spawned a small cottage industry of consultants, lawyers, brokers, and advisors.

Q: How has the industry as a whole flown under the radar for so long? Do you think companies are taking advantage of the fact that the public is uncomfortable (or unwilling) to confront this industry?

A: I think that's exactly right. People who "shop" in this market are obviously engaging in a hugely personal, hugely emotional transaction. They don't want to see their family life as the stuff of markets. And they definitely don't want outsiders looking over their shoulders. And so they are highly unlikely to push for regulation, even if regulation would actually be in their own best interests. Meanwhile, those who are outside the market generally don't even know what's going on.

Q: Are you worried that regulation could stifle innovation in reproductive medicines?

A: Actually, I'm more worried about regulation in the stem cell market right now. It's ironic that we have exceedingly tight regulation—prohibition, in fact—for federally funded research into an area of great promise while, at the same time, we have no regulation at all in the field of reproduction.

Clearly, I wouldn't want to see tight constraints put on reproductive science. But I think that a basic framework of regulation would actually increase innovation since it would tend to increase transparency in this field, and provide potential researchers with the data they need. Regulation could also increase access to reproductive services, which would in turn drive demand for services like IVF, which are currently largely limited to those who can pay.

Right now, it's simply too hard for would-be parents to get accurate and reliable information.

Q: What about the market for babies who have already been born? In your book you bring up Guatemala and Vietnam as countries that have a thriving but questionable market for babies. What are some key ways to improve the adoption market?

A: Compared to high-tech reproduction, the field of adoption is already fairly well regulated. But there are lots of things we could do to make the market work better, and to ensure that children are placed in safe, appropriate homes. For example, more generous tax credits could substantially reduce the cost of adopting available children, and would make adoption more feasible for lower-income families. Our State Department could work more closely with "home" countries, to ensure that they have good procedures for placing children and good means of detecting any illegal baby selling. Most importantly, we could work much harder to ensure that home studies are completed—accurately and in depth—by reputable adoption agencies.

Q: Moves toward regulation on all of these fronts will likely force a lot of public debate. What are some frameworks you would recommend as we begin these discussions?

A: I would recommend beginning with just a handful of basic frameworks—lenses, really—for figuring out how we want to approach this fast-growing area.

First is simply information. We should think about the kind of information that is most important to us (health data, for example, or cost data or comparative studies of clinical success rates or adoption placements) and then provide these data through public sources. Right now, it's simply too hard for would-be parents to get accurate and reliable information.

The second is cost. Because no one likes to think of children as existing in a market, we have been very wary of discussing cost. But it costs money to acquire a child through non-traditional means. So we need to be very upfront in discussing what these costs are, and which pieces of them should be borne by society, rather than by the parents themselves.

A third framework would relate to equity. As a society, we need to think about what fairness means in this realm. Is the ability to reproduce a basic human right? Is it part of medical care? And does it extend to all people, regardless of their age, sexual preference, and health condition? Once we get even a rough consensus around this issue (even if that consensus is forged at a state, rather than a national level) we can begin to craft policies that make sense.

Finally, tough as it may be, I think that we also need to think about appropriate limits to parental choice. Where should we draw the line on what kinds of children people can create, and what kinds of technology they can employ? We've already said no to reproductive cloning. There may well be other prohibitions that we also want to consider.

Q: What other research are you working on?

A: I'm working on several cases right now, most of which deal with the pharmaceutical industry and the ways in which pharmaceutical firms manage through the political dilemmas that often confront them.

I'm also beginning to explore a new project on stem cell science. This is a fascinating new area of scientific inquiry, but also one that has been mired thus far in political controversy. I want to look at how different countries are dealing with this science and what kinds of regulatory regimes they are establishing around it. And I eventually want to figure out what kinds of business models will bring stem cell technologies out of the laboratory and into the market.

About the Author

Manda Salls is a Web editor and content developer at Harvard Business School's Baker Library.