The Faculty Lounge

Our Day Of Market Design

As I mentioned in my last post, 2012 Nobel Prize winner Al Roth visited Duke Law School this week as a guest of the Law & Markets project. We basically worked Al to death while he was here – he gave three talks in a single day: a casual morning discussion over coffee with my Taboo Trades students and select faculty; a lunchtime public lecture about his book, Who Get’s What And Why: The New Economics of Matchmaking and Market Design; and an afternoon faculty workshop on Global Kidney Exchange (sometimes called Reverse Transplant Tourism). And that’s not counting the breakfasts, lunch, and dinner he had with faculty who wanted to hear even more about market design. I was exhausted from just watching him in action.

Those who know Al won’t be surprised by that, I suspect. As I’ve discussed before in prior posts (here and here), Al is deservedly well-known for his generosity in sharing his time and expertise with students, colleagues, and even know-nothings like me.

Whether by design or happy accident (I’m not sure which, though he is a market designer, hmm . . . ) there was little overlap in the content of the three talks, though each one built on the other and someone who attended all three (as many of us did) could gain new insight into market design at each stage. The morning session focused primarily on labor markets, especially the judicial clerkship market and market for summer associates and how that compared to the market for new medical residents. As Al discusses in the book, the market for judicial clerks, unlike the market for medical residents, is one in which attempts to prevent market unraveling have been largely unsuccessful. We talked a bit about why that might be and it was interesting to have that discussion among someone who has studied that market (Al), current market participants (the students), prior participants (law professors) and those who have negotiated some of the earlier (failed) agreements – law school administrators.

The lunch talk focused on the concept of market design more generally, but with an emphasis on school choice, kidney exchange, and high frequency trading as examples. The afternoon session was devoted to Al’s current work on repugnant transactions and Global Kidney Exchange, an issue we have both worked on with Mike Rees.

It was a really special day all around, but I was especially happy to get a chance to share Al in person with my Taboo Trades students. They have already spent more time thinking about repugnant transactions than most people ever will, and it was great for them to have a chance to meet “The Pied Piper of Repugnance,” as I referred to Al some years ago, in person. We memorialized his visit with us in the photo above.

Prior posts about Al Roth:

Tomorrow Is Al Roth Day!

Congratulations to Al Roth!

Al Roth: The Pied Piper of Repugnance?

Al Roth, Market Designer, in August Forbes

Scalping The Dalai Lama

Prior posts about Global Kidney Exchange/Reverse Transplant Tourism: collected here

Prior posts about the Taboo Trades seminar: collected here

 

Tomorrow Is Al Roth Day!

I blogged recently about our Law & Markets program (and earlier here) and tomorrow is one of the highlights of the year – 2012 Nobel Prize winner Al Roth is visiting Duke Law as a guest of the Law & Markets project and will deliver a public lecture about his work and his new book, Who Get’s What And Why: The New Economics of Matchmaking and Market Design. He’ll also give a faculty workshop on global kidney exchange. If you’re in the triangle area, stop by for one or both events (see the attached flyers for details).

You can read more about Roth’s work here:

What Al Roth Did To Win The Nobel Prize In Economics

And here: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2012/roth-facts.html

I’ll be back later with a full report.

 

Duke Project On Law And Markets: Updates

In the fall, I posted about my school’s yearlong initiative on Law & Markets, led by Joseph Blocher and me. The initiative builds on the model developed a few years ago by my colleagues Curt Bradley and Mitu Gulati, when they ran a project on Law & Custom. Like the Custom and Law Project that precedes it, the Law and Markets Project includes a summer reading group (see here for a reading list), a full year of workshops dedicated to law and markets (see here for the schedule), a student seminar (course description here), two public lectures (I’ll post about those separately), and will culminate in a symposium and volume (this one will be published by Law & Contemporary Problems, a quarterly, interdisciplinary, faculty-edited publication of Duke Law School).

Now that we’re into the home stretch, I feel like we’ve achieved a number of the goals we set for ourselves with this project. We’ve hosted speakers from a variety of disciplines (including law, economics, philosophy, sociology, and history) who spoke on topics ranging from refugees, to tax, to credit default swaps, to egg, sperm, blood, and organ markets. We’ve learned a lot, forged stronger connections with some of our colleagues across campus, and had fun. I’m counting it a success.

I’ll be back with more to say about some specific lectures and workshops, but for now am posting the workshop posters here (I’ve been tweeting them as they arise, so if you want updates follow me @KimKrawiec).

Egg Donors Get Pay Limits Axed With Antitrust Settlement

From Law360:

Egg Donors Get Pay Limits Axed With Antitrust Settlement

By Kelly Knaub

 

Law360, New York (February 1, 2016, 7:01 PM ET) -- A class of human-egg donors who allege the American Society for Reproductive Medicine violated antitrust laws by capping compensation to donors asked a California federal court Friday to approve a settlement requiring the organization to remove the compensation guideline, calling the agreement an “excellent resolution” of the case.

Under the proposed settlement, ASRM will remove language stipulating that “[t]otal payments to donors in excess of $5,000 require justification and sums above $10,000 are not appropriate,” effectively benefiting all women who donate eggs in the future.

. . .

In addition, ASRM will pay a total of $1.5 million under the agreement to compensate the plaintiffs’ counsel for fees and costs incurred in in the litigation, as well as up to $150,000 to cover the costs of notice to the class.

 

They could have saved that $1.5 million dollars in legal fees if they had listened to me about this back in 2009.  :-)

Related posts:

The NY Times Weighs In On Egg Donor Price Fixing

If You Want A Market, Have A Market . . . Otherwise

“Feeble Even By Normal Litigation Standards”

Egg Donor Antitrust Suit In Today’s WSJ

Sunny Samaritans’ Suit Survives

ASRM Seeks Dismissal of Egg Donor Suit

Kamakahi v. ASRM et al. — Updates

Politics And Profits in The Egg Business (When Sunny Samaritans Sue, IV)

When Sunny Samaritans Sue, Part III

When Sunny Samaritans Sue, Continued

When Sunny Samaritans Sue

The Value of Smart Eggs

The Washington Post Debates Organ Donor Compensation

In my black market Rhino horn post yesterday, I mentioned that a recent proposal to legalize a market in sustainably harvested Rhino horn:

. . . highlights some pretty standard debates about taboo markets in a new context. For example, one common point of contention is whether, when banning the market has failed to stop trading, society is better served by a regulated, legal market. This debate has occurred recently with respect to markets in prostitution and human organs, for example.

As if on cue, the Washington post began running a debate today on compensating organ donors. They begin with a “Primer” (my Kidney Transplantation Primer with Phil Cook is better, though J) that emphasizes some of the points I made in the Rhino post:

The proponents for change also say that a ban on selling organs helped to create the global black market for organs, mostly in the developing world. The literature on this topic is terrifying: stories of political dissidents killed to have their organs harvested or impoverished citizens tricked into dangerous operations. Some advocates say that a government-regulated system of compensation could help end organ theft.

The participants are:

Sally Satel, resident scholar at the American Enterprise Institute and practicing psychiatrist at the Yale University School of Medicine,

Francis Delmonico, Harvard Medical School professor of surgery at the Massachusetts General Hospital, and Alexander Capron, professor of law and medicine at the University of Southern California,

Scott Sumner, economist at Bentley University and blogger at The Money Illusion,

Benjamin Humphreys, program director at the Harvard Stem Cell Institute,

Nancy Scheper-Hughes, founder of Organ Watch and anthropology professor at University of California, Berkeley.

So far, the posts from Sally Satel (Generosity won’t fix our shortage of organs for transplants) and Frank Delmonico, with USC Law Prof Alex Capron (Our body parts shouldn’t be for sale) have been posted.

Related Posts:

How Can the Shortage of Kidneys for Transplantation Be Rectified?

Reverse Transplant Tourism

Happy Birthday NOTA! (Now Go Away)

Flesh List Is Me

Cash for Kidneys: Reality is Complicated

Kidneys, Part II: The Limits of Deceased Donation Proposals

Innovation and Incentives: Beyond “Cash for Kidneys”

More Organs & Inducements

Black Markets Versus Regulated Markets (Rhino Edition)

Over at Market Design blog, Al Roth flags an interesting controversy developing in South Africa – whether to abandon the current ban on Rhino horn and horn products, in favor of a regulated market in sustainably harvested Rhino horn.   Both the WSJ and NY Times carry recent articles.

As a bit of background (from the WSJ):

"The global rhino population has dwindled from 500,000 at the beginning of the 20th century to about 29,000 today. The surging trade in illicit horn has cut the population of the three remaining Asian species to just a few thousand, including about 40 Javan and less than 100 Sumatran rhinos. Just about 20,000 Southern White Rhinos and 5,000 black rhinos, which include three subspecies in Africa, survive.

...

"Black-market rhino horn can fetch as much as $100,000 a kilogram in Vietnam and other Asian countries, where it is peddled as a cure for ailments ranging from headaches to cancer.”

I find this latest controversy interesting, because it highlights some pretty standard debates about taboo markets in a new context. For example, one common point of contention is whether, when banning the market has failed to stop trading, society is better served by a regulated, legal market.

This debate has occurred recently with respect to markets in prostitution and human organs, for example. In the case of Rhino horn, advocates of a legalized market argue that sustainable herding would both reduce the demand for poached horn and apply price pressure, thus dampening incentives to poach. Again, from the WSJ:

Rhino horn is made of keratin, like human fingernails. It grows as much as 5 inches a year. Biologists say that as long as a stump of 2 to 3 inches remains, it can be trimmed, doing a rhino no more harm than a manicure. “There are no nerves in rhinos’ horns,” said Raoul du Toit, director of Zimbabwe’s Lowveld Rhino Trust. He said there is no evidence that the procedure affects rhinos’ breeding practices or leaves them more susceptible to predators. “Why would you hunt a rhino for seven, eight, nine, 10 kilos of horn when, in a lifetime, it can grow 70 kilos of horn?” Mr. Hume asked.

Many animal rights activists disagree, arguing that a legal market would make enforcement more difficult and raise demand by whetting appetites for Rhino horn, as apparently happened after a one-time sale of elephant ivory stockpiles in 2008. They insist that education and publicity campaigns designed to counter myths regarding Rhino horns’ healing powers are the answer.

Market advocates counter that time is of the essence – Rhino populations are now so low that we can’t afford to wait for societal views to change -- and dispute the lessons learned from the 2008 ivory auction:

The sides argue about precedents. A one-off sale of elephant-ivory stockpiles from four southern African nations in 2008 only whetted appetites for tusks, and elephant poaching has since soared to all-time highs. But a sustained, legal tide of supply—not a brief flood—has worked for other species, like South America’s vicuña, a llama relative. Mr. Hume notes that vicuñas were once slaughtered for their softer-than-cashmere coats but are now farmed sustainably, back from the edge of extinction."

And, as with other taboo trades, you can count on the opponents to differ when it comes to concerns about commodification and the crowding out of nonmarket ideals:

“Where we differ is with your attitude towards the exploitation of an endangered species with the intention of making large profits,” Margot Stewart, founder of the nonprofit group Wild and Free South Africa, wrote in an open letter to Mr. Hume. She argues that rhinos are wild animals and should not be kept in paddocks like sheep or cows—and that it is unethical to farm and sell rhino horn since it has zero medicinal value. “Only two parties want this to continue: the rhino farmers and organized crime syndicates,” she added.

Sources:

Market Design: Rhino horns: flood the market with sustainable horn, instead of prohibiting the market?

WSJ: Would a Legalized Horn Trade Save Rhinos?

With poaching on the rise, ranchers in South Africa want to flood the market—but conservationists warn of corruption and cruelty

NY Times: U.S. Pours Millions Into Fighting Poachers in South Africa

BioNews: Egg donors to challenge US payment rules in court

From BioNews:

Egg donors are suing the American Society for Reproductive Medicine (ASRM) and the Society for Assisted Reproductive Technology (SART) in a class-action lawsuit for setting a 'price cap' on compensation to egg donors. . . .

The guidelines, which have not been adjusted since they were first established by the ASRM in 2000, advise that reimbursement above $5000 for egg donation requires 'justification' and that compensation above $10,000 is 'beyond what is appropriate'. . . .

Despite these guidelines, compensation for donor eggs in the USA regularly goes up to $75,000 dollars and there are even reports of six-figure sums being paid out.

Law professor Kimberly Krawiec from Duke University, North Carolina, argued that the guidelines are a clear violation of the legislation against price-capping, and that if the subject had been anything except human eggs 'we wouldn't be having this conversation'.

In contrast, Professor of Bioethics Arthur Caplan at New York University said: 'Egg sale is not egg donation. Opening a free market in human eggs risks increasing bamboozlement of couples with phony eugenic promises of eggs that will result in beautiful geniuses and the risk of exploiting poor women dazzled by money into ignoring risk.'

I’ve seen no evidence that egg donor compensation “regularly” exceeds $75,000 in the US, though there may have been isolated cases. Admittedly, reliable data on egg donor compensation is pretty scarce, but the studies that are out there tend to suggest that most payments are under the $10,000 guidelines. See my earlier posts here and here, for example.

But I’m happy to see Art Caplan protecting young women and intended parents from the coercive effects of money, which apparently only begin at the $10,000 mark.

Related Posts:

The NY Times Weighs In On Egg Donor Price Fixing

If You Want A Market, Have A Market . . . Otherwise

“Feeble Even By Normal Litigation Standards”

Egg Donor Antitrust Suit In Today’s WSJ

Sunny Samaritans’ Suit Survives

ASRM Seeks Dismissal of Egg Donor Suit

Kamakahi v. ASRM et al. — Updates

Politics And Profits in The Egg Business (When Sunny Samaritans Sue, IV)

When Sunny Samaritans Sue, Part III

When Sunny Samaritans Sue, Continued

When Sunny Samaritans Sue

The Value of Smart Eggs

The NY Times Weighs In On Egg Donor Price Fixing

 And gets it right. 

As I mentioned a few days ago, the NY Times recently published a much-read piece about Kamakahi v. ASRM, the egg donor class action that accuses the American Society for Reproductive Medicine with illegally capping compensation to oocyte donors in violation of US antitrust law.  Yesterday, they followed up with an editorial that, perhaps amazingly, given the heated rhetoric surrounding the case, correctly sides with the egg donors in the litigation. 

From the editorial board’s letter:

Guidelines issued by the American Society for Reproductive Medicine and the Society for Assisted Reproductive Technology suggest that paying a woman more than $10,000 for her eggs is “beyond what is appropriate” and even paying $5,000 or more requires “justification.”

A vast majority of the nation’s fertility clinics follow these guidelines. The stated rationale behind them is to avoid offering so much money that donors, especially those who are often young and poor, will rush to contribute their eggs without considering the risks.

This payment system is unfair. However well-intentioned, it favors the fertility clinics. . . . Meanwhile, it shortchanges the egg donors, whose wishes are ignored in the equation. And if there are indeed risks, they can be addressed and mitigated by the clinics and the doctors, who can strengthen their screening and counseling procedures and provide more information. 

Yep.

If You Want A Market, Have A Market . . . Otherwise

By now most readers will have seen the article in Friday’s New York Times discussing Kamakahi v. ASRM, the egg donor price fixing litigation that I’ve blogged about numerous times here.  (See links below).  I’ll be back later with more to say about the article, but for now wanted to highlight the following quote from Debora Spar, the president of Barnard College and the author of The Baby Business, an excellent book on the assisted reproduction industry. Says Spar:

Our whole system makes no sense . . .We cap the price because of the yuck factor of commodifying human eggs, when we should either say, ‘Egg-selling is bad and we forbid it,’ as some countries do, or ‘Egg-selling is O.K., and the horse is out of the barn, but we’re going to regulate the market for safety.’

I couldn’t agree more and make a similar point in a recent piece in the Journal of Applied Philosophy (the published piece is gated, but you can access an earlier draft here):

ASRM and SART also defend the compensation guidelines on the grounds that they prevent the undue influence and exploitation of egg donors. . . .

It is worth noting at the outset that many countries ban payments to egg donors entirely, due precisely to concerns such as these. Regardless of one’s views on the ultimate wisdom of such bans, they do possess a certain logic — if the lure of payment will cause women to donate who otherwise would not, then one possible solution is to ban payments. An attempt to address inducement concerns through price caps, however, is an entirely different matter. 

Happy reading!

Related posts:

• “Feeble Even By Normal Litigation Standards”
  • Egg Donor Antitrust Suit In Today’s WSJ
  • Sunny Samaritans’ Suit Survives
  • ASRM Seeks Dismissal of Egg Donor Suit
  • Kamakahi v. ASRM et al. — Updates
  • Politics And Profits in The Egg Business (When Sunny Samaritans Sue, IV)
  • When Sunny Samaritans Sue, Part III
  • When Sunny Samaritans Sue, Continued
  • When Sunny Samaritans Sue
  • The Value of Smart Eggs

Tax-Free Pole Dancing in New York

Afici0nados of tax law, pole dancing, or the intersection thereof will be eager to read the decision of the State of New York Division of Tax Appeals in the Matter of 677 New Loudon Corporation d/b/a Nite Moves.  Previously, the establishment -- a purveyor of "semi-nude and nude dancing by females"--had been ordered to pay sales tax on cover charges paid by customers for the privilege of entering the establishment and on the sale of private dances known as "couch dances."  The most recent decision exempts the cover charges, on the grounds that these were the cost of admission to a choreographed dance performance, and thus exempt from sales tax.  But the taxpayer did not prove that the private "couch" dances were choreographed dances.  Because the private dances did not rise to the level of a dramatic or musical arts performance, they were subject to sales tax.

The ABA Journal has a write-up here.  Lawyers at MoFo covered the case in its New York Tax Insights newsletter here.

Medical Research Subjects: Guinea Pigs, Laborers, Or Altruists?

Cari Romm has a great article in The Atlantic, The Life of a Professional Guinea Pig: What It’s Like To Earn A Living As A Research Subject In Clinical Trials.  (HT: Jamie Boyle)

I’ve blogged before about my course on Taboo Trades & Forbidden Markets (see here for course resources, including reading lists, blog posts, and the like) and for the past several years have included readings about the market for professional research subjects. Last year, for example, I assigned this New Yorker article, Guinea Pigging, by Carl Elliott, together with More Money, More Problems? Can High Pay be Coercive and Repugnant?, by Sandro Ambuehl, Muriel Niederle, and Alvin E. Roth, and Martha Nussbaum’s, Taking Money For Bodily Services, in SEX AND SOCIAL JUSTICE.

I’ll certainly be adding Romm’s article into the mix in future years.  The piece hits on two points that I have tried to make in various works on taboo trades, particularly human egg markets.  The first is that attempts to keep payments low, out of coercion or other fears, does not necessarily result in altruistic donors. Instead, the result is often that donors with higher opportunity costs and better income opportunities exit the market, leaving behind “donors” who are poorer, potentially less educated, and more in need of money to meet basic needs. In other words, precisely the donors least likely to thoughtfully weigh the risks of donation against the monetary benefits and most likely to succumb to the “coercive” effects of money, because they have fewer income opportunities from which to choose. Second, pretending that donors are altruists, rather than sellers or wage earners, deprives them of legal protections and, sometimes, legal obligations.   

I discuss both of these issues in a recent article in the Journal of Applied Philosophy (the article is gated, but you can access an earlier draft on SSRN).  As I state there:

The provision of human oocytes for third party reproduction (“egg donation”) has long been contested territory, sitting uncomfortably between the world of gift exchange and its crass cousin, the marketplace. . . . 

[Yet] egg donation is a thriving and profitable industry, a substantial source of income for many young women, and the most important purchase that intended parents will ever make. In other words, it is a market, and well-established social policies seek to address a variety of concerns with respect to all markets. Among other goals, the legal regime governing markets seeks to control collusive economic activity and rationally tax income-generating activities. Those goals are in direct conflict with the [litigation discussed here, namely collusive price controls and challenges to ambiguous and inconsistent tax policies]. . . .

Together, these cases demonstrate the difficulty of achieving in practice what has seemed so appealing to many in the abstract – a mechanism that harnesses the market’s incentivizing forces while at the same time preserving ideals of reproduction and parenthood as outside of the marketplace. . . . A close examination of these cases also provides lessons on the dangers of romanticizing what is, for better or worse, a highly profitable and robust industry. 

The Atlantic, quoting Carl Elliot, sums up these issues well in the context of medical research subjects:

“Under the basic ethics guidelines … research subjects are treated as if they are altruistic volunteers,” he [Carl Elliot] told me. The issue of payment for research participation is an especially complicated one, and the pretense of altruism acts as a hedge against accusations of unethical behavior. “You have to ask: Who has a month or three weeks to just check in to a trial site or live there for that amount of time?” he said. “Homeless people, undocumented people, people who are either temporarily or long-term unemployed, people who are out of jail who can’t get regular work.” Paying members of vulnerable groups to put experimental drugs in their bodies can seem dangerously close to coercion.

But treating money as an afterthought rather than the main motivator also means that guinea pigs aren’t considered employees. “It’s work, but it offers none of the protections of work,” Elliott said. “You don’t have the right to minimum wage, you don’t have the right to unionize, you don’t have disability payments, you don’t even have regular health and safety inspections.”

Read the full Atlantic article here. And definitely read my full article on egg donation here. :-)

Duke Project On Law And Markets

A few years back, I put up a few posts discussing a new initiative we were trying out at my school, called the Duke Project on Custom and Law. As I said at the time:

We’re trying out something new at Duke next (2011-12) academic year that I wanted to float by Lounge readers. . . . 

The plan is to have a continuing academic dialogue at the law school that is broad enough to include large segments of the faculty (ideally, all of it) and, eventually, other folks on campus as well.  I think that the goal is to encourage conversation, collaboration, and cross-pollination among as much of our immediate community as possible.  In order to do that we need a topic that is relevant to many people’s scholarship across fields, obviously.

We’ve chosen the relationship between custom and law.  Sometimes custom informs the law, sometimes it is antagonistic to law, and sometimes it actually is the law.  The year-long dialogue will explore these differing relationships between custom and law.

In hindsight, I think that we accomplished some of those goals better than others, but had sufficient success that our Dean has approved a new project for the 2015-16 academic year, The Duke Project on Law and Markets.  This year’s project will be led by my colleague, Joseph Blocher, and me.  Like the Custom and Law Project that precedes it, the Law and Markets Project will include a summer reading group (see here for a reading list), a full year of workshops dedicated to law and markets (see here for the fall schedule), a student seminar (course description here), and will culminate in a symposium and volume (this one will be published by Law & Contemporary Problems, a quarterly, interdisciplinary, faculty-edited publication of Duke Law School).

Needless to say, I’m very excited about this lineup of speakers and topics and about the project more generally.  Although I was interested in Custom and Law and enjoyed that Project, those of you who know me know that I am much more passionate about law and markets! Our PR folks have circulated a lengthy news article describing the Project in some detail, for those who are interested.  From the article:

About 30 faculty members took part in the project’s first event on June 1, a discussion of a controversial 1970 article on blood donation, which argued that a system based on altruism is superior to a market-based system regulated by self-interest. “We had a very lively, two-hour discussion,” said Blocher. “It was a great kick-off.”

I’ll post updates about the Project as the year progresses. For now, I’ll just post the speaker schedule, along with an invitation for area Loungers to join us for speakers or topics that interest you. Just let me or Joseph know of your interest, and we’ll keep you in the loop.  

The Duke Project on Law and Markets 2015-2016 Faculty Workshop Series will feature the following scholars:

Sept. 9, 2015, 3:45 p.m., Room 4046
Guy-Uriel Charles, Charles S. Rhyne Professor of Law and Senior Associate Dean for Faculty & Research, Duke University School of Law
Representative scholarship: Corruption Temptation, 102 California Law Review 25 (2014)
Margaret H. Lemos, Robert G. Seaks LL.B. '34 Professor of Law, Duke University School of Law
Representative Scholarship: For-Profit Public Enforcement, 127 Harvard Law Review 853 (2014) (with Max Minzner)

Sept. 23, 2015, 3:45 p.m., Room 4046
Kara W. Swanson, Professor of Law, Northeastern University
Representative scholarship: Banking on the Body The Market in Blood, Milk, and Sperm in Modern America, (Harvard University Press, 2014)

October 7, 2015, 3:45 p.m., Room 4046
Jason F. Brennan, Associate Professor of Strategy, Economics, Ethics, and Public Policy at the McDonough School of Business; Associate Professor of Philosophy, at Georgetown University
Representative scholarship: Markets without Limits, with Peter Jaworski (Routledge Press, 2015)

October 21, 2015, 3:45 p.m., Room 4046
Lawrence A. Zelenak, Pamela B. Gann Professor of Law, Duke University School of Law
Representative Scholarship: Custom and the Rule of Law in the Administration of the Income Tax, 62 Duke Law Journal 829 (2012)

November 4, 2015, 3:45 p.m., Room 4046
Jon D. Michaels, Professor of Law, UCLA
Representative scholarship: Running Government Like a Business…Then and Now, 128 Harvard Law Review 1152 (2015).

November 18, 2015, 3:45 p.m., Room 4046
Gillian E. Metzger, Stanley H. Fuld Professor of Law, Columbia Law School
Representative Scholarship: Privatization As Delegation, 103 Columbia Law Review 1367 (2003). Excerpted in Modern Constitutional Theory: A Reader (John H. Garvey, T. Alexander Aleinikoff, & Daniel A. Farber, eds. 2004) To download click here

December 2, 2015, 3:45 p.m., Room 4046
Mario Macis, Assistant Professor, The Johns Hopkins Carey Business School
Representative scholarship: Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior, American Economic Journal: Economic Policy, 2012, 4 (1): 186-223 (with Nicola Lacetera and Robert Slonim)

 

Related Posts:

Duke Project on Custom and Law

More Law And Custom

Law and Custom Today and Tomorrow

Custom, Contract, and Kidney Exchange

Egg Donor Antitrust Suit In Today’s WSJ

In today’s WSJ, Ashby Jones discusses Kamakahi v. ASRM, the egg donor antitrust suit that I’ve written about on numerous occasions (see links below).  From the text: 

How much is a human egg worth? The question is at the heart of a federal lawsuit brought by two women who provided eggs to couples struggling with infertility. 

The women claim the price guidelines adopted by fertility clinics nationwide have artificially suppressed the amount they can get for their eggs, in violation of federal antitrust laws.

The industry groups behind the price guidance—which discourages payments above $10,000 per egg-donation cycle—say caps are needed to prevent coercion and exploitation in the egg-donation process. 

But the plaintiffs say the guidelines amount to an illegal conspiracy to set prices in violation of antitrust laws. The conspiracy, they argue in court papers, has deprived women nationwide a free market in which to sell their eggs, and enabled fertility clinics to “reap anticompetitive profits for themselves.”

One thing I did not previously know is that, according to the article, the court will hear motions later this summer on certifying an expanded class that would include not only past donors (as is currently the case) but also potential future donors. It wasn’t clear to me from the article what sort of relief would be sought on behalf of these future donors. Perhaps injunctive relief?   I’ll have to leave it to the Civ Pro experts to speculate. 

In any event, my fifteen minutes of fame come at the end of the article:

Kimberly Krawiec, a law professor at Duke University who has studied the egg-donor industry, played down such concerns, adding that mothers-to-be generally aren’t looking to build a genetically superior child. Ms. Krawiec said she had little issue with couples paying more for eggs from women with, say, high SAT scores. “Fertile people have been screening for beauty and intelligence for years and years,” she said. “It’s called dating.”

The ASRM defense that the price caps are needed to prevent differential payments for particular traits is one I address in more depth in a forthcoming Journal of Applied Philosophy article.  I’ll be back to say more about that in the coming days.

Related posts: 

• Sunny Samaritans’ Suit Survives
• ASRM Seeks Dismissal of Egg Donor Suit
• Kamakahi v. ASRM et al. — Updates
• Politics And Profits in The Egg Business (When Sunny Samaritans Sue, IV)
• When Sunny Samaritans Sue, Part III
• When Sunny Samaritans Sue, Continued
• When Sunny Samaritans Sue
• The Value of Smart Eggs
• Taxing Eggs: The Decision

How Can the Shortage of Kidneys for Transplantation Be Rectified?

The July issue of Medical Law Perspectives is dedicated to the topic of “Organ Transplants: Saving Lives, Facing Risks, Minimizing Complications.”  Phil Cook and I are featured, with a piece on “How Can the Shortage of Kidneys for Transplantation Be Rectified?” (sorry, subscription required). 

Here’s a bit from the text:

Recent innovations in immunosuppression, kidney matching algorithms, kidney swaps, and NEAD (nonsimultaneous, extended, altruistic donor) chains provide great hope.  Yet, so far none of these mechanisms is sufficiently developed to make a serious dent in the kidney shortage. . . . 

For all of these reasons, we believe the time is ripe to reconsider inducements to kidney donation, and financial inducements in particular. Granted, pure “cash for kidneys” proposals are unlikely to garner popular support at this juncture, as evidenced by public opinion polls and the federal government’s reaction to incentives for bone marrow donations. . . .But an open market in kidneys is not the only option. Instead, any incentive system should build on the existing transplant frameworks and methods that already enjoy widespread acceptance. In particular, it would make sense to continue with a system where a government agency procures kidneys from carefully vetted donors and distributes them to transplant patients according to priority established by medical need. The main change is that the government agency would be in a position to provide some financial compensation to donors. . . . 

For those interested in the topic, see also our recent article in Law & Contemporary Problems, A Primer on Kidney Transplantation: Anatomy of The Shortage.

The full slate of expert commentary from Medical Law Perspectives is below: 

Expert Analysis

	What Proof Is Needed for a Transplant Malpractice Action? Robert D. Kreisman, JD
	How Can the Shortage of Kidneys for Transplantation Be Rectified? Philip J. Cook, Ph.D; Kimberly D. Krawiec, JD
	What Factors Impact the Success of Allogeneic Hematopoietic Cell Transplantation? Hugo Fernandez, MD

 

 

AST and ASTS On Incentives and Disincentives For Organ Donation

Last June, I spent two days at a joint workshop of the American Society of Transplant Surgeons and the American Society of Transplantation, discussing the ethics, legality, and feasibility of providing incentives for organ donation. I blogged about the experience here.

A paper stemming from the workshop and approved by the Boards of both the American Society of Transplantation and the American Society of Transplant Surgeons has now been published in the American Journal of Transplantation and is available online.  From the paper:

The potential for financial incentives to increase organ donation, and ethical considerations that might accompany their implementation remains a controversial topic, fraught with confusion and misunderstanding, and with global implications. Given the growing organ shortage and the evolving discussion of these issues, leadership of both the American Society of Transplantation (AST) and American Society of Transplant Surgeons (ASTS) agreed to convene a workshop to develop a policy statement, acceptable to both societies, on the potential of creating incentives for organ donation in the United States On June 2–3, 2014, 38 representatives of the two societies (including experts in medical ethics, economics, and health care law and policy) assembled in Chicago to explore the potential of incentives to increase both living and deceased organ donation. . . .

By the end of the meeting, it was agreed that though donors assume medical risk and, in most cases, the financial costs associated with donation, everyone else involved in the organ transplant process (recipients, physicians, hospitals, and associated professionals) benefits, most often financially. Might changing this dynamic encourage more potential donors to become actual donors? . . .

We believe it important not to conflate the illegal market for organs, which we reject in the strongest possible terms, with the potential in the United States for concerted action to remove all remaining financial disincentives for donors and critically consider testing the impact and acceptability of incentives to increase organ availability in the United States. However, we do not support any trials of direct payments or valuable considerations to donors or families based on a process of market-assigned values of organs.

Read the whole thing here. 

My sense is that this is a small, but important, step forward in the debate over incentives and disincentives to donate. The authors are leaders in the major transplantation societies, and their views carry a lot of weight.

HT: Al Roth, via Frank McCormick

Bioethx Chat on Reverse Transplant Tourism Tonight

Those of you on twitter should feel free to join me tonight as I host a Bioethx chat on Reverse Transplant Tourism. Given that I am a twitter moron, still don't understand hashtags, and find it hard to even understand much tweet shorthand, this could be fun.  

More News Coverage Of Reverse Transplant Tourism

Via Al Roth comes news of a detailed article in yesterday’s Toledo Blade about the first Reverse Transplant Tourism surgery that I blogged about the other day. 

From the news article:

Dr. Rees calls his new program reverse-transplant tourism.

A husband and wife from the Philippines, Jose and Kristine Mamaril, are the first participants to benefit from this innovative system that allowed Mr. Mamaril to receive a life-saving transplant in Toledo from an American donor in Georgia. His wife, who has a coveted blood type, reciprocated by donating a kidney to a man in Minnesota who previously would have had to wait years for a match.

. . .

“In rich countries there’s not enough kidneys for people who have kidney failure, but there is plenty of money to pay for all the transplants. In poor countries, there’s lots of people that need kidney transplants and lots of available donors, but in poor countries they don’t have enough money,” Dr. Rees said.

This new program breaks down some of those barriers and helps bring people with the universal Type O blood into the U.S donor system, while helping someone from another country get access to free medical care. 

One year of a kidney patient’s dialysis costs Medicare about $90,000, or nearly triple the $33,000 cost of a kidney transplant, Dr. Rees said. He argues his donor-matching system will ultimately save the federal government and private insurers money because it moves patients with kidney failure, also known as end-stage renal disease, off dialysis sooner. 

You can download our recently published article on Reverse Transplant Tourism here.

You can also read my prior posts about RTT:

Reverse Transplant Tourism

Reverse Transplant Tourism (cont.)

RTT Conclusion

Reverse Transplant Tourism Goes Live!!

 

(Photo credit Toledo Blade)

Reverse Transplant Tourism Goes Live!!

Regular readers will recall that I’ve blogged here before about Reverse Transplant Tourism (RTT), a new form of cross border kidney paired donation that Mike Rees and I propose in a recently published article. RTT leverages the substantial cost savings of transplantation over dialysis to pay for immunosuppressant drugs for a foreign recipient, in exchange for an agreement to enter into a kidney swap or NEAD (non-simultaneous, extended, altruistic donor) chain.  The transaction is fairly complex, but I give a reasonably short and easy to understand summary in the posts linked below if you want a better understanding of RTT and its benefits.

Well, I am pleased to report that the first RTT took place in a series of transplants arranged by Mike Rees here in the US and Don Paloyo in the Philippines!

You can watch the video about Jose and Kristine below: 

 

I can attest from first hand observation that this first RTT had to overcome major hurdles before getting off the ground. Dozens of folks dedicated time, money, and expertise to make it happen. But as we state in our paper, and Mike reiterates in the video, RTT cannot survive on philanthropy alone. In order to be sustainable, the insurance companies and (eventually) Medicare – who save thousands of dollars from each RTT transplant – have to fund RTT and other transplant innovations in order to really make a dent in the ever-growing waitlist. 

HT: Al Roth for the video

 

You can also read my prior posts about RTT here: 

RTT Conclusion

Reverse Transplant Tourism (cont.)

Reverse Transplant Tourism

 

And you can download the article here.

Egg Donors With Class

Yesterday, as expected, the US District Court for the Northern District of California certified a class of human egg donors in Kamakahi v. ASRM on the question of whether an agreement among members of the American Society for Reproductive Medicine to cap compensation to those donors violated the Sherman Act.  The Court declined to certify the class on the issue of damages, reserving the question of how to determine that issue until after adjudication on the antitrust violation.  

From the Order: 

The class defined as follows is certified to determine whether the Guidelines‘ restriction of “appropriate” compensation to $5,000, or $10,000 with justification, violates the Sherman Act, with the method of adjudicating damages and injury-in-fact to be determined if Plaintiffs prevail in showing a Sherman Act violation:

All women who sold human egg donor services for the purpose of supplying human eggs to be used for assisted fertility and reproductive purposes (“AR Eggs”) within the United States and its territories at any time during the time period from April 12, 2007 to the present (the “Class Period”) to or through:

1. any clinic that was, at the time of the donation, a member of Society for Assisted Reproductive Technology (“SART”) and thereby agreed to follow the Maximum Price Rules (as that term is defined in Plaintiffs‘ Consolidated Amended Complaint) set forth by SART and the American Society for Reproductive Medicine (“ASRM”); and/or

2. any AR Egg Agency that was, at the time of the donation, agreeing to follow the Maximum Price Rules.

The Court’s order is available online here:  Download Kamakahi classcert

 

Related posts:

• Sunny Samaritans’ Suit Survives
• ASRM Seeks Dismissal of Egg Donor Suit
• Kamakahi v. ASRM et al. — Updates
• Politics And Profits in The Egg Business (When Sunny Samaritans Sue, IV)
• When Sunny Samaritans Sue, Part III
• When Sunny Samaritans Sue, Continued
• When Sunny Samaritans Sue
• The Value of Smart Eggs

Taxing Eggs: The Decision

Regular Lounge readers may recall the Taxing Eggs Mini-Symposium we held here last February, which gathered a number of tax experts to discuss Perez v. Commissioner, No. 9103-12 (Feb. 14, 2014) (Holmes, J.), the first case addressing the inclusion in taxable income (and perhaps the proper characterization) of compensation received for the sale or donation of human eggs and related services. 

The decision was filed today and, as predicted by our panel of experts, held that the money received by Perez was not “damages” under I.R.C. section 104(a)(2) and must be included in gross income. Because both parties agreed that the payment was for services, however, the case doesn't address any capital gains issues.  

From the opinion, which is available here: 

We see no limit on the mischief that ruling in Perez’s favor might cause: A professional boxer could argue that some part of the payments he received for his latest fight is excludable because they are payments for his bruises, cuts, and nosebleeds. A hockey player could argue that a portion of his million-dollar salary is allocable to the chipped teeth he invariably suffers during his career. And the same would go for the brain injuries suffered by football players and the less-noticed bodily damage daily endured by working men and women on farms and ranches, in mines, or on fishing boats. We don’t doubt that some portion of the compensation paid all these people reflects the risk that they will feel pain and suffering, but it’s a risk of pain and suffering that they agree to before they begin their work. And that makes it taxable compensation and not excludable damages. 

I note that the case includes citations to articles by three of our Taxing Eggs participants: Bridget Crawford, Lisa Milot, and me. 

 (Oh my, this post does contain the three cardinal sins of blogging: content links, use of the first person, and self-promotion. Oops, I just did it again).

(HT: Lisa Milot)

 

Related Posts:

Taxing Eggs: A Mini-Symposium

Taxing Eggs: Introduction to Perez v. Commissioner

Taxing Eggs: Paul Stephan

Taxing Eggs: Lisa Milot

Taxing Eggs: Lawrence A. Zelenak

Taxing Eggs: Bridget Crawford and Crawford, Part II

Taxing Eggs: What Have We Learned?

Taxing Eggs: Bridget Crawford III

Taxing Eggs: Lisa Milot Responds

Taxing Eggs: About That Other Case

Taxing Eggs: The Wrap-up