CEO of Cord Blood Bank Challenges Industry Executives to Stop Practice of Physician Kickbacks
NEW YORK, July 21, 2015 /PRNewswire/ — Martin Smithmyer, CEO of Americord Registry, a private cord blood, cord tissue, andplacenta tissue banking company, announced today that Americord is challenging both Cord Blood Registry and Viacord to renounce their long-standing system of providing kickbacks for doctors who recommend their companies over other cord blood banks.
This technique is not new and has been a linchpin of both companies’ success within the cord blood banking industry. It is often conducted under the guise of sponsorship titles or by providing stipends to presiding obstetricians for performing a cord blood collection.
“There is a long history between some of the largest cord blood banks and hundreds of obstetricians and gynecologists,” said Americord CEO Martin Smithmyer. “This results not only in millions of dollars exchanged between private banks and doctors, but situations where trusted healthcare professionals are recommending cord blood banks based on compensation rather than objective evaluation.”
Both Viacord and Cord Blood Registry were founded as private, independent cord blood banks when these practices were instituted. In 2007, Viacord was acquired by PerkinElmer, one of the largest medical device companies in the United States. Following suit, CBR was acquired last month by AMAG Pharmaceuticals. It is illegal in the United States for pharmaceutical and medical device companies to give kickbacks to doctors for prescribing a product, but it is still legal to provide these incentives for promoting one.
“These established cord blood banks have maintained their share of the market by providing kickbacks to doctors,” said Smithmyer. “And now that the two largest cord blood banks in the U.S. are owned by major pharmaceutical and medical device companies, they are able to utilize sales staffs that resemble pharmaceutical representatives and further infiltrate physician offices throughout the country.”
Americord is one of the few cord blood banks that has never provided doctors with incentives for promoting cord blood banking. “We rely on parents who are willing to do their own research and discover the cord blood bank that is right for them,” said Smithmyer. “Americord objects to paying off doctors for persuading patients to purchase a product. We will not reduce our ethics to sell, and I challenge CBR and Viacord to stop participating in this type of kickback scheme.”
About Americord Registry
Americord Registry is a leader in the advancement of umbilical cord blood, cord tissue and placenta tissue banking. Americord and its affiliate lab, Cook General Biotechnology collects, processes, and stores newborn stem cells from umbilical cord blood for future medical or therapeutic use, including the treatment of more than 80 blood diseases such as sickle cell anemia and leukemia. Founded in 2008, Americord is registered with the FDA and operates in all 50 states. The company’s laboratory is CLIA Certified, accredited by the AABB and complies with all federal and state guidelines and applicable licenses. Americord is headquartered in New York, NY. You may visit Americord Registry’s website at http://www.americordblood.com for more information.