The sperm donation business and why sperm banks are doing brisk trade.

ONCE a practice associated with students looking to make a quick buck, sperm donation has penetrated the ranks of big business. The AIDS epidemic that began in the 1980s ended the informality surrounding the business, and as the costs and risks around testing and handling donated sperm increased, medics opted out and entrepreneurs swiftly filled the gap. Today savvy sperm banks—particularly those that are able to export—can make a very decent income supplying a growing and changing market. How do businesses make money in the jizz biz?

Two things have provided entrepreneurs with fertile ground. First, a patchwork of regulatory intervention means that in certain countries the flow hasn’t kept up with demand. In several places, including Britain, anonymous donation has been outlawed. In other countries donors cannot be paid. Both reasons help explain why sperm banks in such places often struggle to recruit donors; the long waiting lists caused by low donor-count can lead to customers shopping abroad. Second, as acceptance of modern family structures grows, so too does demand for a key missing ingredient. Where the vast majority of customers were previously heterosexual couples who had trouble conceiving, today many if not most are either lesbian couples or single women. In some countries such women are forbidden from being treated with donated sperm, encouraging them to shop abroad. The smartest businesses have picked up on such gaps in the market and sell their stuff direct to sperm banks and clinics that struggle to recruit donors at home. A perhaps even bigger money-spinner is selling directly to end-users. Thanks to the internet, dry-ice and DHL, customers can now shop for sperm from more or less anywhere and have it delivered to their homes.
Some American banks boast that a donor can make up to $1,500 per month, which presumably requires near-abstention from personal pleasure. The normal rate for a single donation is around $100. One donation can usually be split into as many as five vials, which in turn sell for between $500 and $1,000 each. Most customers buy several. Despite the costs involved—notably to recruit donors, test and retest, store and marketing—the margins are engorged. Still, sperm banks have to work hard to compete for customers; some distinguish themselves by emphasising the safety and security of their “product”. Others focus on the “user experience” by modelling their websites on popular dating sites, where customers can filter candidates by particular features such as eye colour, education or hobbies. Some banks will charge extra for information ($25 for a childhood picture and so on) or sell premium subscriptions—giving extra information and early access to new donors—for hundreds of dollars more.

Even the most radical free-market liberals struggle with the question of whether sex cells (and other bodily tissue) should be as easy to trade as any other product. In the interest of donor-conceived children there is a strong case for having basic regulation in place to ensure that all vials are tested for certain diseases before they can be sold. But morally driven policies about who can conceive using donated sperm are both discriminatory and, in the age of e-shopping, ineffective. More generally, overly restrictive policies, shortages and higher prices (they have roughly doubled over the past decade) seem to be driving customers to other sources of supply, including an international grey market that is distinctly dodgy. National regulators would do better to jump on the bandwagon rather than try standing in its way.

This article on sperm donation was culled from the Economist


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