deep and persistent demand

Cryos: they keep the stork busy around the world

The market for babies stretches across the globe and it is created by a deep and persistent demand from people who have been denied the blessings of reproduction. Recent statistics indicate that 10 per cent of couples are infertile (www.repromedltd.com). Some decide they will live their lives together without children of their own. Others may pursue adoption – a procedure made more difficult because of the number of single women who choose to keep their children. A third option is for the couple to consult with their physician and to undergo artificial insemination using donor semen. It is many couples’ deeply felt wish to have children that is the basis for the Danish-based Cryos International Sperm Bank. Take artificial insemination. Sperm banking is now global; clients are no longer limited to the small donor pools at local sperm banks. For sperm banks technology plays a major role in the globalization drive. Concern about genetic defects and infectious diseases has led to sophisticated and expensive means of testing donations. Storage and transport methods have also grown more complicated. The improvements add to the investment required to operate a sperm bank. That, in turn, promotes consolidation in the industry.

History

Cryos International Sperm Bank was established in 1987 in Aarhus, Denmark, by Ole Schou. ‘Cryos’ is Greek and means ‘ice’ (from crystallos) and refers to the sperm conservation process. The word is also known from ‘cryobiology’. In English a sperm bank is often called a ‘cryobank’. The office and laboratory were initially established as a service both for men who were going to have a vasectomy and for cancer patients who wanted to have their sperm frozen before chemotherapy or radiation, which might make them infertile. In 1990 the donor programme was established, and the first donor semen was released and delivered after six months’ quarantine in May 1991. Demand increased very quickly. Clinics in Denmark started to receive semen from Cryos, quickly followed by clinics in Norway, Finland, Iceland, the United Kingdom, Greece, Germany, Italy, Switzerland, Belgium and other countries. The clinics were particularly satisfied with the good quality of semen, resulting in high pregnancy results (between 20 and 30 per cent per cyclus) and the professional service, with immediate supply from a relatively high selection of different donors. In 1994 two new departments were opened in the cities of Copenhagen and Odense, and later in Aalborg. In 1995 Cryos started distributing other sperm-related products such as preparation media. The same year Cryos started its own production of the culture media ‘SpermWash’

The ‘suppliers’

On average, across all age groups, it can take up to 13 straws to conceive a child. (An amount of sperm enough for one insemination is stored in a sealed

 

plastic straw.) In Denmark, there are approximately 500 donors, some who begin donating in their 20s. The cut-off age is 40. The average donor continues in the programme for five years and can provide sperm several times a week. Donors get about 350–80 a straw, dependent on the sperm quality. If their sperm does not sell, they are removed from the donor pool. On average each donor is responsible for conceiving 20 to 30 babies throughout the world. Among Cryos’ donors, around 20 per cent have chosen not to be anonymous. Their average age is 32, while that of anonymous donors is between 23 and 25 years. And there is a market for donors who can be traced. Unlike heterosexuals, lesbians and single women often prefer a donor that can be traced because they know their children will one day want to know who their biological father is.

The Cryos business today

Cryos has become the largest sperm bank in the world, with more than 250 donors and more than 15,000 units of semen distributed each year, resulting in 1,200 pregnancies per year. Cryos employs a total of 40 people: 10 medical doctors, 5 biologists and 15 authorized laboratory technicians. An additional 10 people are employed in sales and administration. The freezing of patients’ own sperm has continued, involving several hundred patient deposits. Cryos total sales have risen from two million euros (2.7 million dollars) in 2006 to three million in 2008. Of the income from donor semen 5 per cent is reserved for scientific and development purposes. Cryos will continue to offer a high-quality service related to its area of knowledge including donor semen, patient deposits and other semen-related clinical products. Furthermore, Cryos will continue to try to develop new and improved sperm-related knowledge and/or equipment for clinical use. Using air freight and proprietary freezing techniques, Cryos can deliver to almost any customer in the world within 72 hours. The sperm travels in liquid-nitrogen tanks that, without refilling, can last a week. The quality of the sperm can be validated through laboratory tests.

 

The newest trend – single women

A phenomenon that has increased demand for Cryos’ products and services in the past four years is the increasing number of highly educated single women who prioritized their careers and want to have a child before it is too late.

Internationalization of the fertility market and Cryos

Today, Cryos exports 85 per cent of its more than 15,000 sperm donations to more than 400 clinics in 60 countries. However, while the sperm from a Danish Viking with blond hair and blue eyes may be exactly what clients are looking for in northern Europe, it is not always the ideal in other parts of the world. Therefore Cryos has opened a franchise in New York and another one in Bombay, in India. In the next five years, Cryos plans to open up to 10 new offices, expanding further in Europe, Asia, Africa and Australia to give it a broad ethnical donor base to meet the demands of people all around the world. Laws that prevent anonymous sperm donations in countries like Sweden, Britain, The Netherlands, Austria and Germany have also led to a rise in ‘fertility tourism’, where women visit clinics in other countries to be inseminated, for example French women who go to Belgium and Swedes who go to Denmark.

In addition to selling sperm to clinics, Cryos has recently begun direct online sales to the public in order to meet the demands of some clients. It has set up a online catalogue of 50 donors, including 44 who remain anonymous, on its website, listing donors’ profiles with their IQ, childhood photographs, hobbies, school grades and other personal information. Buyers can select the sperm of the donor that most appeals to them – not an option at clinics, where sperm quality is the only determining factor – and buy it online for up to 8,000 euros. The initiative has been heavily criticised in Denmark and other countries, where opponents argue that sperm should not be handled like a supermarket product.

The US market

In 2001 Cryos opened a branch in the United States (Scandinavian Cryobank) in order to meet the specific market situation and the growing demand for Scandinavian donors. The sperm bank market in the United States is very different from that in other markets around the world, because it is not the clinics but the patients who choose a sperm bank and select the donor. The service includes patient access to donor lists, extended profiles, a patient phone service, etc., all of which could not be organized within the ‘clinic-only service’ concept of Cryos.

Marketing to Americans

About 5 million people in the United States are infertile, and half seek treatment to have a baby. Donor eggs are used by about 10 per cent of couples in treatment. While there are strict guidelines for screening the health of donor sperm, there are no government mechanisms in place to track actual use of the sperm, which can be frozen and stored for decades. In the United States infertility treatment is a $1 billion a year industry and growing. The US market for donor sperm is estimated at around 100 million a year. Recently, the CEO of Cryos, Ole Schou, has launched a global franchising system focusing on quality so that the concept of Cryos can be copied in other clinics around the world. The franchising system involves a very comprehensive package of laboratory standards, control systems, training systems, franchising contracts, marketing plans, investment, financing, computer systems, etc. The following is taken from the Cryos brochure ‘Open your own Cryos Sperm Bank’:

Cryos International’s franchise concept focuses on the establishment of sperm banks worldwide. Our goal is to provide an extensive selection of high quality donor semen as well as a range of clinical sperm related products to patients and clinics all over the world through our network of sperm banks.

Cryos’ franchise concept is based on an agreement between two legally independent parties which gives you (the franchisee) the right to market our products and services using our trademark, trade name and operating methods. The franchisee is obliged to pay the franchisor fees for these rights and the franchisor is obliged to provide rights and support to the franchisees. Cryos offers a defined set of guidelines described in our manuals, making it easy and simple to start your own sperm bank. With a Cryos sperm bank concept it is possi

QUESTIONS

1. Would you characterize Cryos as a ‘born global’? Why/why not?

2. What do you think about Ole Schou’s ideas of a ‘global franchising system’?

3. What ethical and moral issues are involved for Cryos in selling sperm worldwide?