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California Planned Parenthood Centers Don't Profit From Providing Fetal Tissue, Contractor Says

In the past several weeks, the Center for Medical Progress — using secretly recorded videos — has accused Planned Parenthood of profiting from selling tissue from aborted fetuses to biotech companies.

Last updated on July 31, 2015, at 1:58 p.m. ET

Posted on July 30, 2015, at 6:21 p.m. ET

Center for Medical Progress / Via

Many Planned Parenthood centers in California provide tissue from aborted fetuses to biotech companies either at a loss or at a break-even price, a procurement contractor who works with many of the centers told BuzzFeed News.

The pricing of fetal tissue is significant amid a renewed debate over accusations from abortion foes that abortion providers are making money off the procedure. The anti-abortion Center for Medical Progress has published three secretly recorded videos showing two Planned Parenthood officials in California haggling over tissue sale prices with representatives from a fake biotech company ostensibly interested in purchasing them.

The videos — there have been four in all, with one released Thursday — have had wide reverberations. Louisiana authorities are looking into Planned Parenthood's practices, and California's attorney general is investigating whether the secret videos violate privacy laws. Planned Parenthood has asked the National Institutes of Health to assemble independent experts to conduct research on the tissue sales. And Republicans in the Senate are pushing to stop the nonprofit from getting federal aid.

The actors in the videos were conducting a sting operation with CMP, which claims the footage proves Planned Parenthood illegally profits from trafficking the tissue to procurement companies that buy and resell it to labs for disease research.

But, according to the spokesperson for StemExpress, a real California biotech company that has a contract to purchase the tissue from Planned Parenthood, the nonprofit is most likely losing money on these exchanges. The spokesperson requested anonymity because StemExpress has a confidentiality agreement with Planned Parenthood.

"If anything they're losing money," the spokesperson, who spoke on the condition of anonymity, said. "I hope they're breaking even." He added, "I just don't see how Planned Parenthood could be profiting."

In a statement to BuzzFeed News, Planned Parenthood said it "handles medical tissue like other quality health care providers do and we follow all regulations. We believe this material should be handled in a sensitive and professional manner."

CMP founder David Daleiden flatly denied that Planned Parenthood was only covering costs for the tissues it sells to procurement contractors.

StemExpress was the subject of a a third secretly recorded CMP video released earlier this week, claiming that it may be engaged in undefined illegal procurement practices. StemExpress said it has contracts with two of four Planned Parenthood "affiliates" in California — each of which governs several regional clinics. Planned Parenthood would not tell BuzzFeed News how many clinics belong to each affiliate in California.

The StemExpress spokesperson said his company pays Planned Parenthood for fetal tissue, processes it, and then distributes it to both private and federal medical research labs across the country to study a battery of diseases, such as Parkinson's and Alzheimer's.

The money paid to Planned Parenthood, the spokesperson said, "covers only the cost and expenses Planned Parenthood might incur associated with collection of human tissue: packaging, processing, shipping, and storage."

Negotiations like those seen in the videos, he said, are to determine how much the biotech company needs to pay Planned Parenthood, which is trying to cover those costs. This price varies depending on the type of tissue and the distance it's shipped, but it usually comes to $20 to $50 for each shipped specimen, the spokesperson told BuzzFeed News.

Once StemExpress gets the tissue it paid for, it isolates the cells and distributes them to the labs for disease research.

Usually, a batch of cells internally costs StemExpress $300 to $500 to separate from a specimen of tissue, the spokesperson said. "This procedure is highly complicated, is done on machines that cost millions of dollars by paid experts, and there is a high failure rate," he added. This cost also includes "procurement technicians" StemExpress hires to work alongside the doctors in Planned Parenthood clinics to properly procure and transport the tissue, the spokesperson said.

When asked about this, Daleiden told BuzzFeed News, "Planned Parenthood incurs no costs" with harvesting the tissue — and referred to a line in one of his videos where Dr. Mary Gatter, president of Planned Parenthood's medical directors council, said that the clinics "didn't have to do anything" to aid in the procurement of fetuses. (Daleiden said he has thousands of hours of video he has yet to release.)

The "anything" Gatter mentions could either refer to the packaging and storage they are reimbursed for — or it could refer to the actual procurement, which is allotted to the technicians hired under contract by StemExpress, the spokesperson said.

Dr. Arthur Caplan, director of the medical ethics division at New York University, told BuzzFeed News that the amount the StemExpress spokesperson said they paid to Planned Parenthood sounded accurate.

He said ethical questions should focus not on payments to the abortion provider, but on the money biotech companies like StemExpress receive from research labs for the same specimens.

“According to the law, you can’t profit or sell fetal tissue or body parts, but under the [broker’s] rubric of fees or processing, one wouldn’t know what’s being charged unless you sent in auditors, which no one has ever done,” Caplan said. “What these private brokers are doing is only considered legal because there’s no one to monitor them, there is no regulation.”

The amount of money research labs pay StemExpress for the processed cells varies from $488 to $24,250 — depending on how difficult the cells were to extract and how big the batch is, the StemExpress spokesperson said.

A former procurement technician with StemExpress, Holly O'Donnell, was the narrator of one of CMP's more recent videos. In it, O'Donnell said she found the job with StemExpress on Craigslist and described fainting the first time she saw human fetal tissue it was her job to procure. She wore a hidden camera and filmed a part of the procurement process.

"She was a contract employee for a brief period of time," the StemExpress spokesperson confirmed. The company successfully got a restraining order against CMP on Wednesday, preventing the publication of future videos.

StemExpress told BuzzFeed News it is considering a lawsuit against CMP and O'Donnell for wire-tapping the company, the spokesperson said. "She signed and has violated a confidentiality agreement," the spokesperson said. When contacted, O'Donnell referred BuzzFeed News to an agent. The agent didn't return a message for comment.

In California, where the video was filmed, there are privacy laws in place that make it illegal to film anyone without their consent, bioethical and genetic law expert John A. Robertson told BuzzFeed News.

Attorney General of California Kamala Harris said she is also taking that into consideration when she reviews the CMP for the nonconsensual filming of their last two videos.

Clarification: This post has been updated to say why the StemExpress spokesman requested anonymity.

A BuzzFeed News investigation, in partnership with the International Consortium of Investigative Journalists, based on thousands of documents the government didn't want you to see.