Alabama Ruling, Political Blowback Rattle In Vitro Fertilization Market
13 Mar 2024
Drug Approval
Pictured: IVF collage/Nicole Bean for BioSpace
The world of in vitro fertilization was turned upside-down a month ago when the all-Republican Alabama Supreme Court ruled that frozen embryos could be considered “extrauterine children” under state law, making anyone caught destroying them legally liable.
At least three fertility clinics in the state immediately halted IVF services as they considered their risks, but by March 6, Alabama lawmakers had unanimously passed a bill offering civil and criminal immunity to IVF providers and patients. GOP Gov. Kay Ivey signed it into law the next day, and IVF was back at the clinics by the end of last week.
Still, the debate over IVF legality rages on across the nation, and drugmakers in the space are forced to consider what effect a flurry of new political initiatives might have on the market.
Estimates for the size of the IVF market vary widely, but one 2022 estimate placed the global value at $18.1 billion in 2020, forecasting it to grow more than 9% annually to $36.5 billion by 2028. That all-encompassing total includes medications, supplies, medical services and procedures for women and men, as well as embryo storage, and includes a handful of Big Pharma companies such as Pfizer, Merck, Bayer, Takeda and Novartis.
Mark Leondires, founder and medical director of Illume Fertility, a practice serving Connecticut and New York, told BioSpace that he does not believe the Alabama ruling by itself would have had much of an effect on the national market for fertility drugs. But he nevertheless cautioned that the industry should be on high alert. “I do think that pharma companies are at risk [of losing] revenue if this percolates through other states because not everyone’s going to be able to travel to do an IVF cycle.”
And if patients do end up traveling to more legislatively permissive states for IVF services, Leondires added, it could complicate the supply chain. While he said that his service area near New York City has enough capacity to handle anticipated patient volume, “there are regularly issues with drug supply”—shortages perhaps two or three times a year for a few weeks at a time.
Fear of liability for discarded embryos might push some clinicians to only fertilize one egg at a time, experts noted, increasing the cost of full IVF treatments and potentially further cutting into drugmakers’ bottom lines.
The Legislative Landscape
The implications of interpretations like the Alabama Supreme Court’s are significant. Barely half of eggs fertilized in vitro become viable blastocysts, and clinics “routinely discard” unused or unviable embryos, Alexandra Schumm, vice president of research at the Chartis Group, wrote in a company report last week. “Under Alabama’s February ruling, anyone involved in that process could face severe legal repercussions.”
According to Jailendra Singh, a research analyst at Truist Securities, Alabama clinics performed just 0.5% of assisted reproductive technology–based treatments in the U.S. in 2021. “While Alabama itself is likely not that meaningful from a patient volume point of view, there are concerns that the ruling can encourage other states with strict abortion bans to pursue IVF restrictions,” Singh wrote in a research note, obtained through AlphaSense, about fertility benefits company Progyny.
In anticipation of such restrictions, GOP majorities in Florida, Texas and Idaho have taken up bills in the last two weeks to safeguard IVF access. And the Democratic-led Connecticut General Assembly is now seeking to provide “equal access” to fertility treatments for same-sex couples and individuals seeking to have children.
It remains to be seen how important additional legislation will be in protecting rights in the IVF sector. Singh wrote in his research note that in the wake of the landmark 2022 Dobbs v. Jackson U.S. Supreme Court ruling that overturned Roe v. Wade, even states with strict anti-abortion laws “quickly clarified their statutes to eliminate language that could negatively impact fertility treatments. Americans and their employers view fertility services as standard healthcare delivery, where policymakers likely would not want to cross this massive part of the country and their electorate.”
But some in the sector are pushing for more robust protection for IVF, including in Alabama. Last week’s new law to shield patients and providers offers only a “brief reprieve,” according to Schumm. Citing a recent New York Times story, she noted that the bill did not clearly define personhood, “leaving open the prospect of legal challenges in the future.”
Sen. Tammy Duckworth (D-Ill.) agreed, telling CBS News that the Alabama law “does not go far enough.” At the federal level, she has since 2022 championed a federal bill called the Access to Family Building Act that would preempt state laws that limit IVF. Duckworth reintroduced the legislation Feb. 28 in the wake of the Alabama Supreme Court ruling, but Sen. Cindy Hyde-Smith (R-Miss.) objected on behalf of the GOP minority. The status of the legislation is now uncertain, according to Spectrum News.
IVF Alternatives
With much still up in the air for the IVF market, some companies see an opportunity for alternative therapies. Femasys, an Atlanta–based maker of intrauterine insemination (IUI) devices, received FDA 510(k) clearance in September for FemaSeed, the first intratubal insemination (ITI) product to hit the U.S. market. The startup announced last week that it had begun the commercialization of the new device that delivers sperm directly to the fallopian tubes.
While Femasys CEO Kathy Lee-Sepsick supports protection of IVF, she said that conservative pushes to protect embryos and fetuses may be a boon for device-based fertility treatment. Lee-Sepsick is positioning FemaSeed as a noninvasive, lower-cost alternative to IVF and intracytoplasmic sperm injection (ICSI), as well as an advancement over older, less-effective IUI techniques, especially when fertility issues result from low sperm count.
“We don’t require embryos because we’re taking natural fertilization and enhancing it,” Lee-Sepsick said. That means it is exempt from “personhood” laws as well as rulings like the Alabama judgment.
Lower costs might mean that more families could afford fertilization services, especially in states where tight abortion restrictions are pushing IVF clinics to perform more single-embryo transfers. Lee-Sepsick said that there are about 200,000 IVF cycles given in the U.S. annually, but about 10 million people who suffer from infertility. “What’s happening to the rest of them?”
Neil Versel is the business editor at BioSpace. You can reach him at neil.versel@biospace.com. Follow him on LinkedIn or X.
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