On December 1, 2011, a federal appeals court ruled that stem cell donors can now receive compensation for their donations without committing a felony. The appeals court decided that stem cells are renewable tissue and not an organ. The National Organ Transplant Act prohibits compensation for human organs, such as kidneys, but allows payment for renewable tissues such as blood.
The California nonprofit MoreMarrowDonors.org, parents of ill children, and a physician sued U.S. Attorney General Eric Holder in 2009, challenging the ban on compensation for stem cell donations. They argued that financial incentives should be legal and allowed in order to increase the numbers of potential bone marrow donors. They cited the ban on financial incentives violated the U.S. Constitution because it treated bone marrow and stem cells as a human organ while allowing payments for blood, sperm, and eggs.
The government said that payments could lead to exploitation of people in financial need. A California district court sided with the government, but the 9th Circuit Court of Appeals disagreed. The court found that new methods of harvesting stem cells from the donor's blood stream rather than the bone did not amount to an organ transfer because the stem cells enter the bloodstream when they are administered. MoreMarrowDonors.org had wanted to offer donors $3,000 in scholarships, housing allowances or gifts to charities of their choice. The federal appeals court decision now allows compensation as an incentive to recruit donors, and patients can now ask their insurance companies to pay donors identified as a match.