The Global Kidney Bazaar - Is there an economic perspective to this?

At the risk of coming across like a provocateur, I would like to know what people think an “Austrian Perspective” on this topic would be? I have my own ideas, but I would like to hear what others think.

Cheers,

Dietwald


The global kidney bazaar

![Nepal Police parade Indian kidney transplant racket kingpin Amit Kumar Raut (3rd from right) in Kathmandu after arresting him from near the Indo-Nepal border last week. (Sudeshna SarkarISN)](http://www.isn.ethz.ch/sw_images/240/raut_L2.jpg)
Image: Sudeshna Sarkar, ISN

Amit Kumar Raut recently arrested in Nepal, ran an illegal kidney transplant business in India and drew clients from the West, illustrating the extent of the global black market for human organs.

By Sudeshna Sarkar in Kathmandu/New Delhi for ISN Security Watch (18/02/08)

When American medical thriller writer Robin Cook wrote his second novel “Coma,” depicting a scenario in which unscrupulous doctors killed patients in the operation theater to harvest their organs for rich clients, it was hailed as an ingenious story ready for Hollywood.

However, in 2008, “reel” life has become real life with the uncovering of an illegal kidney transplant racket in India that spanned three continents. Reasonably healthy humans can function with one kidney.

Police in India say that Amit Kumar Raut, posing as a doctor, ran a multi-billion dollar clandestine operation of kidney transplants in which the victims were poor laborers and farmers. The recipients were affluent patients from the Middle East, Europe, the US and Canada.

Residents of Gurgaon, a booming call center and IT hub located just outside New Delhi, reported having seen human blood running in the gutters and pieces of human flesh near the Star Max Life Care Hospital run by Raut.

Police raided the hospital in January, unearthing a massive network of touts, doctors and law enforcement authorities that is suspected to have conducted over 500 illegal kidney transplants in under five years.

In a guesthouse used by the clinic, police also found five foreigners - three Americans of Indian origin and two Greeks - awaiting kidney transplants. There were also five Indians, three of whom had already had kidneys removed.

Police also seized nearly four dozen “applications” from kidney patients seeking transplants, most of them non-Indians and predominately from Greece. Applications also hailed from the UK, the US, Lebanon, Canada, Dubai and Saudi Arabia. The “donors” came from various Indian states.

Raut, who holds a Canadian residency permit, fled India along with his brother on the eve of the raids. He was later arrested in Nepal at a holiday resort after Interpol issued a worldwide alert.

“Amit Kumar told us he had come to Nepal because he wanted to close his hospital in India and start a new one in Nepal,” Upendra Arryal, senior superintendent of police at Nepal’s Metropolitan Police’s crime division that lead the hunt for Raut in the country, told ISN Security Watch.

Raut’s bid to shift his business when exposure became imminent is a recurrent motif in his illegal transplant business that spanned over 15 years, including an arrest in 1994 for running a similar network in Mumbai.

In 2006, the Turkish Embassy in New Delhi filed a complaint with India’s External Affairs Ministry after three Turkish nationals died under suspicious circumstances.

When caught in Nepal’s Chitwan district, Raut reportedly attempted to bribe the police team. However, he was brought back to Kathmandu, where police said they would first charge him with carrying a large amount of undeclared foreign currency.

Although authorities planned to keep Raut in custody until an investigation into other transplant cases in which his involvement was suspected, within 48 hours, Raut was deported to India at the request of India’s Central Bureau of Investigation (CBI) with the order coming directly from Nepali Prime Minister Girija Prasad Koirala.

Nepali police are still searching for Raut’s brother.

An old trade

Raut is not the sole “kidney king” in India. There are scores of similar rings flourishing in Indian metros of Kolkata, Chennai, Mumbai, Chandigarh and Lucknow, to name just a few.

In 2004, Indian police arrested alleged kidney racket kingpin Sanjay Singh, the grandson of a former member of the country’s parliament. Singh’s network reportedly ran through five Indian cities.

India lacked an organ transplant law until 1994, when the Organ Transplant Act came into effect. The Act banned the commercial sale of organs and required the donor to be a blood relative. Taking advantage of the vacuum before the law was passed, hospitals, especially in the southern city of Chennai, carried on a flourishing trade.

In 1994, thanks to poor implementation of the Act and a corrupt administration, the racket went underground after the passage of the law, with hospitals continuing to carry on with the connivance of police.

Potential clients are gleaned by touts employed at hospitals where dialysis treatments are performed. They also fan out to villages and even railway stations to obtain organ donors - usually low-wage laborers. There are growing complaints that some of the donors - illiterate, unemployed and lacking access to legal remedies - were deceived about illnesses and had perfectly healthy kidneys removed under the pretext they were malfunctioning.

Others have complained to police that they were promised either jobs or large sums of money in exchange for a kidney but were paid only a pittance.

The kidney racket has been increasingly targeting underdeveloped countries where unemployment is high.

Promising organ hunting grounds

While police are still investigating whether Kumar had lured donors from Nepal, one of the poorest countries in the world, or conducted any illegal transplants in Nepal, the once insurgency-ridden country too is the hunting ground of such mafia.

Nepal’s superintendent of police, Sarbendra Khanal, told ISN Security Watch that last year officials had unearthed three kidney gangs in the country, resulting in two arrests.

According to the suspects, they took Nepali workers to India to extract their kidneys. The men even named the Indian hospitals that had performed the operations while one of them admitted to police that he had photographs of the donors and recipients.

However, though Nepal and India have agreed to work in close collaboration to check cross-border crime and have several bilateral mechanisms for that, and though the Indian government has an embassy as well as a consulate in Nepal and vice versa, no step was taken by either side to jointly investigate last year’s findings fully.

Organs without borders

India and Nepal are just the tip of the iceberg. The international black market in human organs runs through other Asian countries as well. Pakistan is another thriving “kidney bazaar.”

Unlike other Islamic countries that regulate organ transplants, Pakistan, ruled by a military government and shaken by terrorist attacks, had no legislation on kidney transplant until late 2007.

Subsequently, the Indian government’s ban on kidney transplants in the 1990s fuelled a boom in Pakistan.

Although after a series of scandals the government passed the Transplantation of Human Organs and Tissues Ordinance 2007, providing for imprisonment up to 10 years and a fine of Rs1 million (about US$15,900), the Pakistani media says hospitals still continue to perform the operations covertly.

The Philippines, where kidney sales are legal, also has a booming transplant business, drawing clients from the US, Australia, New Zealand and Japan.

The Health Ministry-dictated program costs a foreign buyer nearly 3 million pesos (about US$73,700), which covers health insurance and a cash “gift” for the donor.

Still considerably cheaper than developed nations, the government’s medical tourism program has been often criticized by the opposition parties, especially after erupting scandals about the sale of kidneys by slum dwellers.

In 2005, officials there considered relaxing or totally lifting the ceiling on the number of foreign organ recipients. With the Philippine Medical Tourism Program currently promoting a Medical Tourism Bill that aims to enhance the partnership between the government and the private sector, the organ trade is likely to be bolstered.

China: More organs, more horror

China, which has one of the largest markets for human organs in the world, faces allegations from human rights organizations that it harvests organs from the condemned after they are executed.

Wealthy businessmen from Hong Kong, Taiwan and even Beijing are said to flock to Guangzhou city, capital of China’s Guangdong province, for kidney and liver transplants.

In 2001, the Laogai Research Foundation - a non-profit organization that documents cases of human rights abuse in China, especially in forced labor camps - reported that people who committed non-violent offences were often sentenced to death so that their organs could be transplanted. According to his 2001 testimony in front of an ethics panel, Dr Thomas Diflo, director of the renal transplant program at the New York University Medical Center, US patients were visiting China to receive the organs, in many cases from convicted prisoners.

Some observers say that the lifting of the ban on commercial human organ sales is a more practical solution. It would help the trade run legally, exposing both donors and recipients to fewer risks.

“I lost two sisters because of Nepal’s ban on organ sale,” Rajendra Gurbacharya, a retired travel trade consultant and a Raut supporter, told ISN Security Watch.

"One died in Chennai in 1991, when transplants were still legal there, [but] she was given HIV-infected blood during the operation.

"The other died about seven years ago since the Indian hospital that performed the clandestine operation neglected to see whether she had received a kidney that matched her blood group.

“Those who make the laws are the first to break it when they feel the pinch. Raut did not kill anyone; instead he gave life back to hundreds of people who would have died otherwise. He made some money no doubt but what’s money when you are struggling to save your life?”

I think the article makes a good case for legalizing organ sales. It demonstrates how when the government prohibits certain voluntary transactions the least scrupulous entrepreneurs take over (bootleggers, drug dealers, border crossing coyotes). I obviously don’t approve of these rings defrauding poor people by telling them they need to have their organs removed for medical reasons or stiffing them afterwards. The bit about the Chinese government sentencing minor criminals to death in order to harvest their organs was also disturbing but that has nothing to do with a free organ market.

I agree with John. Legalized organ sales would drastically drop the price of organs and therefore greatly reduce the incentives to steal them from unwitting victims. Organ theft would drop dramatically.

I don’t believe this position is especially ‘Austrian’. The only mainstream critique I’ve heard against allowing organ sales is the disutility of ‘disgust’. That is, allowing organ sales has a negative externality of disgusting people not involved in the sale. In neoclassical theory this would only justify a tax. An Austrian arguing (only as an economist and not as a libertarian) against this might then critique this theory by pointing out how the needed extent of the tax is impossible for a government to calculate, and that interpersonal utility comparisons are impossible.

Of course, the libertarian position is that emotional externalities like disgust are not more important than self-ownership, and so organ sales should be allowed. Ultimately I think the issue comes down to ethics, and I think its pretty obvious where libertarians and the rest of society stand on it.

Even if I believed that disgust was a good reason to use coercion (and I don’t), I don’t see that bans or taxes on organ sales are helpful in a neoclassical sense. Its easy for a democracy to restrict some widely-disliked activity, even if its an issue most people never think about, and it gives near-unlimited utility to 5% of the population. The majority who can’t imagine selling their organs don’t give a damn about the utility of the minority in a democracy (the guys holding the guns never do). I wonder if their tune would change if a firm offered them $1,000 to sign up as an organ donor?