May 23, 2022

Fertility Services Market at Risk with New Oklahoma Abortion Bill

On May 19th, 2022, Oklahoma’s legislature passed a bill that bans abortion starting at conception and is likely to be signed into law by Oklahoma Governor Kevin Stitt. The bill, HB 4327, bans all abortions, except in cases of medical emergencies, rape, incest and sexual assault and only if those incidents have already been reported to law enforcement. Oklahoma’s bill could have a far-reaching impact in other areas of women’s reproductive health such as embryo management, because it defines the beginning of pregnancy as the moment of fertilization. HB 4327 could potentially have a chilling effect on the availability and practice of fertility treatments such as in-vitro fertilization (IVF) and could in effect make it illegal for IVF facilities, clinicians, and patients to freeze or discard embryos created in the process.

According to a 2017 report, more than one million babies were born through the use of IVF or other assisted reproductive technologies in the U.S. In most cases, IVF presumes that embryos will be destroyed during the treatment process, which could be deemed illegal when reading the plain language of the Oklahoma bill. The lack of carve-outs in HB 4327, and other similar laws, for fertility treatments such as IVF could unintentionally complicate access to IVF treatments.

How may Oklahoma’s bill, and others that are similar, impact growing private equity investments in the fertility services market? According to a 2021 report, the global fertility services market is expected to grow from approximately $17 billion in 2020 to $28 billion in 2025. Further, investments in fertility startups appeared to have increased from $93 million in 2020 to over $180 million in 2021. Though there continues to be a desire to invest in companies focused on women’s health and innovation, the language in HB 4327 could lead to interpretations that limit or prohibit IVF and make fertility clinics subject to legal scrutiny. Further, the potential Supreme Court decision to overturn Roe v. Wade, and the impending “trigger” laws in multiple states, could severely curtail investors’ appetite to continue to invest in the women’s health space, specifically as it relates to assisted reproduction. Although the legal battles over the constitutionality of when conception begins may go on for years, the impact of Oklahoma’s near total ban on abortion could have an immediate impact on private equity and venture capital investments in companies focused on women’s health.