Lake Oswego entrepreneur Elena Medo is yanking an age-old practice — wet-nursing — into the 21st century.
The founder and CEO of Medolac Laboratories, Medo this past year opened a 5,000-square-foot headquarters and processing facility, where her 18 employees convert “raw” breast milk into a shelf stable product that can be sold to hospitals and humanitarian aid organizations. Medolac sources the milk from the Mother’s Milk Cooperative, a first-of-its-kind organization Medo established on Mother’s Day 2013 that pays mothers for their milk.
It’s a decidedly postmodern endeavor: applying industrial-scale food-processing technology and social venture/sharing economy principles to enable mass production of human breast milk.
“It’s the producer-processor model,” explains Medo, who is at once pragmatic and passionate about the Medolac setup and its benefits. “Think tomatoes, think dairy,” she explains. “The producers are the people who provide the raw material — in this case, moms. The processor is Medolac. Medolac processes it, but the milk belongs to the co-op.”
In 2014 everyone knows breast milk is best. Getting new moms to switch from infant formula to nursing ranks as one of the public health movement’s big success stories. Over 70% of American women now breast-feed their infants for some amount of time; 44% nurse for six months.
Medolac is entering the scene as a new phase of the breast-feeding campaign unfolds. More and more hospitals are adopting breast milk as a standard of care in neonatal intensive care units (NICUs). For premature babies, human milk provides a protein necessary for healthy development; it can also prevent necrotizing enterocolitis, an intestinal illness that is a leading killer of premature infants. If the mother of a preemie is unable to produce milk, many hospitals now use donor milk when available.
A network of nonprofit milk banks with volunteer donors serves that market. But those milk banks supply less than 5% of very low-birthweight babies’ requirements, asserts Medo, whose credentials include an M.B.A. with a health focus. Paying moms will help scale production to meet demand, she says. Plus, unlike nonprofit donor milk, which must be kept frozen, Medolac’s product can be stored at room temperature — for up to three years. It’s a model Medo says will dramatically increase access to breast milk in the U.S. and around the world.
“We anticipate serving the entire domestic market and extending into the global market in five years,” she says. “There is no acceptable reason for babies to die for lack of donor milk. But that’s what’s happening.”
Medo, 60, has been in the for-profit breast-milk game since 1999, when she started Prolacta Bioscience, a San Diego company that developed a human milk fortifier for use in NICUs. She left in 2008, as a new executive team was thinking about selling the company. “It wasn’t the environment that really fostered innovation. And I really wanted to innovate.”
Armed with a federal-discovery grant and seed capital, Medo launched Medolac in 2009. She also received a USDA grant to explore the feasibility of a milk co-op. Four years later, Medo, along with her husband and Medolac COO Joseph Medo, relocated to Oregon. (Her daughter, Adrianne Weir, oversees the milk cooperative). “The rent, the cost of employees are all dramatically lower here than in California,” Medo says. The Oregon lifestyle was also appealing: “very family friendly, wholesome, lots of water.”
Inside Medolac’s clean room, featuring sterilization tanks and an enormous tub capable of thawing 1,000 gallons of milk in two hours, Medo elaborates on the producer-processor system. The milk co-op has about 2,500 members: participating moms complete a medical screening, submit their milk for third-party testing, then ship the liquid sustenence to Medolac in an insulated freezer container.
Once the shipment arrives, the company applies a process that Medo describes as “similar to canning”: The milk is heated to very high temperatures, preserving nutrients while creating “the only donor-milk product in the world that is commercially sterile.”
The final product comes in a four-ounce foil pouch that looks like the juice pouches you buy at the grocery store. It sells for about $3.60, less than donor milk, Medo says, which requires expensive overnight frozen shipping.
“When I was at Prolacta, we initiated a program to ship thousands of gallons of milk to AIDS orphans in South Africa,” she says. “But the expense of moving frozen product to another continent was cost prohibitive.”
Medo expects the number of mothers enrolled in the co-op will reach 10,000 by the end of the year — yielding about 50,000 gallons of milk or 10% of domestic demand. The producer moms earn an average of $500 to $700 per month, money that helps women who choose to stay at home for a longer period with their babies, Medo emphasizes. “We’re making human milk safer and more affordable while empowering the mothers who produce the milk. This is my life’s passion.”
But not everyone is so enthusiastic about Medolac’s for-profit structure. “If you bring in a financial incentive for mothers, you increase the risk of that donation being tainted; increase the risk that a desperate person might alter the volume or conceal information about their lifestyle,” says Kim Updegrove, president of the Human Milk Banking Association of North America, an organization that has certified 12 nonprofit milk banks across the country, including one that opened last year in Beaverton with 200 donors. “Those are risks we’re not willing to take.”
Others are more open to the idea. Inside Portland’s Randall Children’s Hospital at Legacy Emanuel, human milk is fed to every preterm baby under 1,500 grams, according to neonatal dietician Andi Markell. Since the hospital starting using breast milk instead of formula the rate of necrotizing enterocolitis has declined significantly. Legacy currently purchases milk from nonprofit milk banks, and Markell says she is not familiar with the medical literature assessing Medolac’s high-temperature pasteurization method. “Would a shelf-stable donor milk be appealing if the literature was sound?” she asks. “It would be a consideration for sure.”
So far, her NICU has enough milk to meet need. “But this is Oregon and there is a lot of milk,” Markell says, referring to the state’s reputation for promoting breast-feeding. Legacy has started giving donor milk to full-term babies, she says, and demand is expected to grow amid mounting medical research confirming the health benefits of donor milk.
Medolac began shipping to hospitals several months ago; the company is finalizing its Series A funding and plans to introduce a human-milk fortifier later this year. For people who are squeamish about the idea of paying mothers for their milk — get over it, Medo says. “A lot of women have a tremendous amount of milk,” she says. Medolac, one might say, is simply monetizing an underutilized resource, solving a humanitarian health problem in the process.
“Families live in fear of losing their baby to a preventable disease related to the lack of human milk,” Medo says. “There’s no reason for a shortage, and there’s no reason moms shouldn’t benefit from being donors.”
By Linda Baker
Oregon Business Magazine
Friday, July 11, 2014