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Paying a woman for her eggs to use in stem cell research has been a bioethical no-no for years. But this past June, New York State decided to allow just that, becoming the first state to permit public money to be used in this way. The decision, which allows payment of up to $10,000, will likely jump-start donations-and thereby research. Many bioethicists, however, worry that the financial incentive could exploit women and compromise their health.

Ethical issues surround egg donation because the process is not without risk. It requires a series of hormonal stimulation injections as well as an invasive procedure to retrieve the eggs. The long-term health effects and risks of complication are not well known. A woman who provides eggs for research is "assuming unknown risk for unknown benefits," says Debra Mathews, a pediatrician at Johns Hopkins University. The lingering unknowns prompted the National Academy of Science to issue in 2005 nonbinding guidelines to prohibit payment (but allow direct reimbursement for expenses), as a means to protect underprivileged women in particular.

Various research teams have observed those guidelines...