Stem Cell Clinics Face Long Odds Against FDA in Legal Fight

Two stem cell clinic operators may be facing tough odds in a legal fight with the FDA to stay in business.

The Food and Drug Administration made a big splash in May when it took the stem cell clinic operators to court in California and Florida, seeking to shut them down for offering unapproved treatments the agency says are potentially dangerous. The FDA says the stem cell treatments produced by the clinics are drug products and therefore under the agency’s purview.

It’s part of a high-profile, ongoing effort the FDA announced last year to clamp down on what the agency has described as unscrupulous operators exploiting the promise of regenerative medicine treatments, with some causing serious injuries. In regenerative medicine, living, functional tissues are created and used to repair or replace tissue or organ functions lost due to disease, damage, or other causes.

A ruling against these clinics would give the FDA another notch in its belt in its pursuit of regulating stem cell clinic treatments and strengthen its efforts to regulate more clinics.

In light of past court decisions like U.S. v. Regenerative Sciences LLC that have given the FDA broad leeway in establishing its authority over stem cell treatments, the defendants—California Stem Cell Treatment Center and U.S. Stem Cell Clinic—appear to have little chance of winning.

“I think this is equivalent to Don Quixote, with his lance going at the windmill,” Marc Scheineson, a partner and head of the food, drug, and device practice at Alston & Bird LLP, told Bloomberg Law in an interview.

FDA Authority

In Regenerative Sciences, the U.S. Court of Appeals for the D.C. Circuit held a Colorado clinic’s products derived from bone marrow and synovial stem cells qualified as drug or biologic products under the FDA’s regulations, thereby falling under the agency’s authority to regulate them. The court rejected the clinic’s claim its treatment constituted the practice of medicine, which would be outside the FDA’s authority.

The high-profile decision “broadly established FDA authority over stem cells,” Paul Knoepfler, a professor in the University of California, Davis School of Medicine’s Department of Cell Biology and Human Anatomy, told Bloomberg Law in an interview. “For the federal courts now looking at these current cases, I think [Regenerative Sciences] would make it harder for them to rule against the FDA.”

In Cytori Therapeutics Inc. v. FDA, a 2013 decision also by the D.C. Circuit, the court declined to upend the agency’s refusal to allow a stem cell medical device manufacturer a quicker path to approval by pointing to devices already on the market that are substantially similar. The company’s device used adipose tissue, while the already approved devices used bone marrow.

“Looking at those prior legal cases, I just don’t see how the defendants in these cases are going to convince the courts that they’re engaged purely in the practice of medicine performing surgical procedures, and not offering stem cell products that fall within the purview of the FDA’s authority,” Leigh Turner, associate professor with the University of Minnesota’s Center for Bioethics, told Bloomberg Law in an interview.

Easy Targets?

In November, the FDA released new policies meant to spur regenerative medicine development while ensuring safety. The FDA says stem cell treatments can escape regulation as a drug, biologic, or device only if, among other things, they involve autologous use (when cells taken from patients are reintroduced to them, and not others); the stem cells are only “minimally manipulated”; and the cells are intended for homologous use (when the cells reintroduced to a patient are identical to or perform the same function as those removed).

In targeting the clinics in the California and Florida cases, the FDA “went after the low-hanging fruit,” Scheineson said. “It’s showcasing the worst of unregulated stem cell clinics.” The Justice Department brought the cases at the FDA’s request. This month, the U.S. District Court for the Southern District of Florida allowed the U.S. Stem Cell Clinic extra time to file an answer to the government’s complaint, and the California Stem Cell Treatment Center filed it’s answer this month to the California suit.

The agency said records uncovered while investigating the Florida clinic showed patients suffered detached retinas and eye hemorrhages after being treated with its product, derived from adipose tissues, causing them to become legally or completely blind. One adipose tissue-based product offered by the California operation, which includes a network of more than 100 clinics throughout the state, included the smallpox vaccine.

“If that’s not more than minimally manipulated, nothing is,” Scheineson said. He wants the FDA to loosen up its interpretation of homologous use and minimal manipulation when it comes to adipose tissue, but cases like these will likely strengthen the agency’s hand, he said.

“Bad facts make helpful law” for the FDA, he said. “I think the community, the regenerative medicine community wishes these cases would go away.”

While the agency in these cases benefits from being able to show unproven and unlicensed stem cell products can harm people, the FDA should pursue “not just the most outrageous offenders,” Turner argued. He’d like to see stepped-up investigations and warning letters issued to operators marketing treatments for serious conditions such as multiple sclerosis and Parkinson’s disease without providing credible evidence they’re safe or effective.

“And every step of the way they’re charging people thousands or tens of thousands of dollars,” he said.

Knoepfler said he worries that other suspect clinics may continue to proliferate if the FDA’s legal action drags on for years, like in Regenerative Sciences.

“In the meantime, has FDA taken any action on the hundreds of other clinics out there?” he asked. “It may win these two battles but lose the larger war if in two or three years, there’s a thousand clinics in the U.S.”

To contact the reporter on this story: Greg Langlois in Washington at glanglois@bloomberglaw.com

To contact the editor responsible for this story: Randy Kubetin at rkubetin@bloomberglaw.com