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NA LRA Watchdog Update October 2022

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North America Legal and Regulatory Affairs
Watchdog Update
October 2022

By
Guest Contributor:
Mackenna Roberts, MA
Choice Telemed
London, United Kingdom

Co-Editors:
Crystal Ruff MBA, PhD
Takeda Pharmaceuticals
London, United Kingdom

Joseph (Yossi) Schwartz MD, MPH
Mount Sinai Health System
New York NY, United States

Court ruling threatens FDA jurisdiction over autologous stem cell treatments

What happened?

On August 30, 2022, a US federal judge in California issued a ruling against the FDA, finding that it does not have a legal basis to regulate and prevent clinics from providing experimental/unproven stem cell treatments.

US District Judge Jesus G. Bernal determined that multiple experimental stem cell treatments offered by California Stem Cell Treatment Center, Inc., Cell Surgical Network Corporation and its doctors do not fall within the legal definition of a ‘drug’ but instead qualify as surgical procedures or the practice of medicine, which is exempt from the FDA’s remit. It should be noted that Judge Bernal did find that one experimental cancer treatment was potentially subject to the Food, Drug and Cosmetics Act (FDCA) in his opinion, but the clinics and doctors voluntarily ceased offering it in 2017 (before the lawsuit commenced).

He concluded that the defendants “engaged in the practice of medicine, not the manufacture of pharmaceuticals”.

The decision directly conflicts with the precedent ruling in favour of the FDA in a similar case decided by a district judge in Florida, which was affirmed on appeal by the federal Eleventh Circuit Court in June 2021. Judge Bernal acknowledged but departed from the 2021 Court of Appeal precedent for reasons set out in his 19-page ruling.

This leaves courts, regulators and legitimate cell therapy innovators in a state of confusion. Judicial opinion is divided and future courts will have to decide which decision to follow. This case will likely be appealed but until then the question of whether the FDA has the legal right to regulate these treatments, as it claims, is unclear with two opposite interpretations of the FDCA regulations.

What is the problem?

As Judge Bernal rightly described, the line between a ‘drug’, which is regulated by the FDA, and a ‘medical procedure’, which is not, is “especially muddy” in relation to stem cell procedures involving stromal vascular fraction cells (SVF) and expanded mesenchymal stem cells (MSCs) derived from adipose tissue involving the extraction, isolation and reinfusion of the patient’s own cells.

At the center of the debate between the FDA and clinics is the question of whether the SVF cells and MSCs are exempt from being regulated as a type of biologic drug, specifically as a human cells, tissues, or cellular or tissue-based products (HCT/Ps). The critical threshold is the degree to which the cell is manipulated (ie important characteristics changed) in the extraction process. Clinics argue that no new product is created that is not already naturally occurring in the person, and the FDA argues these are more than minimally manipulated because the extraction process eliminates the components in the tissue that allow it to serve its structural function as fat.^[i]

The decision comes at a time when clinics have proliferated offering direct-to-consumer costly, experimental and unproven stem cell treatments for a range of conditions from arthritis to strokes, cancer and autism. As they are unproven, these could be ineffective or even dangerous. Three patients were blinded by an experimental stem cell treatment for acute macular degeneration in 2017 by way of example.

This decision hinders the US government’s ability to regulate these clinics and protect consumers from unproven, expensive stem cell treatments. ISCT has responded to the federal ruling with a written statement that expresses its concern about the decision and highlights scientific inaccuracies in the judgment that may have led to this decision.

For more information see:

FDA - Guidance Documents

Cellular & gene Therapy Guidances

Case Citations:

United States v. California Stem Cell Treatment Center Inc. et al., 5:18-cv-01005, in the US District Court for the Central District of California

United States v. US Stem Cell Clinic, 403 F.Supp. 3d 1279, 1296-98 (S.D. Fla. 2019)

United States v. US Stem Cell Clinic, LLC, No. 19-13276 (11^th Cir. 2021)

^[i] Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use; Guidance for Industry and Food and Drug Administration Staff

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