Guest Column | December 20, 2022

The Regulatory Labyrinth Of Stem Cell Treatments

By Chad Landmon and Gulrukh Haroon

Stem-cells-Biomedical-biology-microbiology-GettyImages-1218436078

Although stem cell products and clinics have received increasing scrutiny from the FDA, a recent decision by the U.S. District Court for the Central District of California may temper some of FDA’s aggressiveness in this area.

On Aug. 30, 2022, Judge Bernal of the Central District of California ruled that stem cells that are removed from a patient, centrifuged, and reinjected into a patient are not “drugs” and therefore do not require FDA premarket approval.1 This comes at the beginning of what was supposed to be FDA’s long-awaited crackdown on clinics using stem cell therapies that the agency intended to regulate. Below, we explain what led up to this ruling as well as what regenerative medicine companies should be considering as they move forward.

Background On FDA Stem Cell Regulation

Congress empowered FDA to regulate “drugs,” which are defined by the Federal Food, Drug, and Cosmetic Act (FDCA) as any “article,” or component thereof, that is intended for use “in the diagnosis, cure, mitigation, treatment, or prevention of disease,” or is “intended to affect the structure or any function of the body of man or other animals.” 21 USC § 321(G)(1)(B), (C), and (D). Although surgical and medical procedures arguably fall under this definition, Congress has explicitly rejected “any intent to directly regulate the practice of medicine.”2 In cracking down on stem cell clinics, however, FDA argued that when a doctor takes cells from a patient, processes them, and reintroduces them into the patient’s body, a “drug” is created that falls under the purview of the FDCA. By contrast, stem cell clinics argue that these procedures are simply surgical procedures and that the FDA has no authority to regulate the practice of medicine.

Following calls for increased regulation by certain policy makers and members of the public, FDA announced a comprehensive policy framework in November 2017 for the oversight of regenerative medicine products, including stem cell therapies. This new framework3 proposed a process by which FDA would be more actively engaged in oversight of the burgeoning stem cell therapy industry. The framework also clarified the definitions of ambiguous terms such as “minimal manipulation” and “homologous use,” which are important when trying to satisfy the FDA’s premarket approval requirements. The new framework left a grace period of three years with discretionary enforcement of premarket approval requirements for human cells, tissues, and cellular and tissue-based products (HCT/Ps), with the hope that manufacturers would reach out to FDA to align their practices with the new framework.4

Following the grace period, FDA began its more aggressive enforcement actions in May 2021, after having already filed suit against stem cell clinics in California and Florida over what FDA considered to be “potentially dangerous and unproven”5 stem cell therapies. While FDA hoped that bringing these two cases during the grace period would serve as a warning to regenerative medicine companies to comply with new guidelines, the California case has become a setback for the FDA.

USA v. California Stem Cell Treatment Center

In May 2018, FDA brought a lawsuit against the California Stem Cell Treatment Center (CSCTC) in the U.S. District Court for the Central District of California. FDA sought to permanently enjoin CSCTC’s treatment center and doctors from performing various stem cell treatments on patients, asserting that the treatments violate the FDCA by (1) causing the adulteration of drugs; (2) causing the misbranding of drugs; and (3) receiving drugs that are misbranded.

The case centers around three procedures. The first two are called the SVF Surgical Procedure and the Expanded MSC Surgical Procedure. Both of these procedures involve the extraction of stromal vascular fraction cells, also called SVF cells. SVF cells comprise multiple cell types within adipose, or fat tissue — including red and white blood cells, lymphocytes, fibroblasts, and other cells. At their core, both procedures involve surgically removing SVF cells from a patient’s fat tissue, centrifuging them down to separate the stem cells from the fat cells, and reintroducing those stem cells back into the patient’s body. The goal of the procedure is to increase the number of stem cells in circulation around the injured area in a patient’s body in order to promote healing.6

The third procedure in the case is called the SVF/ACAM2000 Treatment, in which CSCTC added ACAM2000, an FDA-approved vaccine for smallpox, to the extracted SVF cells. This process created a new manufactured product, which was then injected into the tumors of patients with terminal cancer. This was a limited experimental treatment only offered to patients with terminal cancer for whom traditional treatment had failed, with the hopes of eradicating the tumors.

CSCTC argued that these procedures qualify for the same surgical procedure (SSP) exception, which exempts any “establishment that removes HCT/Ps from an individual and implants such HCT/Ps into the same individual during the same surgical procedure” from FDA oversight. (21 CFR 1271.15.)

On Aug. 30, 2022, Judge Bernal ruled partially in favor of CSCTC, finding that the SVF procedures were not “drugs” within the FDCA. The court held that the SVF/ACAM2000 Treatment did involve the creation of a drug, however, and therefore could be regulated by FDA.

Judge Bernal’s decision came down to the fact that the SVF cells did qualify as HCT/Ps, which are human cells, tissues, or cellular- or tissue-based products, that are “intended for implantation, transplantation, infusion, or transfer into a human patient.” (21 CFR 1271.3(d).) He therefore found that one of the SVF surgical procedures qualified for the SSP exception, as the SVF cells were extracted, isolated, and reimplanted within a single outpatient procedure. The other SVF surgical procedure did not qualify for the SSP exception but was nevertheless outside the purview of FDA regulation because Judge Bernal found that the SVF cells are not “drugs” within the definition of the FDCA. Therefore, the court denied FDA’s request for a permanent injunction against the marketing of the SVF surgical procedures.

As for the SVF/ACAM2000 treatment, Judge Bernal concluded that it did constitute the manufacture of a drug and therefore would be under the purview of the FDA and FDCA. But the court held that FDA could not pursue injunctive relief because CSCTC had already stopped performing that procedure before the lawsuit even began.

The court’s decision with respect to CSCTC’s SVF surgical procedures is somewhat at odds with a 2019 decision by the 11th U.S. Circuit Court of Appeals in which a similar SVF stem cell procedure was found to be a drug governed by the FDCA.7 That case also dealt with SVF cells taken from fat tissue and reinjected into the patient in the hope of helping to treat debilitating diseases. The 11th Circuit’s decision turned on the fact that the use of these SVF cells did not constitute a “homologous use,” as required by 21 CFR 1271.10(a)(2). To be a homologous use, the cells that are extracted must be intended to perform the same function both before and after reimplantation. In that case, the 11th Circuit determined that the SVF cells were intended to perform a different function after they were reinjected, namely, to treat illnesses in the patient. The CSCTC case, by contrast, did not discuss the homologous use requirement.

The holding in the CSCTC case is also somewhat at odds with the holding in U.S. v. Regenerative Sciences, decided by the D.C. Circuit in 2014, in which lab-expanded marrow cells were ruled to be “drugs “under the purview of the FDA.8 The product in the Regenerative Sciences case is different than SVF cells, however, because instead of stem cells from adipose tissue, the stem cells were derived from bone marrow. Additionally, the stem cells were mixed with the antibiotic doxycycline before reinjecting the cellular mixture into the patient in order to prevent bacterial contamination. This entire process led the court to conclude that the stem cell mixture in Regenerative Sciences constituted a drug under the FDCA, requiring FDA premarket approval.9

What’s Next For Stem Cell Regulatory Affairs?

Many believe that FDA was waiting on Judge Bernal’s decision before bringing additional cases against some of the hundreds of clinics that have been proliferating across the country for stem-cell related products. With the decision as it stands, FDA may now be more cautious in its approach to seeking injunctions against similar clinics.

FDA filed a notice of appeal on Oct. 27, 2022, but the appeals process will take some time. Until then, the decision may have consequences for both FDA and companies interested in stem cell therapies. Judge Bernal’s decision does provide some guidance for regenerative medicines companies in that he distinguishes between stem cell therapies that introduce new media to the cells, such as the ACAM2000 vaccine, and those therapies that only take tissue from the body, centrifuge them, and reintroduce them into the patient. FDA, however, may continue to take a different approach, at least until the appeal is decided.

Companies should therefore carefully evaluate any stem cell treatments or procedures and consider whether they may come under the purview of FDA. While the decision from the Central District of California was mostly in favor of CSCTC, the decision is not binding authority in most of the country. In fact, if FDA decided to crack down on more clinics, other federal judges may not agree with Judge Bernal’s ruling and may not strictly follow it. Stem cell clinics and other companies in the regenerative medicines industry should keep a watchful eye on the upcoming appeal and FDA’s next steps.

References

  1. United States of America v. California Stem Cell Treatment Center, Inc., No.18-cv-01005, (C.D. Cal. Aug. 30, 2022).
  2. Buckman Co. v. Plaintiff’s Legal Comm., 531 U.S. 341, 351 n.5 (2001).
  3. Framework for the Regulation of Regenerative Medicine Products, U.S. Food & Drug Administration, https://www.fda.gov/framework-regulation-regenerative-medicine-products (May 21, 2019).
  4. See Statement from FDA Commissioner Scott Gottlieb, M.D. on the FDA’s New Policy Steps, U.S. Food & Drug Administration, https://www.fda.gov/news-events/press-announcements (Aug. 28, 2017). See also FDA Announces Comprehensive Regenerative Medicine Policy Framework, U.S. Food & Drug Administration, https://www.fda.gov/fda-announces-comprehensive-regenerative-medicine-policy-framework (Nov. 15, 2017).
  5. FDA Acts to Remove Unproven, Potentially Harmful Treatment Used in ‘Stem Cell’ Centers Targeting Vulnerable Patients, U.S. Food & Drug Administration, https://www.fda.gov/news (Aug. 28, 2017).
  6. Lisa Schnirring, Feds Seize Vaccina Virus Vaccine Used in ‘Stem Cell’ Centers, Center for Infectious Disease Research and Policy, https://www.cidrap.umn.edu/news-perspective (Aug. 28, 2017).
  7. United States v. US Stem Cell Clinic, Ltd. Liab. Co., 998 F.3d 1302 (11th Cir. 2021).
  8. United States v. Regenerative Scis., LLC, 408 U.S. App. D.C. 259, 741 F.3d 1314 (2014).
  9. Id.

About The Authors:

Chad Landmon is a partner at Axinn, Veltrop & Harkrider LLP, where he chairs the firm’s Intellectual Property and FDA practice groups and focuses on patent and FDA issues in the life sciences industry, including regenerative medicines products.



Gulrukh Haroon is an associate in Axinn’s Intellectual Property group.