Criminal prosecution was not a concern or consideration in Regenerative Sciences’ decision to stop treating patients in its case way back then

Criminal prosecution was not a concern or consideration in Regenerative Sciences’ decision to stop treating patients in its case way back then

In an earlier post discussing the decision making facing the US Stem Cells and California Stem Cell Treatment Center folks, I discussed the Regenerative Sciences case in which the district court granted the government’s summary judgement motion to bar the company from providing its expanded stem cells to patients (which decision was affirmed by the Court of Appeals.) I related that the company agreed to stop treating patients with the contested procedurevery early on, pending the outcome of the injunction case. I opined that because of the lawsuit result, it was the right decision, and made the counterfactual speculation that that might have been the reason the principals weren’t indicted. This was made to make my point that the two stem cell companies facing injunction actions also face the prospect of criminal prosecution.

Paul Knoefpler’s blog about my post quoted one of Regenerative Sciences’ attorneys pushing back on my counterfactual speculation, stating that the prospect of criminal prosecution was never in the lexicon or under discussion with the government or discussed internally. That lawyer reached out to me directly and asked that I delete that part of the post.

I’m going to have to respectfully decline to do so. However, as he is a respected and credible witness to a historical event, his statement is important and here’s what he wrote to me:

“I was counsel in the Regenerative Sciences case, and I can assure you that there was never any discussion of criminal investigation or prosecution. It literally never came up; not once. The decision to halt the procedure involving culture expansion was both strategic and practical….”

He indicated what those strategic and practical reasons were, but I don’t feel comfortable relating them in this post, only because I haven’t asked his permission. The part I quoted was what he already told Knoefpler on the record.
(personal communications from Andrew Ittleman to me 5/25/18)

I take Mr. Ittleman at his word that there was never any discussion of criminal investigation or prosecution in the decision making process.

That being said, my point was a counterfactual, and while the criminal talk might not have come up in the early part of his case, my lexicon is in part shaped by my representation of what I think was the first doctor using cord blood for therapeutic purposes back in 2002-2003, and the first doctor to be investigated by the FDA for doing so. In that investigation, the FDA explicitly mentioned criminal prosecution, and mentioned the felonies they wanted my client to plead guilty to. They also insisted that he stop treating patients because what he was doing was illegal.

I thought the government couldn’t prove its case, and told him he didn’t have to stop treating patients. I also advised him not to accept any plea. He was never indicted.

In 2006, after a two year investigation, the feds did indict this doctor’s former partners. The charges were wire fraud for fraudulently inducing patients to undergo an unproven cord blood/stem cell treatment, and the FDA trifecta of violations. Sensing what was coming, the pair fled the U.S. prior to the indictment. I worked on that case until my client’s untimely death.

I also had discussions with one of the defendants in the big Texas stem cell fraud case (the one on 60 Minutes). Ultimately, I didn’t get involved, but all the defendants were convicted/pled out.

The Regenerative Science case was different procedurally of course, but they were treating patients not in accordance with the stell cell regulation, 21 CFR 1271, because they weren’t following the same surgical procedure guidelines, (because they were expanding the cells over a period of time.) Even back then, I was advising clients that expanding cells was more than minimal manipulation. Even under the FDA’s prior looser interpretation of 1271, the Regenerative Science folks were on the wrong side of them, the violation of which does raise the FDA trifecta, which are both civil and criminal.

So while not deleting my counterfactual speculation about what didn’t happen as a result of the Regenerative Sciences folks deciding to stop treating patients, I accept and put out there that the issue of criminal prosecution was not a consideration in the company’s decision to stop treating patients pending the outcome of its injunction case with the FDA, and was not even a topic of conversation. And while I am happy to hear that criminal prosecution was not a topic or consideration in that case, I stand by my main point that it most certainly should be in these two current injunction cases.

Rick Jaffe, Esq.
www.rickjaffeesquire.com
rickjaffeesquire@gmail.com

Leave a Reply

Your email address will not be published. Required fields are marked *