Private stem cell clinics should start worrying about some new regulatory players

Private stem cell clinics should start worrying about some new regulatory players

Up until very recently, the FDA has basically been the sole regulatory threat to the private/for-profit stem cell clinics, via published guidance documents, site inspections, warning letters and the recent federal civil injunction cases against the two biggest stem cell operations.

See my posts about the status of these cases at:
http://rickjaffeesq.com/2018/09/26/update-on-fda-injunction-cases/

As an aside

It’s no coincidence that the defendants in both of these injunction cases have many dozens of so-called “affiliate” stem cell clinics throughout the country. Both operations offer training, start-up expertise, as well as sell supplies and equipment to the affiliates. Creating an almost McDonald’s-like business model for the delivery of what the FDA contends is illegal stem cells has to make the FDA very unhappy. It’s going to be interesting to see what happens to these affiliates after the conclusion of these two cases, (but more about that later).

Apart from the FDA, some new regulator/players have recently surfaced. The FTC recently hit one stem cell clinic with a huge fine. The FTC regulates commercial advertising, and I would expect it to get more involved in the stem cell field for two reasons: First the FDA doesn’t have the resources to control/eliminate the private stem cell field. It takes too long and it’s too manpower intensive to go through the process of site inspection, warning letter and injunction lawsuits. They are just too many clinics out there. In contrast, all the FTC has to do is review web sites from the comfort of its local offices, send out letters requesting adequate substaniation for the claims and implied claims, and when it doesn’t show up, swing its big regulatory stick.

Second, to my mind, the real problem in the private stem cell field is not actual danger/harm of the procedure. As I explained in another post, there are surprisingly few serious adverse events from stem cell transplants.

See: http://rickjaffeesq.com/2018/08/09/some-perspective-on-private-stem-cell-clinics-and-the-fdas-response/

The real problem is the unsupported advertising claims made by some of the clinics. But commercial advertising is not really the FDA’s bailiwick. Furthermore, I think the FDA’s regulatory jurisdiction over any autologous, same day surgical procedure is questionable under the existing regulations and for public policy reasons, and its interpretation of the regulations are unclear, and not in accordance with scientific and medical practice realities. Under the right set of circumstances, I think the courts would give the FDA some pushback on its assertion of jurisdiction over these procedures and its interpretation of the regulations, but unfortunately, the two existing lawsuits are not the right vehicles to make the case.

Be that as it may, the FDA is still fundamentally ill-suited to be the sole or even the primary regulatory authority reigning in the stem cell wild west, (which as I continue to argue, is or should be primarily a state law medical practice issue). I predict that some new players will publicly surface soon, and that would be state agencies, particularly in the big stem cell states like California and New York (and probably Florida as well). It’s already quietly happening now in California and New York. I can’t say much publicly about either state because of ongoing matters, but clinics in those two states should watch out! What I can say is that I expect some states to scrutinize the claims made by the private stem cell clinics, and see how they line-up with state law, and if they don’t, then I would expect to see some state agency press releases about settlements or filed lawsuits. Some of these settlements or lawsuits may impact the clinic owners beyond the four corners of the state action.

Circling back to the FDA’s two pending injunction cases and the “affiliates” of the defendants, has anyone noticed that in the complaints, the FDA seems to be lumping the affiliates together with the named defendants? What’s that about? I’ve got my suspicions, but we’ll have to wait to see what happens after after the district court judges issue the injunctions.

So here is my prediction about the stem cell field in 2019

Between the two federal injunction cases which I expect to be resolved mid-2019, the regulatory responses resulting therefrom, and the new regulatory players who will surface in the next few months, the stem cell regulatory and enforcement landscape this time next year is going to look very different and more challenging to these clinics than it is right now.

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

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