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stem cell mis-regulation

Some perspective on private stem cell clinics and the FDA’s response

Some perspective on private stem cell clinics and the FDA’s response

Last week, a highly regarded reporter from a major east coast national newspaper reached out to me to talk about stem cells. She had read some of my posts and thought they were interesting, but I could tell that she didn’t agree with basically anything I said in support of patients’ rights to access their own body parts.

She asked me why I thought the FDA hadn’t filed a preliminary injunction against US Stem Cells and the California Stem Cell treatment center. I hadn’t really thought about the why. But my immediate reaction was that the FDA has bigger fish to fry. She understood immediately and almost simultaneously we both said “the opioid crises.” Maybe it’s that’s simple and suggests that some perspective is needed as stem cell thought leaders and the press lament the proliferation of the for-profit stem cell clinics and attempt to shame and cajole the FDA to shut down all the these lowlife stem cell profiteers (their words and sentiment).

So how much harm are the private stem clinics doing?

A recent study tweeted by the Big Dog entitled “Concise Review: A Comprehensive Analysis of Reported Adverse Events in Patients Receiving Unproven Stem-Cell Based Interventions” was published in Stem Cell Translational Medicine. Here is a pdf of the study.

Bauer_et_al-2018-STEM_CELLS_Translational_Medicine (1)

The authors did a google search of all reported AE’s and stem cells. They separated the AE’s into two categories: AE’s reported in the medical literature and those reported in the mass media. There were a total of 35 serious AE’s, including 11 deaths. Two of the deaths were from direct injection into the brain, another was from a stem cell injection into the right carotid artery. Well, I’ve finally found people with less common sense than the folks who thought that having a nurse practitioner inject stem cells into both eyeballs of patients was a good idea.

None of these three above described deaths occurred in the US, and only one of the total 11 reported deaths occurred in a U.S. clinic. I can’t tell from the article how strong of a causal connection there was, but most of the listed deaths appear to this layman to be strongly presumptively caused by the stem cell intervention. (AE’s are just associations and do not necessarily demonstrate causation because of co-morbidities in the treated.) But let’s make the reasonable assumption that all the reported deaths and other serious AE’s were caused by the stem cell interventions.

Thirty five reported serious AE’s in the world based on medical literature and mass media

We don’t know the denominator, i.e., how many stem cell interventions there have been, but I have to believe it’s a big number, at least tens of thousands of stem cell interventions throughout the world. But who is to say that all serious stem cell AE’s are reported. So let’s double the number and double it again. That’s 140 serious AE’s with 44 deaths and 4 in the US. (Mindful that this is just an extrapolation based on nothing, and the real numbers are 35, with 11 deaths, one of which was in the United States.)

Under the real reported numbers or the hypothesized extrapolation, it’s not a big number.

What about the benefit of stem cell treatments?

I’ve interacted with many physicians using different forms of stem cells and I’ve spoken to many, many patients. Although it will fall on deaf ears, and it’s not science, many of these doctors and patients actually believe that stem cell treatments have a demonstrable clinical benefit in individual patients.

Of course not in every disease

I haven’t personally seen any interesting and hopeful results in ALS. MS patients tell me that stem cells have helped them, but they all seem to need periodic retreatment, and I’ve never heard of a MS patient being cured by stem cells.

I’ve heard about some semi-miraculous results in autism, and know of one case where stem cell treatments appears to have normalized a moderately autistic child.

The biggest benefits I’ve heard about are in the orthopedic field, joints and ligaments. I’m not a scientists, but I’m betting that the orthopedic applications of stem cells will prove out, perhaps even without extensive clinical trials. It seems to work that well. I’m guessing that sooner rather than later most regular orthopedists are going to have to use it, damn the FDA or lose market share.

But lets’ forget about the benefit or possible benefit of stem cells and look at the other side of the ledger.

How many people die of drug overdose each year?

Seems like the best number available is 60,000 drug overdose deaths, with 42,249 deaths due to opioids (in 2016). Here’s the article from where these numbers come.

https://www.drugwatch.com/news/2018/01/17/opioid-overdose-deaths-continue-to-rise-in-us/

These numbers are insane! As the article points out, opioid deaths now eclipses the number of women who die each year of breast cancer.

By way of reference, auto accidents cause around 37,000 fatalities a year, but basically everyone in the country can be a victim in an auto accident, but obviously only people taking opioids can die of an opioid overdose. So the denominator in auto accidents is very substantially larger, meaning that the chances of an opioid user dying of opioids is a lot higher than the changes of dying in a car accident, even though the total number of deaths are not that far apart.

Here are some war comparative data points: over 58,000 US soldiers died in the Vietnam War, over 54,000, in the Korean War, 4500 in the Iraq war.

When comparing the Stem Cell AE article’s charts with the drug watch article on opioids, I’m going to guess that the medium age of death of the 42,249 U.S. opioid overdose deaths is probably at least three decades younger than the 11 reported world wide stem cell deaths, and that my friends is a tragedy.

And when an FDA approved drug (or class of approved drugs, namely synthetic opioids like fentanyl) kills 42,249 young people in one year, that my friends is a national crises requiring the strongest possible response from the agency which (perhaps mistakenly) approved these drugs for use in humans.

The fact that there are 500, 700 or even 1000 or more clinics using stem cells on patients not in accordance with FDA guidance document interpretations of FDA regulations, and that there have been 35 reported world-wide serious AE’s, (including one death in the U.S.) is not a national crises and does not require the strongest possible response from the FDA.

Rather, it is a regulatory issue which needs to be addressed, balancing the risks and benefits, and also considering that we’re talking here about using a person’s own body parts as the basis of the therapy. As I’ve said repeatedly, that makes it different, or at least it should. Admittedly, the regulators and Congress do not seem to agree, yet.

But on the other hand, that might help explain why the FDA is not “balls to the walls” going after all or even a significant percentage of these operations despite the pleas of the stem cell establishment and the press. If so, as painful as it is for me to say, I’m grateful that the FDA realizes that it has bigger fish to fry.

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

Some things in the private stem cell clinic debate are complicated, but some aren’t

Some things in the private stem cell clinic debate are complicated, but some aren’t

I am a believer and advocate that patients should have the freedom to use their own processed and expanded stem cells. That should mean that I support US Stem Cell Clinic’s fight against the FDA’s injunction action.

But I don’t.

I just can’t get past the fact that this Florida stem cell operation allowed a nurse practitioner to inject stem cells into several patients’ eyeballs which resulted in total or partial blindness. A nurse practitioner! Legal though it may have been under Florida law, it is an inexcusable lapse of judgement. Plus, the clinic had already settled several malpractice lawsuits and is facing at least one more lawsuit involving a patient.

I am an advocate for a patient’s right to use his/her own stem cells, but that doesn’t mean that a clinic which continues to cause serious harm to patients has the right to keep injuring them.

In my opinion, US Stem Cells has done serious and irreparable harm to patients, and it needs to be stopped now, not in next few years, which seems like the FDA’s current time table. I don’t often agree with the big dog (aka Paul Knoepfler) but on this issue, I do. See his post at https://twitter.com/pknoepfler.

How the Florida clinic can be stopped sooner rather than later

One of the stem cell luminary thought leaders, Bernie Siegel mentioned to me his hope that the latest big malpractice case against US Stem Cells might shut the place down. I told him I didn’t think so. Here’s why:

Malpractice claims are typically covered by malpractice insurance, and I have to believe given the clinic’s past experience, the first bill it pays after rent is its malpractice policy premium. It’s surely tough being sued, but when you’re not paying to defend and not paying the settlement amount, it’s not quite as tough, and is not a business ending event. So I don’t think any single or even a small number of malpractice lawsuits will do the job.

More effective would be fraud or deceptive practices lawsuits. These most likely won’t be insurance covered, at least not by malpractice insurance. I think there has been at least one such case filed against the clinic by a Miami law firm. I’m rooting for the plaintiff in that case. But these cases take time, and often times, the cases are settled. And insurance or not, I assume these Florida clinic folks have made a ton of money from their stem cell patient business, and they also have a training and franchise operation of sorts, so I wouldn’t expect even a fraud lawsuit or two to put them out of business, not in the short term at least.

So where does that leave those that want to see this clinic gone now?

We have to circle back to the FDA and think about what the agency would need to do to stop this clinic now(ish). And while some parts of the proposed plan may seem harsh, shocking and almost unbelievable, all these tactics have been used against me and my physician/clinic clients in the past by the FDA and other federal agencies.

1. Get the FDA’s OCI (Office of Criminal Investigations) involved

The FDA site inspection which resulted in a form 483 inspectional observations last year establishes what the clinic is doing. The statutes as interpreted by the final guidance documents establish probable cause that the FDA criminal trifecta has been violated (introducing into interstate commerce an unapproved new drug, misbranding and adulteration). The prior warning letter and the injunction complaint establish sufficient knowledge and intent to support a probable cause finding that the crimes are felonies. That should be enough for a federal magistrate to sign-off on a search warrant.

2. Execute the search warrant and take all the clinic’s patient records. If the clinic wants to see the medical records, it will have to come down the local FDA’s office and copy them.

3. Have the warrant search for non-FDA cleared medical devices or any other devices used in connection with the alleged criminal activity. (The latter is not a slam dunk.) That might/would stop the clinic from processing the fat into the stem cell SVF (stromal vascular fraction) product.

4. Invite the Florida medical board to participate in the raid. I don’t know whether the board has taken any action against the nurse practitioner and the supervising doctor yet, but if it hasn’t, there’s probably a decent case for an interim suspension proceeding against both. These proceedings are done ex parte, meaning it’s like a star chamber, done without telling the doctor in advance of the suspension.

5. Start interviewing the clinic’s patients. Many will be supportive of the clinic, including some who have received no benefit, but some won’t be.

6. Interview all the clinic’s employees and vendors/suppliers. OCI has some interesting interviewing techniques which in effect threaten criminal prosecution to people doing business with the target without technically threatening them, but the vendors get the message.

As I said, some or all of this might seem like legal thuggery, but me and my clients have been on the receiving end of all of them (Many of these tactics are discussed in chapters 2 and 9 in my book, Galileo’s Lawyer.). Combined, these tactics will get the clinic’s attention in a way which hasn’t heretofore happened. The other purpose of my discussing this is to show the FDA’s investigative tool box in cases where it really wants someone gone.

Other Government and private actors

US Stem Cells is a public company and that opens up another line of attack. The continued publicity already has and will continue to generate some interest by the SEC (Securities and Exchange Commission) which is looking into the company’s reporting documents (10K’s and 10Q’s). It’s probably a safe bet that the company’s disclosures were inadequate. With all the federal attention, some class action firm might file a shareholder’s suit, and that kind of suit burns a lot of cash for the public company.

The private lawyers who have filed civil malpractice or fraud lawsuits or are contemplating filing will be circling in the air waiting for any government action and especially any agency or judicial decision, which will make the civil fraud or SEC claims easier and faster to resolve favorably. To that end:

FINALLY

The FDA and the US Attorney’s Office should do what they should have done in the beginning, file a preliminary injunction motion, and request a hearing as soon as practical.

That’s going to present some interesting conundrums for the clinic’s principals. Do they testify? If they do, they can’t lie, or they’ll be charged with perjury. Can they say they didn’t know what they were doing is illegal? They can say it, but the judge doesn’t have to believe it. I doubt they’ve been told by an FDA attorney that what they’re doing is legal, so there won’t be an “advice of counsel” defense. Ultimately, they will either be forced to testify and most likely further incriminate themselves, or they’ll fold their tent and go away. (I’d bet on the former.)

If they don’t close down, then the final step is a criminal indictment, and that will put a whole new complexion on things. There’s a saying in criminal law. “You can beat the rap, but you can’t beat the ride.”

But in this case, once the blinded patients and the other injured patients testify, a preliminary injunction case, the permanent injunction case and a criminal trial are effectively over. No reasonable judge or jury is going to let these people continue.

And that’s why this is such a horrible case for stem cell advocates like myself. The idea that these people are the poster children for patients’ unfettered access to their own stem cells is disconcerting. That this case might set precedent for all same-day surgical procedure clinics should be distressing to all such clinic operators.

Therefore, best case scenario for both sides of the debate would be for the Florida clinic to voluntarily shut its doors now. Since that’s not going to happen, next best case scenario for everyone (including and especially patients) is that the clinic be shut down by the government as soon as possible.

And after that happens, the plaintiffs attorneys circling above will swoop down pick the clinic and its operators clean. If the clinic operators have an asset protection plan involving family members or family trusts, there will be fraudulent conveyance lawsuits.

Government and private action could trigger a voluntary bankruptcy proceeding by the corporate clinic/franchise entity. If so, the bankruptcy trustee will hire an attorney whose main job will be to claw-back all the money paid to the insiders, at least in the year prior to the filing, and probably longer. Ultimately, the lawyers (on both sides) will get it all.

That’s how I see it playing out if the FDA decides to take the case more seriously.

Of course, this is just my opinion and speculation based soley on publicly available information viewed through the lens of my 35 years working my side of the street.

What effect would all of the above have on the other private stem cell clinics?
Probably make them much more careful in what they do, say, and who they do it to. And even for a guy on my side of the street, that’s a good thing.

Post Script: I’ve recently read that these people have a new marketing idea and targeted audience: They’re doing penis stem cell injections.
Here we go again!

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

Update on the FDA’s Stem Cell Injunction Cases

Update on the FDA’s Stem Cell Injunction Cases

Watching a federal civil case progress is usually about as interesting as watching grass grow, except that grass grows faster. It’s been around three months since the FDA filed permanent injunction actions against the country’s two most notorious stem cell clinics/networks, California Stem Cell Treatment Center/Cell Surgical Network and US Stem Cell Clinic and network.

The most interesting thing about the cases so far is what hasn’t happened. The FDA has not filed a motion for a preliminary injunction in either case, and there is no indication in the record of either case that the defendants have voluntarily stopped treating patients with what the FDA claims is an illegal treatment. (I’m not in direct contact with either defendant or their counsel, so I can’t say whether or not there has been some private agreement, but I doubt there has been, because the community would have heard about it.)

If these clinics are still treating patients, then since it could take at least another year before the district court makes a decision, that leads me to conclude that that the FDA is in no particular hurry to shut them down. That would be consistent with the FDA’s stated policy when it issued the final guidance documents that it would give some of the private stem cell clinics as long as three years to come into compliance with FDA law, meaning obtaining an IND to treat patients. Of course that would mean that the for-profit clinics couldn’t charge for the stem cells, unless the clinics obtains FDA permission for cost recovery of the actual cost to treat each patient. (Yea, like that’s going to happen.)

So let’s look at the grass and see what’s grown so far

California Stem Cell Treatment Center

The defendants put in their answer, but it doesn’t say much

A defendant served with a federal civil complaint has to put in an answer which responds to the factual allegations and at least lists the legal and equitable defenses. Federal practice adopts what is called “notice pleading,” which means that neither the complaint nor the answer have to tell the complete story or provide all the details of the claims or defenses. When the plaintiff is the government and is trying to stop a defendant like here, invariably the government lays out its case in detail, both for the benefit of the judge, and to start the process of trying to convince the defendant to give up before trial.

In criminal cases, defendants oftentimes hide the ball, meaning they don’t tell the prosecutors what their theory of the defense is. For example, we just learned yesterday at the opening argument that Paul Manafort’s defense to his money laundering and tax evasion case is to blame his underling, Rick Gates. You can do that in criminal cases because there is almost no discovery and a defendant doesn’t have to file a written answer explaining how the case will be defended. He just announces “not guilty” at the arraignment (the reading of the criminal charges in the courtroom).

In civil cases, there is little if any hiding the ball, at least if the plaintiff’s counsel is competent and does proper discovery. And there’s really no reason to hide the ball in an injunction case, since there is no jury and the judge makes the decision.

So how did the California Stem Cell Treatment Center answer? It was pro forma. It denied the material and inculpatory allegations and/or said they were legal conclusions not requiring an answer. The answer listed some conclusory defenses, like lack of subject matter jurisdiction over the procedure because it is an exempt “same day surgical procedure,” and raised the ever present but meaningless violation due process defense. It also raised a Tenth Amendment claim, which I assume in this context means that the procedure is governed by the state law via the medical board. It also raises the patients’ right to privacy. I wish them luck with that. I’ve unsuccessfully trying to get various courts to acknowledge that right for twenty-five years. Other than gun rights, the courts have not been excited about expanding constitutional rights. The Supreme Court had the chance in 1979 to create a patient’s constitutional right to unapproved Laetrile treatment in the Rutherford case, but Justice Thurgood Marshall, writing for the court, refused to even consider the right based on a thin technicality.

What isn’t in the answer is the defense story or argument. As indicated, that’s certainly not required in an initial answer, but still, this is a high profile case, involving serious and important legal and policy issues which effect many millions of people. The case is going to be watched by everyone in the field, both for and against private stem cell clinics. I was hoping that the extremely formidable and high power legal team would come out swinging for many reasons, not the least of which is that there may only be one person needed to be convinced. I think it was a wasted opportunity to start making the case, especially since cases like these are not linear; they are multidimensional. And I speak from some experience.

A scheduling conference is set for October where discovery parameters and deadlines will be set. Until then, and thereafter, we’ll probably be watching the grass grow. The only way it will get more interesting is if the FDA changes its mind and moves for a preliminary injunction, or the defense realizes they are going to have to do something different than just competently and cautiously respond to government papers.

The US Stem Cell Clinic/Network case

The defendants acknowledged receipt of the papers (service, in legal parlance) in early May. In early July, three days before their answer was due, the defense lawyers (2 big time law firms and at least six lawyers have already appeared in the case) asked for a month’s extension to file an answer because the lead counsel firm was very busy, had scheduled vacations and couldn’t find the time to do an answer in two months. The judge wasn’t happy about it or the proffered excuses. She didn’t give them the full month, but gave them almost three weeks. Their answer is due August 3, 2018. I hope they go big and strong.

So far, seems to me that both cases are off to a slow and weak start. I’m hoping this changes because right now, for better, but mostly for worse, these two cases are the tip of the FDA’s spear aimed at the hearts of people wanting stem cell treatments outside of clinical trials. I hope these folks are up to the challenge.

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

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

Further thoughts on the defendants in the FDA’s stem cell injunction actions

Further thoughts on the defendants in the FDA’s stem cell injunction actions

My post about considerations facing the defendants in the FDA’s injunction cases,

http://rickjaffeesq.com/2018/05/17/hard-choices-stem-cell-

defendants-fdas-injunction-cases/

was discussed yesterday in the stem cell field’s big dog, the Niche, by Paul Knoepfler.

https://ipscell.com/2018/05/when-the-fat-stem-cells-hit-the-fire-will-clinics-sued-by-fda-opt-to-stop-soon/.

After reading it, a follow-up is in order.

A correction and follow up:

In my post, I said that both US Stem Cell and California Stem Cell Treatment Center had received warning letters. Knoepfler correctly pointed out that the California company had not received a warning letter from the FDA, just 483 inspection observations. I stand corrected.

BUT what the company did also get was a visit from federal agents who executed a search and seizure warrant, which removed the smallpox vaccine and presumably seized records.

See my original post on this and the warning letter to US Stem Cells.

http://rickjaffeesq.com/2017/09/22/sleeping-giant-awakens-fda-starts-final-push-eliminate-practice-medicine-stem-cell-clinics/

I haven’t reviewed the search warrant, but normally search warrants are issued in the name of a grand jury and is approved by a federal magistrate. As we all now know as a result of the Trump/Michael Cohen legal drama, an affidavit in support of the search warrant would have to establish probable cause that a crime was committed. (Affidavits in support of search warrants are normally sealed until after an indictment.)

So, the lack of a warning letter shouldn’t be all that comforting to the California folks, since it appears that some federal judicial officer has already agreed that the facts alleged in the affidavit constitutes a federal crime.

I think a 483 with a search and seizure warrant is at least the functional equivalent of a 483 plus a warning letter in terms of establishing intent, which is as stated, is the ticket to Felony land.

In fact, it’s arguably worse practically than a warning letter, since the both the OCI (the FDA’s office of Criminal Investigations) and the criminal division of the US Attorneys’ office are likely already involved in the case. These are government employees you definitely don’t want sniffing around your controversial stem cell business. (Again, on the assumption that the warrant was a standard federal criminal warrant.)

Follow-up on US Stem Cell public corporation status

Knoepfler suggested that I didn’t factor in US Stem Cell’s public company status in the decision tree on whether or not it should stop treating patients now.
Interesting point taken. Here’s my quick analysis:

The main difference between private and public companies is that public companies are required to file reports with the SEC, annually, and usually quarterly. The reports (10K’s and 10Q’s) give shareholders and the public at large the company’s financial information as well as disclose other material information which affect the company’s health and future. The information required to be disclosed comes from a variety of sources, including accountants and attorneys who do work for the public company.

As reported by the Knoepfler last month, US Stem Cells issued a press release:

“On or about March 1, 2018, the U.S. Securities and Exchange Commission (“Commission”), Miami Regional Office (“Commission Staff”), served a subpoena upon U.S. Stem Cell, Inc., which seeks production of certain documents and communications including, among other things, minutes and other documents relating to the Company’s board and audit committee meetings, financial statements, and press releases. The Commission Staff is conducting a formal non-public, fact-finding inquiry of U.S. Stem Cell, Inc. This investigation is neither an allegation of wrongdoing nor a finding that any violation of law has occurred. The Company is cooperating with the Commission Staff and has provided, and will continue to provide, information and documents to the Commission Staff.***”

Here is the link to Knoepfler’s article about this and other problems the company faces.

https://ipscell.com/2018/04/clinic-biz-us-stem-cell-reports-sec-subpoena-adding-to-uncertainty-on-its-future/

Having started my career in a wall street securities litigation firm, and having represented a few small, thinly capitalized public companies involved in controversial or innovative technologies, I have some experience with the decision-making which is going on right now at the company.

There are two big reasons the SEC would investigate a very small public company like this: The second reason is possible stock price manipulation. That’s not likely since the company’s stock is probably thinly traded.

The first, and more likely reason is disclosure issues in the reporting documents, and more likely still, press releases, and specifically the possible inaccuracy thereof.

Let’s just say that the company’s business model (and future revenue stream) has arguably been in some doubt since at least the issuance of the FDA’s draft stem cell guidance documents, and arguably in serious doubt since the FDA’s warning letter and the final guidance documents.

There is often a battle between the company and its outside lawyers about how much to disclose and how bleak a picture to paint when bad stuff/things with potential negative consequences happen. Usually a compromise is reached, but the compromise is often less than absolute, perfect disclosure that would maximally protect the company (and the lawyer).

This company and its founder have a lot of enemies out there. Something I’ve seen very often is that the enemies of promoters of unapproved medical interventions use government investigating authorities to attack these businesses. The vehicle of choice is the state medical boards, but when the feds have jurisdiction like in this case, it’s a no-brainer. I’d bet someone in the stem cell mafioso filed some kind of complaint with SEC about alleged false and misleading press releases and required filings.

The other shoe that hasn’t dropped yet

My prediction is that the SEC inquiry/investigation and the FDA injunction action are not the end of the story. There’s more to come.
Either agency action alone would be blood in the water. Together it’s like putting a thousand tons of chum in the water and hoping that the sharks won’t show up in shark infested waters.

The sharks being the plaintiffs’ class action securities lawyers. They are like ambulance chasers only worse, in that they tear apart companies, rather than take money from large, greedy insurance companies. (I still hate insurance carriers.)

These lawyers work on a contingency fee, and so they like to do as little work as possible for maximum gain. One of the best techniques to effectuate this maximum payout for the minimum work ratio is to let other people do their work and apply pressure. There’s no better applier of pressure than the federal investigatory agencies. An adverse finding by an agency like the SEC or the FDA does most of the work on a plaintiff’s liability case. I have been in this situation many, many times and it is not pleasant for the company. It feels like the world is closing in on them.

So, my guess is that if the complaint wasn’t filed by or with the support of one of these plaintiffs’ firms, the combination of the SEC and FDA’s actions is going to make the company a target too good to pass-up.

So, what does all that mean for US Stem Cells?

Up until the FDA litigation, I’m guessing that the company’s insurer has paid the freight on its legal fees and payouts in the several settled malpractice actions.

Normally, FDA litigation costs are not insurable. Neither are SEC investigations, and neither are fraud securities claims filed by private parties (directors might be covered under directors’ insurance policies).

The company is facing massive legal fees over the next year or two, at least in the high six figures. That’s an important consideration. And since the company’s principal is not a medical doctor, there’s no falling back to a straight medical practice which is the option that the principals of the California company have.

The even more important consideration is what effect stopping/continuing will have on the SEC investigation and the likelihood of the plaintiffs’ bar going after the company.

It’s a complicated calculation, like playing multidimensional chess (a la Spock). We’ll see what they decide and I’ll have more to say later.

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

Hard choices for the stem cell defendants in the FDA’s injunction cases

Hard choices for the stem cell defendants in the FDA’s injunction cases

As recently reported, the FDA filed permanent injunction actions against the two highest profile stem cell clinic/operators, US Stem Cells Clinic and Cell Surgical Network/California Stem Cell Treatment. See my post at http://wp.me/p7pwQD-dz

As an FDA attorney who has worked on civil and criminal stem cell investigations and cases, I can tell you that these defendants are facing a major decision: whether to stop treating patients during the pendency of the permanent injunction action.

Here’s what I believe to be the decision tree/analysis:

Factors weighing in favor of stopping operations pending the judge’s final decision:

1. The FDA can seek a preliminary injunction barring treatment pending the outcome of the case

The FDA has not yet moved for a preliminary injunction, but of course it can do so.My guess is that the FDA didn’t give either clinic advance notice that it intended to file the permanent injunction action, and that the FDA decided to file first then discuss with the operators their ceasing operations pending the judge’s decision on the permanent injunction. I would guess that these discussions are currently going on now or has just concluded. If they agree to close down, expect a FDA press announcement soon.

To obtain a preliminary injunction, the government has to prove 1. Likelihood of success of on the merits, 2.irreparable injury, and 3. balance of equities in favor of the government and the injunction pending a final decision.

These are flexible standards. Regrettably, recent case law is on the government’s side, making it likely they can show likelihood of success on the merits.

Both complaints cite cases of actual harm in the form of side effects the some patients. That will present a challenge to the operators, but it’s not insurmountable.

As to the balance of the equities, again it’s a challenge but there are arguments to be made in support of the operators.

A preliminary injunction motion is a mixed blessing. The advantage is that it’s a dry run, in that will give the operators a sense of the judge’s thinking early on in the case. If they lose, they could decide to fold up their tents, which will save them big bucks as opposed to trying a long and expensive permanent injunction case. The downside of course is losing, and that means operations stop, and there are other negative consequences explained below.

In my mind, the government’s threat of filing a preliminary injunction, while serious, should not be a determining factor in deciding whether to stop operating.

2. Potential criminal prosecution

This is where the rubber meets the road. The government is claiming that these operators are introducing into interstate commerce an unapproved new drug, and that the drug id adulterated and misbranded. These are both civil and criminal violations. And here’s where it gets interesting.

The FDA criminal statutes are both misdemeanors and felonies. The difference is intent or knowledge that what you’re doing is illegal. Based on the operators’ prior receipt of the warning letters in late summer 2017, and more importantly, the fact that the operators are now being charged with FDA violations in a civil action, well that goes a long way towards proving they had intent or knowledge that what they are doing is illegal.

And that puts the operators in Felony Land!

And once you’re in the land of felonies, that makes it more likely that the criminal division of the US attorney’s office will get involved, because they are basically “felony factories”, meaning they typically don’t prosecute cases involving only misdemeanors, because most people who plead or get convicted of misdemeanors get probation. (And what’s the fun of that for the prosecutors!) But most people who get convicted of felonies go to jail.

Of course, the operators can take the position that they are entitled to assert their legal defenses in the civil case. However, their lawyers are surely telling them that to do so creates a risk of criminal prosecution and a greater risk of actual incarceration upon conviction. That’s a tough thing for most successful doctors and business folk to risk.

Which is probably why when the FDA filed a permanent injunction action against Regenerative Sciences and its physician owner, Chris Centeno, he decided to stop treating patients with his expanded cell, stem cell procedure pending the outcome of the case. Turned out he made the right decision since he lost both at the district and appellate court levels. I suspect that no criminal charges were brought against him in no small part because of that decision.

Factors weighing for not closing down pending the end of the case:

1. There’s been no decision by a judge yet, and everyone is entitled to present a defense.

2. Their case is different from Chris Centeno’s case in the following ways: ____________,_______,______ (the defendants will have to fill in the blanks.

3. These folks are very, very motivated to seek vindication. Both Berman and Comella have been quoted in the stem cell press as expressing a high degree of motivation and belief in the righteousness of their actions, and caving-in just might not be in their DNA.

4. And here is the biggest factor and the consideration which could carry the day if they decide not to close down pending the outcome of the case:

Both operators have networks of physicians or franchisee physicians providing stem cell treatments throughout the country. (And that’s a big part of the reason why the FDA chose to go after these two first).

I don’t know the details of how these folks operate, but there are many physicians in the United States who treat patients with stem cells associated with these two operations. I suspect, but don’t know for sure whether they supply any stem cell products or supplies to their networkees/franchisees. But if they do, then agreeing to stop operations now might cause the cessation of all the associated clinics. (Hey these Feds aren’t so dumb!) Because the decision could involve so many other people involved in business with them, I think this could be the dispositive factor, if either or both decide not to close their operations right now. One way or the other, there might be some collateral legal/liability issues between the operators and their networkees.

What happens if they don’t close down now?

The decision to remain open during the pendency of this permanent injunction case will certainly have consequences. There is discovery in a civil case, and the defendant should expect to be deposed. There is no Fifth Amendment privilege in a civil case, so the defendants are going to have to answer every question fully, or ultimately, their formal answer to the injunction complaint will be stricken by the court and judgment will be entered against them.

On the other hand, if they do answer questions, the answers will be admissible in a criminal case, whether or not they take the stand in a criminal trial. This is just another wrinkle to what has to be a very hard decision.

Having defended medical mavericks for a long time, my guess is that at least one of them (and probably both) is going to stay open, but we’ll see. It would be hard to overestimate the impact of these cases as they wind their way through the courts.

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

Texas Medical Board to patients needing stem cells (and the Texas legislature): Drop Dead!

Texas Medical Board to patients needing stem cells (and the Texas legislature): Drop Dead!

Last year, the Texas legislature passed landmark stem cell legislation (HB 810). The law didn’t open the floodgates for every physician who wanted to inject patients with stem cells. However, it did allow patients to access their own stem cells (as well as other people’s stem cells), under controlled circumstances, namely the procedure had to be performed in a high level facility (an ambulatory surgical center or hospital), and it required university type IRB (institutional Review Board) approval.

Here is the Texas law:

https://capitol.texas.gov/tlodocs/85R/billtext/pdf/HB00810F.pdf#navpanes=0

As the bill was winding its way through the Texas legislature, a few Texas senators (probably doing the bidding of the Texas Medical Association and/or the Texas Medical Board (“TMB”) tried to kill the bill by adding requirement that the procedure had to be FDA approved, i.e., part of a clinical trial.
(I pointed this and other flaws in the bill in a post. See: http://wp.me/p7pwQD-a )
Let’s just say that my comments were not appreciated.

The whole point of the law was to allow people to receive stem cells even if they were not part of clinical trials or under FDA approved special exception. Obviously, by re-imposing the clinical trial/FDA approval requirement, the law would be meaningless. Fortunately, the clinical trial requirement was dropped from the final bill.

But………..

There was one other provision in the bill that was particularly worrisome to me: that the TMB was given carte blanc to promulgate rules implementing the stem cell statute.

I’ve been litigating cases before the TMB for 30 years and have interacted with dozens of board members. They are very conservative medically, and most don’t believe in physicians practicing beyond established clinical guidelines. So I was very concerned when the Texas legislature gave the TMB unfettered discretion to set-up rules for stem cells. I said so publicly, subtly in my past posts(see the end of this post, http://wp.me/p7pwQD-ab) and much more bluntly in private conversations with the patient advocates shepherding the bill through the legislature. Let’s just say my concerns were not well-received.

But my long (and hard-fought) experience with the board members and the Board’s legal staff was telling me that the Board was going to be very reluctant to implement the statute as the legislature intended. In fact, the relative ease in which the opposing Senators gave up the FDA clinical trial requirement made me suspect that they simply decided to pass the bill knowing that the Board would kill it, or at least never let it be implemented as the rest of the legislature intended.

So what’s in the Board rule?

On March 26, 2018, the TMB published its proposed rule on HB 810, the stem cell law as well as regulations implementing the Texas “right to try” law (I’ll deal with the right to try regulations in a separate post).

Here is a link to the entire revised rule on investigational treatments:
http://www.sos.state.tx.us/texreg/archive/April62018/Proposed%20Rules/22.EXAMINING%20BOARDS.html#30

Here is a pdf of just the stem cell part of the proposed rule.
SUBCHAPTER B

But it’s a statute and thus pretty boring, so I’ll just relate the part which kills the stem cell law:

“(d) Stem cell treatments which are under investigation in a clinical trial and being administered to human participants:
(1) may be administered or provided to eligible patients with qualifying terminal illnesses or severe chronic diseases as defined by the executive commissioner of the Health and Human Services Commission; and
(2) must be done in compliance with applicable law.
(e) In order for a patient to be eligible to receive treatment with investigational stem cells, the eligible patient must:
(1) be enrolled in a clinical trial investigating the use of adult stem cells in humans;”

As previously stated, the whole point of HB 810 was to make stem cells available to patients outside of clinical trials. There is no need for a law that says patients can enroll in clinical trials, because that’s already the law. The point is to allow clinicians not doing clinical trials to administer stem cells outside of clinical trials.

Well why can’t a clinician just start a clinic trial and administer stem cells to his/her patients?

The answer: because it’s illegal (or so says the FDA). Physicians can’t give non-FDA approved drugs (which the board rule calls “investigational drugs”) to patients except in an FDA approved clinical trial. If they do, they are violating the FDA’s trifecta of introducing an unapproved drug into interstate commerce, and providing a misbranded and adulterated drug to patients. That’s the thrust of the recent injunction actions that I wrote about in my last two posts. (And it’s a nonstarter for the average clinician to do a clinical trial; it’s a quantum level more work and money than any clinician or clinic can do (unless your name is Burzynski).

And remember, the TMB’s proposed rule states that the stem cells being administered to patients in clinical trials must be done so “in compliance with applicable law.” There’s no more applicable law than the FDA law and regulations on clinical trials.

I think there are other problems with the TMB rule regarding IRBs which will make compliance practically impossible for university level IRBs, but that’s secondary to the fact that the proposed TMB rule limits stem cell access to patients on clinical trials performed “in compliance with applicable law,” which was exactly the law before Texas legislature passed SB 810!

Way to go TMB! The stem cell Mafioso is breathing a sigh of relief.

The good news, if there’s any, is that that this is just the TMB’s proposed rule. Public comments are allowed. Here is the number for more information:
(512) 305-7016.

There might be a public hearing sometime in the future. To state the obvious, there’s more work to be done by the folks who are advocating for access to stem cells outside of clinical trials.

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

The FDA’s injunction complaints against US Stem Cell Clinic and California Stem Cell Treatment Center

The FDA’s injunction complaints against US Stem Cell Clinic and California Stem Cell Treatment Center

Yesterday, May, 9th the FDA filed complaints seeking permanent injunctions in Florida and California federal courts against the two highest visibility U.S. stem cell operations. For the interested, here are the complaints.

comella

bermancomplaint

What’s in the complaints?

It’s pretty much as I said in yesterday’s post. The two complaints are substantially identical and no doubt prepared in Washington, primarily by the FDA with input from Main Justice (or vice versa).

Both entities were inspected by the FDA, after which they received 483 inspection observations indicating Good Manufacturing Practices violations and the fact that they were illegally manufacturing unapproved new drugs which makes the products adulterated and misbranded under federal law.

The clinics responded with basically the same legal argument that the FDA didn’t have jurisdiction to regulate them because they were doing a surgical procedure/just practicing medicine which the FDA cannot regulate.

The FDA then issued warning letters rejecting the lack of jurisdiction argument. That was back in late summer 2017. Since that time, both companies continued their rejection/defiance of the warning letters via public statements about the FDA’s lack of jurisdiction over their clinics’ medical practices.

It was just a matter of time.

The complaints go through the FDA standard argument that the products are drugs and biological products, and not covered by the same surgical procedure exemption (21 CFR 1271.15, which I’ve discussed in many of my previous posts:
See my post at: http://wp.me/p7pwQD-bB )

The complaint against US Stem Cell points out that the solutions the company uses to separate the fat from the stem cells and to wash the product are labeled for “research purposes only” and “not for human therapeutic use.” Ooops! (While that’s mostly just CYA on the part of the suppliers, it won’t sit well with the federal judge, and I predict, the suppliers’ limitation language will be in the judge’s final opinion.)

The complaint against California Stem Cell Treatment Center points out that its stem cell product (actually stromal vascular fraction (SVF) contains a small pox vaccine, Vaccinia Vaccine, Live, which carries a black box warning “designed to call attention to serious or life-threatening product risk, including swelling of the heart tissues, brain or spinal cord.” Yikes! Expect a lot of discussion about that in the summary judgement papers.

Both complaints relate serious adverse events associated with the products, which in the case of US Stem Cell are the notorious three cases of blindness (or partial blindness) resulting from injecting the SVF into the eyes of patients (a practice which US Stem Cell mercifully doesn’t do anymore, according to its co-owner).

So what’s next?

The good news is that there is no motion for a preliminary injunction which means that the cases will take some time, months, at least. The companies will file an answer raising all their arguments. A scheduling conference with the judge will be held, and the government will press for setting up a summary judgement briefing schedule.

The companies need to do something different, because we know how summary judgement proceedings go in this type of case; just ask Chris Centeno and the Regenerative Science folks. So defendants, try something different. Searching for a factual issue would be the place to start. There’s only heartache and loss in summary judgement in this kind of case, followed by an affirmance by the Circuit court. (Here is the legal precedent what has to be worked around, https://caselaw.findlaw.com/us-dc-circuit/1656447.html )

So do something different!

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

First 2018 Stem Cell Update

First 2018 Stem Cell Update

We’re now beginning the second month of 2018, and we are a few months past the FDA’s issuance of the final stem cell guidance documents which are intended to dramatically limit the availability of stem cell treatments outside of FDA approved clinical trials.

See my prior post at: http://wp.me/p7pwQD-bB

So what’s going on so far in 2018?

FDA Inspections?

Rumor has it that there already have been several facility inspections this year. What I can say is that it’s more than a rumor. I can also say that the FDA is looking hard at cGMP and GTP compliance issues, and my informed guess is that not many of the private stem cell clinics are so compliant. I think the FDA’s reaction to these non-compliance issues as these entities go through the administrative process will vary and depend on some key factors. But we’ll have to wait and see how this shakes out.

The new Texas Stem Cell Law: Are we there yet?

The short answer is no because the law isn’t fully implemented yet.

For the details of the Texas law, see my post at: http://wp.me/p7pwQD-ab

The Texas law (HB 810) called on the Texas Medical Board (TMB) to issue a rule flushing out the law. Presumably, it’s not going to be legal to treat patients under HB 810 until the board creates an implementing rule.

Does that mean that stem cell treatments are not available in Texas now? Of course not. There are many docs and clinics administering stem cells right now in Texas. But they are operating very arguably in violation of federal FDA law. HB 810 creates, in effect, a Texas safe harbor for stem cell clinics to operate, but not until the TMB passes a rule about it. (The TMB already has a rule on investigational treatments, but that rule excludes stem cells.)

There was an initial stakeholder meeting in December about the rule, and there is a second meeting set for next week. The stakeholder group is composed of approximately 25 various interest groups, legislators, and state agencies. No doubt the key players are the stem cell clinics which plan to open up under the new law and some of the patient groups, which groups did the heavy lifting for the passage of the new law. They are a formidable group of people.

The Medical Board has already set up an ad-hoc committee to consider the rules once they are drafted. Expect the draft rule to be published in the Texas Register.

But that’s not the end of the process. Even if the TMB passes a rule, the statute requires that Health and Human Services Commission (HHSC) define terminal illness and severe chronic disease which are the statutory requirement to be eligible for treatment with stem cells. HHSC has delegated those duties to the Department of State Health Services, which has not yet started its rulemaking process.

The bottom line for patients: Don’t expect to get the treatment from these statutory clinics in the near future.

And for potential clinics: same, but further: It’s not a slam dunk that these statutorily approved clinics will ever see the light of day in Texas. After all, the Texas stem cell law bumps-up hard against federal law. Texas is a very conservative state, medically speaking. I have been dealing with the TMB and the AG’s office for 30 years, and I can tell you they are deeply committed to protecting the public against what they feel are unsafe or questionable medical practices. I think the HB 810 conflict with federal law is likely to cause some serious reflection on their part, and I think they will be very, very cautious in light of all the negative PR about the private stem cell clinics. But we’ll see.

And speaking of the drone of negative information about private stem cell clinics:

Of course there continues to be the hand-wringing and fear mongering about the private medical clinics and how the FDA is not doing enough to regulate them (read, put them all out of business). Expect the drum beat to continue, with citation to the same three eyeball injection/blindness cases brought to you by those idiots in Florida, along with the dangers of the deadly viruses used by the California stem cell physician group, that is, until there is a new stem cell horror/ fear inspiring story.

But there’s also a new PR tactic: mock those who say there is a conspiracy between Pharma, government, the stem cell academic institutions and stem cell trade groups to pressure the FDA to shut down the private stem cell clinics. I don’t know about Pharma’s role, but I suppose my constant use of the phrase “Stem Cell Mafioso” makes me a member of the conspiracy mongers. I’ve been called worse.

I’m going to be an adjunct professor! (for two hours anyway)

I’ve been asked to speak about stem cell regulation at a major university health law center graduate seminar on healthcare controversies. I was flattered to be asked, especially when I heard that the other speaker (pro-regulation) was Professor Leigh Turner, who is half of the Knoepfler-Turner team which published the seminal article about the 500 plus unregulated, wild west stem cell clinics, which article has been one of the key justifications of the aforementioned Stem Cell Mafioso’s efforts.

For sure, we’ll talk about the recent California and Texas stem cell laws, but I hope to broaden the discussion out to the role of medical innovation and restrictions on innovation. I think I’m also going to talk about the myth and limitations of evidence based medicine. I haven’t stepped foot in a law school lecture hall since law school, and that was when most of the original Saturday Night Live cast was still on the show. Yikes!

Any ideas of what I should talk about or what I should ask Professor Turner?

Should be interesting for a guy who lives in the trenches to have a brief visit to lofty academia.

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

FDA sends a Happy New Year greeting to another stem cell operation!

FDA sends a Happy New Year greeting to another stem cell operation!

As a prelude to more of what may be coming this year, the FDA has issued its first warning letter to a for-profit stem cell entity, on the third working day of the New Year. As per previous posts, expect more to follow in the coming weeks and months, targeting the most visible stem cell only entities.

Here is the warning letter:

https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm591225.htm

Same ol, same ol, but with a twist

The letter is largely the FDA’s standard form warning letters to stem cell operations, but not quite. This entity, based in New Jersey, produces SVF (stromal vascular fractions) from adipose tissue, which is what most of these places do. That product is considered “more than minimally manipulated” under the FDA’s final guidance document. The business also apparently claims that its product may treat a wide variety of diseases, which makes the use “non-homologous,” under the aforesaid guidance document.

The letter also makes noises about a “biologics license.” Places like this New Jersey entity have more of a chance of seeing a unicorn than they do in obtaining a biological license.

And like two prior warning letters, this warning letter finds cGMP noncompliance, including not having a (very expensive) clean room, and well as numerous other facility, hardware, systems and documentation deficiencies involved in commercially producing drugs.

The rub/twist in this case

Based on the warning letter, it appears that this entity doesn’t actually treat patients, but rather just manufactures the product for resale/injection by health care providers.

The other rubs is that there is an IRB (Institutional Review Board) involved and, according to the warning letter, the product is listed “for research use only.” The FDA didn’t think either of these things helped the company’s case and made the product legal.

Just to recap the regulatory process

First, the FDA shows up for an inspections, usually unannounced and with at least three FDA inspectors. They stay for at least a week demanding to see documents. The last day of the inspection, the company is handed a 483 inspection report, which is the agency’s preliminary and non-binding and non-exhaustive findings/”observations.” (In these FDA stem cell inspections, I have to believe the agents have a standard form or template, since all of these entities have the same basic operation and operational deficiencies).

The company is given a short time to respond in writing to the noted 483 deficiencies. The FDA then reviews the response. The FDA is never satisfied with the response (at least in for- profit stem cell entities), so 3-6 months later, a warning letter arrives in the mail, usually after it is posted on the FDA warning letter web page
The company has another short period (15 working days) to respond to the warning letter. Most of the time, and especially if the entities respond without counsel, they just repeat their response to the 483 observations. The FDA then considers the response, and then . . . .?

What’s next?

This is the third warning letter issued against stem cell entities since late summer. (See my earlier post on the prior two warning letters:

http://rickjaffeesq.com/2017/09/22/sleeping-giant-awakens-fda-starts-final-push-eliminate-practice-medicine-stem-cell-clinics/

So far, the FDA hasn’t taken the next step which would be a civil injunction action to stop the stem cell providers for administering and manufacturing their products. But dollars to donuts, the civil actions are coming. I suspect they will be (or the two summer warning letter at least) will be filed about the same time, so as to maximize the PR/threat impact.

The FDA’s choice of the three initial targets is interesting and possibly informative

The Florida stem cell clinic involves the most egregious facts. A nurse practitioner injected stem cell products into patients’ eyeballs and caused permanent vision damage, and the operation is run by someone without any actual health care background or training. This should be an easy case for the FDA, on the merits and more importantly, it and won’t cause public outrage even from the pro stem cell clinic field because of the bad facts. As I’ve said before, this is the best initial target, from the FDA and stem cell Mafioso’s point to view.

The California clinic supposedly uses some illegal or non FDA approved toxin either in or in the processing of its HCT/P’s. That’s about as good as you can get from the FDA’s point of view in terms of trying to solidify the FDA’s position on “more than minimal manipulation.” It’s going to be very hard for a federal judge to go for the stem cell advocate’s view if a clinic is using dangerous toxins in its product.

The New Jersey case is interesting and useful to the FDA because it targets an HCT/P manufacturer. This an important part of the FDA strategy because there are many, many docs out there using HCT/P’s who are buying the product from manufacturers like this New Jersey company. With this warning letter, the FDA is telling all these manufacturers that it hasn’t forgotten about them.

We’ll have to see how it all shakes out, but I’m still predicting that multiple injunction actions will be filed by the FDA in 2018, and I’ll bet sooner rather than later.

I still feel that the defense is going to be part legal and part public/legislative, and there’s probably still some arguments to be made which might be more receptive to the courts than to the FDA, but we’ll see.

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