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stem cell mis-regulation

Five Things the FTC won’t like about Private Stem Cell Clinic Advertising and What it Can do About it

Five Things the FTC won’t like about Private Stem Cell Clinic Advertising and What it Can do About it

There have been some recent musings about what the FTC (Federal Trade Commission) might think about how the private stem cell clinics are advertising their treatments.

See https://ipscell.com/2018/12/upside-down-sometimes-wacky-fine-print-on-stem-cell-clinic-sites/

The post quotes advertising claims and disclaimers from a few of these websites and wonders what the FTC might think of this. I’m guessing the author already knows the answer, but for those who don’t, here are the five things the FTC is going to have a problem with any stem cell clinic employing the advertising/disclaimers commonly used by these web sites:

1. Lack of adequate substantiation for the claims and implied claims

Under FTC law, claims made by businesses (including medical businesses, to the extent the FTC choses to assert jurisdiction over them) require adequate substantiation. In the medical field that means that the claims have to be supported by well-controlled clinical trials. (Of course, FDA approval would do the job as well.) My guess is that at least initially and without a fight, the FDA wouldn’t think any of the autologous MSC/SVF claims made by the stem cell clinics have adequate substantiation, and hence the FTC would view all such claims and implied claims of efficacy as false advertising.

2. Use of testimonials

Most of these clinics use testimonials from successfully treated patients. The FTC doesn’t particularly like testimonials, and it thinks that disclaimers following testimonials that “results may differ” or that the “testimonial doesn’t imply success in your or any other case” are not usually adequate to negate the implied efficacy claim.

3. Lack of clear and conspicuous disclaimers

Most of the disclaimers in these web sites are at the end of the page, require scrolling down, and are in small print. From the FTC’s point of view, that’s a violation of its clear and conspicuous disclaimer policy.

(Here it is: https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf

4. Disclaimers which are contradicted by the claims

The author points out that the there is an inconsistency between the claims made and the disclaimers. If the FTC agrees, that would also be a problem, especially as the claims are prominent and the disclaimers/caveats are not.

5. Based on all of the above individual problems, the FTC might well conclude that the overall net effect of these web sites constitutes false advertising, perhaps even if there was no clear and conspicuous disclaimer problem. The FTC is big on looking at the overall effect of a web site as viewed from the average person, and if it concludes that the overall effect is to make one or more therapeutic claims which is (are) not substantiated, then that’s a problem for the FTC which becomes a problem for the claim-making clinic.

So, what can the FTC do about it?

We’ve seen one example already, where it forced a settlement from a stem cell clinic.

What happens if an offending clinic doesn’t settle?

The FTC has two options. It can bring a federal injunction lawsuit in the district in which the stem cell clinic operates. Second, and the preferred approach seems to be to bring an administrative action in Washington, D.C. before an FTC employed administrative judge. All these FTC judges do is apply FTC law to businesses which other agency employees have determined has violated FTC law. Let’s just say that for a litigator (and a client) it’s not the best possible forum. Practically what that means is that if you’re in an FTC administrative proceeding and what you’ve done is in violation of an FTC guideline, you’re going be found in violation of FTC law, enjoined and probably fined.

So, what does all this mean for the private stem cell community?

The bad news for the clinics is that FTC cases are much easier cases to pursue than FDA cases, since they don’t require a week or two site visit by multiple federal investigators. It can all be done by FTC investigators at their desks. The good news for the clinics is that the FTC, like the FDA has limited resources, and heretofore, medical clinics have not been a FTC high priority, and I sort of doubt that will change in a big way, because they have overlapping jurisdictional authority with some other government agencies which have more direct and obvious oversight, like the FDA, medical boards and the consumer fraud divisions of the state attorney generals offices.

I’m curious why all these agencies haven’t sat down together and figure-out and implement a comprehensive approach and prioritizing to the private stem cell clinic issue. That’s what I’d do. Or maybe it’s coming. We’ll see.

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

Brief Memo on Advertising to Private Stem Cell Clinics (Especially the “Affiliates” of the two Defendant Organizations)

Brief Memo on Advertising to Private Stem Cell Clinics (Especially the “Affiliates” of the two Defendant Organizations)

The free pass given by the federal and state authorities on private stem cell clinic’s publicly professed exuberance (aka web site advertising) is coming to an end.

By early 2019, I expect both federal and some state regulators to bring lawsuits and/or announce settlements with more than a few private stem cell clinics, many of which are affiliates of the two stem cell networks which are currently defendants in the FDA injunction lawsuits in California and Florida.

Having looked over a web site or two, it might be time for you folks to rethink your marketing strategy. The authorities have a different and quite technical view of what constitutes false advertising and what constitutes substantiation of actual and implied claims. And don’t even get me started on their view on implied claims. It’s not to be believed.

It’s the end of the year and now would be a good time to implement a correction plan for advertising which is likely to be viewed by the authorities as deceptive trade practices, for a couple reasons. First, of course it’s always to better to comply with what the authorities think is the law, which is better than having to duke-it-out with the authorities in an injunction action brought by the FDA/FTC or the state’s attorney general office, because it’s not really a fair fight. There might be arguments to be made in defense of some commonly made stem cell claims. However, per the above, the best choice is not to have to make them.

Second, there could be medical board implications for physicians who consent to or have a judicial finding of false advertising. That opens-up a whole other front, and who needs that!

In short, now is a good time.

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

Some Perspective on the California Medical Board’s “task force” on Stem Cell Clinics

Some Perspective on the California Medical Board’s “task force” on Stem Cell Clinics

A few days ago, the big dog blogged that a San Diego TV station was reporting that the Medical Board of California (MBC) has announced its intention to form a task force to “investigate” private stem cell clinics, presumably following the Federation of State Medical Board’s (Federation) report on the subject.

Here is the post:
https://ipscell.com/2018/11/medical-board-of-california-task-force-to-investigate-stem-cell-clinics/

The intended or unintended implication is that all these clinics are about to be shut down by the MBC. But let’s take a breath.

What effect does this MBC proposed action actually have?

Short term: None. Task forces take time, even non-government task forces like the Federation’s stem cell task force took a year, and all it did was produce a relatively benign report.

It’s way more complicated when a state agency wants to study something, because the end result could change the law, create a new regulation or prompt agency action. Implementing a state agency’s task force’s recommendations requires either a new statute passed by the legislature, or an agency approved regulation, policy statement or guideline (like the compassionate use medical marijuana guideline). Anything substantively new by a state agency requires a lengthy administrative process involving input from the stakeholders and the public at large, through public comment and/or hearings. And that takes a lot of time and effort.

So, like I said, in the short term – say a year or eighteen months (at the very least) – I don’t see any change in the MBC’s practices resulting from its announcement that it will be setting up a task force to study/deal with the issue.

What could the MBC do after studying the issue?

A possible answer might come from the Federation’s 11 recommendations contained its task force report.

(Here is a pdf of the entire task force report. The recommendations start on page 10)

fsmb-stem-cell-workgroup-report[1]

The Federation’s first and main recommendation

The Federation’s first and central recommendation relates to the core issue in the private stem cell clinic model, namely the lack of clinical trial evidence supporting the efficacy of stem cell intervention for the conditions promoted/treated.

The Federation’s recommendation relating to this core issue is that there be a “appropriate rationale” or a “basis in theory” to use the “unproven” therapy and that unproven stem cell therapy should only be given when “proven treatment modalities have been exhausted.”

There are many facets and complexities to this recommendation. For example, the notion of “proven” modalities is a vast oversimplification of the state of medical knowledge in many serious diseases. Many “proven modalities” are not curative. For example, many cancer chemotherapeutic agents are only “proven” to extend median survival by a clinically insignificant period of time (like six to eight weeks), or provide no increased survival, but only have a proven palliative benefit. (Don’t even get me started about how cytotoxic chemotherapy gets approved based on evidence of palliative benefit.) Risperdal may be a standard of care treatment for autism, but it’s not a cure, it just suppresses some of the symptoms (and usually causes side effects as bad or worse than the behavior it’s meant to supress).

Nonetheless, in some sense, the Federation’s recommendation that “unproven” stem cell therapy only be used after proven modalities have been exhausted will be easy to satisfy by the private stem cell industry. Most of the patients who go to private stem cell clinics have incurable chronic conditions or fatal diseases which are refractory to other forms of treatment. There is no cure for MS or autism, and many MS patients and some autistic kids receive stem cell treatments for their conditions. Anecdotal evidence and solid theory supported by pre-clinical studies about how stem cells can affect some of these serious and terminal conditions likely supply the rationale for treatment under the Federation’s recommendation.

Many of the Federation’s other recommendations are innocuous, like raising awareness among physicians about the state of the law on stem cells, making sure physicians and patients engage in “shared decision-making,” making sure physicians don’t charge excessive fees (good luck with that, since boards don’t normally get involved in the cost of medical services).

There is a recommendation that medical boards review stem cell advertising claims and pursue false advertising physicians. That might be a good idea, but probably not practical since most boards are underfunded and investigations are complaint driven. There are not yet board investigative departments which search out false advertising by physicians. Maybe there should be, but I just don’t think that’s going to happen. So I think anti-private stem cell clinic forces are going to have to find another way to have the boards go after the stem cell advertising doctors.

An obvious recommendation was that the medical boards monitor FDA warning letters and investigate those involving “unscrupulous and unprofessional practices” relating to providing stem cells. The problem, as I’ve oft stated in prior posts, is that the the FDA doesn’t have the resources to do more than a couple of warning letters in the stem cell field in a given year. So, if the anti-private stem cell folks were looking to this recommendation to dramatically curtail private stem cell clinics, they will likely be disappointed and will have to figure out a work-around.

In short, my opinion is that the Federation’s recommendations, even if implemented in toto by the MBC, are not likely to slow down the proliferation of the private stem cell clinics. While there might be some things which the MBC could do to stop or slow them down in California, it’s going to have to do more than just adopt the Federation’s recommendations to get the job done.

Like what you ask?

Well, that’s not my job, so I’ll let the smart and competent people working at the Medical Board and the Attorney General’s office figure out what they can and should do to implement its task force’s recommendations. However, that will be many moons from now, and that is a long time in the stem cell world. By that time, I think other things are going to happen, both to the good and bad in terms of regulatory enforcement and developments in standard of care.

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

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

The grass is still growing ever so slowly in the FDA’s injunction cases against U.S. and California Stem Cell Clinics

The grass is still growing ever so slowly in the FDA’s injunction cases against U.S. and California Stem Cell Clinics

Since my last update about these cases in early August, not much has happened, which is to be expected in federal civil litigation. Nonetheless, here is an update.

Let’s start with what hasn’t happened

1. There has been no announced agreement in either case that the defendants have stopped treating patients with their SVF, stem cell therapy which the FDA claims are unapproved new drugs, adulterated and misbranded, pending the final decision by the judges in these injunction actions.

2 The FDA hasn’t filed a motion for a preliminary injunction against either company to stop them from treating patients until the judges’ final rulings.

The FDA sure isn’t litigating these cases like these clinics are a big public threat. There are a few well-publicized cases of harm from U.S. Stem Cells patients, and there is much made of the fact that California group was using a dangerous toxic substance in processing their “drug” product. But as I’ve said in some previous posts, the FDA has bigger fish to fry.

See my post at:

http://www.rickjaffeesq.com/2018/08/01/update-on-the-fdas-stem-cell-injunction-cases”>http://www.rickjaffeesq.com/2018/08/01/update-on-the-fdas-stem-cell-injunction-cases”>http://www.rickjaffeesq.com/2018/08/01/update-on-the-fdas-stem-cell-injunction-cases

Of course, it’s a complicated subject for a federal judge, and maybe the FDA is worried about losing in the abbreviated hearing process of a preliminary injunction motion. Maybe the thinking is “do it right and take your time.” If so, I can’t argue with it.

Here is what has happened

U.S. Stem Cell

The defendants filed an answer in August. It largely parallel’s the answer in the California case, which isn’t surprising since the same big firm is lead counsel in both cases. Here is the Answer:

09261800

There is one big difference: U.S. Stem Cell’s answer contains a demand for “a jury trial as permitted by law.”

No such request was contained in the California Stem Cell Treatment answer. Getting the case away from a judge and into a jury’s hands would be a good thing for a defendant in this type of case, so did the California lawyers miss an opportunity?

I don’t think so. Injunction cases aren’t decided by juries; they are decided by judges. I think the Florida lawyers just tossed out a jury request and the docket just mechanically picked it up and the mechanical/automated software spit out the jury trial forms deadline. My guess and prediction is that down the road the jury trial issue will be addressed and rejected by the judge, even if the case gets that far.

The case is set for trial during a two week period starting June 10, 2019.

The more relevant deadline is March 11, 2019, which is the summary judgment motion deadline. Seems a safe bet that the FDA will file a summary judgement motion for a final judgment. (FYI: That’s how the Regenerative Sciences case was resolved). The feds will do some discovery, nail down via admissions and depositions what the company does and doesn’t do – most notably, being cGMP compliant – which establishes adulteration. The feds will get in admissible form the label instructions for use, which establishes misbranding, and obtain admissions and deposition testimony of the facts of how the product is processed, and how/for what indications it’s being used, which should establish non-compliance with the main regulatory requirements for drug status, i.e., more than minimal manipulation and non-homologous use, (at least under the FDA guidance documents.)

With those facts established in admissible form in discovery, there probably won’t be any factual issues to be tried by the judge (or jury). That makes the case amenable to resolution via summary judgement.

The defenses challenge is to find a disputed issue of fact on which the judge has to hear factual testimony from the parties at a trial. In this case, it will be a challenge, but there are some possibilities. The defense has smart lawyers and will figure it out, if there’s something to be figured out. And who knows, they might even come up with a legal basis to move the case sideways.

I’d look to have the defense seek a delay to filing papers in opposition to the summary judgment motion, figure a month. (Anything beyond that would probably interfere with the early June trial setting.) That would make a decision on the summary judgement motion in May. That’s how and when I’d see this case wrapping-up unless defense counsel figures out a way to derail or slow down the proceedings. Speaking as a defense lawyer, sometimes delay is the best you can hope for, because who knows what the future will bring. This point is aptly made in a fable I related at the beginning of my chapter on cancer doctor Stanislaw Burzynski’s several decades war with the FDA and the Texas medical board in Galileo’s Lawyer. It’s a good story. Here it is for those who have an immediate need for a smile.

mendal

Sometimes horses learn to fly, and a year or two could present an entirely new regulatory reality.

California Stem Cell

The parties filed a joint preliminary statement, which sets forth the claims and defenses, lists the witnesses, and the documents (and of course it can be amended as more information becomes available through discovery), and sets forth a proposed case schedule. The parties are looking at a trial in late July to early August, subject to the Court’s availability. They are proposing a motion deadline of late May. Here is the joint statement. castemcelljtdiscovery

There is a scheduling conference with the judge on Tuesday, October 1, 2018, at which point proposed deadlines will be adopted or changed.

The legal issues related in the joint statement are as expected and as discussed in prior posts, namely whether the defendants’ procedure is an unapproved new drug or not regulated by the FDA because it’s a same day surgical procedure, with not more than minimally manipulated autologous cells, given for a homologous use and all the practice of medicine and lack of jurisdiction stuff thrown in. The relevant trial documents are the 483 inspectional observations, communications between the parties and the final guidance documents pertaining to these issues, as well as patient complaints. Predictably, the defense seems to want to have some patients testify, and I’m always in favor of that. Look to the government to seek to stop that, because hey, that’s how they roll.

Yawn. I warned you it’s like watching grass grow.

Since the discovery process does not normally result in the publishing or making public, documents or other information revealed in discovery, I think nothing exciting is going to happen in these two cases (or nothing we will hear about) until summary judgement papers are filed (unless the lawyers come up with an interesting delay strategy). The Florida judge did refer the case out to mediation, but that’s a non-starter. U.S. Stem Cell isn’t stopping, and the FDA isn’t going away until it stops the Florida operation.

So any more news from the FDA in the stem cell field will be about other lawsuits or collateral things, like its cracking down on private stem cell clinics using clinicaltrials.gov to promote their clinics via patient funded clinical trials, per a recent post by the big dawg. https://ipscell.com/2018/09/fda-outlines-potential-crackdown-on-clinicaltrials-gov-offenders/

(And for the record, I don’t have a problem with the feds restricting clinicaltrials.gov to IND clinical trials, or at the very least, requiring disclosure that the trials are not FDA approved and that the “participants” pay for the treatment. That seems fair and reasonable.

I’m also very much in favor of the private stem cell clinics providing accurate and complete information about their operations, including that their treatments are not FDA approved, are not considered to be safe and effective by institutional authority, and that anecdotal evidence is not considered scientifically reliable, or even disclosing that there is no government review or verification that the statements made by the clinics on their web sites are true (like what the supplement manufacturers have to state). And I also don’t have a problem with the FDA or the FTC going after any health care facility which puts out materially false information to fraudulently induce patients to undergo the treatment. I’m all about providing the patients with accurate and complete information and let them make an informed choice, because it’s their bodies and their body parts we’re talking about).

So in sum about the status of the FDA’s two pending injunction cases: the millstones (wheels) of justice grind exceeding slow . . . . (you know the rest).

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

For those who don’t: “The wheels of justice grind exceeding slow, but they grind exceedingly fine.” The odds favor the millstone over Mendal in these cases, so per Damon Runyon, “The fight isn’t always to the strong, or the race to the swift, but that’s the way to bet.”

RAJ

King Canute and why the FDA will never stop the private stem cell clinics

King Canute and why the FDA will never stop the private stem cell clinics

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But first, two predictions:

Prediction 1

The FDA will win its injunction cases against US Stem Cell, and the California Stem Cell Treatment Centers, and obviously these injunction decisions will be bad precedent for the private stem cell industry.

Prediction 2 (and the big one)

The injunction decisions, even after the Court of Appeals affirms both injunctions -which will happen – will not stop or even slow down the explosive growth of the private clinic stem cell industry.

And the lesson of King Canute tells us why

Seeing the FDA’s relatively timid efforts to date reminds me of King Canute putting his throne at the sea’s edge and commanding the incoming tide to stop. (It didn’t.)

The FDA will have about as much success as King Canute had. (Of course, if the king sat by the beach for 24 hours, tides being what they are, it might have appeared that the sea was listening to him for some portion of the day. Maybe that’s taking the analogy too far, or maybe not.)

For sure, the FDA is going to win its current injunction actions in a relatively short period of time, (a year or eighteen months ish) in part because these cases are being defended by the same big firm, and big firms are masters of linear defense thinking. In cases like this, linear thinking will lead to permanent injunctions.

But these two cases aside, the FDA’s problem is that even now there are just too many clinics for too few FDA resources. It is estimated that there are around six to seven hundred clinics providing some kind of stem cell treatment. I think there are more, because some are flying under the radar screen, and the counting methodology is based on Internet searches.

To understand why the FDA’s task is impossible, consider what’s involved in getting to the place the FDA is in these two injunction cases.

Each FDA case starts with a site visit by multiple (usually three) FDA inspectors (usually called “consumer safety officers”). They spend anywhere from one to three weeks at the clinic. At the end of the visit, the facility receives a 483 inspectional observations report. Then there is a lengthy administrative process: a response by the clinic, consideration of the response by the FDA. If the response is inadequate, (and it always is), a warning letter is sent, but that will be many, many months after the site visit, because a warning letter involves much internal review from a couple different levels of employees and divisions.

Then the clinic has an opportunity to respond to the warning letter. Then there is a further administrative/bureaucratic process for reviewing the clinic’s response to the warning letter. Assuming, (as is always the case), the clinic’s response is inadequate, the FDA has to decide what to do about it, and that’s a further administrative review process.

If the FDA decides to proceed with litigation, it involves its counsel’s office and then the civil division of the US Attorney’s Office in the district in which the stem cell clinic operates.

The US Attorneys’ Office acts as the lawyer for the FDA which is the client. This involves another layer of bureaucracy. US Attorneys’ Offices are usually very busy places, and the lawyers in the civil division usually have big case dockets involving a wide variety of federal matters. They are a very smart and experienced bunch of people, but they are overworked, have to deal with many demanding federal judges and demanding clients who think their agency’s business and the agent’s case is the most important thing in the world.

The FDA’s practical problem here is that most US Attorneys’ Offices throughout the country have not dealt with stem cell cases, so there is some learning curve, which eats up more time. For sure, the US Attorneys’ Offices are aided by the FDA’s counsel’s office, and the FDA investigators, but still, it’s more inefficient than say federal administrative agency cases which are filed in the District of Columbia District Court, which handles many federal administrative cases and the DC US Attorneys’ Office which works on many cases in the same fields involving the same legal issues.

Consider that the two clinics/networks facing injunctions are notorious and have been known by the FDA for years. And yes, the FDA has also sent a few other warning letters to stem cell clinics over the past few years, but it’s not a big number relative to the number of clinics out there. Even if the feds up their game, and file more cases which are in the pipeline, what’s that number going to be? Five, seven? It’s not going to be 50 or even 20, given all of the above and the fact that CBER only has around 1100 total employees. (By comparison CDER (the drug division) has over 4,000 employees.)

Of course, the FDA has graciously said that it’s going to give these clinics three years to come in compliance, and is only now going after the most egregious violators who pose the greatest risk to patients.

That’s a very laudable position, but it reminds me of Siddhartha’s statement “when you have nothing to eat, the best thing to do is to fast.”

Apart from the sheer number of clinics, here are some other reasons why the FDA won’t be able to stop the tide of stem cell clinics:

2. The stuff works, and too many people are being helped

Not in all conditions or in all people, but basically I think the market has spoken and continues to speak by virtue of the fact that there are so many clinics out there and so many more coming online. You can’t fool all the people all the time.

The alternative is that everyone who gets stem cells is a moron, especially those who keep going back for retreatment, like MS patients. The MS stem cell patients are obviously delusional because they don’t understand that the clinical benefit they supposedly achieved every time they do their stem cell treatments is happenstantial/just a temporal correlation with their treatments and not caused by it, or is a placebo effect.

But here’s the thing, most of the MS stem cell patients have tried and failed multiple prior conventional therapies. So obviously these stem cell clinics have just happened to discover a better acting placebo. Ultimately, the bed rock mantra from the stem cell scientific community is, wait for it, “It’s just anecdotal evidence and not science.”

But I digress.

I think stem cells treatment is like medical marijuana. Regardless of all the studies showing that drug abusers suffer side effects and brain damage, there are so many people who have benefited from medical marijuana that the feds have been unable to stop the explosive growth of the use of medical marijuana, and many states have passed laws allowing it, despite its continued illegality under federal law.

I think we are seeing the same thing in stem cells, but to a lesser degree and we’re earlier in the cycle because 1. It’s a much more recently developed therapy than cannabis, 2. You have to go to a medical clinic to get stem cells, where it’s possible to get cannabis without a physician’s recommendation. 3. Stem cells are of course a quantum level more expensive than medical marijuana.

But it is the same societal forces at work. Ultimately, over time people know when something can benefit them. I think that’s one of the benefits of the internet; it’s all out there, the good and the bad. Obviously, this is a heresy for scientists but, respectfully, the scientist and the scientist policymakers on this issue are like King Canute thinking that they can affect the stem cell tide with all their unproven and harm talk. And speaking of harm:

3. There’s not enough harm from stem cell treatments

In all the years that stem cells have been given outside of clinical trials, there just isn’t enough harm to create the necessary groundswell of support to stop it.
In my last post, I discussed the publicly reported serious adverse events around the world from stem cell treatments.

Here is that post:

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

Here are the numbers: one US death, 10 or 11 other deaths throughout the world, and a total of less than 40 serious adverse events, in the world from the presumed tens of thousands of people who have received stem cell treatments. Those are extremely low numbers for a medical intervention.

Contrast that to over 42,000 deaths from opioid abuse in 2016. After I did that post, the 2017 numbers came out and they are even worse, over 70,000 deaths, the large majority of which were from FDA opioids.

Yes, the institutional stem cell industry and its spokesmen are decrying the venality, villainy and danger of these stem cells clinics, but their own numbers show that it’s not all that dangerous, at least compared to real societal drug problems like the opioid crises.

4. There’s too much money to be made in the field, and it’s quite easy for physicians (and others) to get into the field

Stem cell establishment folk will argue that money/greed is the primary reason why the FDA might have trouble eliminating the private stem cell clinics. No doubt there is a great deal of money to be made in the field. And greed often is a factor in big bucks enterprises. The treatments are expensive ($6,000 to $18,000). It’s a high margin business. Best of all, it’s a strictly cash business, meaning no insurance, and that’s as good as it gets for a health care practitioner, just ask the cosmetic surgeons. So for sure, the money is an important reason why many clinics won’t be scared off by two injunction cases, even when they result in permanent injunction orders.

In addition, there are models out there which are not physician driven, witness the new chiropractor based stem cell model. That is only one of several models which has opened the field up to non-physicians. Good luck trying to stop it King Canute. I’m not making a judgment here, just an observation and a prediction.

Reason Number 5: The FDA does wholesale well, but this is retail and that’s a whole different ballgame

The FDA primarily regulates pharmaceutical companies making drugs and vaccines, device manufacturers, and it also regulates the nation’s blood supply. It does a reasonable job of that given its limited resources. (And by the way, regulating the nation’s blood supply is a really, really important job for CBER, which is the FDA division which also regulates tissue based products and entities like stem cell clinics. Does anyone think it would be a good idea to transfer a bunch of FDA personal from protecting our blood supply, which affects everyone in the country going under the knife or who gets a transfusion, to shut down a few more stem cell clinics?)

The thing about trying to regulate retail clinics as drug manufactures is that the drug source is different; it walks in with the patients. The technology necessary to process the “drug” is relatively simple and cheap. Moreover, the training necessary to administer the drug/biologic is easily obtained, relatively cheap and quick (many would say much too quick, but that’s another topic and another one of my stories).

In market and economic terms, this is a low barriers to entry business model, and especially, to reiterate, because the patient comes in with his/her own drug supply and the clinic just processes it. This is just another part of the tidal forces facing the FDA.

And the last reason why the FDA will never stop the private stem cell clinics:

They are a moving target, and the target is starting to move on from fat

Readers of my book will know that I was involved in the original iteration of private stem cells business model, namely umbilical cord blood from blood banks. (See chapter 9 of Galileo’s Lawyer about the first stem cell criminal investigation https://www.amazon.com/Galileos-Lawyer-Alternative-Complementary-Experimental/dp/0980118301/ )

Autologous from fat is the second, much more popular model, and as readers of my posts know, I was involved in the beginning of that too.

But the field has been reading the tea leaves, meaning the warning letters and the guidance documents administrative process, and it is starting to move on. The new iteration is autologous bone marrow based products, which are claimed to be exempt under 21 CFR 1271.15. (I haven’t looked hard at the issue yet, but I expect to in the future, for one reason or another.)

It took the FDA 12 years to publish final autologous fat guidance documents. It will likely take the FDA less time to work through the bone marrow model, but some of these clinics are going to slip through the cracks, either because of limited FDA resources, low risk of harm, or because they actually do meet the 1271.15 exemption criteria (essentially, homologous use, not more than minimally manipulated, and provided in the same surgical procedure).

My prediction is that the better, smarter, more informed clinics will end up being in compliance, others will not.

But one way or the other, we’re going to go through the same process as what happened with autologous fat derived stem cells, and that’s going to take a significant amount of time.
And so we start again.

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

Post Script
In case some of you never heard of King Canute, he was King of Denmark, England and Norway in the early 11th century. There is an apocryphal story about him putting his throne at the edge of the sea, ordering the incoming tide to stop before the water got to the throne. A common misunderstanding was that his hubris led him to think that he was so powerful that he could stop the tide from coming in. Admittedly, I was one of those so misinformed until I did some deep research (ok, Wikipedia).

Turns out the actual version of the apocryphal story (assuming that such a thing matters in apocryphal stories) is that he knew he couldn’t affect the tides, and that only God could, but he did it to shut-up his retinue who thought he was all powerful.

If so, then maybe the whole FDA analogy/metaphor to King Canute doesn’t even apply (or maybe it still does).
RAJ

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