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Where are we Really on the on the Adipose/Fat Stem Cell and other private Stem Cell Business

Where are we Really on the on the Adipose/Fat Stem Cell and other private Stem Cell Business

There have been recent reports about the FDA’s impending forced closure of the autologous adipose stem cell business because the three-year grace period (to come into compliance with the FDA’s view of the law) is expiring soon. (The three-year grace period was extended for six months because of the pandemic.) The big dog has dutifully reported the FDA’s pronouncement about the end of the adipose and other non-FDA compliant business model and he is (as he has often done in the past) cajoling the agency to start taking more aggressive action about what he now thinks are around 1,000 of these illegal operations. Here is that post: https://ipscell.com/2021/04/fda-to-end-grace-period-on-stem-cell-clinics-agency-should-go-big-on-continued-offenders/

To show that it has not been just sitting on its thumbs, the FDA is reminding the stem cell community that it has issued 350 letters (warning and other lesser letters) to those businesses it feels are in violation of the law as the FDA sees, which view is stated in the final guidance documents issued at the end of 2017. Here is my post about the final guidance documents in case there is someone out there who can’t recite it chapter and verse by heart: https://wp.me/p7pwQD-bB.

The 1000 illicit stem business estimate is an interesting number because it is almost double the number of these illegal operations from when the widely publicized study of these illegal stem cell clinics was first reported in 2016 by the big dog and Leigh Turner. Here is that study/report.
https://www.cell.com/cell-stem-cell/fulltext/S1934-5909(16)30157-6.

By the metric of the estimated number of businesses, it doesn’t seem unfair to say that if the government has been attempting to eradicate what it thinks is the illicit stem cell business, it has not succeeded and is moving in the wrong direction.

True, three and a half years were under the grace period. However, there are a few “howevers”. First, the FDA hasn’t been the only player trying to stop these businesses. With great fanfare, the FTC announced a multimillion-dollar settlement with a California stem cell clinic. And to my knowledge, that’s the end of the FTC’s published involvement in the field. Another well-known California stem cell clinic filed bankruptcy but that was probably in large part because of a highly publicized class action suit. (full disclosure, I represented that clinic on matters unrelated to that civil lawsuit). States have filed or threatened to file consumer protection suits for false advertising (including against one or more of my clients). And that certainly has gotten the attention of those targets/defendants. (When I wrote this, I got an image of the whack-a-mole game, for some reason.)

I think (ok, I know) that other state agencies are nosing around the field trying out different jurisdictional ways to regulate/shut these places down, and yet the numbers continue to increase. And yet the numbers of these clinics continue to grow, which is what I have been saying for the past few years in response to each of the many, many times which the members of the institutional opposition to the private stem cell clinics have reported each bad thing that happened to a clinic or the FDA’s attempts to stop them.

I have an image in my mind which sums up my feeling that despite the FDA’s talk about the end of the grace period, and the predictions of demise by the stem cell constitutionalists, it might not go as planned. Anyone remember the Mad Magazine cartoon showing a police officer hammering a sign which reads “30 miles per hour speed limit, radar enforced”. A guy next to him says “all that radar equipment must have been very expensive.” to which the cop responds. “Naw, it was 20 bucks for the sign.”

Of course, the FDA has tons of people and billions of dollars in its budget, but nonetheless, its resources are limited and most of its enforcement efforts seem to focus on letters that have no actual binding legal effect (according to the FDA’s (and other federal agencies’) position it takes in court which has been accepted by the judiciary), but that another story.

But apart from the lack of FDA’s resources to deal with 500 plus but now 1,000 plus of these businesses (and let’s not forget that we’re in a pandemic and the FDA is going has bigger and more important priorities), there is one gigantic possible impediment to the announcement/prediction/wishful thinking that the FDA is going to file a bunch of lawsuits and shut these 1000 plus clinics down.

Maybe the FDA is wrong!

This is not a crazy thought (even though a couple of years ago, I thought it was) for two reasons. First, as I have related many times, Judge Bernal’s summary judgment decision in the California Stem Cell case said that SVF does not appear to be a new drug, or at least that is the implication of his decision. See one of several of my earlier posts about that https://rickjaffeesq.com/2021/01/24/for-the-same-surgical-procedure-autologous-stem-cell-transplant-crowd-big-decisions-are-a-coming/?preview_id=3334&preview_nonce=32c880d320&post_format=standard&_thumbnail_id=-1&preview=true

And FYI, I guess a buried the lead because the California Stem Cell remote trial is now underway. Today, May 5th is the second day of what is expected to be an 8-day trial. It is remotely viewable. Here is Court’s calendar for today with contains the log-in information.
may5calendar

Figure around 60 days for the judge to make his decision. Between the trial briefs and the proposed findings of fact and conclusions of law and the work he did on the summary judgment motion, it should not be that big a deal. (the preparation of the trial transcript might push this time frame back a bit, unless one of the parties is ordering daily copies).

Second, as I also pointed out previously, one month after the Florida district court judge granted summary judgment to the FDA in an almost identical case, the Supreme Court limited judicial defense which federal judges can accord to an administrative agency’s interpretation of its laws (statutes and regulations) to cases where the statute/regulation is ambiguous. The Florida district appeared to defer to the FDA’s interpretation of its laws via the Court’s reference to the stem cell guidance documents which are the FDA’s written current interpretation of its laws. (My above post talks about this as well). So the question is whether the statute and regulation (21 CFR 1271) is/are ambiguous. If the Eleventh holds that it is, then presumably the Florida District Court properly relied on the guidance document. If it isn’t, then the case should get reversed and sent back. And then there is the California stem cell ongoing trial.

If either the Eleventh reverses or Judge Bernal rules against the FDA and or just holds that SVF is not a new drug, the FDA can kiss its intimidation PR enforcement campaign goodbye, and the cajoling for criminal prosecutions will fall on deaf ears. I can tell you from my personal experience that the federal prosecutors do not like ambiguity in the law and they surely don’t take cases where a federal judge has decided against the FDA position if that is the theory of the intended prosecution.

And finally, as I have repeatedly said, parts of the adipose stem cell business have already moved on to other products like bone marrow, and that product is not more than minimally manipulated and some uses are likely homologous even to the FDA. For other products, the FDA might have a clearer path to the FDA designation of illicit new drug status, but even with them, the FDA’s battle begins anew, one company at a time.

In my view, market forces driven by ineffective conventional treatments for chronic conditions which have strong anecdotal evidence of efficacy and little evidence of harm are just as strong and certain as the ocean washing on to the shore. Trying to stop that force will most likely have the same result as King Canute. I love the King Canute picture, so here it is again:

Best of luck to the California Stem Cell folks and their legal team, (in case you had any doubt about where I stand).

Rick Jaffe, Esq.