In early September 2022, a court ruling in California caused a minor shock to the cell and gene therapy scene.
A landmark and potentially controversial decision by the Honorable Judge Jesus G. Bernal of the Central District of California has ruled that stem cell treatments offered by the Cell Surgical Network company of Beverly Hills should not be subject to the oversight of the FDA. The FDA had filed a lawsuit against the company, hoping to control their questionable use of stem cells to treat a number of conditions. However, Judge Bernal ruled in favor of the defendants, arguing that their treatments are outside the jurisdiction of the FDA because they are not drugs.
Although California is something of a hub in the sketchy world of unproven stem cell therapies and the clinics that sell them, few – perhaps no one – in the reputable mainstream of the cell and genetics scene care. A federal judge would be expected to rule on the side of such a company, and especially not with such questionable reasoning. For an informed perspective on this decision and its potential consequences, I spoke to Laertis IkonomouAssociate Professor in the Department of Oral Biology and the Center for Cellular, Genetic, and Tissue Engineering at the University at Buffalo, and Chair of the Committee on Cellular and Gene Therapy Ethics of the International Society for Cellular and Gene Therapy.
In general, we’ve seen a lot of regulatory action on behalf of and from the FDA and the Federal Trade Commission (FTC), whose letters carry special weight.
Yes. Over the past two years, we have seen a series of positive developments. In 2018, in a very similar case, the Department of Justice sought an injunction on behalf of the FDA against a Florida-based company, the US Stem Cell Clinic. The decision in this case turned out to be quite the opposite of what we have just seen in California. In the US Stem Cell Clinic case, a district judge ruled that stromal vascular fraction (SVF) should be regulated as a drug – even though it is autologous and derived from the patient. From the perspective of the International Society for Cell and Gene Therapy (ISCT), this is a positive development.
In general, we’ve seen a lot of regulatory action on behalf of and from the FDA and the Federal Trade Commission (FTC), whose letters carry special weight. The FTC has taken regulatory action against companies that advertise unproven and unauthorized products as COVID-19 treatments, and at the state level we have seen authorities take legal action against companies selling products. unproven, dangerous and fraudulent drugs. This job is not easy because the market in question now has more than 2,700 companies across the United States. But, in general, the developments seemed positive.
And that is why the Bernal ruling shocked us. The decision not only contradicts current scientific evidence, but also previous rulings on the treatments in question.
We absolutely have! We have been monitoring this industry almost since its inception. In 2013, we established our Presidential Task Force on the Use of Unproven and/or Unethical Cell and Gene Therapies, which we recently renamed the ISCT Committee on Cell Therapy Ethics and gene (ECGT). The name change reflects an expanded scope; we now deal not only with direct-to-consumer companies offering unproven interventions, but also with all the ethical aspects of cell and gene therapy development. The committee includes many experts in a variety of fields, including regulatory science, bioethics, public policy, and basic and clinical research. We try to cover as many facets of this industry as possible.
I do not think so. In the very name of “Cell Surgical Network”, we can see the most disturbing commonality of these operations: they form networks. There may be dozens or even hundreds of clinics in these networks. It can be a very lucrative business, and because of that, we have to remember that these companies often have the wherewithal to engage in protracted legal battles with the FDA. In this sense, the Cell Surgical Network is a prototypical example of an American direct-to-consumer provider of unproven “stem cell” therapies.
That’s a great question, and today we have the data to answer it. About 10 to 15 years ago when these companies emerged, we followed them in the dark. But fast forward to 2022, and we have plenty of high-quality quantitative data. For example, ECGT member Leigh Turner has investigated this market, and you can read her most recent findings in an article titled “Selling American Stem Cells in 2021: American Companies Selling Stem Cell Interventions unlicensed and unproven stem cells”, published in Cell Stem Cell. He found a high concentration of clinics in specific states, including California, Florida, Texas and Arizona. Above all, we can say that these companies are not evenly distributed in the United States. So it makes sense that legal battles like the one in question tend to play out in these wealthy “pivotal states” as well.
I am not a legal expert but to my knowledge this case will not set a legal precedent as there have been many previous decisions in the 2010s. In 2012, in a case between the FDA and Regenerative Sciences, LLC, a District of Columbia judge has ruled that expanded mesenchymal stromal cell (MSC) treatments should be regulated as drugs. But that did not create a binding precedent, and so we have now come to a contrary decision.
I would pin this particular decision more on a particular judge and his decision, rather than the product of a trend. After considering the arguments of both parties, it appears that he agreed with that of the defendants – the wording of his decision closely matches their case. How it happened, I cannot say. In the end, this judge had to decide that these arguments were scientifically more valid than those of the FDA, and ultimately we at the ISCT do not believe that he chose correctly. We’re seeing a setback here rather than a trend, and I think it’s likely the FDA will take this decision to an appeals court and overturn it.
That said, we should still be concerned. Even if a decision is not binding, it can nevertheless create room for manoeuvre. This will send a signal to other unproven “stem cell” companies to continue fighting the FDA in court, and it may even boost the California market for these questionable therapies. The verdict will also create a general sense of regulatory uncertainty, and that’s a shame because legitimate developers thrive on certainty – they want and need to know what the rules are. Another factor to be concerned about here is a potential migration of unproven cell therapy companies to California. If they see this as a “safe state” for operations, they will not hesitate to bear the costs of relocation.
One of the best and worst things about the United States is that when something big happens here, chances are it will have international repercussions. In many areas, the United States is one of the most regulated countries in the world. Many other countries are watching closely and may even depend on US regulations. If something happening in the United States seems legitimate to a key regulator in another country, the business environment there may slide toward a much more lax approach to SVF regulations and “stem cell” therapies. untested. We may or may not see such a ripple effect – it’s too early to tell.
An ideal decision would have been consistent with previous decisions – that SVF is not a minimally manipulated product. Rather, it is a significantly manipulated product and should therefore be regulated. Additionally, the moment you place the MSCs in culture, you expand them dramatically to create a large number of cells to inject back into patients. Even if it is an autologous product, it involves a lot of risks because the cells change characteristics. And that is why the law and its interpreters must ensure that these treatments go through the usual channels to demonstrate their safety and effectiveness. At the ISCT, we do not agree with decisions that say otherwise.
Right now, only shades of victory are on the table, but I think a state “hammer” should play an important role in how we control and contain this market. The FDA has had to work on this for the past two years, after its discretionary enforcement period ended (it had set a three-and-a-half-year deadline for companies to comply with existing regulations).
However, this is a complex area, and it is sad but true that upholding the rule of law and due process is always slower than rule by decree. Wealthy companies can lock the FDA into legal battles that last four, five or six years and still have funds to spare. Even when enforcement targets as many bad actors as possible, as rigorously and vigorously as possible, there are too many. Scientific, medical and professional organizations and associations such as the ISCT can lend a hand here; for example, educating the public or working to help regulators and legitimate developers.
Yes, especially in the case of lawsuits brought by patients. It would also be good to see more whistleblowing within these companies, where the employee in question is able to expose any egregious practices they have witnessed or been asked to facilitate. The role of good expert witnesses in relevant court cases is also important. But at the end of the day, I think regulatory action is more important and effective than all of the above when it comes to dissolving the image of these unproven treatments being so innovative, revolutionary and effective.
You can read the full ISCT official statement on Judge Jesus Bernal’s decision here.
Between my undergraduate studies in English and my masters in publishing, I was in Shanghai, teaching, learning and losing myself a lot. Now I expand my mind into a rather different rabbit hole: the pharmaceutical industry. Outside of this job, I read mountains of fiction and philosophy, and I must say that it is very difficult to say who is the most advanced: the scholars or the drug manufacturers.
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