D.C. Circuit to Determine if FDA can Regulate Stem Cell Treatments

The intersection of what is the practice of medicine and what is a regulated drug or biologic is an interesting place with constitutional and regulatory implications. These issues have come to the forefront in a significant case involving an autologous stem cell procedure used by an orthopedic group in Colorado. In United States of America v. Regenerative Sciences, LLC, 878 F. Supp. 2d. 248 (D.D.C. 2012), available here, a D.C. district court judge issued an opinion addressing many of these constitutional and regulatory issues, which decision has been appealed and recently argued in the D.C. Circuit Court of Appeals. Information regarding the appeal is available, click here (subscription required).

In this case, two physicians developed the Regenexx procedure and formed Regenerative Sciences LLC (Regenerative) to implement the therapy. To perform this procedure, a licensed physician takes blood samples and a small bone marrow sample from a patient. Subsequently, stem cell samples are sent to a laboratory where the stem cells are isolated from the bone marrow and then multiplied. If the expanded stem cells pass quality assurance testing, they are placed back into the patient to repair an injured area. The stem cell processing takes place in a Colorado location, though an antibiotic used in the processing procedure is purchased from a source from outside of Colorado. The product and procedure were exclusively licensed to the physicians’ practice.

Claiming statutory authority under the Food, Drug, and Cosmetic Act, the FDA came to the conclusion that the stem cell product was a drug and a biologic. No new drug application had been filed by Regenerative because it took the position that the product was not a drug or biologic, and that its use was solely in the practice of medicine within the state of Colorado, and that it did not use interstate commerce. Following inspections, the FDA charged Regenerative with selling an “adulterated” and “misbranded” drug. The FDA believed that Regenerative did not follow Good Manufacturing Processes, rendering the drug adulterated. The drug did not contain labeling that said RX only, and did not have instructions for use, rendering it misbranded. The FDA took the position that Regenerative’s actions were unlawful for failure to obtain the necessary approvals for the cell production, which it felt involved conduct beyond “minimal manipulation.”

Regenerative’s response was both legal and constitutional. Regenerative argued it actions and the product constituted the practice of medicine under the state of Colorado’s oversight and beyond the FDA’s regulatory authority. It also argued that the procedure is not a “drug” subject to federal government regulation in part because it was intended for use by the patients from whom the cells were taken.

The district court agreed with the FDA and although it was a ‘close question’ held the procedure involves the manufacture, sale, and distribution of an unapproved biologic drug product and granted summary judgment to the FDA. Because the product was intended to treat orthopedic, musculoskeletal, and spinal injuries, and arthritis, the legal definition of a drug was met. The court ruled that the FDA’s conclusion that the production process of the cells was more than “minimal manipulation” was entitled to substantial deference and should not be disturbed. Thus, the court agreed that the drug was adulterated and misbranded. Finally, because the product was considered a drug, the fact that it is used in the practice of medicine does not prevent the FDA from exercising regulatory control over it. Consequently, Regenerative was enjoined from making Regenexx until it was brought into regulatory compliance.

The legal analysis was interesting. The court analyzed the definitions of drug and biologic and held that the product was both. The interstate commerce requirement was met because one of the components of the solution the stem cell solution was shipped in was obtained from an out of state source.

On appeal, Regenerative argued the FDA does not have authority to oversee its medical practice. Furthermore, it argued the procedure is similar to a physician using a hospital bed or surgical tool to aid in a patient examination. Judge Thomas B. Griffith expressed skepticism at oral argument regarding the appeal and stated, “If it’s a practice of medicine that uses a drug, there’s nothing that keeps it from being regulated by federal authorities.” The FDA generally does not act to prevent an approved drug for being used for unlabeled purposes by a licensed physician. Here the issue is whether the stem cells are to be considered a drug under these circumstances. Hence, the district court’s ruling will probably be upheld because Regenexx appears to fall within the Federal Food, Drug, and Cosmetic Act’s definition of drug and should be regulated by the FDA.