What Will FDA Do With All Those “Violative” Stem Cell Clinics Once Enforcement Discretion Tolls in November 2020?

Enforcement discretion for stem cell facilities (and certain other HCT/P manufacturers) ends in November of 2020, and as FDA indicated in a recent press release, the agency is “discouraged” by the dearth of manufacturers wanting to interact with them during the enforcement discretion period.

Back in 2008, when I was still in the Office of Chief Counsel at FDA, there were virtually no U.S. clinics marketing stem cell therapies, and in late 2015 when I left my position as CBER’s Deputy Director  of the Office of Compliance and Biologics Quality, at FDA, there were at least 570 stem cell clinics/manufacturers in the U.S., concentrated mainly in California, Florida, Texas, Colorado, Arizona and New York, according to an independently published report.  There are likely many more than that today.

In fact, I recently discovered that even the internal medicine practice that I frequent in the Washington DC suburbs offers autologous stem cells derived from adipose tissue to treat osteoarthritis – this just a stone’s throw from the FDA campus in White Oak, Maryland.

Given the number of such facilities, the “discouraging” trend that FDA referenced in its recent press release, and that fact that over a third of the enforcement discretion period has already passed, it is highly unlikely that most of these clinics will voluntarily cease operations by the end of the period.  In that eventuality, what are FDA’s options?

Over the past 6-8 years, the agency’s policy with regard to stem cell facilities has largely been wait-and-see.  They have sent a number of untitled letters and warning letters to such facilities over the years, but have very rarely taken any action beyond that, despite many of these facilities continuing their activities unabated after receiving such regulatory correspondence from FDA.

Over the years, FDA has initiated legal action (i.e., seizure or injunction) only against stem cell manufacturers in two types of situations.  First, in instances where there were allegedly serious or life-threatening adverse events to patients of the facility, such as in the actions against US Stem Cell Clinic LLC of Sunrise, Florida and California Stem Cell Treatment Center Inc., previously discussed here.

In the first case, ocular stem cell injections were alleged to have led to the partial or total blindness of at least three patients, and in the second case, the therapies were alleged to have led to infections necessitating the hospitalization of several recipients of the therapies.

A similar case is currently unfolding, with FDA having sent a Warning Letter late last year to Genetech, Inc., a stem cell company from San Diego, California (not to be confused with Genentech, from San Francisco, California).  In a press release issued in conjunction with the publication of the Genetech Warning Letter, FDA stated that CDC had received reports of infections from 12 patients, and that all these patients all required hospitalization.  If this company does not desist in the manufacture and implantation of these cell therapies, one would expect that this case is also likely to lead to FDA initiated litigation.

The other type of situation that has led to FDA legal action against a stem cell company, is the case of the U.S. v. Regenerative Sciences LLC, where Regenerative, somewhat atypically in the industry, cultured the autologous stem cells for several days before re-administering them to patients.  Apparently, FDA found the culturing of these cells to be particularly problematic and successfully obtained an injunction against Regenerative.

At the end of the enforcement discretion period which, perhaps not coincidentally, will be around the time of the next presidential election, it seems that the agency would have the following enforcement options: (1) to continue to only litigate the types of cases they are already litigating, meaning primarily facilities where there are allegations of serious or life-threatening adverse events – usually requiring hospitalization; (2) to also litigate instances of facilities administering stem cells via routes of administration associated with higher risk (as described in the enforcement discretion portion of the guidance), even where there are no allegations of serious or life-threatening adverse events, and/or instances of facilities administering stem cells that are intended for non-homologous uses that are intended for the prevention or treatment of serious and/or life-threatening diseases and conditions (i.e., basically the agency’s carveout under the current enforcement discretion); and (3) to litigate even more broadly any alleged violations of the four criteria under 21 CFR Part 1271.10(a).

Option #3 is so broad as to be unmanageable given the number of facilities currently in existence, and it also doesn’t really allow for any reasonable means of prioritizing which cases to bring.  Option #1, on the other hand, is unlikely to be satisfactory for the agency given that they have been exercising this option for the past several years, and despite this the stem cell industry has continued to flourish.  That leaves option #2.  The question is how many lawsuits will FDA need to bring under this option for the hundreds of facilities in existence (including the ones on FDA’s doorstep in suburban Maryland, Virginia and DC) to reconsider marketing their stem cell products, and does the agency have the resources and the intestinal fortitude to bring all those cases?  Time will tell.