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D.C. Circuit Issues Landmark Ruling for Stem Cell Therapies

Michael N. Druckman

Michael N. Druckman,

Washington, D.C.

Jason Conaty

05 February 2014

The D.C. Circuit has issued a ruling that will shape the future development of stem cell therapy in the United States.  Through its February 4 decision, the court has broadly upheld FDA’s authority to regulate stem cell therapies as drugs.  Thus, any sense that the development of such therapies may be exempt from the pre-market approval process, or from FDA’s labeling and manufacturing requirements, is now sorely misplaced.

 The case, United States v. Regenerative Sciences, involves a proprietary stem cell therapy known as Regenexx, owned by Regenerative Sciences, LLC.  Regenerative Sciences is a Colorado company operated by Dr. Christopher Centeno and Dr. John Schultz.  Drs. Centeno and Schultz developed the therapy, which they now license, through their company, to themselves, for exclusive use at their own Colorado clinic.

 The therapy is intended for the treatment of degenerative joint diseases such as arthritis as well as joint injury.  The treatment involves removing mesenchymal stem cells (MSCs) from a patient’s bone marrow or synovial fluid, culturing the cells in a laboratory, combining the cultured cells with an antibiotic, doxycycline, and then injecting the preparation at the site of the damaged tissue.  (MSCs are capable of differentiating to form bone and cartilage tissues.)

 Regenerative Sciences has maintained that this therapy is merely two physicians practicing medicine, and does not involve the production of a drug or biological product.  As such, it would fall outside FDA’s jurisdiction, and must instead, in the company’s view, be regulated solely under Colorado state law on “practice of medicine.”  This argument was firmly rejected at the district court level, and has now been rejected with equal clarity by a federal appellate panel.

 Notably, the company also contended that even if the therapy is considered a drug, FDA’s own regulations exempt human cells, tissues, and cellular or tissue-based products (HCT/Ps) from federal approval, manufacturing, and labeling requirements, as long as the HCT/P meets certain criteria, such as being “minimally manipulated” outside the body.  See 21 CFR 1271.10(a).  The company argued that the Regenexx preparation is therefore exempt because it is only “minimally manipulated.”  Likewise, the company argued that, if a drug at all, then Regenexx is a compounded drug, and therefore similarly exempt from FDA’s manufacturing and labeling requirements.  See 21 USC 353a(a).

 Both of these arguments were rejected.

 The appellate ruling lends critical weight to FDA’s stance that cellular products intended for use as somatic cell therapy, are biologics, and thus subject to regulation under both the Food, Drug, and Cosmetic Act, and the Public Health Service Act.

 Unless the decision is appealed to the Supreme Court, and the Justices take a different view, the ruling means that Regenerative Sciences and similar entities will be subject to FDA’s inspection and Current Good Manufacturing Practice (cGMP) authorities, as well as the investigational new drug (IND) and pre-market approval process.  Likewise, the decision carries implications well beyond small, clinic-based practices.  It applies equally to hospitals, universities, and pharmaceutical companies active in this space.

The authors thank Michael Moskowitz for his assistance.

Michael N. Druckman

Michael N. Druckman,

Washington, D.C.

Jason Conaty

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