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Regulation or innovation: United States v Regenerative Sciences
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In this month’s Orthopedic Medical Legal Advisor column, we examine a legal case titled, United States of America v Regenerative Sciences LLC, Christopher J. Centeno, MD, John R. Schultz, MD, and Michelle R. Cheever, that was filed in the U.S. District Court for the District of Columbia. According to the facts set forth in the case, Centeno and Schultz are practice partners who own a clinic in Broomfield, Colo., and they are shareholders in Regenerative Sciences LLC, which owns the “Regenexx Procedure.” This procedure is exclusively licensed to their clinic for use. Sheever serves as Regenerative’s laboratory director.
The case facts further explain that the Regenexx procedure consists of aspirating bone marrow and obtaining venous blood from a patient. At the Regenerative laboratory, mesenchymal stem cells are isolated from the bone marrow and stimulated by hematopoietic growth factors from the patient’s own blood. The chemical reagents used and drug products added to the cells (e.g., doxycycline) are FDA-approved. After testing at the University of Colorado to ensure no cell mutations have occurred, these cells are placed 4 weeks to 6 weeks after being removed from the patient into sites such as fracture non-unions, arthritic knees, rotator cuff disease and lumbar discs. Many patients obtained relief of symptoms from this procedure.
In July 2008, the FDA notified Regenerative that the FDA was concerned that the cells used in the Regenexx procedure constituted a drug under its rules, and a biological product under the Public Health Service Act (PHSA), 42 U.S.C. § 262. Regenerative filed a lawsuit against the FDA in federal court, alleging that the FDA did not have the jurisdiction to regulate autologous use of stem cells, and asking for a restraining order from the court. After various claims and legal motions were sorted out, the court had to rule on a motion for summary judgment filed by the FDA, as well as a motion to dismiss all of Regenerative’s counterclaims.
Summary judgment
The legal standards for summary judgment are complex, but under the Federal Rules of Civil Procedure, summary judgment is granted if the moving party can show there is no genuine dispute as to any material fact and if the party against whom summary judgment is sought fails to establish the existence of an element that is essential to that party’s case. When these criteria are met, a court can grant summary judgment as a matter of law. In other words, if there is no judicial remedy available, even if the court mandatorily assumes that all facts presented are true, then judicial economy requires that the court simply rule in favor of the moving party (FDA) without further deliberation or trial.
A motion to dismiss asks the court to examine the facial validity of a lawsuit. The law requires that a plaintiff provide sufficient grounds when filing a lawsuit of his or her entitlement to judicial relief. If the allegations are legally insufficient, then the motion to dismiss may be granted. Both summary judgment and the motion to dismiss are powerful legal tools; both can effectively deny a party any legal relief at the pre-trial stage of litigation, essentially showing the party the door out of the courtroom.
B. Sonny Bal
If, for example, a patient sues a physician because he or she had a bad outcome and ended up unhappy, then a lawsuit stating only these allegations is likely to be dismissed. If a patient alleges the physician violated the standard of care by doing something that led to the bad outcome, then the lawsuit will likely survive a motion to dismiss. If the defending physician can establish at the outset that the bad outcome was entirely unrelated to the alleged misconduct, thereby breaking the chain of causation, then summary judgment in favor of the physician may be granted by a court.
Outcome of litigation
On July 23, 2012, the U.S. District Judge ruled in favor of the FDA’s motion for summary judgment, and its motion to dismiss counterclaims by Regenerative LLC. It also granted the FDA’s request for a permanent injunction. The significance of this decision is that it is one of the first cases involving novel stem cell and tissue procedures used by companies and physicians. Regenerative had maintained, and other stem cell innovators agree, that the therapy simply constituted the practice of medicine, which the FDA does not have the authority to regulate. In fact, in allowing the use of medical devices by surgeons in applications not explicitly approved by the FDA, the FDA has clarified that does not regulate the practice of medicine.
In Regenerative, the FDA’s position is that stem cells and other autologous tissues represent a “drug” or “biologic” product that must comply with the extensive pre-marketing approval requirements and the Public Health Service Act. In granting summary judgment and dismissing counterclaims made by Regenerative LLC, the court essentially said that even if it were to accept the facts set forth by Regenerative as true, there was no possible way to make out a case in favor of Regenerative. In dismissing the counterclaims, the court essentially said that Regenerative simply could not make out any plausible legal claim against the FDA. This was a harsh outcome for Regenerative.
Analysis of outcome
The judicial outcome simply cut off all legal relief for Regenerative, as a matter of law and has implications for any nascent therapies involving autologous cells. Such therapies typically have little patent protection and are not privy to the marketing exclusivities enjoyed by new pharmaceutical products and new biologic products. Accordingly, innovators may have little incentive or financial ability to complete the extensive application process and time-consuming clinical trials.
Treatments in which stem cells are harvested from bone marrow and injected back into the same patient are deemed part of routine medical practice that is not regulated by the FDA. If the cells are subjected to more than “minimal manipulation,” then the FDA maintains the therapy becomes a “drug,” which must be specifically approved for use. This was the FDA’s position in the above litigation as it sought to shut down Regenerative LLC.
Lawrence H. Brenner
Centeno, medical director of Regenerative, has said that a patient’s cells are not drugs and has indicated he will appeal the court’s decision. Centeno had published case reports describing the use of Regenexx to treat joint problems, but no controlled trials had been published. Christopher T. Scott, MA, who heads the Program on Stem Cells in Society at Stanford University in California, opined that, “I think it’s a good ruling, and I’m glad to see that the FDA has exercised its muscle on the case.” Scott expressed his hope that the FDA will now step up its efforts to regulate other, similar outfits that offer unproven stem cell treatments. One such outfit is Celltex of Sugar Land, Texas, which came to prominence after Gov. Rick Perry (R) of Texas was injected with stem cells supplied by the company to help him recover from back surgery.
Impact on research
Adult stem cells are the subject of intense research, and the Regenerative ruling impacts such work squarely. The court’s ruling also, at least in principle, could be extended to include FDA oversight into things like in vitro fertilization, since the ruling turns cells into drugs that are subject to FDA regulation. Proponents of stem cell research have argued that since autologous stem cells are harvested for injection into the same person, such cells are never developed into products and sold on the market. The law, according to such proponents, has always required that something needs to be an “article” or a “thing” in order to be a drug that is subject to FDA regulation. A medical procedure, such as Regenexx, where a patient’s tissue is placed back in the same patient, is therefore not a “thing” and cannot be a drug.
How much regulation?
Every year, the FDA complains to Congress that its lacks resources to carry out its work of regulating products that fall squarely in its purview. Emerging technologies present new challenges for the FDA. For example, the FDA has sought to regulate smartphone medical apps. It took multiple attempts for 2 years at a cost of $150,000 for MIM software to get FDA clearance for a smartphone app that physicians can use to view MRI and other medical images. FDA police power was justified on the grounds that if a medical app malfunctions, then it could impact a patient’s health, possibly even creating a life-threatening situation. Accordingly, this summer, Congress gave the FDA approval to define smartphone apps that need its scrutiny, while also ordering the Obama administration to devise a strategy that balances public protection with innovation.
The outcome of the appeal of Regenerative promises to be interesting and significant, in that it will affect the regulatory framework in which orthopedic surgeons practice their craft and develop new therapies and technologies to help patients and drive innovation. Pending the appeal, here are some points to consider:
- Surgeons remove bone graft, then shape it on the back table and perhaps soak the graft in saline with a topical antibiotic before re-implanting the graft into the desired site. Should such autogenous grafting be regulated by the FDA as a drug since it is a “thing,” and after removal from a person, is subjected to manipulation and exposure to other materials such as an antibiotic solution?
- The FDA regulates the reproductive services industry, specifically sperm donation and the use of sperm for artificial insemination, thereby adding to the costs associated with such activity. Earlier this year, a woman sued the FDA for the right to be artificially impregnated with sperm from someone she knows, at no cost to her. Under the reasoning of Regenerative, should the court grant summary judgment in favor of the FDA and dismiss this lawsuit?
- What if a serial centrifugation method was developed in which a patient’s blood and bone marrow could be mixed, and by repeated centrifugation performed in office, the stems cells could be concentrated and put back into the patient during the same visit, using no pharmaceutical treatments or additives. Would such stem cells be considered drugs subjected to FDA oversight?
- Alternative health remedies are sold over the counter with a warning that the FDA has not tested their claims. Is disclosure sufficient to protect the public? Instead of regulating the stem cells in Regenexx, should the FDA simply require the clinic to disclose to each patient that the therapy has not been evaluated for safety or efficacy by the FDA?
Discuss with your colleagues at www.OrthoMind.com.
For more information:
B. Sonny Bal, MD, JD, MBA, is an associate professor of hip and knee replacement in the department of orthopedic surgery, University of Missouri School of Medicine.
Lawrence H. Brenner, JD, is on the faculties of orthopedics at Yale University and the University of Southern California, and practices in Chapel Hill, N.C. Address all correspondence to Brenner at lb@lawrencebrennerlaw.com.