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Stem Cells Grown in Lab Prior to Clinical Use as Transplantation Product Are Biological Drugs Subject to FDA Rules

U.S. v. Regenerative Sciences
Record No. 12–5254 (U.S. Court of Appeals, District of Columbia Circuit, February 4, 2014)
by Colleen K. O’Brien, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In this civil enforcement action, the U.S. Court of Appeals for the District of Columbia Circuit decided whether Defendants, Regenerative Sciences and three (3) individuals (collectively Regenerative Sciences), violated the Federal Food, Drug & Cosmetic Act (FDCA), 21 U.S.C. § 301, et seq., and the Public Health Service Act (PHSA), 42 U.S.C. § 201, et seq., by producing, as part of their medical practice, a substance consisting of a mixture of a patient’s stem cells and the antibiotic doxycycline which was designed as an alternative treatment to surgery for various orthopedic conditions and diseases. Because the Court concluded that Regenerative Sciences did indeed violate federal laws regulating the manufacture and labeling of drugs and biological products, it affirmed the district court’s judgment and permanent injunction entered against Regenerative Sciences.

The substance at issue in this case was produced by Regenerative Sciences as part of a medical therapy marketed as the “Cultured Regenexx Procedure” (the Procedure). The Procedure was developed to treat patients' orthopedic conditions. The Procedure begins with the extraction of a sample of a patient's bone marrow or synovial fluid. From that sample, Regenerative Sciences isolated stem cells, which were then placed in a solution to culture them—that is, to cause them to divide and proliferate. When the stem cells were sufficiently numerous for re-injection, they were combined with doxycycline, an antibiotic obtained in interstate commerce and used to prevent bacterial contamination of the stem cells. The resulting mixture (the Mixture) is injected into the patient from whom the stem cell sample was initially taken, at the site of the damaged tissue. Regenerative Sciences promoted the stem cell injection procedure as an alternative to surgery for various orthopedic conditions and diseases.

In August 2010, the government filed an action for a permanent injunction against Regenerative Sciences, alleging that the Mixture was both a drug and a biological product that is adulterated and misbranded in violation of § 3 31(k) of the FDCA and § 262(j) of the PHSA, which incorporates § 331(k) by reference. Regenerative Sciences counterclaimed, asserting that the Mixture was not subject to federal regulation and that, even if it is, the FDA's effort to regulate the Mixture was defective under both the PHSA and the Administrative Procedure Act (APA), 5 U.S.C. § 706(2).

The district court granted the government's motion for summary judgment and dismissed the counterclaims, holding that Regenerative Sciences had violated the FDCA and the PHSA. United States v. Regenerative Scis., LLC, 878 F.Supp.2d 248, 263 (D.D.C.2012). Finding a “cognizable danger of a recurrent violation,” the district court entered a permanent injunction prohibiting appellants from committing further violations of the FDCA's adulteration and misbranding restrictions. Regenerative Sciences timely appealed both orders.

Regenerative Sciences’ principal argument on appeal was that the Mixture was not subject to regulation under the FDCA or PHSA because it was neither a drug nor a biological product, but was rather, a medical procedure. The Court disagreed, however, and held that the “wide-ranging” definitions in the text of the applicable statutes foreclosed this argument since the Mixture was an article derived mainly from human tissue and intended to treat orthopedic diseases. Regenerative Sciences’ also urged the Court to construe the FDCA in light of purported federalism concerns, as in the following syllogism: since the FDCA was not intended to infringe on states' traditional role in regulating the practice of medicine, and the Procedure fits Colorado's statutory definition of the “practice of medicine,” therefore, the FDA's regulation of the Procedure exceeds the FDA's authority under the FDCA. The Court considered this syllogism to be flawed.

The Court also held that the Procedure was connected to interstate commerce since, not only did the Mixture undoubtedly have effects on interstate markets for orthopedic care, but it actually included an article shipped in interstate commerce, namely, doxycycline. To the Court, the Commerce Clause did not pose an obstacle to regulating the Mixture under the FDCA. The fact that the doxycycline, rather than the entire Mixture was shipped in interstate commerce was sufficient to invoke 21 U.S.C. § 331(k). Not only did the FDCA define the term “drug” to include a drug's components, but to interpret § 331(k) as appellants suggested would severely narrow a statutory scheme designed to regulate the safety of drugs at every stage of their distribution.

For these reasons, plus the additional reasons that, the Mixture was more than minimally manipulated during production; the Mixture was not a compounded drug; the Mixture was per se adulterated, the Court held that the Mixture was misbranded and a permanent injunction was warranted.