A company that developed a stem cell-based therapy for treating diseases and conditions was found to be in violation of the federal Food, Drug, and Cosmetic Act for failing to seek approval for its product. Cellular and tissue-based therapeutics derived from processes that alter the biological characteristics of cells or tissue, and such products that include an ingredient shipped interstate, are subject to FDA regulation.

The United States Court of Appeals for the District of Columbia Circuit recently affirmed a ruling that a cellular mixture consisting of a patient’s own stem cells and the antibiotic doxycycline is subject to regulation by the U.S. Food and Drug Administration (the “FDA”). In United States v. Regenerative Sciences, LLC, No. 12-5254, slip op., — F.3d — (D.C. Cir. Feb. 4, 2014), the appellants (referred to collectively as “Regenerative”) developed and marketed an autologous stem cell-based therapy for treating orthopedic conditions and diseases. The therapy consisted of extracting mesenchymal stem cells from a patient’s bone marrow and culturing the cells for proliferation and development of certain biological characteristics. Doxycycline was also added to prevent bacterial contamination. Then, the cellular mixture was injected back into the patient. The FDA brought an enforcement action against Regenerative, arguing that Regenerative never sought FDA approval of its mixture and, as such, its product violated the Food, Drug, and Cosmetic Act (the “FDCA”) and the Public Health Service Act (the “PHSA”). The district court granted summary judgment in favor of the government and entered a permanent injunction against Regenerative.

On appeal, Regenerative claimed that its stem cell mixture was not subject to FDA regulation because it was, in fact, a medical procedure. The court disagreed and reached the following key conclusions regarding the cell mixture:

  • The court agreed with the FDA that the mixture was a combination of drug and biological product under the FDCA and PHSA and, therefore, was subject to FDA scrutiny. Regenerative should have obtained the necessary approvals. As a result, the product was adulterated and misbranded.
  • The court agreed with the FDA that Regenerative’s product did not satisfy the “minimal manipulation” requirement for exemption under 21 C.F.R. § 1271.10, which provides that the product is not regulated as a drug or biologic under the FDA regulations, because the mixture altered the biological characteristics of the resultant cell population through its culturing process.
  • The court disagreed with Regenerative and explained that the FDA was not attempting to regulate the practice of medicine. Rather, it was regulating the distribution of a drug. Furthermore, the Commerce Clause did not pose an obstacle because the product affected interstate markets for orthopedic care and used an ingredient (doxycycline) that is shipped interstate. By focusing on the inclusion of this ingredient, the court extended to stem cell therapy a principle that had previously been applied only to prescription drugs. The mere introduction of an ingredient that is transported interstate satisfies the “shipment in interstate commerce” requirement of 21 U.S.C. § 331(k), to bring the entire stem cell mixture within the ambit of FDA regulation.

Clinics and biological companies working in the stem cell space should take note of two key takeaways from the D.C. Circuit decision. First, “minimal manipulation” under 21 C.F.R. § 1271.10 is interpreted to exclude any processing that changes the biological characteristics of the resultant cell population. The Regenerative decision leaves open whether just one of these steps — culturing or the addition of doxycycline — would have exceeded minimal manipulation. In the absence of clearer guidance from the court, companies and clinics should carefully examine their processes to determine whether any one step might exceed minimal manipulation, requiring the product to comply with the FDA regulatory process, including product approval.

Second, a product that includes just one ingredient that is shipped interstate is deemed sufficient to satisfy the Commerce Clause and “interstate commerce” requirement under 21 U.S.C. § 331(k). The D.C. Circuit made it clear that shipment of the entire product interstate is not necessary. Therefore, as with prescription drugs, if a cellular or tissue-based product merely includes an ingredient that is shipped interstate, the manufacturing company may be in violation of the FDCA and PHSA if it has not obtained the necessary regulatory approvals.

To download a copy of the D.C. Circuit decision, please click here.