Last week, FDA Commissioner Gottlieb issued a statement describing the Agency’s “new” policy for regulating stem cell therapies and regenerative medicine. In particular, Dr. Gottlieb announced that the Agency intends to clarify the framework for regulating cell-based products (including defining an “efficient process” for evaluating their safety and effectiveness) and to increase enforcement and compliance actions. Although the Commissioner characterized many of the Agency’s initiatives as “new,” the content of his statement seems to suggest that the Agency’s intention is actually to provide much-needed and long overdue clarity about the application of existing policies to novel therapies, like those used in regenerative medicine. Regenerative medicine generally refers to the use of cell-based therapies, including, but not limited to, stem cell therapies, to treat, modify, reverse, or cure a disease or condition. Cell therapy is a cutting edge area of biomedical research that focuses on administering live whole cells or maturing a specific cell population in a patient, in order to repair damage and/or to create normal cellular metabolism. Stem cell therapies, in particular, are regarded as having the potential to transform the practice of medicine. Due to their unique regenerative abilities, stem cells are widely heralded for their potential to treat a wide range of diseases and conditions, some of which are serious or life-threatening, and for which there may be no viable treatments options currently available.

FDA regulates stem cells and other human cells and tissues (and products derived therefrom) under a set of regulations initially developed twenty years ago and codified in 2001 in 21 C.F.R. Part 1271. [In this regulation, FDA created the term “human cells, tissues, and cell- and tissue-based products” or “HCT/Ps” to describe this category of products.] HCT/Ps that meet certain criteria set forth in 21 C.F.R. § 1271.10 are subject to regulation solely under Section 361 of the Public Health Service Act (PHSA), the intent of which is simply to prevent the introduction, transmission, and spread of communicable diseases. Accordingly, there is no premarket review of these products for safety and efficacy. Rather, Section 361 HCT/Ps are subject only to limited controls that are intended to minimize infectious disease risks. Because of the absence of premarket review, a product regulated solely under Section 361 has, essentially, a fast track to market. By contrast, an HCT/P that does not meet the criteria for regulation solely under Section 361 will typically be regulated by FDA as a biological product requiring FDA premarket approval under Section 351 of the PHSA (and may also be subject to the drug provisions of the Federal Food, Drug, and Cosmetic Act (FDCA)). The criteria that determine whether a product is a Section 361 HCT/P or a Section 351 biological product include, primarily, whether a product has been minimally manipulated, is intended for homologous use, and does not depend on the metabolic activity of living cells to achieve its primary function. Stem cell therapies generally do not satisfy these criteria and therefore are typically regulated as Section 351 products, requiring approval via a Biological License Application before they may be marketed, a process that is expensive and time-consuming.

Seeing the many benefits of rapid innovation in regenerative medicine contrasted against the time-consuming and onerous process of FDA approval, Congress included provisions in the 21st Century Cures Act (the “Cures Act”) that created an expedited approval pathway for the most promising types of cellular therapies. Section 3033 of the Cures Act allows for expedited approval if: “(a) the drug is a regenerative medicine therapy [which] includes cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products…(b) the drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (c) preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs.” A product designated by FDA as a “regenerative medicine advanced therapy” pursant to Section 3033 of the Cures Act is eligible for the same expedited development and review benefits available to products designated as breakthrough therapies, including “early interactions to discuss any potential surrogate or intermediate endpoint to be used to support the accelerated approval.”

Clarifying FDA’s Regulatory Framework for Cellular Therapies

Although we will have to wait until the “new” framework is issued this fall, Commissioner Gottlieb’s recent statement suggests that the Agency’s policies will largely be an extension of its existing approach, but will seek to accelerate the Agency’s long-standing attempts to encourage legitimate regenerative therapies while reigning in entities that have exploited ambiguities in FDA’s regulation of 361 HCT/Ps. Specifically, the Commissioner noted that “the policies [for evaluating the safety and effectiveness of complex regenerative medicine products] will be set forth in a series of guidance documents that are the result of a public process we have held in recent years…The FDA has already held public meetings to inform its thinking in these areas, so much of the Agency’s approach is already part of the public record.

As we have reported previously, for many years FDA has been in the process of developing guidance documents to bring clarity to the industry about the appropriate application of the existing regulatory criteria for marketing a HCT/P under the Section 361 pathway–clarity that is particularly necessary in light of the fact that HCT/P distributors are the arbiters, in the first instance, of whether their products meet those criteria. Four important draft guidances in this area were issued between October 2014 and November 2015, but finalization of these guidance documents has been delayed while the Agency considers the comments that it received from stakeholders in connection with a public meeting held last year. The Commissioner’s new statement suggests that (contrary to speculation by some industry observers), the Agency remains intent on finalizing them in the near future, an action that is critical to ensuring consistent, predictable, even-handed regulation that fosters the innovation needed among patients.

Given the seriousness of the diseases being treated and the inherent challenges associated with developing cell-based products, we expect that the Agency, in defining an “efficient process” for evaluating the safety and effectiveness of regenerative medicine products, may look to CDRH’s paradigm of using real-world evidence to support regulatory decision-making.

Increased Enforcement

In addition to announcing the “new” regulatory framework, Dr. Gottlieb also promised increased enforcement activities. As noted above, a striking aspect of FDA’s HCT/P regulatory framework is that it leaves the determination as to whether the product satisfies the criteria for marketing as a Section 361 HCT/P to the product’s manufacturer or distributor in the first instance. Given that products that fall solely under Section 361’s umbrella escape the necessity for premarket approval, post-market advertising and promotion oversight, and the requirement to report most types of serious adverse events, distributors of HCT/Ps have a strong incentive to interpret the criteria of 21 C.F.R. § 1271.10 broadly, often stretching the plain meaning of the regulations to the breaking point. Over the last 5-8 years, there has been growing concern among some regulators, clinicians, biological product distributors, and patient communities that some HCT/Ps are being marketed under Section 361 of the PHSA when they do not actually meet the requirements for marketing under this simplified pathway.

It is therefore encouraging to see Dr. Gottlieb’s announcement that he has directed the FDA to launch a new working group to pursue companies and individuals seeking to evade FDA oversight “through whatever legally enforceable means are necessary to protect the public health.” Indeed, the Agency has already begun to do so. Just last week, US Stem Cell Clinic, LLC received a Warning Letter from the FDA, in which the Agency took the position that stem cells that the clinic recovers from patients, processes, and then re-administers to them in order to treat a range of diseases and conditions (including Parkinson’s disease, amyotrophic lateral sclerosis, heart disease, and pulmonary fibrosis) is subject to FDA regulation as a biological product under Section 351 of the PHSA and relevant drug-related provisions of the FDCA. In the letter, FDA explained that the clinic’s HCT/Ps do not qualify for regulation solely under Section 361, because its processing of the tissue “alters the original relevant characteristics of the adipose tissue relating to the tissue’s utility for reconstruction, repair, or replacement.” The cells therefore cannot be said to be minimally manipulated–one of the requisite criteria for regulation as a Section 361 HCT/P. The clinic reportedly responded to the Warning Letter, taking the position that it is not making a drug, but rather is performing a medical procedure pursuant to the practice of medicine, the regulation of which FDA has historically deferred to states.

In his statement, the Commissioner highlighted that some businesses have seized on the promise of regenerative therapies, making “deceptive, and sometimes corrupt, assurances to patients based on unproven and, in some cases, dangerously dubious products.” We suspect that FDA will continue to employ a risk-based model of enforcement, targeting companies that produce cell-based therapies that have the potential to cause significant patient harm. But in its calculation of risk, we also expect that the Agency will seek more stringent enforcement of the “clearer lines” delineating which products should be evaluated by FDA for safety and effectiveness.

It is also reassuring that the Commissioner is making FDA’s regulation of cell-based products an Agency priority; these products have tremendous potential and the Agency should act within its power to provide patients greater access to important and life-saving therapies. In doing so, the Agency will need to continue its risk-based approach, implementing a regulatory pathway to expedite legitimate cellular therapies, while taking action to prevent unscrupulous companies from evading meaningful regulation under the guise of regulatory ambiguity.