July 24, 2019 Richard Jaffe

http://rickjaffeesq.com/2019/07/24/s...vf-stem-cells/

The injunction entered by the Florida federal district court judge in the US Stem Cell case ordered the company to destroy all of the SVF product which it was storing for their patients and SVF banking customers. I did not think that was right, in large part because the owners of the stored product were not parties to that lawsuit. See my previous post: http://rickjaffeesq.com/2019/07/22/b...e-in-the-suit/

here is the final injunction order:
http://rickjaffeesq.com/wp-content/u...ctionorder.pdf

The basis of the judge’s destruction order was that the material is an unapproved new drug basically because the separation of the SVF from the fat from which it was derived constitutes more than minimal manipulation and is not even a stem cell. The FDA also claimed that US Stem Cell was using the product in their patients for non-homologous use, but that may or may not carry over into SVF banking because there is no use homologous or otherwise in banking, and won’t be until the client wants the cell back for reimplantation, arguably anyway. The other problem the court had with the product, (also adopting the FDA’s position), is that the material was not produced in accordance with Current Good Manufacturing Practices, which made the drug product adulterated under FDA law.

As I reported recently, the judge stayed the part of the injunction ordering the destruction of the banked SVF product pending appeal, even though she thought the product was FDA illegal and the owners did not have any rights to their body parts.

In case you have any doubt about how unimpressed the judge was with the rights of patients/consumers to control their own body parts (or something derived therefrom), here are the judge’s words and you can decide for yourself.

“As an initial matter, the Court is not persuaded that any party has a property interest in the SVF Product warranting a stay of the Order of Permanent Injunction. First, the law is unsettled as to a party’s rights in its biological tissue. See, e.g., Greenberg v. Miami Children’s Hosp. Research Inst., Inc., 264 F. Supp. 2d 1064, 1075 (S.D. Fla. 2003) (explaining that “[t]he property right in blood and tissue samples also evaporates once the sample is voluntarily given to a third party.”). And, in this case, any such rights would be governed by the contractual relationship between Defendants and each individual patient, which rights are not addressed properly in this lawsuit. Second, as explained in the Court’s Order on the Parties’ Motions for Summary Judgment, the SVF Product is not the same as the patients’ stem cells; rather, the SVF Product is a separate product created by Defendants through a proprietary and complex multi-step processing procedure. See D.E. 73. Lastly, in-line with well-settled and recently affirmed Supreme Court precedent, in the Court’s Order on the Parties’ Motions for Summary Judgment, the Court deferred to the FDA’s scientific expertise and its interpretation of the FDCA that the SVF Product is an adulterated and misbranded drug. See D.E. 73; Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (affirming Auer v. Robbins, 519 U.S. 452 (1997)). Accordingly, the Court is not persuaded that any party has a property interest in the SVF Product because it is an adulterated and misbranded drug. See United States v. Ellis Research Labs., Inc., 300 F.2d 550, 554 (7th Cir. 1962) (“We find no merit in defendants’ argument that the injunction sought and granted is an unconstitutional and unwarranted exercise of the regulatory powers exercised by the United States under the Act in question . . . they can have no vested interest in a business activity found to be illegal.”) (emphasis added).”

Here is the judge’s complete stay order:
http://rickjaffeesq.com/wp-content/u...ctionorder.pdf

I think there are sound and compelling arguments to be made in response to the judge’s opinion, and sooner or later, in this or another case, I am confident they will be made.

So, the question arises what, if any effect the judge’s decision will have on patients who have banked their SVF (or some other stem cell derived product) with other stem cell banks. There are technical, theoretical and practical answers to this.

The technical legal answer is that a district court decision is not binding in other districts. The reasoning of the decision might be persuasive, but the decision itself is not binding. In fact, I think even a judge in the same district court can disagree. That is especially the case here since the owners of the material were not parties to the lawsuit, and I think that makes the judge’s decision on this particular point much less persuasive.

My prediction is that eventually the patients/SVF owners of material held by US Stem Cells will become parties to the appeal. If so, once the Eleventh Circuit decision comes out (in about a year) that decision will be precedential and binding unless another court of appeals takes a different position. So much for the technical/legal.

As to the theoretical, I suppose the FDA could take that decision and start looking at all the stem cell banking operations to determine which of them are manufacturing adulterated drugs (and that would probably be most or all of them I would guess) even though these materials are not imminently going to be injected into patients. However, I do not see that happening.

The reality is the FDA has a lot on its plate in the stem cell field. There are many hundreds of these private stem cell clinics out there operating in violation of FDA law. The 2017 FDA guidance document stated reason for not taking action against all these clinics is that it wanted to give the industry a three-year window to come into compliance, (and that was damn nice of them if you ask me). But in actuality, the FDA does not have the manpower to investigate and prosecute them all. So as Siddhartha says, “If you have nothing to eat, you should fast.”

Apart from the autologous MSC dervied stem cell clinics, there are dozens and probably hundreds of clinics providing allogeneic based products. All of these places are treating patients with what the FDA would consider illegal drugs. The MSC based autologous stem cell banks are just “manufacturing” and storing the material for possible future use. (And honestly, I just do not get why older people store their stem cells. I’ll address that in another post). But back to the point, I have to believe that the low risk profile of these stem cell banks puts them way down on the potential enforcement list.

I think the FDA’s next target is much more likely to be clinics that provide birth related derived products (i.e. umbilical cord stem cells, cord and placental tissue, and more exotic products) used in alleogeneic therapy. But more about that later.

Rick Jaffe, Esq.