D.C. Circuit Says FDA Can Regulate Stem Cell Drugs; Company Properly Enjoined

D.C. Circuit Says FDA Can Regulate Stem Cell Drugs; Company Properly Enjoined

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals on Feb. 4 said the federal government can regulate a company that cultures stem cells for injection in the donor patient and said a lower court did not err in permanently enjoining the company from violating federal drug regulations (United States of America v. Regenerative Sciences, LLC., et al., No. 12-5254, D.C. Cir.).[Enhanced opinion available to lexis.com subscribers.]  

Dr. Christopher Centeno, Dr. John Schultz, Michelle Cheever and Regenerative Sciences LLC offered a medical therapy marketed as the Cultured Regenexx Procedure to treat certain orthopedic conditions.  In the procedure, a sample of a patient’s bone marrow or synovial fluid is extracted and the mesenchymal stem cells (MSCs) are isolated. 

The MSCs are cultured until they divide and proliferate.  The MSCs are then combined with the antibiotic doxycycline, and the mixture is injected into the patient.  

Regulation, Lawsuits 

After the FDA in 2010 found that the defendants failed to comply with Current Good Manufacturing Practices and that their product was an unadulterated and misbranded drug, the defendants sued the government in the U.S. District Court for the District of Colorado.  The court backed the federal government. 

The defendants appealed to the 10th Circuit U.S. Court of Appeals and also filed a new complaint against the government in the U.S. District Court for the District of Columbia, challenging the FDA’s authority over them.  The government filed its own suit in the District of Columbia court, and the defendants counterclaimed, arguing that their product is not subject to federal regulation and that if it is, the FDA’s regulation is defective under the Public Health Service Act (PHSA) and the Administrative Procedure Act (APA). 

The District Court granted summary judgment in favor of the government, dismissed the defendants’ counterclaims and entered a permanent injunction against the defendants.  The defendants appealed to the D.C. Circuit Court.

Regulations Clearly Apply 

A Circuit Court panel said the defendants’ product is subject to regulation under the Food, Drug and Cosmetic Act (FDCA) and the PHSA because their definitions of drug and biological product “clearly apply to the Mixture, an article derived mainly from human tissue and intended to treat orthopedic diseases and to affect musculoskeletal function.” 

The panel rejected the defendants’ argument that the government is infringing on the practice of medicine, an area traditionally left to the states.  The panel said the FDA is not saying that the procedure used to administer the mixture is unsafe but that the mixture itself is unsafe.  

The defendant’s construction of the FDCA and the practice of medicine would “allow states to gut the FDCA’s regulation of doctors, and thereby create an enormous gap in the FDCA’s coverage, by classifying the distribution of drugs by doctors as the practice of medicine,” the panel said.  

Commerce Clause 

The defendants’ argument that the procedure occurs entirely within the State of Colorado does not square with case law involving the commerce clause of the U.S. Constitution, the panel said.  Case law allows Congress to regulate even purely local activities that will have a substantial effect on interstate commerce, the panel said. 

The defendants’ mixture has effects on interstate markets for orthopedic care and includes an ingredient shipped via interstate commerce, doxycycline, the panel continued. 

The defendants argued that their mixture is covered by an exception from federal regulation because it is “minimally manipulated.”  The panel said the government noted that the defendants’ product undergoes a culturing process that alters its relevant biological characteristics. 

Rule-Making Argument 

The panel rejected the defendants’ argument that the government’s arguments are based on regulatory “preambles” that have not gone through the rule-making procedure.  The panel said its decision is based on the regulations themselves, not the preambles. 

Also rejected was the defendants’ argument that their product is a compounded drug and not subject to FDA regulation. 

The panel also agreed with the government that the defendants’ product is adulterated and misbranded under federal regulations. 

Finally, the panel said the District Court did not abuse its discretion in issuing a permanent injunction against the defendants. 

Panel, Counsel 

The opinion was written by Circuit Judge Thomas B. Griffith.  The other panel members were Circuit Judge Sri Srinivasan and Senior Circuit Judge Harry T. Edwards. 

The defendants are represented by Andrew S. Ittleman and Mitchell S. Fuerst of Fuerst, Ittleman, David & Joseph in Miami and William F. Coffield of the Coffield Law Group in Washington. 

The federal government is represented by Abby C. Wright, Stuart F. Delery, Alisa B. Klein and Mark B. Stern of the U.S. Justice Department in Washington, U.S. Attorney Ronald C. Machen Jr. of the U.S. Attorney’s Office in Washington and William B. Schultz and Eric M. Blumberg of the FDA in Silver Spring, Md.   

Amicus curiae American Association of Orthopaedic Medicine is represented by Jonathan W. Emord of Emord & Associates in Clifton, Va.  Amicus Association of American Physicians and Surgeons Inc. is represented by Lawrence J. Joseph of the Law Offices of Lawrence J. Joseph in Washington. 

Amicus Tim Moore is represented by James C. Turner of Swankin & Turner in Washington.

For all of your legal news needs, please visit www.lexisnexis.com/mealeys.

Lexis.com subscribers may search all Mealey Publications.

Non-subscribers may search for Mealey Publications stories and documents at www.mealeysonline.com or visit www.Mealeys.com.

Mealey's is now available in eBook format!

For more information about LexisNexis products and solutions, connect with us through our corporate site.