October 25, 2020

The Niche

Knoepfler lab stem cell blog

Surprising main obstacle to point-of-care stem cell commercialization by small clinics

Stem Cell ClinicThere is enormous interest in point-of-care for-profit stem cell commercialization by relatively small clinics hoping to hit it big here in the U.S.

Some big investors have poured millions into these clinics that are treating patients with adult stem cell therapies.

As I’ve talked with some of these folks they expect this market to grow dramatically over the next few years. They also expect to make big money.

I believe the former expectation is far more likely to be realized than the latter expectation. The market is going to grow, but I’m not so sure they are going to make much money.

Why?

What is the big obstacle to these guys making big money?

The FDA?

No, it’s not the FDA.

And it’s not scientists complaining about these clinics failing to follow FDA rules or about blowing off real clinical trials or about them using rubber-stamping IRBs.

The obstacle is the risk of patient litigation.

We’ve seen the first major lawsuit filed against RNL Bio for alleged stem cell fraud.

It’s a no-brainer prediction that we’ll be seeing many more such lawsuits in coming years. Pretty much any point-of-care for-profit stem cell clinic is at serious risk of being sued by patients.

As I’ve pointed out in the past, a wicked and inescapable paradox exists for such clinics. Every new patient they treat to try to boost profits is a potential future plaintiff who may sue them.

Such lawsuits can have devastating financial consequences. Even just one particularly bad outcome from litigation can in effect wipe out an entire clinic.

Why would clinics offering point-of-care, non-FDA stem cell treatments be at higher risk of litigation than say a company following FDA rules?

You can see the reasons in the potential foundations for such lawsuits.

  • Lack of compliance with any of a host of FDA regulations
  • False claims of efficacy
  • False claims of safety
  • Fraud
  • And many more….

It’s not a question of if, but when….and liability insurance is not going to protect you because after a single lawsuit, the insurance companies may dump you as a client that is just too high risk.