November 30, 2020

The Niche

Knoepfler lab stem cell blog

Permanent injunction on clinic firm US Stem Cell is big blow to fat clinics

US Stem Cell Clinic
US Stem Cell Clinic.

Today the United States District Court of the Southern District of Florida entered a permanent injunction against stem cell clinic firm US Stem Cell and co-defendants including U.S. Stem Cell Clinic. Patients have been harmed by the unproven treatments sold by these firms.

US Stem had lost the case a couple weeks back, but now we know the details of the permanent injunction on them by Judge Ursula Ungaro.

The order against US Stem, which is likely to be appealed, is appropriately strict in my first quick read through. I’d be curious of other’s views of it. Update: Here’s the FDA’s PR on the injunction.

I need to read it more carefully later today, but here are some highlights:

  • “The SVF Product is a drug within the meaning of 21 U.S.C. § 321(g)(1).” Again, SVF is a drug.
  • “Defendants violate the Act, 21 U.S.C. § 331(k), by causing articles of SVF Product to become adulterated within the meaning of 21 U.S.C. § 351(a)(2)(B), and misbranded within the meaning of 21 U.S.C. § 352(f)(1) while the SVF Product, or one or more of its components, is held for sale after shipment in interstate commerce.” In this case, the SVF drug was adulterated and misbranded.

  • “Defendants and each and all of their directors, officers, agents, employees, representatives, successors, assigns, attorneys, and any and all persons in active concert or participation with any of them, who have received actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined under 21 U.S.C. § 332(a) and the inherent equitable authority of this Court from directly or indirectly receiving, manufacturing, processing, packing, repacking, labeling, and/or distributing the SVF Product, unless and until:” Here the court lists many conditions including getting a cleared IND for the defendants potential future use of SVF. My prediction would be that the defendants will not meet these conditions in the future and they’ll switch to something to focus on other than SVF. We’ll see.

  • The court also orders careful oversight of the defendants. They will be essentially examined (by an “Expert”) and regularly monitored (by an “Auditor”) at the defendants’ expense.
  • Defendants must correct CGMP problems.
  • Defendants must destroy their frozen stocks of SVF within 30 days. This may be a big one as my impression (I could be wrong) is that they have banked quite a few people’s SVF on a for-profit basis. Will they have to refund all those people’s money? From the injunction, “Within thirty (30) calendar days after the entry of this Order, Defendants, under FDA’s supervision, shall destroy any and all SVF Product that is in Defendants’ possession, custody, or control. Defendants shall bear the costs of destruction and the costs of FDA’s supervision.”
  • If the defendants don’t comply with the order, it will likely get very costly for them. If I understood the injunction text right, violations could result in tens of thousands of dollars a day in what seem to me to be fines: “If Defendants fail to comply with any provision of the Act, its implementing regulations, and/or this Order with respect to any of Defendants’ SVF Products and/or Defendants’ facility, including any time frame imposed by this Order, then, on written notice of FDA in this proceeding, Defendants shall pay to the United States of America: fifteen thousand dollars ($15,000) in liquidated damages for each day such violation continues; an additional sum of fifteen thousand dollars ($15,000) in liquidated damages for each violation; and further additional sum equal to the retail value of SVF Products.”

My impression in a general sense from having looked at the government’s proposed order submitted earlier in the evolution of this case is that the FDA got nearly everything it wanted.

I suppose this injunction could be overturned on appeal, but in my view as a non-attorney, I kind of doubt that.

What happens next?

I can’t be sure, of course, but I suspect in the end that a similar injunction will be put in place in the California case probably before the end of this year. What happens then to their scores of network member clinics? Presumably they will be subject to the same injunction as the Network if indeed the California case goes the way I think and results in similar language as the Florida one has.

State Medical boards may finally get engaged if doctors continue to sell unproven stem cells that are now unambiguously not permitted based on a federal court ruling. The Florida ruling may also be used in the many patient lawsuits against clinics, aiding the plaintiffs.

Some fat stem cell clinics are probably going to just switch to other unproven stem cell types, but it won’t be that easy. Many will drop out of the unproven clinic industry entirely. Other clinics may move overseas. A few might continue to try to sell SVF in the U.S. without FDA approval, but I bet not many and not for long.

Overall, this is good news for the stem cell & regenerative medicine field and for patients. Former FDA Commissioner Scott Gottlieb and current CBER Director Peter Marks deserve recognition for their hard work in this area. I see it as a victory for science-based regenerative medicine even as the larger conflict continues.

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