September 26, 2020

The Niche

Knoepfler lab stem cell blog

Georgia AG sues clinics & owner Justin Paulk

More states have taken action against stem cell clinic-related firms in the past year than ever before and now we can add Georgia to the list.

Georgia adds to growing list of state AGs suing stem cell clinics

The George Attorney General Chris Carr filed suit against several related firms (going by various names over time) and their owner, Justin Paulk. The firms listed as defendants in addition to Paulk as an individual include, “Elite Integrated Medical, LLC, formerly known as Superior Healthcare of Woodstock, LLC d/b/a Superior Healthcare Group, Superior Healthcare Sandy Springs, and Superior Healthcare Morrow.”

Reporter Johnny Edwards of The Atlanta Journal-Constitution did a piece about 18 months ago on stem cell clinics in the Atlanta area including Superior so there is some more background there.

AG Carr filed suit alleging the defendants, collectively known as “Elite”, violated, “the Georgia Fair Business Practices Act (FBPA) by making false and misleading claims about the regenerative medicine products they offered to Georgia consumers.”

I asked Associate Professor Aaron D. Levine of Georgia Tech, who has been doing work on policy matters in the cell therapy area, about the suit and he had this to say:

“Unproven cell based interventions pose both medical and financial risks to patients and I’m pleased to see that the Georgia Attorney General’s office has taken action to help protect patients from these risks. It will be interesting to see if this is a stand-alone action or the start of a trend as there are certainly other providers in Georgia that are marketing cell based therapies to patients without, what I would consider, to be appropriate evidence of safety and efficacy.”

It is interesting to think about how officials chose which firms to take action against when there are dozens of clinics out there in many states doing very similar things.

Justin Paulk, a defendant in suit by Georgia AG for alleged stem cell clinic violations.
Justin Paulk, a defendant in suit by Georgia AG for alleged stem cell clinic violations.

Operations to take big money from vulnerable patients

The AG says that Elite made over $6.4 million from at least 842 patients. This reminds me of the big bucks ($2.8 million) that AGs in Iowa and Nebraska said that clinic firms active in their states were raking in for unproven stem cells.

I’d estimate that these kinds of clinics and their suppliers across the U.S. have collectively taken in a couple hundred million dollars over the last few years, all for injections that have no likelihood of benefit and have definite risks.

Based on the statements from AG Carr, the Georgia clinic setup is very reminiscent of a common kind of clinic operation all over the U.S. These clinics have MDs who are affiliated with them, but the actual injections are often done by non-physicians, raising risks. Many of the customers come from chiropractic practices. Often the purported “stem cells” are not actually living stem cells, but are non-living amniotic or other birth-related materials. This kind of approach seems designed to maximize profits, but have little-to-no chance to help patients.

In addition, those running these clinics are often not physicians themselves with many being chiropractors. In fact, sometimes they have no science or medical background at all. Instead they seem to be more into marketing.

What about defendant Paulk?

Who is Justin Paulk?

I found a LinkedIn page for him here. He has no listed connections there.

I couldn’t find almost any background information on him at all in terms of previous experience or education. He might be or have been a chiropractor.

More emphasis on marketing than medical science?

The stem cell clinics that fit the bill including the attributes I mentioned above often emphasize marketing. AG Carr alleges that the defendants in this case had some problematic marketing:

“The Attorney General’s office also alleges that Elite acted deceptively by featuring on its website a customer testimonial from a purported customer who is actually an owner of Elite’s advertising agency, without disclosing the material connections between itself and this person or the fact that this “customer” received his treatments for free.”

It seems the AG already reached a settlement with the marketing firm in this case, Grow Smart Marketing, LLC.

You can see glitzy marketing in some of Elite’s YouTube videos (e.g. the one below) where they emphasize 5-star reviews from what are portrayed to be customers.

So more broadly when clinics tout great patient reviews, how much trust can you put in that? Here in California, stem cell clinic firm Stemgenex, which has filed for bankruptcy, has been facing a class-action patient lawsuit over marketing including portrayal of patient satisfaction on their website. Note that in its bankruptcy filing, documents suggested that Stemgenex was taking in up to $4 million per year.

Broader U.S. trend of AGs stepping up

We now have seen enough state AGs taking action on clinics that we can call it a full-fledged trend. These states include North Dakota, New York, Iowa, Nebraska and now Georgia. California, which has the largest number of unproven stem cell clinics by far, has not seen its AG take action so far, which is disappointing. Our California AG’s office definitely knows about the problem too. Still, I expect to see more AGs filing suit.

More generally, at some point somewhere across the U.S. is some law enforcement agency going to file criminal charges in the next year against some of the worst of the worst clinics or suppliers?

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