It’s been a long saga for the FDA and the unproven stem cell clinic group called Cell Surgical Network, headquartered in Beverly Hills. A court case involving the two has been unfolding for many years. It has big implications for agency authority and the hundreds of stem cell clinics across the U.S.
The case took another twist just now.
FDA vs. Cell Surgical Network, et al.
The case started when the FDA sought an injunction against this large affiliated group of unproven stem cell clinics.
The matter ended up in federal district court here in California, with the network, the founders (Mark Berman and Elliot Lander), and their flagship California clinic, California Stem Cell Treatment Center, as defendants.
The clinics won the initial case. Judge Jesus Bernal found their arguments compelling. As I’ve written before, I felt Bernal didn’t give the FDA much of a chance from the get-go. I briefly testified in the case and tried to find time to watch other parts of it too. The trial was available via Zoom.
At the heart of the matter is whether an adipose cell product called stromal vascular fraction or SVF is a drug. Can the FDA regulate SVF as a drug? The clinics said no and the FDA said yes. Bernal sided with the former.
A break with precedents
In doing so, the judge broke with a federal district court in Florida that ruled in favor of the FDA on a similar SVF case. Bernal also broke with the 11th Circuit Court that heard the appeal of the Florida case and ruled for the FDA on the injunction there.
Bernal even broke with the precedent in the older US vs. Regenerative Sciences Inc. (RSI) case, buying the argument that lab-grown cells (SVF in this case, bone marrow cells in the original RSI case) were not drugs. This part of his decision seemed particularly extreme to me. Note that SVF is often not grown in a lab prior to use, but some clinics use both plain SVF and a lab-grown form of SVF.
As a stem cell biologist, I see even unamplified SVF as a drug, but in some ways this definition is more of a legal than scientific matter.
The FDA’s appeal win and what happens now?
The FDA appealed Bernal’s ruling, which went to a three-judge panel from the 9th Circuit Court of Appeals.
The panel ruled in favor of the FDA on the Cell Surgical Network case, giving the agency a key win. In their decision, the appeals court panel agreed with the FDA and the 11th Circuit Court, sending the matter back to Bernal. (Note that the Florida case involved US Stem Cell Clinic, a firm that had several customers lose vision after getting eye injections with SVF.)
While I’m not an attorney, my understanding is that one possible next step is for Bernal to reconsider the case with the now-established law from a higher court in mind. The FDA could ask for summary judgment and Bernal might have to give it to them.
On the other hand, it might not be that simple.
Also, before any of that happens, a new development is that the defendants have now asked for the whole 9th Circuit Court to hear the case rather than just the panel. This is called a petition for rehearing en banc. See the docket listing on this above.
Looking ahead and broader perspectives from the Cell Surgical Network case
If the petition is denied, we’ll have to see what Bernal does.
Should he grant the FDA’s injunction, I believe the defendants’ last step could be trying to go to The Supreme Court. A sad side note is that Mark Berman passed away while this was all unfolding. He won’t get to see how it all plays out. Over the years, while we have had very different philosophies, Berman and I had a cordial relationship and good discussions.
For broader context, there are more than a thousand other clinics operating in the US, many seemingly unrelated to this case. Still, the final outcome could influence both the FDA and a larger swath of clinics. There are even other large chains of such clinics including QC Kinetix and R3 Stem Cell. So far, the FDA has not taken major action against another large group of clinics, although it did send an untitled letter to R3 Stem Cell. I’m not aware of any further action on R3 since then though.
Sometimes clinics and these clinic chains operate in regulatory gray areas. It’s not always clear whether they are compliant or not, a decision only the FDA (and in some cases the courts) decide. The very large Regenexx chain of clinics, using bone marrow cells and PRP, seems more clearly compliant with FDA regs.
Looking to 2025 and beyond, while the FDA has done much much in 2024 on stem cell clinics than in past years, RFK Jr. and the new Trump term bring major uncertainty to this arena.
We could see a return to FDA quiescence on stem cell clinics that was so prevalent in past years.
What worries me about this case is that the en banc Ninth Circuit might see it as an opportunity to consider the effects of the Supreme Court’s decision ending what is called Chevron deference. With Chevron deference, for the last 40 some years, courts are supposed to give substantial weight to the interpretation of an unclear statute that has been given it to enforce. The 1938 Federal Food, Drug, and Cosmetics Act isn’t specific about stem cell treatments as drugs, nor are the 1944 Public Health Service Amendments (as biological products). The 11th Circuit precedent could also be viewed as weakened by Loper Bright (the case overruling Chevron). And none of that takes into account the possible changes of FDA’s positions and actions under its new MAHA overlords. Just one more uncertain and scary reality thanks to Nov. 5!