The US Food and Drug Administration (FDA) has decided to appeal a surprising decision after it lost a case it was fighting against a California stem cell clinic.

The appeal was made against a decision by a California District Court that the California Stem Cell Treatment Center (CSCTC)’s medical procedure that utilises patients’ personal stem cells does not fall under the FDA’s authority.

Conflicting rulings about stem cell treatments could raise questions about the FDA’s authority. If the 9th Circuit were to support the district court’s ruling, the resulting circuit split could challenge FDA’s authority to regulate such unscrupulous businesses.

In the district court, Judge Jesus Bernal ruled that the defendants’ stromal vascular fraction (SVF) surgical procedure and its expanded mesenchymal stem cells (MSC) procedure are not considered as drugs within the meaning of the Federal Food, Drug, and Cosmetic Act (FDCA). Accordingly, the SVF Procedure and Expanded MSC Procedure are not subject to the Act’s adulteration and misbranding provisions.

The defendants’ SVF procedure also qualifies for the same surgical procedure (SSP) exception. The difficulty with this ruling is that it contradicts legal precedents such as a recent Florida district court decision (US Stem Cell) that was approved by the 11th Circuit.

The FDA is investigating stem cell businesses which promise cures for a range of diseases and conditions — without evidence for their safety and efficacy. In 2017, the FDA created a policy framework for stringent regulation of regenerative medicine products and cellular therapies. It has also declared its intention to beef up its enforcement measures of cellular therapies.

In 2018 the FDA tried to stop stem cell clinics from administering patients with adipose-tissue-derived stem cell products advertised for a multitude of conditions and diseases. The agency filed a lawsuit seeking to prevent the CSCTC from administering stem cell treatments to patients based on similar allegations raised in the Florida case. In that case, it alleged that the products had been associated with adverse events such as infections that needed hospitalisation.

The defendant lost in its appeal in the 11th Circuit in Florida.

Judge Bernal, however, denied the FDA’s application for a summary judgment. He ruled that whether the SSP exception applies was a triable issue of fact (thus, a trial was needed). A subsequent trial addressed whether the procedures qualified for the exception.

What are the chances of success of the FDA’s appeal?

Blogger and scientist Paul Knoepfler is optimistic. He said, “I believe that the FDA has an excellent chance of getting the ruling overturned. One main reason is that the 11th Circuit Court of Appeals earlier ruled in favor of the FDA in a very similar Florida case. There the FDA had initially prevailed to get a permanent injunction of sale of SVF and the defendants (US Stem Cell) had appealed. Then in the appellate ruling, the court went out of its way to be critical of Judge Bernal’s initial ruling against summary judgment requested by the FDA in the California case. Of course, the Ninth Circuit will decide whatever it wants, but the Eleventh Circuit judgment could be a powerful precedent. The Eleventh Circuit is kind of viewed as a top appellate court as well. Note that I testified for the FDA in the case before Bernal.” 

But there are no guarantees. A 9th Circuit decision to uphold the California district court ruling would create what is known as a “circuit split”.

Stanford University law professor and bioethicist Hank Greely explains: “In the US federal court system, 13 Courts of Appeals sit between the trial courts and the Supreme Court. All but one of them (the Federal Circuit, which deals mainly with patents) have geographical jurisdiction. When two of these courts disagree about the meaning of a federal law, it is possible that one interpretation will govern in cases heard in federal court in, say, Florida, Georgia, and Alabama (the 11th Circuit) while a different view of the law would be enforced in federal courts in the (very large) 9th Circuit (Hawaii, Alaska, Washington, Idaho, Montana, Oregon, California, Nevada, and Arizona). And the other ten Circuits could agree with either the 9th or the 11th or take an entirely different position.”

If the FDA loses the appeal, will the agency go to the US Supreme Court?

Possibly. But only 1% of appeals get that far; most are rejected.

Greely notes that: “The Supreme Court is more likely to hear a case where a circuit split exists, in order to bring uniformity to the federal law interpretations; it is a major reason why the Supreme Court accepts cases. But there are many circuit splits where the Court, perhaps from a view about the relative unimportance of the question or the likelihood that the split will be otherwise resolved, does not hear cases involving circuit splits and allows the ambiguity to continue. I’m not sure it would feel compelled to resolve this particular disagreement between lower courts.”

If the 9th circuit agrees that the SSP exception protects stem cell clinics from FDA scrutiny, the agency may decide to amend its regulations to reduce the width of the exemption. However, this could be onerous for the FDA and there is no guarantee of immunity against another challenge.

The FDA’s appeal will be closely observed — especially the proliferating stem cell clinics.

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Patrick Foong

Dr Patrick Foong is a senior law lecturer at Western Sydney University. His research interest lies in bioethics and health law.

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