Can FDA Regulate Stem Cell Companies if State Laws Allow Them?
​​[Posted on: Thursday, September 21, 2017]

Can FDA be forced to recognize un-proven stem cell therapies due to pressure from States? Will the state laws curtail development of FDA-approved stem cell therapies? A stem cell clinic is one that offers a product containing enriched stem cell preparations to patients for treating a variety of indications. This month a new law came into effect in Texas that allows practically all kinds of stem cell clinics to freely operate in the state. Similar laws currently being debated or enacted in about 30 states could soon make such therapies available practically everywhere in the country, all violating FDA’s stated position on the regulation of such businesses. All these state laws claim that FDA approval of such therapies will take too long for patients to wait and hence give manufacturers in the state permission to market such unproven therapies with no risk of prosecution, interference in business or risk to medical license. These laws do not prohibit FDA to take action but it would be hard, if not impossible, for FDA to enforce Federal laws where the State law allows the same. This creates a regulatory conundrum where Federal and state laws contradict. According to 21 CFR 1271, also known as the HCT/P rules, most cellular products must be registered with FDA and follow strict restrictions on claims for treatment. FDA has always required that developers of products that don’t meet the current definition of HCT/P, conduct clinical trials under an IND and file for market approval as biological products, both of which require a significant financial investment by the developers and several years to market. More importantly, clinical trials may expose new safety issues and have the risk of showing that these therapies do not work in many of the indications they claim to treat. On the other hand, there are scores of patients willing to try these therapies at their own cost. The patients trust their doctors who prescribe such therapies and are either ignorant of the risks or have few options. With these new laws that allow businesses to operate with impunity, there is no incentive for marketers of cellular therapies to seek formal FDA approval. The state laws require that these non-FDA approved therapies be provided under ongoing clinical trials, require informed consent, and that in case of injury patients reserve the right to take legal action, but allow several ways for manufacturers to avoid major risk to their business while being compliant with the state laws. More importantly, unlike the federal laws governing clinical trials that do not allow manufacturers to charge patients for the experimental treatments in most cases, the state laws are silent on that aspect clearing the path to unregulated expensive non-insurance covered cellular therapies to thrive. At the same time, these state laws likely create a disincentive to bonafide cell therapy companies seeking FDA approval by creating unfair competition from unregulated products. FDA is left with few options. In the past FDA had prosecuted companies for unregulated inter-state commerce but with therapies allowed in most states, businesses may register in all states where legal making it hard for FDA to enforce using that mechanism. FDA can wait for accidents and then take action but by that time the cell therapy industry may be too big to rein in. Or FDA can quickly approve cellular therapies currently under review creating legal products which carry the coveted FDA-stamp of approval, and making it easier to require manufacturers of unapproved products to seize sales. States are pushing major change in the regulation of products under federal mandate, and not in the best way.