Stem Cell Surgery Fraud

Stem Cell Surgery Fraud Lawsuit


I. Introduction

Stem cell therapies used to be primarily focused on developing treatments from embryonic stem cells. Recent developments have allowed scientists and physicians to extract adult stem cells from bone marrow and adipose fat tissue, among other parts of the body.

The typical adipose fat stem cell treatment involves a procedure where the patient goes to a clinic and receives some light liposuction. The extracted fat is then centrifuged and washed in a chemical solution before being passed through a micron filter. Through this process the adult’s stem cells are extracted and can be cultured and reinjected into the patient.

The idea is that these stem cells will then come into contact with damaged tissue near the injection site and will help stimulate regeneration of that tissue. Hence, you will often hear this referred to as “regenerative medicine.”

Adipose fat stem cell treatments have not been approved by the FDA. See United States v. US Stem Cell Clinic, No. 0:18-CV-61047-UU (S.D. Fla. June 3, 2019). The only stem cell-based products that are FDA-approved for use in the United States consist of blood-forming stem cells (hematopoietic progenitor cells) derived from cord blood [FDA: Consumer Updates, “FDA Warns About Stem Cell Therapies,” (content current as of: 09/03/2019; site last visited 10/01/2019),].

II. Federal Regulatory Framework

The federal regulatory framework consists of three tiers: the stem cell treatment could (1) go through a clinical trial and receive FDA approval, (2) be subject to the HCT/P minimal manipulation and homologous use exception, or (3) is subject to the same surgical procedure exception.

1. Clinical Trial Pathway

A clinical trial is initiated by an Investigational New Drug Application (IND). Usually a clinical trial goes through three phases: (1) Phase I is to test safety and dosage and usually includes a sample size of approximately 30 patients, (2) Phase II is to test safety and efficacy, meaning does it do what the drug manufacturer claims it does, and includes a sample size of 100 to 300 patients, and (3) Phase III further tests safety and efficacy in a broader population, usually 1,000 to 3,000 patients.

If a drug completes all three phases of a clinical trial, it is approved for the market (called premarket approval) and can be sold to the general public. The treatment is subject to post-market surveillance and if adverse events occur, the FDA can intervene and pull the drug off the market. As stated above, only blood-forming stem cells (hematopoietic progenitor cells) derived from cord blood have been approved by the FDA under this regulatory pathway.

This regulatory pathway is administered under the authority granted by section 351 of the Public Health Services Act, so stem cells that have gone through or are going through this pathway are often referred to as “351 cells.”

2. HCT/P Minimal Manipulation and Homologous Use Exception

The first exception to the general rule that every stem cell product must go through clinical trials is called the minimal manipulation and homologous use exception. This exception is administered under authority granted by section 361 of the Public Health Services Act, so these cells are often referred to as “361 cells.” The applicable regulations can be found in 21 CFR Part 1271.

If an HCT/P does not meet the criteria set out in 21 CFR1271.10(a), and the establishment that manufactures the HCT/P does not qualify for any of the exceptions in 21 CFR 1271.15, the HCT/P will be regulated as a drug, device, and/or biological product under the FD&C Act, and/or section 351 of the PHS Act (42 U.S.C. 262), and applicable regulations, including 21 CFR Part 1271, and premarket review will be required.

3. Same Surgical Procedure Exception

The third pathway and second exception from the general rule is the same surgical procedure exception. This exception is housed in 21 CFR 1271.15(b). For the exception to apply, an establishment must: (1) Remove and implant the HCT/Ps into the same individual from whom they were removed (autologous use); (2) Implant the HCT/Ps within the same surgical procedure; and (3) The HCT/Ps remain “such HCT/Ps;” they are in their original form. This exception is generally applicable to things like skin grafts and other procedures where tissue is moved from one portion of the body to another without significant alteration.

Adipose Fat Stem Cell Treatments Do Not Meet Either Exception

There has been a multi-year debate ongoing about whether adipose fat stem cell treatments are required to go through the Clinical Trial Pathway or one of the two exceptions. A recent case brought by the DOJ on behalf of the FDA established that adipose fat stem cell treatments do not enjoy either exception and must be submitted to the FDA under an IND and proved to be safe and efficacious through a clinical trial. See United States v. US Stem Cell Clinic, No. 0:18-CV-61047- UU (S.D. Fla. June 3, 2019).

We now know, as a matter of law, that adipose fat stem cell treatments do not meet either exception, therefore the only relevant question is whether the treatment is being administered as part of a clinical trial. If the answer is no, the treatment is not in compliance with federal regulations and anyone administering the treatment is potentially liable for negligence per se, medical malpractice claims, breach of contract, DTPA claims, and potentially fraud claims depending on the representations made to patients in advertising materials.

Scope of the Problem and Number of Providers

There are numerous direct-to-consumer (DTC) clinics in Texas and the greater United States offering unapproved therapies that do not comply with federal regulations. The FDA’s enforcement against DTC clinics has been historically lax, although the recent enforcement action established precedent that should empower attorneys to enforce these regulations via civil suits.

On summary judgment the Florida federal court explained that adipose fat derived stem cell treatments are in violation of FDA regulations and cannot be sold without premarket approval. See United States v. US Stem Cell Clinic, No. 0:18-CV-61047-UU (S.D. Fla. June 3, 2019).

In Texas, there are many clinics marketing adipose fat derived stem cell treatments, among other unapproved stem cell therapies. One study found 100 such clinics in Texas as of May 2017. This data lists the providers in the state at the time of the study, although this number has likely grown, and provides information about what kinds of stem cells they were

Common Fact Patterns

A potential client will be one who received an adipose fat stem cell treatment. These treatments are alternatively referred to as stromal vascular fraction (SVF). The patient will have received the treatment without having properly been enrolled in a clinical trial. There are likely to be multiple claims for anyone who has this simple fact pattern:

  1. They have been financially harmed and sold what essentially amounts to snake oil;

  2. They may have been medically harmed, and it is possible that there will be latent harms, such as increased tumoricity, which is a known potential side effect of these treatments;

  3. They may have been fraudulently or deceptively induced to purchase the treatment;

  4. They may have simple breach of contract claims assuming the treatment does not conform to what is described in the contract; and

  5. They will likely have a negligence per se claim or negligence claim against the provider.

Example 1:

A patient tore his ACL, received a revision surgery, and as part of the treatment was given injections of SVF that had been liposuctioned from his rear end. His physician told him that increased scar tissue around the injection site may be a problem he experienced. Ultimately, that’s exactly what happened. The stem cells caused excess scar tissue to develop around his knee and he was losing range of motion. He had to go back to the physician for a second revision surgery to have the excess scar tissue removed. It is unclear what the ongoing risks are, including whether he has an increased likelihood of developing tumors in his knee.

His knee appears to be recovering well after the second surgery. He would have claims for negligence per se, because his physician did not follow FDA rules and regulations regarding stem cell treatments; he would have a medical malpractice claim; he would likely have a DTPA and/or fraud claim; and he may have a breach of contract claim. His damages might include the cost of his stem cell treatment, the cost of the second surgery, pain and suffering, mental anguish, future medical harm, among other categories of damages.

Example 2:

The Florida clinic that was sued by the DOJ on behalf of the FDA injected SVF into a woman’s eye for macular degeneration. In the course of that treatment, the woman’s eye detached from the retina and she went blind. Like Example 1, she would have multiple causes of action, and the damages would likely be much higher given her permanent blindness.

Example 3:

The FDA heard testimony at an agency workshop about a patient who received SVF injections near the base of his spine to help with a degenerating disc. The patient developed a spinal tumor at the injection site that ultimately had to be removed. The gravity of this injury is obvious and the patient would likely have multiple claims and categories of damages.

Generally Known Side Effects

The FDA has warned the public against these treatments and lists the following as known potential side effects:

  • Administration site reactions;
  • The ability of cells to move from placement sites and change into inappropriate celltypes or multiply;
  • Failure of cells to work as expected; and
  • The growth of tumors.
  • These are harms we should be aware of and watching for when we speak with potentialclients, including whatever consumer claims they have based on misrepresentations.



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