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The FDA's Misguided Regulation of Stem-Cell Procedures: How Administrative Overreach Blocks Medical Innovation


The FDA's Misguided Regulation of Stem-Cell Procedures: How Administrative Overreach Blocks Medical Innovation

Richard A. Epstein September 24, 2013
Legal ReformOther
Health PolicyFDA Reform

The current biomedical revolution has its most tangible application to ordinary people in the new cutting-edge techniques devised by individual physicians for the cure and palliation of chronic and degenerative diseases. The rate of advance in this area is a testimony to the creative forces unleashed by the decentralized control over medical procedures. But that progress is now threatened by the federal Food and Drug Administration (FDA), which seeks to extend its statutory authority to subject these practices to the same oversight that is given to large drug manufacturers in the design and production of new products for the mass market. One area over which the FDA has asserted its power is private adult stem-cell treatment, which has developed treatment protocols that were not possible a generation, or even a decade, ago.

The FDA has taken the aggressive position that it has oversight authority over any stem-cell procedure that reinjects harvested stem cells into the same person from whom they were removed, so long as those cells were grown and cultured outside the human body. Indeed, one promising use of this technique for heart-attack patients was scuttled after the FDA stepped in to require extensive clinical trials over a hospital that could not afford the high costs of FDA compliance. It is unclear how many promising similar avenues have been shut off by physicians who were unwilling to run the FDA gauntlet of initial approval and constant oversight to bring their techniques to the market in the United States without risk of regulatory censure. But two physicians utilizing one such approach are now challenging in federal court the FDA’s authority to regulate — and effectively prohibit — the use of adult stem cells to mitigate the effects of one widespread malady: degenerative joint conditions, including those caused by sports injuries.

Regenerative Sciences, LLC v. United States, now pending before the U.S. Court of Appeals for the D.C. Circuit, concerns a stem-cell procedure developed by Colorado doctors Christopher Centeno and John Schultz. The doctors’ procedure involves the patient-specific extraction of blood and bone marrow stem cells, centrifuged, grown, and sterilized in their in-house laboratory, and then reinjected into the patient’s own body. The FDA claims that the doctors’ procedure involves the manufacturing of “drugs” for sale in “interstate commerce” that falls within its statutory purview to prevent the spread of “communicable diseases.”

This paper analyzes the government’s position on legal and policy grounds. Legally, the government incorrectly reads the “interstate commerce” clause of the Federal Food, Drug and Cosmetic Act of 1938 (FFDCA) as identical to the broad authority that contemporary cases attach to the Commerce Clause in the U.S. Constitution. A close reading of the statutory text and history suggests that it is anything but that. Properly read, the clause clearly places the doctors’ procedure outside the FDA’s purview. Similarly, the government’s broad definition of the doctors’ procedure as a “drug” rather than the “practice of medicine” strains the ordinary meaning of both terms. Read as a whole, the government’s theory boils down to the proposition that its power to prevent the spread of “communicable diseases” applies to the doctors’ procedure because the patient’s own stem cells may become contaminated during the process, as could happen in all common forms of surgical procedures widely understood to fall outside FDA authority. This sweeping assertion of new statutory authority, if consistently applied, would grant the FDA broad powers to regulate common surgical practice, traditionally regulated by the states.

This paper reviews and rebuts specific arguments as they relate to these issues in more detail:

  1. Interstate Commerce. The FFDCA gives the FDA authority to regulate an act involving a drug if the act occurs “after shipment in interstate commerce and results in such article being adulterated or misbranded.” The government, as well as the district court that ruled on the government’s behalf below, has argued that the broad deference that the Supreme Court affords Congress’s constitutional power to regulate interstate commerce gives the FDA ample authority to oversee any local business that receives supplies or customers from out of state. What the government position misses is that the statutory authority does not extend as far as the constitutional authority. The FFDCA was enacted four years before the Supreme Court’s 1942 decision in Wickard v. Filburn, which expanded Congress’s power over interstate commerce to reach purely intrastate activities that influenced interstate commerce. It was only as late as 1964 in Katzenbach v. McClung that the Supreme Court held that Congress’s power over interstate commerce covered any business that received some of its supplies through the channels of interstate commerce. In context, the statutory definition of interstate commerce in the FFDCA—like the parallel language in the statute’s predecessor, the 1906 Pure Food and Drug Act — makes conscious and explicit reference to the pre-Wickard account of interstate commerce. The stem-cell procedure developed by doctors Centeno and Schultz clearly is not interstate commerce as defined in the statute
  2. Drugs Versus the Practice of Medicine. The government and district court also misfire when they assume that the stem cells removed from and reinjected into patients are “drugs” subject to FDA regulation rather than the “practice of medicine,” the regulation of which Congress has traditionally left to the states. The traditional mass-production manufacturer that makes a drug that is sold downstream for physicians’ use has little in common with the physician who grows a patient’s own stem cells for reinjection into the same patient. Those differences all cut in favor of removing the FDA from a role of direct oversight over the physician’s practice. Although the government insists that the FDA should be afforded substantial deference in defining the meaning of the term “drug,” the Supreme Court has often cut back against FDA definitions that generate major extensions of the agency’s jurisdiction into areas already subject to alternative schemes of regulation, as in the Court’s 2000 decision in FDA v. Brown & Williamson Tobacco.
  3. Communicable Diseases. The government claims that the FDA may also regulate the Colorado doctors’ stem-cell procedures under the 1944 Public Health Service Act, which gives the agency authority “to make and enforce such regulations as … necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession.” Whatever risks the stem-cell procedure developed by Centeno and Schultz might create for the doctors’ patients — and there are no documented cases of adverse side effects cited by the FDA — such risks would not involve “communicable diseases,” according to those words’ ordinary meaning, given that their procedure involves injecting not foreign stem cells but the patients’ own stem cells into their own bodies. The government’s fear that under the Colorado doctors’ procedure, “samples may be improperly labeled, mixed up with other cells, and contaminated or exposed to communicable disease agents,” is doubtless correct but only identifies risks routinely found in a clinical setting whenever a lab technician makes a similar error. These local issues should be, and typically are, regulated by local public health authorities. Such errors are far more likely to happen in routine hospital settings when blood, stool, or urine samples are taken from sick individuals who are known to carry various infectious agents than in the controlled process used in the Colorado doctors’ lab. Tellingly, the FDA’s own report asserting regulatory authority over stem-cell procedures of the sort developed by Centeno and Schultz impliedly claims the power to control any common form of surgery that requires drug use, which, in practice, is all surgeries.

The legal questions at play in Regenerative Sciences highlight broader policy questions, particularly the disconnect between the FDA’s review standards and the new style of personalized medicine. The FDA operates under a strong premarket clearance system, which places heavy burdens on the proponents of new therapies to prove them safe and effective. The FDA model of large double-blind clinical trials imposes enormous costs, which today could run to hundreds of millions of dollars and years of delay in getting new molecular entities to market. The FDA then sets a high bar for the warnings and instructions under which these products must be sold. Although large trials and strict controls may work well for testing a new high-blood-pressure medicine on a large population, no small, customized medical operations can find funds to pay the compliance costs associated with FDA clinical trials. The FDA rules thus freeze out of the market the people in the best position to make decisive medical innovations.

The decision to receive the stem-cell treatments offered by the Colorado doctors resembles the practice of medicine far more than the large-scale development, marketing, and sale of single-formula pharmaceutical products and medical devices. Control over critical medical procedures should lie with patients themselves, in consultation with their own physicians subject to state regulatory authority, and not with the FDA. The record in Regenerative Sciences demonstrates that the FDA has neither the medical insight nor the legal expertise to justify the extraordinary new powers that it claims for itself over the practice of medicine.