Stem MSJ FDA

Case 1:10-cv-01327-RMC Document 19
Filed 01/07/11 Page 1 of 64
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, Plaintiff, v. REGENERATIVE SCIENCES, LLC, et al., Defendants.
) Civil Action No. 1:10-CV-01327-RMC ) ) ) ) ) ) ) )
PLAINTIFFS MOTION FOR SUMMARY JUDGMENT Plaintiff, the United States of America, pursuant to Fed. R. Civ. P. 56 and LCivR 7(h), hereby moves for summary judgment in the above-captioned matter on the ground that there is no genuine dispute as to any material fact and plaintiff is entitled to judgment as a matter of law. In support of this motion, plaintiff relies upon its Memorandum of Law in Support of Summary Judgment, its supporting Declarations, and Plaintiffs Statement of Material Facts, attached to this motion. Wherefore, Plaintiff respectfully request that its motion be granted and summary judgment be entered in its favor. DATED this 7th day of January, 2011.
Respectfully submitted,
TONY WEST Assistant Attorney General ANN M. RAVEL Deputy Assistant Attorney General
Of Counsel: MARK B. CHILDRESS Acting General Counsel RALPH S. TYLER Associate General Counsel Food and Drug Division ERIC M. BLUMBERG Deputy Chief Counsel, Litigation PAIGE H. TAYLOR Senior Counsel Food and Drug Administration 10903 New Hampshire Avenue Silver Spring, MD 20993-0002 301-796-8720
EUGENE M. THIROLF Director
/s/ PERHAM GORJI Trial Attorney Office of Consumer Litigation Civil Division U.S. Department of Justice 450 Fifth Street, N.W. Washington, D.C. 20001 Phone: 202-353-3881 Fax: 202-514-8742 Perham.Gorji@usdoj.gov
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, Plaintiff, v. REGENERATIVE SCIENCES, LLC, et al., Defendants. ) Civil Action No. 1:10-CV-01327-RMC ) ) ) ) ) ) ) )
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT
TABLE OF CONTENTS
Page(s) TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATUTORY AND REGULATORY FRAMEWORK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 I. II. III. THE FDCA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 THE PUBLIC HEALTH SERVICE ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 THE HCT/P RULE: 21 C.F.R. PART 1271. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 I. II. III. THE DEFENDANTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 DEFENDANTS CULTURED CELL PRODUCT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 PRIOR WARNINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 I. II. STANDARD FOR SUMMARY JUDGMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 DEFENDANTS ARE VIOLATING THE FDCA BY CAUSING THE ADULTERATION OF THE CULTURED CELL PRODUCT. . . . . . . . . . . . . . . . 17 A. Defendants Cultured Cell Product is a Drug Subject to the FDCA. . . . . . . . . . . 18 1. The Cultured Cell Product is Intended to Treat Disease and to Affect the Structure and Function of the Body. . . . . . . . . . . . . . . . 18 The Cultured Cell Product Cannot Qualify for Regulation Solely Under 21 C.F.R. Part 1271 . . . . . . . . . . . . . . . . . . 20
2.
B.
Defendants Cultured Cell Product is Held for Sale After Shipment of One or More of its Components In Interstate Commerce. . . . . . . . . . . . . . . . . 22
C. III.
Defendants Adulterate Their Cultured Cell Product. . . . . . . . . . . . . . . . . . . . . . . 24
DEFENDANTS CULTURED CELL PRODUCT IS MISBRANDED. . . . . . . . . . . . . . 28 A. The Cultured Cell Product Is Misbranded Because It Is a Prescription Drug and Its Label Fails to Bear the Symbol Rx only. . . . . . . . . . 28 The Cultured Cell Product is Misbranded Because Its Labeling Fails to Bear Adequate Directions for Use. . . . . . . . . . . . . . . . . . . . . . . 29
B.
III.
DEFENDANTS VIOLATIONS ARE NOT EXCUSED BY THEIR CLAIM THAT THEY ARE ENGAGED IN THE PRACTICE OF MEDICINE. . . . . . . . . . . . . . 34 THIS COURT SHOULD ISSUE A PERMANENT INJUNCTION RESTRAINING DEFENDANTS FROM FURTHER VIOLATIONS OF THE FDCA. . . . . . . . . . . . . . . 36 A. B. Legal Standard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Defendants Will Continue to Violate the FDCA Unless Enjoined. . . . . . . . . . . . 39
IV.
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ii
TABLE OF AUTHORITIES FEDERAL CASES Page(s) *Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach, 495 F.3d 695 (D.C. Cir. 2007). .............................................................................................. 36 Actavis Elizabeth LLC v. FDA, 625 F.3d 760 (D.C. Cir. 2010). ................................................................................................ 4 *Action on Smoking and Health v. Harris, 655 F.2d 236 (D.C. Cir. 1980). .......................................................................................... 4, 19 Alberty Food Prods. Co. v. United States, 194 F.2d 463 (9th Cir. 1952). ................................................................................................ 31 *Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)............................................................................................................... 17 *Baker v. United States, 932 F.2d 813 (9th Cir. 1991). ................................................................................................ 24 CareToLive v. von Eschenbach, 525 F. Supp. 2d 952 (S.D. Ohio 2007). ................................................................................... 5 Cason v. District of Columbia, 580 F. Supp. 2d 76 (D.D.C. 2008). ........................................................................................ 18 Cowan v. United States, 5 F. Supp. 2d 1235 (N.D. Okla. 1998)................................................................................... 36 *Estee Lauder, Inc. v. FDA, 727 F. Supp. 1 (D.D.C. 1989). ................................................................................................. 4 *FTC v. Morton Salt Co., 334 U.S. 37 (1948)................................................................................................................. 20 *Harry C. Crooker & Sons, Inc. v. Occupational Safety and Health Review Comm'n, 537 F.3d 79 (1st Cir. 2008).................................................................................................... 21
*Authorities upon which we chiefly rely are marked with asterisks iii
Hecht Co. v. Bowles, 321 U.S. 321 (1944)............................................................................................................... 38 John D. Copanos and Sons, Inc. v. FDA, 854 F.2d 510 (D.C. Cir. 1988). .............................................................................................. 26 Kordel v. United States, 335 U.S. 345 (1948)............................................................................................................... 37 Lambert v. Yellowley, 272 U.S. 582 (1926)......................................................................................................... 36 Nat'l Nutritional Foods Ass'n v. Mathews, 557 F.2d 325 (2d Cir. 1977)................................................................................................. 3, 4 National Ass'n of Pharm. Mfrs. v. FDA, 637 F.2d 877 (2d Cir. 1981)................................................................................................... 25 Nature Food Centres, Inc. v. United States, 310 F.2d 67 (1st Cir. 1962).................................................................................................... 30 *Novartis Pharms. Corp. v. Leavitt, 435 F.3d 344 (D.C. Cir. 2006). .............................................................................................. 22 Regenerative Sciences, Inc. v. FDA, Civ. No. 1:09-cv-00411-WYD (D. Colo. 2009). ............................................................. 15, 20 Regenerative Sciences, Inc. v. FDA, Civ. No. 1:10-cv-01055-RMC (D.D.C. 2010) . ...................................................................... 15 *Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994)............................................................................................................... 22 *United States Air Tour Ass'n v. FAA, 298 F.3d 997 (D.C. Cir. 2002). .............................................................................................. 22 United States v. 9/1 Kg. Containers, 854 F.2d 173 (7th Cir. 1988). .......................................................................................... 32, 35 United States v. 789 Cases, More or Less, of Latex Surgeons' Gloves, 799 F. Supp. 1275 (D.P.R. 1992)........................................................................................... 26 *United States v. Algon Chemical, Inc., 879 F.2d 1154 (3d Cir. 1989)........................................................................................... 30, 35 iv
*United States v. An Article of Device . . . "Hubbard Electrometer,", 333 F. Supp. 357 (D.D.C. 1971). ........................................................................................... 31 United States v. An Article of Drug . . . Mykocert, 345 F. Supp. 571 (N.D. Ill. 1972). ......................................................................................... 32 United States v. Article of Device, 731 F.2d 1253 (7th Cir. 1984). .............................................................................................. 32 United States v. Articles of Device, 527 F.2d 1008 (6th Cir. 1976). .............................................................................................. 32 United States v. Articles of Drug . . . Hydralazine HCL, 568 F. Supp. 29 (D.N.J. 1983). .............................................................................................. 23 *United States v. Articles of Drug (Rucker Pharmacal), 625 F.2d 665 (5th Cir. 1980). ................................................................................... 30, 31, 32 United States v. Baxter Healthcare Corp., 712 F. Supp. 1352 (N.D. Ill. 1989), aff'd, 901 F.2d 1401 (7th Cir. 1990). ............................ 32 United States v. Calise, 217 F. Supp. 705 (S.D.N.Y. 1962)........................................................................................... 5 *United States v. City and County of San Francisco, 310 U.S. 16 (1940)................................................................................................................. 37 *United States v. Dianovin Pharms., Inc., 475 F.2d 100 (1st Cir. 1973).................................................................................................. 24 *United States v. Diapulse Corp. of Am., 457 F.2d 25 (2d Cir. 1972)............................................................................................... 37, 38 United States v. Diapulse Corp. of Am., 514 F.2d 1097 (2d. Cir.), cert. denied, 423 U.S. 838 (1975). ................................................ 23 United States v. Dotterweich, 320 U.S. 277 (1943)............................................................................................................... 37 *United States v. Endotec, Inc., 563 F.3d 1187 (11th Cir. 2009). ............................................................................................ 21 United States v. Endotec, Inc., No. 6:06-1281-Orl, 2009 U.S. Dist. LEXIS 93985 (M.D. Fla. Sept. 28, 2009). ................... 38 v
*United States v. Evers, 643 F.2d 1043 (5th Cir. 1981). ........................................................................................ 23, 35 *United States v. Genendo Pharm., N.V., 485 F.3d 958 (7th Cir. 2007). ................................................................................................ 22 United States v. H.W. Andersen Products, Inc., No. 2:95cv00315, 1997 U.S. Dist. LEXIS 3080 (M.D. N.C. Jan, 24, 1997)......................... 38 United States v. Kasz Enterprises, No. 930455P, 1994 U.S. Dist. LEXIS 8597 (D. R.I. May 6, 1994)....................................... 38 United States v. Lane Labs-USA, Inc., 324 F. Supp. 2d 547 (D.N.J. 2004). ....................................................................................... 37 United States v. Livdahl, 356 F. Supp. 2d 1289 (S.D. Fla. 2005). ................................................................................. 38 *United States v. Loran Medical Systems, Inc., 25 F. Supp. 2d 1082 (C.D. Cal. 1997). .............................................................................. 5, 35 United States v. Miami Serpentarium Labs., Inc., 1981-82 FDC L. Rptr. Dev. Trans. Binder 38,164 at 38,931 ........................................ 33 United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998). .............................................................................................. 38 United States v. Nutri-cology, Inc., 982 F.2d 394 (9th Cir. 1992). .......................................................................................... 37, 38 *United States v. Odessa Union Warehouse Co-Op, 833 F.2d 172 (9th Cir. 1987). .......................................................................................... 37, 38 United States v. Premo Pharm. Labs., Inc., 511 F. Supp. 958 (D.N.J. 1981). ............................................................................................ 32 United States v. Pro-Ag, Inc., 796 F. Supp. 1219 (D. Minn. 1991)....................................................................................... 38 United States v. Radix Laboratories, Inc., 963 F.2d 1034 (7th Cir. 1992). .............................................................................................. 26 United States v. Richlyn Laboratories, Inc., 827 F. Supp. 1145 (E.D. Pa. 1992). ....................................................................................... 38 vi
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*United States v. Rutherford, 442 U.S. 544 (1979)............................................................................................................... 36 United States v. Rx Depot, Inc., 290 F. Supp. 2d 1238 (N.D. Okla. 2003)......................................................................... 37, 38 United States v. Spectro, 544 F.2d 1175 (3d Cir. 1976)................................................................................................. 37 United States v. Sullivan, 332 U.S. 689 (1948)............................................................................................................... 23 *United States v. Torigian Labs., Inc., 577 F. Supp. 1514 (E.D.N.Y. 1984), aff'd without op., 751 F.2d 373 (2d Cir. N.Y. 1984) ................................................................................... 23 United States v. Two Units, More or Less, of an Article or Device, Consisting of a Power Unit and a Chair, 49 F.3d 479 (9th Cir. 1994). .................................................................................................. 30 United States v. Undetermined Quantities of Articles of Drug, 145 F. Supp. 2d 692 (D. Md. 2001). ................................................................................ 33, 34 *United States v. W.T. Grant Co., 345 U.S. 629 (1953)............................................................................................................... 37 United States v. Western Serum Co., 498 F. Supp. 863 (D. Ariz. 1980), aff'd, 666 F.2d 335 (9th Cir. 1982). ................................ 26 United States v. Writers & Research, Inc., 113 F.3d 8 (2d Cir. 1997)......................................................................................................... 3 Weinberger v. Hynson, Westcott, & Dunning, Inc., 412 U.S. 609 (1973)............................................................................................................... 33 *Whitaker v. Thompson, 353 F.3d 947 (D.C. Cir. 2003). ................................................................................................ 3
FEDERAL STATUTES 21 U.S.C. 301-399b. ................................................................................................................. 1 *21 U.S.C. 321(g)(1)(B). .................................................................................................... 18, 28 vii
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*21 U.S.C. 321(g)(1)(C). ................................................................................................ 3, 18, 28 21 U.S.C. 321(g)(1)(D). ............................................................................................................ 23 21 U.S.C. 321(p)(1) . ................................................................................................................. 33 21 U.S.C. 321(p)(2). ................................................................................................................. 33 21 U.S.C. 331(d). ........................................................................................................................ 4 21 U.S.C. 331(k). ............................................................................................................... passim *21 U.S.C. 332............................................................................................................................ 2 21 U.S.C. 332(a). ...................................................................................................................... 36 21 U.S.C. 351.............................................................................................................................. 4 *21 U.S.C. 351(a)(2)(B). ............................................................................................ 1, 4, 13, 25 21 U.S.C. 352.............................................................................................................................. 4 *21 U.S.C. 352(f)(1). ......................................................................................................... passim 21 U.S.C. 353(b)(1). ................................................................................................................. 31 *21 U.S.C. 353(b)(1)(A)........................................................................................................... 28 *21 U.S.C. 353(b)(4). .................................................................................................. 1, 4, 28 29 21 U.S.C. 353(b)(4)(A)............................................................................................................. 29 21 U.S.C. 355(a). ........................................................................................................................ 4 *21 U.S.C. 379a. ....................................................................................................................... 24 21 U.S.C. 396............................................................................................................................ 35 42 U.S.C. 202.............................................................................................................................. 6 42 U.S.C. 262.............................................................................................................................. 4 42 U.S.C. 262(i). ................................................................................................................... 5, 20 *42 U.S.C. 262(j). ....................................................................................................................... 5 viii
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*42 U.S.C. 264........................................................................................................................ 5, 8 42 U.S.C. 264(a). .................................................................................................................... 5, 7
FEDERAL REGULATIONS *21 C.F.R. 201.5. ............................................................................................................... 30, 31 21 C.F.R. 201.100. .................................................................................................................... 33 21 C.F.R. 201.100(b). .................................................................................................................. 33 21 C.F.R. 201.100 (c)(1).............................................................................................................. 33 21 C.F.R. 201.115. .................................................................................................................... 33 21 C.F.R. 201.128. ................................................................................................................ 4, 19 21 C.F.R. Parts 210-211 ......................................................................................................... 13, 25 21 C.F.R. 211.42(c)(10)(iii). ..................................................................................................... 16 21 C.F.R. 211.42(c)(10)(iv). ............................................................................................... 14, 16 21 C.F.R. 211.42(c)(10)(v). ...................................................................................................... 16 21 C.F.R. 211.113(b). ......................................................................................................... 14, 16 21 C.F.R. 211.160(b). ............................................................................................................... 14 21 C.F.R. 211.165(a)........................................................................................................... 14, 16 21 C.F.R. 211.165(b). ......................................................................................................... 14, 16 21 C.F.R. Parts 600-680......................................................................................................... 13, 25 21 C.F.R. 610.12. ................................................................................................................ 14, 16 21 C.F.R. Part 1271 .............................................................................................................. passim 21 C.F.R. 1271.3(a)................................................................................................................... 12 21 C.F.R. 1271.3(d). ................................................................................................................... 7 ix
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*21 C.F.R. 1271.3(f)(2). ................................................................................................. 9, 18, 21 *21 C.F.R. 1271.10. ..................................................................................................................... 8 21 C.F.R. 1271.10(a)............................................................................................. 8, 9, 20, 22, 23 21 C.F.R. 1271.10(a)(1).................................................................................................. 8, 18, 21 21 C.F.R. 1271.10(a)(3)............................................................................................................ 23 21 C.F.R. 1271.15. ...................................................................................................................... 8 *21 C.F.R. 1271.20. .................................................................................................... 8, 9, 20, 22 59 Fed. Reg. 59820 (Nov. 18, 1994)............................................................................................ 34 62 Fed. Reg. 9721 (Mar. 4, 1997).................................................................................................. 7 63 Fed. Reg. 26744 (May 14, 1998). ............................................................................................. 6 66 Fed. Reg. 1508 (Jan. 8, 2001). .................................................................................................. 7 66 Fed. Reg. 5447 (Jan. 19, 2001). ....................................................................................... passim 69 Fed. Reg. 29786 (May 25, 2004). ............................................................................................. 7 69 Fed. Reg. 68612 (Nov. 24, 2004).............................................................................................. 7
FEDERAL RULES Fed. R. Civ. P. 56(c). ................................................................................................................... 17
HISTORY 1966 Reorg. Plan No. 3, eff. June 25, 1966, 80 Stat. 1610........................................................... 5
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INTRODUCTION Plaintiff, United States of America, seeks to enjoin Regenerative Sciences, LLC (RS LLC), a corporation, and Christopher J. Centeno, M.D., John R. Schultz, M.D., and Michelle R. Cheever, individuals (collectively, Defendants), from violating the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301-399b. Defendants manufacture, hold for sale, and distribute an unapproved injectable biological drug product, referred to here as the cultured cell product, which Defendants promote as a safe alternative to traditional surgery for a variety of orthopedic conditions, including osteoarthritis, bulging lumbar discs, and non-healing bone fractures. Defendants violate the FDCAs prohibition on adulterating and misbranding a drug while it is held for sale after one or more of the drugs components have been shipped in interstate commerce. Under the FDCA, a drug is deemed to be adulterated if it is not manufactured, processed, or held in compliance with current good manufacturing practice (CGMP). 21 U.S.C. 351(a)(2)(B). FDA inspections of RS LLC in 2009 and 2010 revealed serious and obvious violations of CGMP at RS LLCs manufacturing facility. The inspections documented that Defendants fail to perform critical tests that are absolutely essential to help assure the safety of patients who receive the drug (e.g., tests for sterility and for the presence of endotoxins (which cause fevers) and mycoplasma (a pathogenic genus of bacteria)). Defendants also have a grossly inadequate environmental monitoring program and failed to use proper aseptic technique in manufacturing the cultured cell product, among other violations. FDAs inspections also documented that Defendants cause their cultured cell product to be misbranded. Under 21 U.S.C. 353(b)(4), a prescription drugs label must bear the symbol Rx only at all times before it is dispensed. Defendants cultured cell product is a prescription drug
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and its label does not bear the Rx only symbol. In addition, under 21 U.S.C. 352(f)(1), a drugs labeling must bear adequate directions for use. The labeling on Defendants cultured cell product is missing essentially all of the information required to provide adequate directions for use. The material facts regarding Defendants violations of the FDCA are either admitted or are beyond dispute. Defendants admit that their cultured cell product is intended to treat orthopedic conditions and injuries, which makes it a drug under the FDCA. Defendants likewise admit that FDAs 2009 and 2010 inspections of RS LLC show they do not process the cultured cell product in compliance with CGMP and that it contains a component that has been shipped in interstate commerce. Defendants also have admitted how they label the cultured cell product. Defendants principal defense to these charges is that the FDCA does not apply to them because they are engaged in the practice of medicine, which is not regulated by FDA. But, as we show below, the law is well-established that the practice of medicine defense does not apply to drugs that have not been approved for any use, and it is undisputed that FDA has not approved RS LLCs cultured cell product for any purpose. Because the material facts are not in dispute and Defendants are plainly violating the FDCA, the government is entitled to summary judgment as a matter of law. Congress vested federal courts with jurisdiction to enjoin violations of the FDCA under 21 U.S.C. 332. Because Defendants refuse to comply with the law, indeed vigorously dispute that they are subject to the FDCA, permanent injunctive relief is necessary to stop them from
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violating the FDCA and to protect the public health. In support of its motion for summary judgment, the government submits this memorandum and the attached declarations.1 STATUTORY AND REGULATORY FRAMEWORK I. THE FDCA Under the FDCA, an article is a drug if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease or is intended to affect the structure or any function of the body of man or other animals. 21 U.S.C. 321(g)(1)(B)&(C)). Thus, whether any particular article is a drug depends on its intended use. See Whitaker v. Thompson, 353 F.3d 947, 953 (D.C. Cir. 2004) (under the FDCA, classification of a substance as a drug turns on the nature of the claims advanced on its behalf); United States v. Writers & Research, Inc., 113 F.3d 8, 11 (2d Cir. 1997) (Regardless of the classification of a drug, if an article is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man it is defined as a drug); Natl Nutritional Foods Assn v. Mathews, 557 F.2d 325, 333 (2d Cir. 1977) ([t]he vendors intent in selling the product to the public is the key element in this statutory definition.). [I]t is well established that the intended use of a product, within the meaning of the [FDCA], is determined from its label, accompanying labeling, promotional claims, advertising,
Attached are the declarations of: Karen S. Kreuzer, Acting Director of FDAs Denver District Office (Kreuzer Dec.) (Exhibit A); Steven R. Bauer, Ph.D., Chief, Cellular and Tissue Therapies Branch, Division of Cellular and Gene Therapies, Office of Cellular, Tissue, and Gene Therapies (OCTGT), in FDAs Center for Biologics Evaluation and Research (CBER) (Bauer Dec.) (Exhibit B); Kevin J. Shannon, M.D., Medical Officer, OCTGT, CBER (Shannon Dec.) (Exhibit C); Dennis E. Guilfoyle, Ph.D., FDAs international expert in pharmaceutical microbiology (Guilfoyle Dec.) (Exhibit D); and George F. Muschler, M.D., Vice Chairman of the Orthopaedic and Rheumatologic Institute and Vice Chairman of the Department of Biomedical Engineering, at the Cleveland Clinic, in Cleveland, Ohio (Muschler Dec.) (Exhibit E). 3
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and any other relevant source. Action on Smoking and Health v. Harris, 655 F.2d 236, 239 (D.C. Cir. 1980) (internal citations omitted); see 21 C.F.R. 201.128; Natl Nutritional Foods Assn, 557 F.2d at 333-34; Estee Lauder, Inc. v. FDA, 727 F. Supp. 1, 2 (D.D.C. 1989) (Courts have long held that the decision as to whether a product is a drug depends on its intended use, which can be determined from objective evidence such as the products current and past containers, instructions, and advertisements.). The FDCA deems a drug to be adulterated and misbranded, unless it complies with the requirements in 21 U.S.C. 351, 352, and 353(b)(4). Of particular relevance here, section 351(a)(2)(B) deems a drug to be adulterated if it is not manufactured in compliance with CGMP, section 352(f)(1) deems a drug to be misbranded if its labeling does not bear adequate directions for use, and section 353(b)(4) deems a prescription drug to be misbranded if, at any time prior to dispensing, its label fails to bear, at a minimum, the symbol Rx only.2 II. THE PUBLIC HEALTH SERVICE ACT FDA also regulates biological products under the Public Health Service Act (PHSA), 42 U.S.C. 262. A biological product includes any virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except any chemically
2
Under the FDCA, a drug is a new drug unless it is generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in its labeling. 21 U.S.C. 321(p)(1). Moreover, even if as a result of investigations to determine its safety and effectiveness a drug has become generally recognized as safe and effective for the conditions suggested in its labeling, it remains a new drug if it has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions. 21 U.S.C. 321(p)(2). The statute prohibits introducing a new drug into interstate commerce unless that drug is the subject of an approved new drug application or abbreviated new drug application. 21 U.S.C. 331(d), 355(a); Actavis Elizabeth LLC v. FDA, F.3d , 2010 WL 4454301 *2 (D.C. Cir. Nov. 9, 2010). 4
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synthesized polypeptide), or analogous product . . ., applicable to the prevention, treatment, or cure of a disease or condition of human beings. 42 U.S.C. 262(i). A product may be both a drug and a biological product. See, e.g., CareToLive v. von Eschenbach, 525 F. Supp. 2d 952, 957 (S.D. Ohio 2007) (Biological products can also be drugs, and are generally subject to the same statutory and regulatory requirements that apply to drugs); United States v. Loran Med. Sys., Inc., 25 F. Supp. 2d 1082, 1084 (C.D. Cal. 1997) (cell product made from neonatal rabbit and human fetal cells was a drug and a biological product); United States v. Calise, 217 F. Supp. 705, 708-09 (S.D.N.Y. 1962). A product that has been licensed under the PHSA is not required also to have an approved new drug application under the FDCA; in every other respect, however, the FDCA applies, including the provisions applicable to adulteration and misbranding of drugs. 42 U.S.C. 262(j). In a separate provision, the PHSA grants FDA broad authority to issue regulations to prevent the transmission of communicable diseases. Section 361(a) of the PHSA, 42 U.S.C. 264, provides: The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are 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. For purposes of carrying out and enforcing such regulations, the Surgeon General may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary. 42 U.S.C. 264(a) (emphasis added). This authority has been delegated to FDA.3
3
The statute grants this authority to the Surgeon General, with the approval of the Secretary. The Office of Surgeon General was abolished by section 3 of 1966 Reorg. Plan No. 3, eff. June 25, 1966, 80 Stat. 1610, and all of its functions were transferred to the Secretary of 5
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III.
THE HCT/P RULE: 21 C.F.R. PART 1271 In 1997, FDA announced a new proposed approach for regulating human cells, tissues, and
cellular or tissue-based products (HCT/Ps). See Proposed Approach to Regulation of Cellular and Tissue-Based Products, FDA Dkt. No. 97N-0068 (Feb. 28, 1997) (Proposed Approach) (available at http://www.fda.gov/downloads/BiologicsBloodVaccines/GuidanceCompliance RegulatoryInformation/Guidances/Tissue/UCM062601.pdf). Prior to that time, FDA had regulated human cellular and tissue based products on a case-by-case basis, responding as the agency determined appropriate to the particular characteristics of and concerns raised by each type of product. Establishment Registration and Listing for Manufacturers of Human Cellular and Tissue-Based Products; Proposed Rule, 63 Fed. Reg. 26744 (May 14, 1998) (Proposed Registration Rule); Proposed Approach at 6. Although FDA is authorized to apply all of the requirements in the FDCA and PHSA to every product that meets the definition of drug and biological product, in developing a new, comprehensive scheme for regulation of HCT/Ps, the agency chose a tiered, risked-based approach that would provide only the degree of government oversight necessary to protect the public health. Proposed Approach at 6; see also Proposed Registration Rule, 63 Fed. Reg. 26745. The agency explained that the new framework would ensure that innovation and product development in this rapidly growing medical field could proceed unhindered by unnecessary regulation, while at the same time providing physicians and patients with the assurance of safety that the public has come to expect from drugs, biologics, medical devices and other medical products overseen by the
Health, Education, and Welfare (now Secretary of HHS)) by section 1 of 1966 Reorg. Plan No. 3, set out under 42 U.S.C. 202. The HHS Secretarys authority has been delegated to FDA. See FDA Staff Manual Guide 1410.10.1.A.3. 6
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FDA. See Proposed Approach at 7; see also Proposed Approach to Regulation of Cellular and Tissue-Based Products; Availability and Public Meeting, 62 Fed. Reg. 9721 (Mar. 4, 1997). To implement this tiered approach, FDA issued, through notice and comment rulemaking, several regulations invoking its communicable disease authority under section 361 of the PHSA, 42 U.S.C. 264. See Human Cells, Tissues, and Cellular and Tissue-Based Products; Establishment Registration and Listing; Final Rule, 66 Fed. Reg. 5447 (Jan. 19, 2001) (Final Registration Rule); Eligibility Determination for Donors of Human Cells, Tissues, and Cellular and Tissue-Based Products; Final Rule, 69 Fed. Reg. 29786 (May 25, 2004); Current Good Tissue Practice for Human Cell, Tissue, and Cellular and Tissue-Based Product Establishments; Inspection and Enforcement; Final Rule, 69 Fed. Reg. 68612 (Nov. 24, 2004).4 The regulations define HCT/Ps as articles containing or consisting of human cells or tissues that are intended for implantation, transplantation, infusion, or transfer into a human recipient. 21 C.F.R. 1271.3(d). FDA determined that, in limited circumstances not applicable here, certain HCT/Ps can be effectively regulated solely by controlling the infectious disease risks they present. Under the agencys regulatory framework, such products are regulated only under the agencys HCT/P regulations (21 C.F.R. Part 1271), even if such HCT/Ps would otherwise meet the FDCAs definition of a drug or the PHSAs definition of a biological product. Such products are sometimes referred to as 361 HCT/Ps, after the communicable disease provision in
As noted supra, section 361 of the PHSA authorizes FDA to make and enforce regulations to prevent the introduction, transmission, or spread of communicable disease. 42 U.S.C. 264(a). Because HCT/Ps are derivatives of the human body, they pose a potential risk of transmitting communicable diseases. See Current Good Tissue Practice for Manufacturers of Human Cellular and Tissue-Based Products; Inspection and Enforcement; Proposed Rule, 66 Fed. Reg. 1508, 1509 (Jan. 8, 2001). 7
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section 361 of the PHSA, 42 U.S.C. 264. All other human and tissue-based products are regulated as drugs, devices, and/or biological drugs because they may present a greater degree of risk. 21 C.F.R. 1271.20; Final Registration Rule, 66 Fed. Reg. at 5450.5 FDA regulates an HCT/P solely under section 361 of the PHSA (42 U.S.C. 264) and the regulations in 21 C.F.R. Part 1271 if it meets four criteria, which are set forth in 21 C.F.R. 1271.10.6 One of these criteria is that the cells or tissue be minimally manipulated. 21 C.F.R. 1271.10(a)(1).7 For cells (like Defendants cultured cell product), minimal
There are also exceptions from 21 C.F.R. Part 1271 set forth in 21 C.F.R. 1271.15, but they are not applicable to the cultured cell product at issue here. See 21 C.F.R. 1271.15; Ex. B (Bauer Dec.) at 30 n.1.
6
21 C.F.R. 1271.10(a) provides,
(a) An HCT/P is regulated solely under section 361 of the [PHSA] and the regulations in this part if it meets all of the following criteria: (1) The HCT/P is minimally manipulated; (2) The HCT/P is intended for homologous use only, as reflected by the labeling, advertising, or other indications of the manufacturers objective intent; (3) The manufacture of the HCT/P does not involve the combination of the cells or tissues with another article, except for water, crystalloids, or a sterilizing, preserving, or storage agent, provided that the addition of water, crystalloids, or the sterilizing, preserving, or storage agent does not raise new clinical safety concerns with respect to the HCT/P; and (4) Either: (i) The HCT/P does not have a systemic effect and is not dependent upon the metabolic activity of living cells for its primary function; or (ii) The HCT/P has a systemic effect or is dependent upon the metabolic activity of living cells for its primary function, and: (a ) Is for autologous use; (b ) Is for allogeneic use in a first-degree or second-degree blood relative; or (c ) Is for reproductive use. In developing the regulatory approach, the agency focused on public health and regulatory concerns, including how transmission of communicable disease can be prevented; what processing controls are necessary, e.g., to prevent contamination that could result in an unsafe or ineffective product, and to preserve integrity and function so that products will work as 8
7
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manipulation means processing that does not alter the relevant biological characteristics of cells or tissues. 21 C.F.R. 1271.3(f)(2). Products that are more than minimally manipulated or that fail to meet any of the remaining criteria in section 1271.10(a) remain subject to the provisions of the FDCA and the PHSA, including the FDCAs adulteration, misbranding, and premarket approval requirements. 21 C.F.R. 1271.20; Final Registration Rule, 66 Fed. Reg. 5449, 5456. STATEMENT OF FACTS I. THE DEFENDANTS RS LLC is incorporated under the laws of Colorado. The laboratory where Defendants manufacture the cultured cell product is located at 6850 West 116th Avenue, Unit D, Broomfield, Colorado. See First Amended Answer (Answer8) 4; Ex. A (Kreuzer Dec.) 5. Defendants Dr. Centeno and Dr. Schultz are the majority shareholders of RS LLC. Counterclaims 4. Dr. Centeno also serves as the companys Medical Director and Acting Chief Executive Officer. Answer 5. He is the person most responsible for the overall operation of the company. Id. Defendant Schultz serves on RS LLCs board of directors. Id. 6.9
they are intended; and how clinical safety and effectiveness can be assured. Proposed Approach at 9. One of the factors FDA considered particularly relevant to these questions is the extent of processing the cells undergo. For example, the agency noted, inter alia, that [i]mproper handling . . . can allow cells or tissues to become contaminated (e.g., bacterial contamination during collection, processing, storage, or transplantation, or cross contamination from other contaminated tissues). Id. at 15. The agency also explained that clinical safety and effectiveness concerns depend in part on the extent of manipulation of the cells or tissues. Id. at 11. Defendants Answer and its Counterclaims appear in the same document (Dkt No. 15-1), both starting with paragraphs numbered 1. To avoid confusion, we cite the two portions of the document separately. Dr. Centeno and Dr. Schultz jointly own Centeno Schultz, P.C., a Colorado corporation that does business as the Centeno-Schultz Clinic (the Clinic) and is located at 403 Summit 9
9 8
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Defendant Michelle R. Cheever is RS LLCs Laboratory Director. Answer 7. She is responsible for the day-to-day operations of the RS LLC laboratory. Id. (admitting sentence but objecting to any inference that Ms. Cheever is the most responsible person for the operations of the laboratory); Ex. A (Kreuzer Dec.) 7 and Ex. 46 (SOP 124.2) at 2 (stating that the Laboratory Director is responsible for all procedures and administrative operations of the facility.);10 Id. Ex. 48 (SOP 126.3) at 2 (same). Ms. Cheever participated in drafting the companys laboratory procedures. Answer 7; Ex. A (Kreuzer Dec.) Ex. 46 (SOP 124.2) at 1 (stating that SOPs should be revised and approved by the Laboratory Director and Medical Director). Ms. Cheever holds equity ownership in RS LLC. Answer 7; see also Ex. A (Kreuzer Dec.) Ex. 30 at 81 (article authored by defendants Centeno, Schultz, and Cheever stating that they all have equity ownership in Regenerative Sciences). II. DEFENDANTS CULTURED CELL PRODUCT RS LLC promotes the Regenexx procedure, in which patients are injected with the cultured cell product, to treat orthopedic conditions, including osteoarthritis, non-healing bone fractures, avascular necrosis, and bulging lumbar discs. See Answer 16; Ex. A (Kreuzer Dec.) Ex. 27.11 When a patient undergoes the Regenexx procedure, the Centeno-Schultz Clinic
Blvd, Suite 201, Broomfield, Colorado. Answer 8. The Clinic is not named as a defendant in this suit. Attached to Exhibit A (Kreuzer Dec.) are 64 numerical exhibits, which are cited in this brief as Ex. A (Kreuzer Dec.) Ex. __. Although Defendants often refer to the Regenexx procedure, they claim that the cultured cells are responsible for the alleged treatment effect. See, e.g., Counterclaims 5, 10 (explaining the Regenexx procedure and how the cells are placed back into the patients 10
11 10
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aspirates (withdraws using a needle) bone marrow from the patients hip or synovial fluid (fluid in the joint) from the patients knee and also draws some whole blood from the patient. Answer 10. These materials are sent to RS LLC. Counterclaims 5; Ex. A (Kreuzer Dec.) 8 and Ex. 42 (SOP 114.2) at 2. RS LLC isolates what it describes as mesenchymal stem cells (MSCs)12 from the bone marrow or synovial fluid, expands them using growth factors from the patients blood (e.g., platelet lysate) and reagents (e.g., Dulbeccos Modified Eagles Medium), and combines them with other drug products (such as heparin and doxycycline). Answer 11. The process of expanding the cells typically takes two to three weeks and involves multiple steps in which the cells are centrifuged (with certain cell and plasma layers then removed) and placed in culture media13 in an incubator, thereby causing the cells to divide and expand in number. Id. When the cells expand to a certain point, they are exposed to an enzyme, trypsin, which digests some of the proteins on the surface of
injured area (i.e. knee, hip, rotator cuff), typically 4-6 weeks after they were removed. The stem cells then begin to repair the patients degenerated or injured area.) (emphasis added); see also Complaint filed in Regenerative Sciences v. FDA, Civ. No. 1:10-cv-01055-RMC (D.D.C.) (Dkt. No. 1) 11, 14-15 (RS DC Complaint) (RS LLC alleges that the Regenexx Procedure is for the treatment of orthopedic injuries and arthritis, and that the Procedure requires the removal of stem cells and other tissue from a donor patient, the expansion of the stem cells, and the placement of the stem cells in the same patient for the treatment of the patients degenerated or injured area of the body.) (emphasis added). Mesenchymal stem cells are a type of multipotent stem cell, meaning they can give rise to several, but not all, different cell types found in the body. See Ex. B (Bauer Dec.) 12-14. Culturing is defined as ex vivo (that is, outside the living body) support of living cells. In culture, cells grow and respond to the tissue culture flasks and the composition of the culture media in which they are maintained. Under these conditions, some of the cells originally isolated from the body do not survive, and others preferentially expand in number. During this selection process, surviving cells adapt to grow in the artificial conditions of tissue culture. Ex. B (Bauer Dec.) 37. 11
13 12
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the cells and causes the cells to detach from the plastic flask in which they were contained. Id. RS LLC then harvests the detached cells, treats them with media to stop the action of the trypsin, washes them with fresh media, and either puts the cells into other flasks for further expansion, prepares them for cryo-preservation, or prepares them for injection. Id. Ultimately, after manipulating the cells by selective culturing and expansion over a two to three week period (and, in some cases, following cryo-preservation), RS LLC places the expanded cells, along with a drug product that has moved in interstate commerce and other additives, into a syringe. Answer 11, 29.14 RS LLC places the syringe into a sterile bag and then transports it to the Clinic for injection into the patient from whom the bone marrow or synovial fluid was obtained. Answer 11, 34; see also Ex. A (Kreuzer Dec.) 8-9 and Ex. 45 (SOP 119.3) at 1, 3.15 According to Defendants standard operating procedures, when the cultured cell product is sent to the Clinic, the bag is labeled only with the patients name, date of birth, laboratory notebook number, cell passage number, day in culture, cell number, number of cells cryopreserved, and condition of cell suspension. Answer 34; see also Ex. A (Kreuzer Dec.) Ex. 6 (photograph of product label) and Ex. 45 (SOP 119.3) at 3.
This drug is identified in the copy of Exhibit A filed under seal, but not in this brief because Defendants consider it to be confidential commercial information. See Ex. A (Kreuzer Dec.) 8 and Ex. 45 (SOP 119.3) at 2. Defendants cultured cell product is thus intended solely for autologous use. See Answer 12. Autologous use refers to the implantation, transplantation, infusion, or transfer of human cells or tissue back into the individual from whom the cells or tissue were recovered. 21 C.F.R. 1271.3(a). Allogeneic use refers to the implantation, transplantation, infusion, or transfer of human cells or tissue into an individual other than the individual from whom the cells or tissue were recovered. 12
15
14
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As noted, Defendants processing of the cultured cell product involves many steps, including selective culture and expansion of a multitude of different types of blood-forming and rare bone marrow stromal cells using plastic flasks, additives and nutrients, and environmental conditions such as temperature and humidity, to determine the growth and biological characteristics of the resulting cell population. Answer 29. This process of tissue culture, expansion, and passaging alters the relevant biological characteristics of the cells that come from the donor/recipients bone marrow or synovial fluid. See Ex. B (Bauer Dec.) 35-41. As Defendants admit, FDA has not approved the cultured cell product for any use. Answer 20-21, 25. Indeed, there is no valid scientific evidence to show that Defendants cultured cell product is safe or effective for any of the indications for which Defendants are promoting it. See Ex. C (Shannon Dec.) 24, 29-32, 40; Ex. E (Muschler Dec.) 25-36, 46, 54. III. PRIOR WARNINGS On July 25, 2008, FDA sent a letter to RS LLC. FDAs letter explained that the agency had reviewed RS LLCs website, www.regenexx.com, and advised that RS LLC was promoting its cell product for use under conditions that caused it to be a drug under the FDCA and a biological product under the PHSA. Answer 41; Ex. A (Kreuzer Dec.) 10 & Ex. 1. RS LLC responded to FDA on August 25, 2008, stating that its activities fall within the practice of medicine and are both lawful and unregulated by the FDA. Ex. A (Kreuzer Dec.) 11. The FDA conducted its first inspection of RS LLC between February 23 and April 15, 2009. Answer 31; Ex. A (Kreuzer Dec.) 12. Defendants concede, as they must, that the inspection showed that their manufacture of the cultured cell product did not comply with CGMP. See 21 U.S.C. 351(a)(2)(B) and 21 C.F.R. Parts 210-211; see also 21 C.F.R. Parts 600-680 13
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(setting forth additional standards applicable to biological products). Answer 31; Ex. A (Kreuzer Dec.) 12. The CGMP violations observed during the 2009 inspection included, but were not limited to, the following: a. Failure to establish and follow appropriate written procedures designed to
prevent microbiological contamination of drug products purporting to be sterile, as required by 21 C.F.R. 211.113(b); see also 21 C.F.R. 610.12. Answer 31.a. b. Failure to perform appropriate laboratory testing of each batch of drug
product required to be free of objectionable microorganisms, as required by 21 C.F.R. 211.165(b). Id. 31.b. c. Failure to establish scientifically sound and appropriate specifications,
standards, sampling plans, and test procedures designed to assure that drug products conform to appropriate standards of identity, strength, quality, and purity, as required by 21 C.F.R. 211.160(b). Id. 31.c. d. Failure to ensure, for each batch of drug product, appropriate laboratory
determination of satisfactory conformance to final specifications for the drug product prior to release, as required by 21 C.F.R. 211.165(a). Id. 31.d. e. Failure to establish an adequate system for monitoring environmental
conditions during product manufacturing, as required by 21 C.F.R. 211.42(c)(10)(iv). Id. 31.e. At the close of the 2009 inspection, FDA investigators issued a list of inspectional observations (Form FDA 483) to RS LLCs Acting CEO, Dr. Centeno, with Dr. Schultz and Ms. Cheever present. Answer 31; Ex. A (Kreuzer Dec.) Ex. 2. In addition to listing CGMP deficiencies, the list of inspectional observations notified Defendants that their cultured cell 14
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product is a biological drug under the PHSA. Answer 41; Ex. A (Kreuzer Dec.) Ex. 2. The investigators also informed Dr. Centeno, Dr. Schultz, and Ms. Cheever that if corrections were not made, FDAs regulatory options included sending the company a letter or pursuing a seizure, injunction, or prosecution. Ex. A (Kreuzer Dec.) 13; see also Plaintiffs Motion for Stay of Administrative Action 10 (Dkt. No. 29) filed in Regenerative Sciences v. FDA, Civ. No. 1:09-cv-00411-WYD-BNB, 2010 WL 1258010 (D. Colo. Mar. 26, 2010) (statement by RS LLC that upon the issuance of the Form 483, the FDA advised Regenerative that the failure to comply with FDAs biological drug manufacturing protocols could lead to the issuance of a warning letter, seizure, injunction, criminal prosecution . . . .).16 FDA investigators inspected RS LLC again between June 2 and June 16, 2010. Answer 32. Defendants admit that this inspection once again documented numerous CGMP violations. Id.; see also Ex. A (Kreuzer Dec.) 14. The CGMP violations observed during the June 2010 inspection included, but were not limited to, the following: a. Failure to establish scientifically sound and appropriate specifications,
standards, sampling plans, and test procedures designed to assure that in-process materials and drug products conform to appropriate standards of identity, strength, quality, and purity, as required by 21 C.F.R. 211.160(b). Answer 32.a.
RS LLC filed two lawsuits seeking to enjoin FDA from bringing an enforcement action against it. See Regenerative Sciences, Inc. v. FDA, Civ. No. 1:09-cv-00411-WYD (D. Colo.) (filed Feb. 26, 2009), and Regenerative Sciences, Inc. v. FDA, Civ. No. 1:10-cv-01055-RMC (D.D.C.) (filed June 22, 2010). 15
16
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b.
Failure to ensure, for each batch of drug product, appropriate laboratory
determination of satisfactory conformance to final specifications for the drug product, prior to release, as required by 21 C.F.R. 211.165(a). Id. 32.b. c. Failure to establish and follow appropriate written procedures designed to
prevent microbiological contamination of drug products purporting to be sterile, as required by 21 C.F.R. 211.113(b); see also 21 C.F.R. 610.12. Id. 32.c. d. Failure to perform appropriate laboratory testing of each batch of drug
product required to be free of objectionable microorganisms, as required by 21 C.F.R. 211.165(b). Id. 32.d. e. Failure to establish an adequate system for monitoring environmental
conditions during product manufacturing, as required by 21 C.F.R. 211.42(c)(10)(iv). Id. 32.e. f. Failure to establish and follow an aseptic gowning qualification program to
assess the ability of aseptic processing technicians to maintain the quality of the gown after performance of manufacturing operations, as required by 21 C.F.R. 211.113(b). Id. 32.f. g. Failure to perform cleaning validation on the biological safety cabinet
aseptic processing surfaces or on all other surfaces in the aseptic processing laboratories, as required by 21 C.F.R. 211.42(c)(10)(v). Id. 32.g. h. Failure to maintain separate or defined areas or such other control systems
for the firms operations as are necessary to prevent contamination during aseptic processing, as required by 21 C.F.R. 211.42(c)(10)(iii). Id. 32.h.
16
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At the close of the 2010 inspection, FDA investigators issued a list of inspectional observations (Form FDA 483) to Dr. Schultz.17 Answer 32; Ex. A (Kreuzer Dec.) 15 and Ex. 3. Ms. Cheever was present, and Dr. Centeno attended by telephone. Answer 32. As they had done at the close of the 2009 inspection, the FDA investigators explained that failure to take appropriate corrective actions could result in possible regulatory action, including an administrative letter, seizure, injunction, and prosecution. Ex. A (Kreuzer Dec.) 15. The government filed the instant action on August 6, 2010. When government counsel notified Defendants of their intention to file this suit and to seek a preliminary injunction, Defendants (while disputing that their cultured cell product violates the FDCA) agreed to refrain from manufacturing any cultured cell product during the pendency of this suit. See Stipulated Order 7 (Dkt. No. 10). ARGUMENT I. STANDARD FOR SUMMARY JUDGMENT Summary judgment is appropriate where the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c)). The Supreme Court has explained that, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Moreover, there is no issue for trial unless there is sufficient evidence favoring the non-moving
The FDA 483 was subsequently amended and reissued on June 22, 2010 to correct several minor errors (changing two dates, correcting spelling errors, and adding the name of a member of the FDA inspection team, whose name had been inadvertently omitted). Ex. A (Kreuzer Dec.) 14. 17
17
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party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Id. at 249-50 (internal citations omitted); Cason v. District of Columbia, 580 F. Supp. 2d 76, 78 (D.D.C. 2008) (Collyer, J.). II. DEFENDANTS ARE VIOLATING THE FDCA BY CAUSING THE ADULTERATION OF THE CULTURED CELL PRODUCT To establish that Defendants are violating 21 U.S.C. 331(k) by adulterating the cultured cell product, the government must establish: (1) the cultured cell product is a drug within the meaning of 21 U.S.C. 321(g)(1)(B) or (C)); (2) the cultured cell product is held for sale after one or more of its components have been shipped in interstate commerce; and (3) Defendants cause their cultured cell product to become adulterated by failing to comply with CGMP. All of the facts relevant to these three issues have either been admitted by Defendants or are beyond dispute, and therefore this Court should grant summary judgment for the government. A. Defendants Cultured Cell Product is a Drug Subject to the FDCA
As we show below, the cultured cell product is a drug under the FDCA because it is intended to treat a variety of orthopedic conditions and injuries. In addition, Defendants cultured cell product does not qualify for regulation solely under 21 C.F.R. Part 1271 because their manufacturing process constitutes more than minimal manipulation under 21 C.F.R. 1271.3(f)(2), 1271.10(a)(1). As a result, their cultured cell product remains subject to the FDCAs adulteration and misbranding provisions.
18
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1.
The Cultured Cell Product is Intended to Treat Disease and to Affect the Structure and Function of the Body
Defendants have admitted all of the facts necessary to establish that the cultured cell product is a drug within the meaning of the FDCA. As discussed in greater detail supra at 3-4, whether an article is a drug depends on its intended use, which, in turn, may be shown, inter alia, by how the product is promoted in its labeling and other promotional materials. 21 U.S.C. 321(g)(1)(B)&(C); 21 C.F.R. 201.128; Action on Smoking and Health, 655 F.2d at 239. Defendants cultured cell product is a drug because they promote it to the public to treat a variety of orthopedic conditions. For example, Defendants admit that the RS LLC website, www.regenexx.com, describes the Regenexx procedure (which involves administration of the cultured cell product, see supra at 10 n.11) as an Alternative to Traditional Surgery and that the FAQs on the website state that the procedure can be used to treat Fractures that have failed to heal, joint cartilage problems, partial tears of tendons, muscles, or ligaments, chronic bursitis, avascular necrosis of the bone, and lumbar disc bulges. See Answer 16.b. Defendants likewise concede that an RS LLC pamphlet regarding the Regenexx procedure claims, The Regenexx procedure is safe and can often prevent the need for surgery and that it lists the following conditions and diseases as candidates for the procedure: Patients with non-healing bone fractures; Osteoarthritis of the knee, hip, ankle, shoulder, hands; Chronic bulging lumbar disc; Injuries to the meniscus, rotator cuff; Avascular Necrosis of the shoulder, hip; and Chronic Bursitis. Id. 16.a. Defendants also have confirmed that the Regenexx Procedure is intended to treat diseases and injuries in pleadings they have filed in this suit and in their suits against FDA. Counterclaims 3, 10 (explaining how the stem cells . . . begin to repair the
19
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patients degenerated or injured area); RS DC Complaint 14 (the Procedure is for the treatment of orthopedic injuries and arthritis); Complaint filed in Regenerative Sciences, Inc. v. FDA, Civ. No. 1:09-cv-00411-WYD (D. Colo.) (Dkt No. 1) 16 (The Procedure is for the treatment of musculoskeletal and spinal injury.). Because Defendants admit that the intended use of the cultured cell product is to treat a variety of diseases and to affect the structure and function of the body, there is no genuine dispute that it is a drug under the FDCA.18 2. The Cultured Cell Product Cannot Qualify for Regulation Solely Under 21 C.F.R. Part 1271
As discussed above, FDA has established a tiered, risked-based approach for regulating HCT/Ps under which an HCT/P that meets all of the criteria in 21 C.F.R. 1271.10(a) is regulated solely under 21 C.F.R. Part 1271, even if it otherwise meets the FDCAs definition of a drug or the PHSAs definition of a biological product. All HCT/Ps that do not meet the criteria for regulation solely under 21 C.F.R. Part 1271 are regulated as drugs, devices, and/or biological drugs. 21 C.F.R. 1271.20; Final Registration Rule, 66 Fed. Reg. 5456. Because the cultured cell product clearly meets the definition of a drug, if Defendants contend that it should be regulated solely under 21 C.F.R. Part 1271, they bear the burden of proving that their cultured cell product meets all of the criteria in 21 C.F.R. 1271.10(a). See, e.g., FTC v. Morton Salt Co., 334 U.S. 37, 44-45 (1948) (providing that the general rule of statutory construction that the burden of proving
18
Given Defendants admissions that their cell product is derived from a patients bone marrow (Counterclaims 5) and that it is intended to treat orthopedic conditions, there likewise can be no dispute that Defendants cultured cell product is also a biological product under the PHSA because it is a blood, blood component or derivative, . . . or analogous product . . . applicable to the prevention, treatment, or cure of a disease or condition of human beings. 42 U.S.C. 262(i) (emphasis added). Ex. C (Shannon Dec.) 9. 20
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justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits); United States v. Endotec, Inc., 563 F.3d 1187, 1195 (11th Cir. 2009) (manufacturer bears burden of proving that its device fits within custom device exception to premarket approval requirement); Harry C. Crooker & Sons, Inc. v. Occupational Safety and Health Review Commn, 537 F.3d 79, 85 (1st Cir. 2008) (party seeking to find shelter under [an] exception to an OSHA regulation bore burden of both production and persuasion). Defendants cannot meet this burden. To qualify for regulation solely under 21 C.F.R. Part 1271, among other things, an HCT/P can be only minimally manipulated, 21 C.F.R. 1271.10(a)(1). For a product like the one at issue here, minimal manipulation means processing that does not alter the relevant biological characteristics of cells or tissues. 21 C.F.R. 1271.3(f)(2). Yet, Defendants manufacturing process does just that. Defendants admit that the processing of the cultured cell product involves many steps, including selective culture and expansion of a multitude of different types of blood-forming and rare bone marrow stromal cells using plastic flasks, additives and nutrients, and environmental conditions such as temperature and humidity, to determine the growth and biological characteristics of the resulting cell population. Answer 29 (emphasis added).19 As discussed in detail in the attached declaration of Steven R. Bauer, Ph.D., Chief of FDAs Cellular and Tissue Therapies Branch, culturing results in the selection and alteration of the original bone marrow (or
By comparison, examples of processing that FDA considers to be minimal manipulation include centrifugation; selective removal of B-cells, T-cells, malignant cells, red blood cells, or platelets; cell separation; cryopreservation; or freezing. Final Registration Rule, 66 Fed. Reg. 5457. 21
19
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synovial) cells, whether or not such changes are intended, because cells grow and respond to the tissue culture flasks and the composition of the media and other conditions under which they are grown. See Ex. B (Bauer Dec.) 37. Under culture conditions, most of the cells from the original bone marrow aspirate would fail to adapt and die. Id. 37, 39-40. The remaining cells would expand in number and change so they are different from the original cells in the bone marrow. Some of the changes caused by culturing include changes in the proteins and the genes expressed by the cells, as well as changes in the shape of the cells. Id. 37. Defendants cultured cell product is more than minimally manipulated because the process of tissue culture, expansion, and passaging alters the relevant biological characteristics of the cells that come from the donor/recipient's bone marrow or synovial fluid. See id. 35-41.20 Because it is beyond dispute that Defendants cultured cell product is more than minimally manipulated, it is regulated as a drug and biological product under the FDCA and PHSA and remains subject to, among other provisions, the FDCAs adulteration and misbranding requirements. 21 C.F.R. 1271.20.21
When a court is evaluating an agencys interpretation of its own regulations, the agency is entitled to substantial deference. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994); United States Air Tour Assn v. FAA, 298 F.3d 997, 1005 (D.C. Cir. 2002); see also United States v. Genendo Pharm., N.V., 485 F.3d 958, 946-65 (7th Cir. 2007); Novartis Pharms. Corp. v. Leavitt, 435 F.3d 344, 349 (D.C. Cir. 2006) (We have held on a number of occasions that FDA interpretations of the [FDCA] receive deference, as do its interpretations of its own regulations unless plainly erroneous or inconsistent with the regulations.). In some cases, as part of the manufacturing process, Defendants use a drug during culturing, the addition of which would also be more than minimal manipulation. (We have not identified the drug here because Defendants consider it to be confidential commercial information. The addition is shown in Ex. A. (Kreuzer Dec.) Ex. 52 at 2 and Ex. 62 at 56, 59, & 65; and discussed in Ex. B (Bauer Dec.) 41.c). The use of this drug in manufacturing the cultured cell product means that the cultured cell product cannot qualify for regulation under 21 C.F.R. Part 1271 for an additional reason: To qualify for regulation under 21 C.F.R. Part 22
21
20
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B.
Defendants Cultured Cell Product is Held for Sale After Shipment of One or More of its Components In Interstate Commerce
Section 331(k) prohibits doing any act with respect to, a . . . drug . . ., if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded. 21 U.S.C. 331(k). A product is held for sale under section 331(k) if it is used for any purpose other than personal consumption. United States v. Torigian Labs., Inc., 577 F. Supp. 1514, 1521 (E.D.N.Y. 1984), affd without op., 751 F.2d 373 (2d Cir. N.Y. 1984); United States v. Articles of Drug . . . Hydralazine HCL, 568 F. Supp. 29, 31 (D.N.J. 1983); see United States v. Diapulse Corp. of Am., 514 F.2d 1097, 1098 (2d. Cir.), cert. denied, 423 U.S. 838 (1975); see also United States v. Sullivan, 332 U.S. 689, 697 (1948) (section 331(k) intended to extend [FDCAs] coverage to every article that had gone through interstate commerce until it finally reached the ultimate consumer); United States v. Evers, 643 F.2d 1043, 1050 (5th Cir. 1981) (A practicing physician may also fall within the bounds of this section. A serious gap would be left in the statute if doctors who had received drugs in an intrastate transaction from a party who had in turn received them from interstate commerce were allowed to misbrand the drugs and then distribute them to their patients. Doctors holding drugs for use in their practice are clearly one part of the distribution process, and doctors may therefore hold drugs for sale within the meaning of [21 U.S.C. 331(k)].). Defendants cultured cell product is held for sale because when manufacturing is
1271, the manufacture of the HCT/P cannot "involve the combination of the cells or tissues with another article, except for water, crystalloids, or a sterilizing, preserving, or storage agent . . . ." 21 C.F.R. 1271.10(a)(3). The drug at issue is not water, a crystalloid, or a sterilizing, preserving, or storage agent, Ex. B (Bauer Dec.) 41.c, and thus the cells to which Defendants add this drug do not meet the criteria under 21 C.F.R. 1271.10(a). 23
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complete, Defendants transport it to the Clinic to be injected into patients. Ex. A (Kreuzer Dec.) 8 & Ex. 45 (SOP 119.3 at 3); see also Counterclaims 3, 10.22 Defendants cultured cell product also satisfies section 331(k)s after shipment in interstate commerce requirement. The FDCA defines drug to include components of a drug, 21 U.S.C. 321(g)(1)(D). Courts have consistently interpreted section 331(k) and section 321(g)(1)(D) to mean that the final drug product (here, the cultured cell product) need not have been shipped in interstate commerce in completed form to satisfy the requirement of prior shipment in interstate commerce and establish a predicate for a 21 U.S.C. 331(k) violation. See, e.g., Baker v. United States, 932 F.2d 813, 814-15 (9th Cir. 1991) (the shipment in interstate commerce requirement is satisfied even when only an ingredient is transported interstate); United States v. Dianovin Pharms., Inc., 475 F.2d 100, 103 (1st Cir. 1973) (appellants use of components shipped in interstate commerce to make vitamin K for injection brought their activities within section 331(k), and conferred jurisdiction to restrain violations thereof upon the district court). When one of a drugs components has been shipped in interstate commerce, manufacturing an article of drug from that component in a manner that renders the drug adulterated or misbranded violates 21 U.S.C. 331(k). Dianovin Pharms., 475 F.2d at 103. There is no dispute that the interstate commerce requirement of section 331(k) is satisfied here. Defendants admit that they include doxycycline in the cultured cell product that they distribute for patient injection, and that the doxycycline has been shipped in interstate commerce
22
RS LLCs website previously stated, The cash price for most Regenexx procedures is $7,000-$8,500 depending on what is being treated. www.regenexx.com/commonquestions/index.html. (accessed July 21, 2010); see also RS DC Complaint at 10 (noting that, at the time of the filed suit against FDA, patients whose cells were in cryostorage had paid Regenerative $5-8000 each for stem cell treatments). 24
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from Illinois to Colorado. Answer 13. Defendants likewise admit that when the processing of the cells is complete, the syringe that they ship to the Clinic for patient injection includes a drug product that has been shipped in interstate commerce. Answer 11; see also 21 U.S.C. 379a (In any action to enforce the requirements of [the FDCA] respecting a . . . drug . . . the connection with interstate commerce required for jurisdiction in such action shall be presumed to exist.). As a result, based on the undisputed facts, Defendants cultured cell product is held for sale after shipment of one or more of its components in interstate commerce. C. Defendants Adulterate Their Cultured Cell Product
In their Answer, Defendants admitted that FDAs inspections have shown that Defendants do not comply with CGMP when they make the cultured cell product. Answer 31-32. Under the FDCA, a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to or are not operated or administered in conformity with [CGMP] to assure that such drug meets the requirements of [the FDCA] as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess. 21 U.S.C. 351(a)(2)(B). CGMP refers to procedures and practices intended to ensure that drugs have the identity, strength, quality, purity, and other attributes necessary for their safe and effective use. FDA has promulgated regulations establishing minimum CGMP requirements applicable to drugs, including biological drugs. See 21 C.F.R. Parts 210-211 (drugs); 21 C.F.R. 600-680 (additional standards for biological products). The CGMP regulations have the force and effect of law. Natl Assn of Pharm. Mfrs. v. FDA, 637 F.2d 877, 889 (2d Cir. 1981). Violation of a single CGMP regulation
25
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renders a drug adulterated. United States v. 789 Cases, More or Less, of Latex Surgeons Gloves, 799 F. Supp. 1275, 1287 (D.P.R. 1992). When drugs are not manufactured or held in conformance with CGMP, they are deemed adulterated as a matter of law, regardless of whether the products are actually deficient in any way. 21 U.S.C. 351(a)(2)(B); John D. Copanos and Sons, Inc. v. FDA, 854 F.2d 510, 514 (D.C. Cir. 1988) (Drugs produced in violation of these CGMP regulations are deemed to be adulterated without the agency having to show that they are actually contaminated.); see also United States v. Radix Labs., Inc., 963 F.2d 1034, 1038 n.4 (7th Cir. 1992) (If a drug is not manufactured in conformity with CGMP it is adulterated.); United States v. W. Serum Co., 498 F. Supp. 863 (D. Ariz. 1980) (government need not prove the drug is deficient to be adulterated for failure to comply with CGMP; the FDCA is concerned with the manner in which a drug is produced as well as its composition and content), affd, 666 F.2d 335 (9th Cir. 1982). As noted, Defendants admit that FDAs 2009 and 2010 inspections showed that they do not make their cultured cell product in compliance with CGMP. See Answer 31-32; see also Ex. A (Kreuzer Dec.) 12, 14. In particular, Defendants admit that both FDA inspections documented that Defendants fail to perform finished product testing on the cultured cell product before it is released for distribution and have not established product release specifications. See Answer 31a, 32b; see also Ex. A (Kreuzer Dec.) 12.a, 14.a-b. For example, Defendants do not test the cultured cell product for sterility, the presence of mycoplasma, or endotoxin before release.23
23
Mycoplasma is a genus of bacteria that lacks a cell wall, and some mycoplasma species can be pathogenic in humans and can cause pneumonia, sometimes leading to death. Cells that are cultured for more than a few days are at risk for mycoplasma infection. Accordingly, cellular products like Defendants cultured cell product should be tested for the presence of mycoplasma before administration to patients. See Ex. B (Bauer Dec.) 50. Endotoxins are toxic structural 26
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This failure is particularly remarkable because Defendants standard operating procedures acknowledge that [c]ontamination by microorganisms is a major problem in tissue culture. Bacteria, mycoplasma, yeast and fungal spores may be introduced via the operator, the atmosphere, work surfaces, solutions, and many other sources. Ex. A (Kreuzer Dec.) Ex. 38 at 1 (emphasis added). Defendants admitted failure to test each batch of the cultured cell product to ensure it is free of microorganisms is a gross CGMP deficiency. See, e.g., Ex. B (Bauer Dec.) 44-52; Ex. D (Guilfoyle Dec.) 45-52. Defendants have admitted other significant CGMP violations. Both FDA inspections documented Defendants failure to establish an adequate system for monitoring environmental conditions during product manufacturing, and their failure to use proper aseptic technique, among other violations. See Answer 31-32; Ex. A (Kreuzer Dec.) 12, 14; see, e.g., Ex. D (Guilfoyle Dec.) 20-23, 25-27, 29-39.24 Thus, there is no genuine dispute that Defendants manufacture of
components of bacteria, which are released mainly when bacteria are lysed (cell walls broken open). Endotoxin can be present in cultured cell products even in the absence of live bacterial contamination, and even small amounts of endotoxin can cause illness in humans. Id. 54. Endotoxin testing is a critical assay for assuring purity for biological drug products administered to human beings. Id. Despite ample opportunity to do so, Defendants have failed to remedy many of these violations. At the close of the 2010 and 2009 inspections, FDA investigators provided Defendants with a list of inspectional observations (known as a Form FDA 483). See Answer 31-32; Ex. A (Kreuzer Dec.) 14, 16 & Exs. 2-3. Defendants chose not to correct the observations identified in the 2009 inspection. See RS DC Complaint 27 (Regenerative did not institute any proposed remedial measures to address FDAs concerns regarding the purported manufacturing of a drug, because the FDA had no jurisdiction to regulate Regeneratives medical practice, the proposed remedial measures did not impact patient safety, and FDAs inspectional observations were wholly unsuitable for a medical practice . . . .). In their response to the 2010 inspection, Defendants stated that they would correct some of the violations, but they refused to correct or did not address many others, including their failure to perform sterility, mycoplasma, and endotoxin testing on their product. Ex. A. (Kreuzer Dec.) 17 and Ex. 4. 27
24
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the cultured cell product does not conform to CGMP, and, as a result, it is adulterated within the meaning of the FDCA. In sum, the government has established that the cultured cell product is a drug subject to the FDCA, that it is held for sale after shipment of one or more of its components in interstate commerce, and that Defendants cause the cultured cell product to become adulterated through their admitted failure to comply with CGMP. Consequently, there is no genuine dispute regarding Defendants violation of 21 U.S.C. 331(k), and the government is entitled to summary judgment as a matter of law. III. DEFENDANTS CULTURED CELL PRODUCT IS MISBRANDED To establish that Defendants are violating 21 U.S.C. 331(k) by misbranding the cultured cell product, the government must establish two things it has already shown above namely, (1) the cultured cell product is a drug within the meaning of 21 U.S.C. 321(g)(1)(B) or (C)) and (2) the cultured cell product is held for sale after one or more of its components have been shipped in interstate commerce and (3) the absence of certain information that is required to be included in the label and labeling of the drug pursuant to 21 U.S.C. 353(b)(4) and 352(f)(1). Here again, the facts are beyond dispute. A. The Cultured Cell Product Is Misbranded Because It Is a Prescription Drug and Its Label Fails to Bear the Symbol Rx only
The FDCA specifies that a drug is a prescription drug if due to its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use, [the drug] is not safe for use except under the supervision of a practitioner licensed by law to administer such drug . . . . 21 U.S.C. 353(b)(1)(A). Defendants cultured cell product is a
28
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prescription drug because it is intended to be injected into the patients joint or spine, with the aid of an x-ray device (e.g., fluoroscope).25 Thus, the method of using the cultured cell product and the collateral measures necessary for its use make it a prescription drug. See Ex. E (Muschler Dec.) 24 (because the mode of administration is injection into a specific anatomic site (i.e., a joint space, tendon sheath, facial plane or muscle compartment), and the safe administration of the RS cultured cell product requires the avoidance of trauma or inadvertent injection into nerves or major blood vessels, the RS cultured cell product can only be administered by a skilled clinician, who is knowledgeable in accurate diagnosis of musculoskeletal medical conditions, human anatomy, and experienced in the safe and sterile administration of injection agents into the appropriate musculoskeletal sites); Ex. C (Shannon Dec.) 34-35. A prescription drug is misbranded if at any time prior to dispensing the label of the drug fails to bear, at a minimum, the symbol Rx only. 21 U.S.C. 353(b)(4)(A). The label for Defendants cultured cell product does not contain the statement Rx only. See Ex. A (Kreuzer Dec.) 18 and Ex. 6 (photograph of product label); id. Ex. 26 at 3 (copy of product label); see also Answer 34. Thus, Defendants cultured cell product is misbranded under 21 U.S.C. 353(b)(4) as a matter of law.
See Ex. A (Kreuzer Dec.) Ex. 59 at 2 (consent form for Autologous Transplantation of Synovial Fluid Derived Mesenchymal Stem Cells states X-ray guidance will be used to place the sterile needle to the site in need of repair.); Id. Ex. 30 at 83 (Centeno article stating under fluoroscopic guidance, MSCs were inserted percutaneously into either a peripheral joint or an intervertebral disc.); see, e.g., id. Ex. 61 (description of patient procedure noting use of lateral fluoroscope to place the needle and x-ray to confirm accurate placement). 29
25
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B.
The Cultured Cell Product is Misbranded Because Its Labeling Fails to Bear Adequate Directions for Use
The FDCA also deems a drug misbranded if its labeling fails to bear adequate directions for use and the drug does not fall within a regulatory exemption from that requirement. 21 U.S.C. 352(f)(1). The cultured cell products labeling is inadequate both as a matter of fact and as a matter of law, for several reasons. First, FDA has defined adequate directions for use as directions under which the layman can use a drug safely and for the purposes for which it is intended. 21 C.F.R. 201.5; see also United States v. Algon Chem., Inc., 879 F.2d 1154, 1156 (3d Cir. 1989) (Courts have consistently upheld the FDAs interpretation of this provision as requiring adequate directions for use of the drug by a layman.) (emphasis in original); United States v. Articles of Drug (Rucker Pharmacal), 625 F.2d 665, 673 (5th Cir. 1980) (a drugs labeling must contain adequate directions for a consumer to engage in self-medication.); United States v. Two Units, More or Less, of an Article or Device, Consisting of a Power Unit and a Chair, 49 F.3d 479, 482 (9th Cir. 1995) (medical device is misbranded if it does not bear adequate directions to enable a layperson to use it safely.). Directions for use are inadequate unless the drugs labeling contains, among other things: quantity of dose, including, among others, the usual quantities for each of the uses for which it is intended and usual quantities for persons of different physical conditions; frequency and duration of administration; time of administration in relation to time of meals, onset of symptoms, and other factors; and route or method of administration. See 21 C.F.R. 201.5; see also Nature Food Centres, Inc. v. United States, 310 F.2d 67, 69-71 (1st Cir. 1962) (drug misbranded if labeling fails
30
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to state all intended uses for which it is marketed); Alberty Food Prods. Co. v. United States, 194 F.2d 463, 464 (9th Cir. 1952) (adequate directions for use must include statement of the purposes and conditions for which the drug was intended and sufficient information to enable a layman to intelligently and safely attempt self medication.); see also United States v. An Article of Device . . . Hubbard Electrometer, 333 F. Supp. 357, 362 (D.D.C. 1971) (Accompanying labeling must specify the conditions for which the device is intended and sufficient information under which the device can be used safely and effectively for the purposes for which it is intended to be used.). The labeling for Defendants cultured cell product clearly does not meet these requirements. Defendants admit that, per their standard operating procedures, when RS LLC finishes processing the cells, the cells (and other ingredients) are placed in a syringe in a sterile bag that is labeled only with the patients name and date of birth, and such manufacturing information as laboratory notebook number, cell passage number, days in culture, and similar information. Answer 34; Ex. A (Kreuzer Dec.) 18 and Ex. 45 at 3; id. Ex. 6 (product label); id. Ex. 26 at 3 (product label). This label contains none of the information required by 21 C.F.R. 201.5, and thus the cultured cell product is misbranded under 21 U.S.C. 352(f)(1). Second, the labeling for a prescription drug cannot, as a matter of law, satisfy the requirement that it bear adequate directions for use by a layperson. A prescription drug like the cultured cell product, by its nature, may be used safely only under the supervision of a physician. See 21 U.S.C. 353(b)(1); Articles of Drug (Rucker Pharmacal), 625 F.2d at 670. Because prescription drugs can be used safely only at the direction, and under the supervision, of a physician, directions under which the layperson could use a drug safely cannot be written for a 31
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prescription drug. Id. at 673, 675 (it is not possible to provide a layperson with adequate directions for use for a prescription drug); United States v. Baxter Healthcare Corp., 712 F. Supp. 1352, 1359 (N.D. Ill. 1989) (because the company restricted distribution of these products to prescription use only, perforce its labels are not adequate for use by a layperson), affd, 901 F.2d 1401 (7th Cir. 1990); United States v. An Article of Drug . . . Mykocert, 345 F. Supp. 571, 573 (N.D. Ill. 1972) (drug manufacturer was foreclosed from arguing that its drug bore adequate directions for lay use because the drug was a prescription drug); see also Ex. E (Muschler Dec.) 50-51. Because the cultured cell product by definition cannot bear adequate directions for use by a layperson, it is per se misbranded unless it qualifies for an exemption from section 352(f)(1). Articles of Drug (Rucker Pharmacal), 625 F.2d at 673 (Since a prescription drug by definition can be used only under a physicians supervision, and is unsuitable for self-medication, such a drug must qualify for a regulatory exemption created by FDA under section 352(f)); United States v. Premo Pharm. Labs., Inc., 511 F. Supp. 958, 977 n.23 (D.N.J. 1981) (A drug is misbranded if it is a prescription drug that is an unapproved new drug, because a prescription drug cannot bear the adequate directions for use required by statute, section 352(f)(1), and the lack of an approved [new drug application] means that there is no FDA exemption from the adequate directions for use requirement) (citations omitted). However, Defendants cannot meet their burden of showing that they qualify for any such exemption.26
26
Should Defendants seek to avail themselves of one of the regulatory exemptions to section 352(f)(1), they bear the burden of showing that the cultured cell product meets all of the criteria for the exemption. See United States v. 9/1 Kg. Containers, 854 F.2d 173, 176 (7th Cir. 1988) (claimant bore burden of proof that drugs qualified for exemption to requirement that drug labeling bear adequate directions for use); see also United States v. Article of Device, 731 F.2d 1253, 1261-62 (7th Cir. 1984) (same, in device context); United States v. Articles of Device, 527 F.2d 1008, 1012 n.6 (6th Cir. 1976) (same). But Defendants cannot show that their product 32
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Third, even if Defendants tried to draft adequate directions for use of their cultured cell product, it would be impossible to do so based on currently available data. Adequate directions for use including indications, contraindications, dosages, routes of administration, warnings, side effects, and necessary collateral measures are premised on a body of animal and clinical data derived from extensive, scientifically controlled testing. United States v. Miami Serpentarium Labs., Inc., 1981-82 FDC L. Rptr. Dev. Trans. Binder 38,164 at 38,931 (S.D. Fla. Mar. 30, 1982) (copy attached as Ex. F); see also United States v. Undetermined Quantities of
qualifies for any of the exemptions from 21 U.S.C. 352(f)(1). Specifically, 21 C.F.R. 201.115 permits a new drug (see supra at 4 n.2) to be exempt from section 352(f)(1) [t]o the extent . . . such exemption is claimed in an approved new drug application. Defendants cultured cell product is a new drug under 21 U.S.C. 321(p)(1) because it is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof . . . . See Weinberger v. Hynson, Westcott, & Dunning, Inc., 412 U.S. 609, 629-30 (1973) (in the absence of any evidence of adequate and well-controlled investigation supporting the efficacy of [a drug], a fortiori [the drug] would be a new drug subject to the provisions of the [FDCA]); Ex. E (Muschler Dec.) 25-36, 43, 46, 54 (there are no published adequate and well-controlled studies establishing that the cultured cell product is safe or effective for any condition and it is not generally recognized as safe and effective for any orthopedic indication); Ex. C (Shannon Dec.) 32. Even if the cultured cell product were generally recognized as safe and effective for its conditions of use, which it is not, it would still be a new drug because it has not been used to a material extent or for a material time under such conditions. See 21 U.S.C. 321(p)(2); see, e.g., www.regenexx.com/common-questions/ (in a FAQ explaining why the procedure is not covered by insurance, RS LLC explains The procedure is too new to be covered yet by insurance. and answering Why dont other doctors do this yet? RS LLC states, Like any new technique, the medical community takes some time to adopt the procedure.) (accessed Dec. 21, 2010); Ex. A (Kreuzer Dec.) Ex. 30 (Centeno et al. reporting on groups of patients treated from 2006-2009). Because the cultured cell product is a new drug and it is unapproved, Answer 20, 25, it cannot qualify for the exemption in 21 C.F.R. 201.115. See also Rucker Pharmacal, 625 F.2d at 675 (unapproved new drug not exempt from 21 U.S.C. 352(f)(1)). The cultured cell product also fails to qualify for the exemption for prescription drugs for human use, 21 C.F.R. 201.100. Among other things, its label does not bear information required under 21 C.F.R. 201.100(b) & (c)(1). See Answer 34; Ex. A (Kreuzer Dec.) 18 and Ex. 6 (photograph of product label showing the absence of information required under those regulations). 33
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Articles of Drug, 145 F. Supp. 2d 692, 702 (D. Md. 2001) (Essentially, in the absence of investigations or clinical data demonstrating the safety and efficacy of the drugs, there can be no adequate instruction for their safe use.) (emphasis in original); Ex. E (Muschler Dec.) 54 (directions for use that are not based on scientific evidence of safety and efficacy based on widely accepted standards of study conduct and documentation are not adequate.); Ex. C (Shannon Dec.) 39-40. Because no well-controlled studies have been conducted on Defendants cultured cell product, there is no scientifically valid evidence to show that it is safe or effective for any indication, or on which to base the directions for use. See Ex. C (Shannon Dec.) 39-40; Ex. E (Muschler Dec.) 25-36, 46, 54-55. For any one and all of these reasons, there can be no dispute that Defendants cultured cell product is misbranded under 21 U.S.C. 352(f)(1) because its labeling does not - and cannot - bear adequate directions for use. IV. DEFENDANTS VIOLATIONS ARE NOT EXCUSED BY THEIR CLAIM THAT THEY ARE ENGAGED IN THE PRACTICE OF MEDICINE Defendants principal defense is that their conduct is beyond FDA jurisdiction because they are engaged in the practice of medicine. See Answer at 8.27 As an initial matter, Defendants argument offers no explanation of how RS LLC, a corporation, and its Laboratory Director, Ms. Cheever (a non-physician), could possibly engage in the practice of medicine. In any event, there is no exemption in the FDCA for the conduct at issue here. Although FDA generally does not interfere with a physician prescribing lawfully marketed products for uses
Although we respond briefly to Defendants practice of medicine argument here because it appears to be their principal defense to this suit (see Answer at 8-10), we will not respond to Defendants affirmative defenses unless and until they are briefed by Defendants. 34
27
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other than those for which they are approved, licensed, or cleared by FDA,28 the agencys role in determining the availability of therapeutic products inevitably affects the options available to practitioners seeking to use or prescribe those products. See, e.g., 9/1 Kg. Containers, 854 F.2d at 176 (Congress gave the FDA comprehensive powers to license the manufacture of drugs and limit their sales. To regulate drugs is to be involved in the practice of the healing arts.); Evers, 643 F.2d at 1048 ([W]hile the [FDCA] was not intended to regulate the practice of medicine, it was obviously intended to control the availability of drugs for prescribing by physicians.); Loran Medical Sys., 25 F. Supp. 2d at 1087 (The court disposes quickly of defendants' argument that the FDAs exercise of authority over the Cell Product is an attempt to regulate the practice of medicine -- an area traditionally left to the states. While the [FDCA] was not intended to regulate the practice of medicine, it was obviously intended to control the availability of drugs for prescribing by physicians. The court has already determined that the Cell Product is a drug. Accordingly, the FDA has the authority to regulate its use.) (internal citation and quotation omitted). Accordingly, the practice of medicine provides no safe harbor for Defendants manufacture and distribution of an unapproved drug. See Algon Chem., 879 F.2d 1154 (holding that practice of medicine policy did not permit veterinarians to compound drugs from components they could not legally obtain); 9/1 Kg. Containers, 854 F.2d at 176-78 (the statements in the legislative history of the FDCA that the statute would not interfere with the practice of the healing arts never meant more than that medical licensure and discipline would continue to be the
28
See Citizen Petition Regarding the Food and Drug Administrations Policy on Promotion of Unapproved Uses of Approved Drugs and Devices; Request for Comments, 59 Fed. Reg. 59820, 59821 (Nov. 18, 1994) ([O]nce a [drug] product has been approved for marketing, a physician may prescribe it for uses or in treatment regimens of patient populations that are not included in approved labeling.). 35
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states business. . . . Nothing in the history or structure of the [FDCA] permits drugs deemed ineffective or dangerous by the FDA to be available for use.); Cowan v. United States, 5 F. Supp. 2d 1235 (N.D. Okla. 1998) (adopting magistrate judges report and recommendation rejecting argument that practice of medicine exception permits physician to treat AIDS patient with an experimental drug developed by the physician); see also 21 U.S.C. 396 (FDCA does not limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease . . . .); cf. United States v. Rutherford, 442 U.S. 544 (1979) (holding that FDA could prohibit sale and distribution of an unapproved drug for the treatment of terminally ill cancer patients); Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach, 495 F.3d 695, 710-711, n.18 (D.C. Cir. 2007) (en banc) (holding terminally ill patient had no fundamental right to access investigational drugs; explaining that there is no right to practice medicine which is not subordinate . . . to the power of Congress to make laws necessary and proper) (citing, inter alia, Lambert v. Yellowley, 272 U.S. 582, 588, 590, 596-597 (1926)). Because, as Defendants admit (Answer 20-21, 25), the cultured cell product has not been approved for any purpose, Defendants practice of medicine claim is unavailing. V. THIS COURT SHOULD ISSUE A PERMANENT INJUNCTION RESTRAINING DEFENDANTS FROM FURTHER VIOLATIONS OF THE FDCA A. Legal Standard
In this suit, the government seeks a statutory injunction to restrain violations of a remedial public health statute. 21 U.S.C. 332(a). Where, as here, a statute authorizes an injunction to enforce Congressional policy, the court applies a different standard to consider the propriety of an
36
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injunction than that applied to private litigants. The Supreme Court has held that the government need not show that irreparable harm will result to obtain an injunction authorized by statute. United States v. City and County of San Francisco, 310 U.S. 16, 31 (1940). When seeking a statutory injunction, the government need only show that the defendants have violated the statute and there is some cognizable danger of recurrent violation. United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953); accord United States v. Diapulse Corp. of Am., 457 F.2d 25, 28-29 (2d Cir. 1972) (the court will consider the likelihood of continuing violation when evaluating whether to grant an injunction under the Act); United States v. Odessa Union Warehouse Co-Op, 833 F.2d 172, 175 (9th Cir. 1987) (in statutory injunctions, the agency to whom the enforcement of the right has been entrusted is not required to show irreparable injury and [n]o specific or immediate showing of the precise way in which violation of the law will result in public harm is required.); United States v. Lane Labs-USA, Inc., 324 F. Supp. 2d 547, 571 (D.N.J. 2004); United States v. Rx Depot, Inc., 290 F. Supp. 2d 1238, 1246 (N.D. Okla. 2003). This standard is particularly appropriate in cases where, as here, the government seeks to enforce a statute enacted with the overriding purpose of protecting the public health and consumers who are largely unable to protect themselves. United States v. Dotterweich, 320 U.S. 277 (1943); Kordel v. United States, 335 U.S. 345, 349 (1948) (purpose of FDCA is to protect the public). Under such circumstances, violation of the statute is presumed to cause public harm.29 W.T. Grant
29
As one court recently explained:
[T]he Court is not aware of any decision requiring the Government to establish irreparable injury before issuing an injunction prohibiting further violations of [section 331 of the FDCA]. See, United States v. Nutri-Cology, Inc., 982 F.2d 394, 398 (9th Cir. 1992); United States v. Spectro, 544 F.2d 1175, 1181 (3d Cir. 1976); Diapulse, 457 F.2d at 28 (2d Cir. 1972) (citing cases); United States v. 37
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Co., 345 U.S. at 633; accord Odessa, 833 F.2d at 175-76; Diapulse, 457 F.2d at 28; Rx Depot, 290 F. Supp. 2d at 1246.30 The risks posed by Defendants violations underscore the need for injunctive relief here. Defendants are manufacturing an injectable biological drug product in a manner that does not comply with CGMP, thereby posing significant risks to the consumers who receive it. See, e.g., Ex. B (Bauer Dec.) 46 (the absence of lot-release sterility testing is a significant CGMP violation and unnecessarily places recipients of the Regenexx cultured cell products at risk of exposure to bacteria and fungi and, as a consequence, possible severe illness); id. 3, 49, 51-52, 54-55, 69; Ex. E (Guilfoyle Dec.) 21, 26, 31-39, 45-52, 54-55. Moreover, no adequate and
Livdahl, 356 F. Supp. 2d 1289, 1290-91 (S.D. Fla. 2005); United States v. Rx Depot. Inc., 290 F. Supp. 2d 1238, 1246 (N.D. Okla. 2003); United States v. H.W. Andersen Prods., Inc., No. 2:95cv00315, 1997 U.S. Dist. LEXIS 3080, at *4 (M.D. N.C. Jan, 24, 1997); United States v. Kasz Enters., Inc., No. 930455P, 1994 U.S. Dist. LEXIS 8597, at *32 (D. R.I. May 6, 1994); United States v. Richlyn Labs., Inc., 827 F. Supp. 1145, 1150 (E.D. Pa. 1992); United States v. Pro-Ag, Inc., 796 F. Supp. 1219, 1231 (D. Minn. 1991). This principle reflects the underlying difference of purpose between an injunction sought by the sovereign pursuant to a statute and that sought by a private litigant. This difference is the pursuit of the public interest. Hecht Co. v. Bowles, 321 U.S. at 330 (explaining that it is the standards of the public interest, not the requirements of private litigation, [that] measure the propriety and need for injunctive relief). Because the passage of the statute is itself an implied finding by Congress that violations will harm the public. Nutri-Cology, Inc., 982 F.2d at 398, the Court sees no reason to deviate from this approach and will not do so. United States v. Endotec, Inc., 2009 U.S. Dist. LEXIS 93985 *18-19 (M.D. Fla. Sept. 28, 2009). The D.C. Circuit discussed in dicta what standard should apply when the government seeks a preliminary injunction action to enforce a statute in United States v. Microsoft Corp., 147 F.3d 935, 943-44 (D.C. Cir. 1998). That case, however, involved a preliminary injunction issued in response to the governments petition for contempt for violations of a consent decree, rather than a statutory injunction issued in response to violations of the underlying statute. That case did not involve and did not establish the standard for issuance of an injunction under the FDCA. 38
30
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well-controlled clinical trials have been performed on the cultured cell product, and it has not been shown to be safe and effective, through valid scientific evidence, for the treatment of any of the myriad orthopedic conditions for which Defendants are promoting its use. Ex. F (Muschler Dec.) 25-36, 43-45, 55; Ex. C (Shannon Dec.) 24, 29-32, 40. B. Defendants Will Continue to Violate the FDCA Unless Enjoined
As shown above, Defendants have violated the FDCA by causing the adulteration and misbranding of a drug while it is held for sale after shipment of one or more of its components in interstate commerce. An injunction is necessary to bring Defendants into compliance with the law and to prevent future violations. RS LLC steadfastly maintains that FDA may not regulate the cultured cell product and Defendants manufacturing practices even though the cultured cell product falls squarely within the definition of a drug and a biological product. Indeed, the company has sued FDA twice in a flawed attempt to prevent FDA from enforcing the FDCA against its product. See supra at 15 n.16. Defendants have likewise failed to correct significant CGMP violations observed at RS LLC during two FDA inspections. See Ex. A (Kreuzer Dec.) 12, 14, 16. Many of the violations were repeat observations. For example, although in the 2009 inspection FDA noted RS LLCs failure to establish product release specifications and to perform finished product testing on its cultured cell product before it is released for distribution (and thus injected into patients), FDA found these deficiencies were continuing in 2010. Answer 31-32; Ex. A (Kreuzer Dec.) 12.a & 14.a. FDA also observed gross deficiencies related to environmental monitoring and aseptic technique during both inspections. Ex. A (Kreuzer Dec.) 12.b-d, 14; see also Answer 31-32.
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Thus, it is evident that Defendants will not bring their product into compliance with the law unless compelled to do so by this Court. CONCLUSION Defendants admissions and the evidence submitted by the government show that there is no genuine issue of material fact in dispute. It is equally clear that Defendants violate wellestablished law. The government therefore respectfully requests that this Court grant its motion for summary judgment and permanently enjoin Defendants from causing the adulteration and misbranding of their cultured cell product. A proposed order is filed herewith. DATED this 7th day of January, 2011.
Respectfully submitted, TONY WEST Assistant Attorney General ANN M. RAVEL Deputy Assistant Attorney General EUGENE M. THIROLF Director
Of Counsel: MARK B. CHILDRESS Acting General Counsel RALPH S. TYLER Associate General Counsel Food and Drug Division ERIC M. BLUMBERG Deputy Chief Counsel, Litigation PAIGE H. TAYLOR Senior Counsel Food and Drug Administration 10903 New Hampshire Avenue Silver Spring, MD 20993-0002 301-796-8720
/s/ PERHAM GORJI Trial Attorney Office of Consumer Litigation Civil Division U.S. Department of Justice 450 Fifth Street, N.W. Washington, D.C. 20001 Phone: 202-353-3881 Fax: 202-514-8742 Perham.Gorji@usdoj.gov
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, ) ) ) ) ) ) ) ) ) ) ) Civil Action No. 1:10-cv-01327-RMC
Plaintiff, v. REGENERATIVE SCIENCES, LLC, a corporation, et al., Defendants.
PLAINTIFFS STATEMENT OF MATERIAL FACTS AS TO WHICH THERE IS NO GENUINE ISSUE The United States of America, plaintiff, by and through undersigned counsel, respectfully represents as follows: 1. Regenerative Sciences, LLC (RS LLC) is incorporated under the laws of the
State of Colorado and its laboratory is located at 6850 West 116th Avenue, Unit D, Broomfield, Colorado. See Defendants First Amended Answer, Affirmative Defenses, and Counterclaims (Answer and Counterclaims)1 (Dkt No. 15-1) 4. 2. Christopher J. Centeno, M.D. is the Medical Director and acting Chief Executive
Officer of RS LLC. Dr. Centeno is the person most responsible for the overall conduct of RS LLC. Answer 5. 3. John R. Schultz, M.D. serves on RS LLCs board of directors. Answer 6.
Defendants Answer and their Counterclaims appear in the same document (Dkt No. 15-1), both starting with paragraphs numbered 1. To avoid confusion, we cite the two portions of the document separately as Answer __ and Counterclaims __, respectively.
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4.
Dr. Centeno and Dr. Schultz are the majority shareholders of RS LLC.
Counterclaims 4. 5. Michelle R. Cheever is RS LLCs Laboratory Director. Answer 7. She is
responsible for the day-to-day operations of the RS LLC laboratory. Id. (admitting sentence but objecting to any inference that Ms. Cheever is the most responsible person for the operations of the laboratory); Motion for Summary Judgment Exhibit A (Declaration of Karen S. Kreuzer) (hereafter, Kreuzer Dec.) Ex. 46 (RS LLC SOP 124.2, Standard Operating Procedure Guidelines) at 2 (stating that the Laboratory Director is responsible for all procedures and administrative operations of the facility.); Kreuzer Dec. Ex. 48 (RS LLC SOP 126.3, Terminology) at 2 (Laboratory Director is responsible for all procedures and administrative operations of the facility, including compliance with these Standards.). Ms. Cheever participated in drafting RS LLCs laboratory procedures. Answer 7. 6. Ms. Cheever holds equity ownership in RS LLC. Answer 7; see also Kreuzer
Dec. Ex. 30 (Centeno CJ, Schultz JR, Cheever M, Robinson B, Freeman M, Marasco W, Safety and Complications Reporting on the Re-implantation of Culture-Expanded Mesenchymal Stem Cells using Autologous Platelet Lysate Technique, Current Stem Cell Research & Therapy, 2010; 5:81-93) at 81. 7. RS LLC owns what it describes as a procedure, called the Regenexx
procedure. Counterclaims 4. 8. The Regenexx procedure involves the removal of stem cells from a donor patient,
expansion of those stem cells in culture, and placement of the stem cells into the donor patient. See Regenerative Sciences v. FDA, Civ. No. 1:10-cv-01055-RMC (D.D.C.), Complaint (Dkt. No.
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1) 14-15 (hereafter, RS DC Complaint) (the Regenexx procedure requires the removal of stem cells and other tissue from a donor patient, the expansion of the stem cells, and the placement of the stem cells in the same patient for the treatment of the patients degenerated or injured area of the body.); see also Counterclaims 5, 10. 9. RS LLC receives samples of a patients bone marrow or synovial fluid. Kreuzer
Dec. 8; see also Counterclaims 5. RS LLC then isolates what it describes as mesenchymal stem cells (MSCs) from the bone marrow or synovial fluid, expands them using growth factors from the patients blood (e.g., platelet lysate) and reagents (e.g., Dulbeccos Modified Eagles Medium), and combines them with other drug products (such as heparin and doxycycline). Answer 11. The process of expanding the cells typically takes two to three weeks and involves multiple steps in which the cells are centrifuged (with certain cell and plasma layers then removed) and placed in culture media in an incubator, thereby causing the cells to divide and expand in number. Id. When the cells expand to a certain point, they are exposed to an enzyme, trypsin, which digests some of the proteins on the surface of the cells and causes the cells to detach from the plastic flask in which they were contained. Id. RS LLC then harvests the detached cells, treats them with media to stop the action of the trypsin, washes them with fresh media, and either puts the cells into other flasks for further expansion, prepares them for cryopreservation, or prepares them for injection. Id. Ultimately, after one or more cell passages (and, in some cases, following cryo-preservation), the expanded cells, along with a drug product that has been shipped in interstate commerce and other additives, are placed into syringes. Id. 10. The processing of the cultured cell product involves many steps, including
selective culture and expansion of a multitude of different types of blood-forming and rare bone
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marrow stromal cells using plastic flasks, additives and nutrients, and environmental conditions such as temperature and humidity, to determine the growth and biological characteristics of the resulting cell population. Answer 29. 11. RS LLCs Regenexx pamphlet states that The Regenexx procedure is safe and
can often prevent the need for surgery. Answer 16.a. The pamphlet lists the following conditions and diseases as candidates for the procedure: Patients with non-healing bone fractures; Osteoarthritis of the knee, hip, ankle, shoulder, hands; Chronic bulging lumbar disc; Injuries to the meniscus, rotator cuff; Avascular Necrosis of the shoulder, hip; and Chronic Bursitis. Answer 16.a.; see also RS DC Complaint 14 (the Procedure is for the treatment of orthopedic injuries and arthritis); Regenerative Sciences v. FDA, Civ. No. 1:09-cv-00411-WYD-BNB (D. Colo.), Complaint (Dkt. No. 1) 16 (RS Colorado Complaint) (The Procedure is for the treatment of musculoskeletal and spinal injury.). 12. The Regenerative Sciences website, www.regenexx.com, describes the
Regenexx procedure as an Alternative to Traditional Surgery. See http://www.regenexx.com/ the-regenexx-procedures/. Answer 16.b. The frequently asked questions section of www.regenexx.com states, What types of problems can be treated? Fractures that have failed to heal, joint cartilage problems, partial tears of tendons, muscles, or ligaments, chronic bursitis, avascular necrosis of the bone, and lumbar disc bulges. See http://www.regenexx.com/ common-questions/ (accessed July 20, 2010). Answer 16.b. The www.regenexx.com the website also states, The Regenexx procedure has been
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shown to be safer than tradtional [sic] surgical techniques in published research and can often prevent the need for surgery. See http://www.regenexx.com/the-regenexx-procedure-explained/ (accessed July 20, 2010). Answer 16.b. 13. Defendants cultured cell product is administered by injection into, for example,
the patients joint or intervertebral disc using a type of x-ray device. Kreuzer Dec. Ex. 59 at 2 (consent form states X-ray guidance will be used to place the sterile needle to the site in need of repair.); see also Kreuzer Dec. Ex. 30 at 83 (Centeno CJ, Schultz JR, Cheever M, Robinson B, Freeman M, Marasco W, Safety and Complications Reporting on the Re-implantation of Culture-Expanded Mesenchymal Stem Cells using Autologous Platelet Lysate Technique, Current Stem Cell Research & Therapy, 2010; 5:81-93) (stating, With the patients written consent, and under fluoroscopic guidance, MSCs were inserted percutaneously into either a peripheral joint or an intervertebral disc.) (emphasis added); Kreuzer Dec. Ex. 61 (2010 EIR Ex. KDM 9) (describing use of lateral fluoroscope to place the needle and X-ray to confirm accurate placement). 14. FDA investigators inspected RS LLC between February 23, 2009 and April 15,
2009. Answer 31. That inspection showed that the methods used in, and the facilities and controls used for, the manufacture, processing, packing, or holding of the cultured cell product do not conform to and are not operated or administered in conformity with CGMP. See 21 U.S.C. 351(a)(2)(B) and 21 C.F.R. Parts 210-211; see also 21 C.F.R. Parts 600-680 (setting forth additional standards applicable to biological products). Answer 31. At the close of the 2009 inspection, FDA investigators issued a list of inspectional observations (Form FDA 483) to Regenerative Sciences Acting CEO, Dr. Centeno, with Dr. Schultz and Ms. Cheever present.
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Answer 31; Kreuzer Dec. Ex. 2. The CGMP violations observed during the 2009 inspection included, but were not limited to, the following: a. Failure to establish and follow appropriate written procedures designed to
prevent microbiological contamination of drug products purporting to be sterile, as required by 21 C.F.R. 211.113(b); see also 21 C.F.R. 610.12. Answer 31.a. b. Failure to perform appropriate laboratory testing of each batch of drug
product required to be free of objectionable microorganisms, as required by 21 C.F.R. 211.165(b). Answer 31.b. c. Failure to establish scientifically sound and appropriate specifications,
standards, sampling plans, and test procedures designed to assure that drug products conform to appropriate standards of identity, strength, quality, and purity, as required by 21 C.F.R. 211.160(b). Answer 31.c. d. Failure to ensure, for each batch of drug product, appropriate laboratory
determination of satisfactory conformance to final specifications for the drug product prior to release, as required by 21 C.F.R. 211.165(a). Answer 31.d. e. Failure to establish an adequate system for monitoring environmental
conditions during product manufacturing, as required by 21 C.F.R. 211.42(c)(10)(iv). Answer 31.e. 15. FDA investigators inspected RS LLC again between June 2, 2010 and June 16,
2010. Answer 32. That inspection also showed that the methods used in, or the facilities and controls used for, the manufacture, processing, packing, or holding of Defendants cultured cell product do not conform to and are not operated or administered in conformity with CGMP. Id.
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(admitting but denying that CGMP is applicable to them). At the close of the 2010 inspection, FDA investigators issued a list of inspectional observations (Form FDA 483) to Dr. Schultz. Id.; Kreuzer Dec. Ex. 3. Ms. Cheever was present and Dr. Centeno attended by telephone. Answer 32. The CGMP violations observed during the June 2010 inspection included, but were not limited to, the following: a. Failure to establish scientifically sound and appropriate specifications,
standards, sampling plans, and test procedures designed to assure that in-process materials and drug products conform to appropriate standards of identity, strength, quality, and purity, as required by 21 C.F.R. 211.160(b). Answer 32.a. b. Failure to ensure, for each batch of drug product, appropriate laboratory
determination of satisfactory conformance to final specifications for the drug product, prior to release, as required by 21 C.F.R. 211.165(a). Id. 32.b. c. Failure to establish and follow appropriate written procedures designed to
prevent microbiological contamination of drug products purporting to be sterile, as required by 21 C.F.R. 211.113(b); see also 21 C.F.R. 610.12. Id. 32.c. d. Failure to perform appropriate laboratory testing of each batch of drug
product required to be free of objectionable microorganisms, as required by 21 C.F.R. 211.165(b). Id. 32.d. e. Failure to establish an adequate system for monitoring environmental
conditions during product manufacturing, as required by 21 C.F.R. 211.42(c)(10)(iv). Id. 32.e.
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f.
Failure to establish and follow an aseptic gowning qualification program to
assess the ability of aseptic processing technicians to maintain the quality of the gown after performance of manufacturing operations, as required by 21 C.F.R. 211.113(b). Id. 32.f. g. Failure to perform cleaning validation on the biological safety cabinet
aseptic processing surfaces or on all other surfaces in the aseptic processing laboratories, as required by 21 C.F.R. 211.42(c)(10)(v). Id. 32.g. h. Failure to maintain separate or defined areas or such other control systems
for the firms operations as are necessary to prevent contamination during aseptic processing, as required by 21 C.F.R. 211.42(c)(10)(iii). Id. 32.h. 16. When the manufacturing of the cultured cell product is complete, it is loaded into a
syringe and placed into a sterile bag. Answer 11; Kreuzer Dec. Ex. 45 (RS LLC SOP 119.3) at 3. According to Defendants standard operating procedures, the bag is labeled only with the patients name, date of birth, laboratory notebook number, cell passage number, day in culture, cell number, number of cells cryo-preserved, and condition of cell suspension. Answer 34; Kreuzer Dec. Ex. 45 (RS LLC SOP 119.3) at 3. The bag is then placed into a cooler and sent to the Clinic. Id. (admitting but denying this is a distribution activity); see also Kreuzer Dec. Ex. 45 (RS LLC SOP 119.3) at 3. 17. When RS LLC ships the cultured cell product to the Centeno Schultz Clinc, its
label does not bear the symbol Rx only. Kreuzer Dec. 18 & Ex. 6 (photograph of product label); Kreuzer Dec. Ex. 26 at 3 (copy of product label); see also Kreuzer Dec. Ex. 45 (SOP 119.3) at 3.
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18.
When RS LLC ships the cultured cell product, its labeling does not specify
frequency of administration; duration of administration; time of administration; route of administration; or preparation for use. Answer 34; Kreuzer Dec. 18 & Ex. 6 (photograph of product label); Kreuzer Dec. Ex. 26 at 3 (copy of product label); see also Kreuzer Dec. Ex. 45 (SOP 119.3) at 3. 19. There is not now, nor has there ever been, an approved new drug application
(NDA) filed with FDA pursuant to 21 U.S.C. 355(b) or (j) for Defendants cultured cell product. Answer 20. 20. There is not now, nor has there ever been, an approved investigational new drug
application (IND) filed with FDA pursuant to 21 U.S.C. 355(i) for Defendants cultured cell product. Answer 21. 21. There is not now, nor has there ever been, an approved biologics license
application (BLA) filed with FDA pursuant to 42 U.S.C. 262 for Defendants cultured cell product. Answer 25. 22. Defendants use doxycycline at various points in the manufacture of the cultured
cell product. See Answer 11, 13. 23. The doxycycline that Defendants use in the manufacture of the cultured cell product
has been shipped in interstate commerce to Defendants from outside of Colorado. Answer 13; Kreuzer Dec. 17 & Ex. 5. 24. FDA sent a letter to Dr. Centeno as a representative of RS LLC on July 25, 2008,
in which the agency advised the company that it was promoting cells used in the Regenexx
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procedure for uses that cause them to be drugs under the FDCA and biological products under the PHSA. Answer 41; see Kreuzer Dec. Ex. 1; RS Colorado Complaint 43-44.
DATED this 7th day of January, 2011. Respectfully submitted, TONY WEST Assistant Attorney General _________/s/_______________ PERHAM GORJI Trial Attorneys Office of Consumer Litigation U.S. Department of Justice P.O. Box 386 Washington, D.C. 20044 Telephone: (202) 353-3881
OF COUNSEL: MARK B. CHILDRESS Acting General Counsel RALPH S. TYLER Chief Counsel, Food and Drug Division ERIC M. BLUMBERG Deputy Chief Counsel, Litigation PAIGE H. TAYLOR Senior Counsel Food and Drug Administration 10903 New Hampshire Avenue Silver Spring, MD 20993-0002 Telephone: (301) 796-8720
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CERTIFICATE OF SERVICE I certify that on the 7th day of January, 2011, the undersigned caused a true and correct copy of the above-entitled Plaintiffs Motion for Summary Judgment, and attached Memorandum of Law in Support of Plaintiffs Motion for Summary Judgment, its supporting Declarations, and Plaintiffs Statement of Material Facts, to be served via the District Courts Electronic Filing System upon counsel of record for the defendant as follows: William F. Coffield, Esq. Coffield Law Group, LLP 1330 Connecticut Avenue, NW Suite 220 Washington, DC 20036 (202) 429-4799 (o) (202) 429-3902 (f) wcoffield@coffieldlawgroup.com
s/ Perham Gorji Perham Gorji

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Case 1:10-cv-01327-RMC Document 19

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, Plaintiff, v. REGENERATIVE SCIENCES, LLC, et al., Defendants.

) Civil Action No. 1:10-CV-01327-RMC ) ) ) ) ) ) ) )

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EUGENE M. THIROLF Director

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MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT

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Defendants Adulterate Their Cultured Cell Product. . . . . . . . . . . . . . . . . . . . . . . 24

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*42 U.S.C. 264........................................................................................................................ 5, 8 42 U.S.C. 264(a). .................................................................................................................... 5, 7

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FEDERAL RULES Fed. R. Civ. P. 56(c). ................................................................................................................... 17

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21 C.F.R. 1271.10(a) provides,

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