Jumping into the stem cell industry can be an exciting venture. However, with this emerging industry comes a mine field of legal pitfalls and potential problems. The keys to a successful business not only include selecting a strong product and building strong relationships with clients but being able to navigate the regulatory framework that accompanies this type of product.
FDA regulations require establishments that perform one or more steps in the manufacturing process of HCT/Ps (i.e. Human Cells, Tissues, and Cellular and Tissue-Based Products) to register and submit a list of products with the agency. If so, you have five days to register after beginning operations. When I mention “manufacturing” to clients they usually interject with “I only want to distribute.” Good point. However, the FDA defines “manufacture” as any or all steps in the recovery, processing, storage, labeling, packaging, or distribution of any human cell or tissue. These registrations must be updated annually and in the event of a change of ownership, within 30 days of the change.
Certain stem cell products fall under the definition of a HCT/P. If so, unless an exception is met, the product will be subject to regulation by various laws and regulations such as the Food, Drug and Cosmetic Act (“FDCA”), Public Health Safety Act (“PHSA”), and 21 CFR 1271. When determining which apply, 21 CFR 1271.10(a) and the exception in 21 CFR 1271.15(b) (i.e. the “Same Surgical Procedure Exception”) must be reviewed. However, many are left asking: what is the relationship between the same surgical procedure exception and the four criteria set forth in 21 CFR 1271.10(a)? Thanks to recent guidance released by the FDA, some clarification has arrived.
There are no off the shelf solutions when it comes to starting a new stem cell business or adding a new component to a practice. Between navigating regulations, receiving training, and marketing the service, there’s a lot to address in a short time. Trying to do it all yourself? You may be a highly trained clinician, but given healthcare’s ever-changing regulatory environment, seeking out experienced counsel at the outset will save lots of time and money in the long run. To get started, here is a short summary of what to expect.
Stem Cell Business – Corporate Structure
The first issue is always protection when starting a business or adding a new service. Take the case of an orthopedic physician that wants to add stem cell treatments (e.g. PRP) to his or her practice. The initial inclination is usually to create a new entity separate from the medical practice. What the physician is likely unaware of is that this may create exposure to state self-referral laws. Typically, under these types of laws, intent is not a requirement to find a physician liable for wrongdoing. Therefore, is it important to determine if your state has this type of law and if so, how to structure the new venture before moving forward.
In November 2017, the U.S. Food and Drug Administration (FDA) issued new guidance regarding its current interpretation of the minimal manipulation and homologous use criteria set forth in 21 CFR Part 1271(a) and the agency’s view on the same surgical procedure exception under 21 CFR 1271.15(b). Additionally, the FDA issued a notice to all interested stakeholders that the agency intends to initiate increased discretionary enforcement over the next 36 months for HCT/P businesses. Based on the agency’s latest position, it is important for HCT/P manufacturers and providers to understand the inspection process and be prepared to respond accordingly in this heightened regulatory environment.
The FDA is tasked with regulating HCT/Ps under the authority of Section 361 of the Public Health Service Act (PHS). Within the FDA, the Center for Biologics Evaluation and Research (CBER) is responsible for ensuring the safety of these products and promoting corrective action. In order to reach this goal, CBER is armed with an array of administrative actions to address violations of regulatory significance.
The U.S. Food and Drug Administration (FDA) has issued new guidance for regenerative medicine manufacturers and healthcare providers. At the core of the guidance are two central interpretations: 1) the FDA’s current interpretation of the minimal manipulation and homologous use criteria set forth in 21 CFR Part 1271; and 2) the FDA’s current view on the same surgical procedure exception under 21 CFR 1271.15(b). Additionally, the FDA issued a notice to all interested stakeholders that the FDA intends to initiate increased discretionary enforcement over the next 36 months for human cell and tissue-based products. Given these developments, healthcare companies and providers impacted by this guidance are strongly encouraged to ensure compliance with the FDA’s new interpretations.
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