Celltex Under Fire by the FDA

A week ago the FDA released its 483 inspection report relating to Celltex Therapeutics Corporation’s practices banking and facilitating the administration of adult stem cells for therapeutic purposes.  News sources (here and here) and the Center for Genetics and Society published portions of its startling findings.  Celltex processes, multiplies, distributes, and facilitates the injections of mesenchymal cells derived from adipose tissue using technology licensed from RNL Bio based out of Seoul, South Korea.  Prominent physician Carl Elliot, MD, PhD and bioethicist Leigh Turner, PhD have both expressed public concern about Celltex’s seemingly flagrant circumvention of FDA regulatory standards, licensing partnership with a controversial corporation, and conflict of interest in the oversight of its operations.

Since its opening in December 2011, Celltex is the largest stem cell bank in the US and facilitates the process and supplies the product for individuals seeking to receive stem cell injections, charging a hefty fee ranging from an estimated $20,000-$30,000 for its services.  It has garnered significant publicity arising in part from Texas Governor Rick Perry’s support, his personal use of stem cell injections for a back injury, and Perry’s push for state legislation to create a state adult stem cell banking initiative and revise Texas Medical Board regulations relating to physicians’ ability to administer non-FDA approved stem cell “treatments” to their patients.

Back in February, Turner compiled a letter of listed concerns relating to Celltex’s practices, requesting that the FDA investigate the company’s practices.  Turner and other media sources have pointed out the following, along with other issues:

Celltex has not offered substantial data or clinical trials to show the stem cells it offers are safe and efficacious.   In January 2012 the FDA issued a Consumer Health Information guide cautioning consumers to make sure that any stem cell treatment they consider has been approved by the FDA or is subject to a current protocol submitted to the FDA to ensure that the stem cells are safe, effective, and have undergone adequate and well controlled clinical trials.  Furthermore, the FDA must oversee the manufacturing process to assure the products’ safety, purity, and potency.

If individuals are receiving experimental injections, Celltex and the physician should thoroughly explain that the procedure is experimental medical research rather proven clinical medicine and the risks associated with the procedure.  Both the FDA and physician commentators have noted that patients seeking to have cells injected face safety risks arising from the procedure, even if they are the patient’s own stem cells and the corporation follows good manufacturing practices.  Jamshid Lofti, MD, a neurologist who has administered injections to more than 20 patients has admitted the need for controlled trials, but has problematically downplayed such risks, asserting that “the worst that can happen is it won’t work.”  Not according to the FDA and numerous other physicians, who list potential risks to include tumors, cancer, and even death.  Such risks are at the forefront of investigation (see here and here) into partner company RNL Bio’s practices in South Korea, where former patients and their families have come forth with allegations of cancer and death linked to receipt of RNL Bio’s stem cells. 

Celltex contends that it merely processes and expands individuals own stem cells, only minimally manipulates the cells, and is currently coordinating prospective clinical studies.  According to Nature, Celltex coordinates with physicians and pays physicians $500 per injection, and each patient receives at least three injections.  Celltex argues that the process of culturing and preparing the stem cells does not constitute the manufacture of a biological drug, so the process stands outside the scope of FDA regulations normally required for biological drugs.  A Colorado court is currently examining this issue arising from the practices of another company Regenerative Sciences, who proffered a similar argument to avoid applicability of FDA requirements. 

However, Rita Chappelle, a spokesperson for the FDA’s Center for Biological Evaluation and Research asserts that any “expanded” cells cannot be considered minimally manipulated.  Importantly, the FDA’s 483 inspection form classifies Celltex as a biological drug manufacturer in the business of manufacturing mesenchymal  stem cells rather than minimally manipulating stem cells.  Independently of how Celltex classifies its processes, the 483 report made news headlines based on the number of alarming deficiencies in the processing and manufacturing procedures.  It found Celltex failed to validate processes to prevent contamination; to distinguish between components being quarantined or approved; to routinely calibrate and check the equipment; to review quality processing systems; and could not guarantee the sterility, uniformity or integrity of the cells.  Celltex’s press release in response is here.

Had there been any uncertainty about the scope of FDA regulation, the Consumer Health Information guide back in January clarified that the manufacture of stem cells must undergo FDA review.  Yet Celltex continued its operations charging clients tens of thousands of dollars for unproven and unregulated “treatments,” evaded FDA’s clarification, and exposed consumers to additional risks based on its manufacturing deficiencies detailed in the 483 inspection.  More problematically, associated figures such as Gov. Perry and physicians who administer the injections provide the imprimatur of  Celltex’s practices- creatively flouting regulatory requirements, downplaying risks of the procedure, and reaping hefty profits.  Even in the name of therapeutic progress and statewide economic growth, it is time for the FDA to set an example that such disregard for its jurisdiction and review process will not be tolerated. 

--Katherine Drabiak-Syed

Waiting for November 2012 and the Final Verdict on Brüstle v. Greenpeace e.V.

The German Federal Court of Justice (“BGH”) finally announced that it will decide in the case Brüstle v. Greenpeace e.V. on November 27, 2012.

The case was described and discussed here at PredictER News, December 13, 2012 and June 11, 2012. The court will adjudicate more than two years after it requested preliminary ruling from the European Court of Justice (ECJ) on December 17, 2009 (Case Xa ZR 58/07, now changed to X ZR 58/07), and a year after the ECJ’s decision in Case C-34/10 regarding the interpretation of Art. 6 of the Directive 98/44/EC on October 18, 2011.

The BGH’s decision will not only influence the question of whether or not patents can be gained on inventions which are based on embryonic stem cells, but it will also impact embryonic stem cell research in general. In addition to the German Patent Protection Act, the German Embryonic Protection Act (“ESchG”) is also based on Directive 98/44/EC.

The ESchG prohibits research with embryos, see Paragraph 2 ESchG, but not research with embryonic stem cells. However, Paragraph 2 ESchG has to be interpreted in the terms of the ECJ decision now. As a result, and with ECJ's broad interpretation of the Directive and definition of embryos research with human embryonic stem cells might be prohibited in Germany. In other words, embryonic stem cells would have to be treated as embryos and, as such, research would be prohibited. This prohibition would include even basic research on embryonic stem cells.

Therefore, the German jurisdiction as well as the legislature should examine how the ESchG should be interpreted in future. A change or amendment to the ESchG's definition of embryos should also be deliberated, because under German law, the use of the term "embryo" and its impact on stem cell research needs clarification. Because the ECJ has not directly prohibited embryonic stem cell research, but has persisted in broadly defining "embryo," other than the ECJ the BGH has to take the consequences of its verdict for embryonic stem cell research into consideration.

It still remains to be seen what will happen on November 27, 2012 and what consequences the decision will have on embryonic stem cell research.

-- Bianca Buechner, Ph.D., LL.M. Candidate
Indiana University Robert H. McKinney School of Law

What happened after the European Courts of Justice decision Brüstle v. Greenpeace e.V.?

More than six months after the European Court of Justice (ECJ) decided Brüstle v. Greenpeace e.V. (Case C-34/10) on October 18, 2011 (which was described and discussed here at PredictER News, December 13, 2012), the German Federal Court of Justice (BGH) has still not made its decision. What happened after the October decision?

Only a couple days after the decision had been made, several representatives of the European Parliament filed a request to the EU Commission to stop the funding of embryonic stem cell research in the EU program, Horizon 2020 (EPP Group in the European Parliament). In their point of view, the ECJ decision indicated that embryonic stem cell research shall cease.

Horizon 2020 is the main EU financial instrument to support research and innovation in the Member States. The research funding budget will cover an amount of about 80 Billion Euro to be used from 2014 to 2020. Horizon 2020 was drafted on the basis of Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Program of the European (FP7) Community for research, technological development and demonstration activities (2007-2013). Art. 6 Subsec. 2 of the Decision No 1982/2006/EC regulates that research on human stem cells, both adult and embryonic, may be financed, depending both on the contents of the scientific proposal and the legal framework of the Member State(s) involved. However, Decision No 1982/2006/EC was made before the European Court of Justice held in Brüstle v. Greenpeace e.V. that human embryonic stem cell lines have to be seen as embryos.

On May 31, 2012 the 3169th Competitiveness Council meeting was held. Inter alia, the Proposal for a Regulation establishing Horizon 2020, as well as the rules for participation and dissemination, were discussed in the form of a Progress Report. It has been announced that the EU Science Minister finally reached an agreement on the overall structure of the Horizon 2020 research funding program. The proposal of the Committee on Industry, Research and Energy to amend the Horizon 2020 proposal (COM(2011) 811) from November 30, 2011 does not suggest any changes to the Horizon 2020 proposal of the European Commission related to stem cell research. Even though, requests have been filed to stop or lower the funding of embryonic stem cell research the proposal for Horizon 2020 did not change the wording of section 2.1, that “Supporting a large set of embryonic, high risk visionary science and technology collaborative research projects is necessary for the successful exploration of new foundations for radically new future technologies” (COM(2011) 811, Sec. 2.1 of the Council Decision).

The Competitiveness Council agreed that stem cell research will be treated under Horizon 2020 the same as under the 7th Framework Program. The following “Triple-Lock-System” which was established under FP7 will be continued for the funding of stem cell research:

1. National Legislation must be respected and EU projects must follow the laws of the Member States in which the research is conducted; and
2. all projects have to be scientifically peer reviewed and must undergo rigorous ethical review; and
3. EU funding cannot be used for derivation of new stem cell lines or for research that destroys embryos (3169th Competitiveness Council meeting).

The German Federal Court of Justice decision is still outstanding. The final decision on Horizon 2020 (“FP8”) has not been made yet either. It still remains to be seen how the German Federal Court of Justice will decide and which influence the decision will have not only on the German legislation but also on Horizon 2020.

-- Bianca Buechner, Ph.D., LL.M. Candidate
Indiana University Robert H. McKinney School of Law

Legislatures Race to Define Rights and Obligations Relating to Genetic Information: Avoiding Another Bearder

California is the latest state to take steps toward defining permissible uses and restrictions relating to obtaining, retaining, and sharing individuals’ genetic information.  Senator Alex Padilla recently introduced Senate Bill 1267, the Genetic Information Privacy Act, designed to protect individuals against surreptitious testing of their genetic material without consent.  SB 1267 is a comprehensive piece of legislation which would require a specific authorization to obtain, analyze, or disclose genetic information unless otherwise exempted or allowed by law (exemptions include activities such as newborn screening, duties of the medical examiner, using some types of data for research, and law enforcement uses).  The legislation also contains a civil penalty structure for violations and provides a private right of action for aggrieved individuals who suffer economic, bodily, or emotional harm proximately caused by such violations. 

California’s legislation classifies genetic information within a privacy framework and seeks to increase individual control by requiring the individual to understand the purposes of how the information will be used and stored, as well as which entities have access to the information.  Other states such as Alabama, Massachusetts, South Dakota, and Vermont have introduced similar legislation that govern the collection, retention, and sharing of DNA, genetic information, and or genetic test results.  These states differ in their comprehensiveness and scope- from South Dakota’s paragraph long House Bill 1260 to Alabama’s extensive eleven page House 78.

Unlike California, these states seek to classify DNA, genetic information, and or genetic test results within a property law framework rather than under the umbrella of privacy, which carries distinct legal requirements for transfer, use, and retention.   As legislatures race to define individual rights within existing  legal concepts, they should be well aware of property law’s limitations at upholding individual autonomy while appropriately and efficiently defining permissible research uses depending on how the legislature crafts the language of the statute. 

As we witnessed in the progression of the Bearder v. Minnesota litigation (related to collecting, retaining, and disseminating newborn blood spots) even if a law is seemingly clear, individuals, clinicians, and investigators still may face confusion over relevant terminology and obligations relating to the meaning of key terms and the scope of consent exemptions.  (Blogs and article on that topic here.) Specifically, will these statutes govern the collection, use, and dissemination of genetic information after the analysis of a genetic test using a blood sample or will the language broadly address collecting blood samples, DNA, and genetic test information?  Public health officials, investigators, and individuals have vehemently disagreed over the meaning and scope of these terms and when consent is required.  Individuals have claimed immense injury to privacy and dignity when public health officials and investigators collect, retain, and disseminate their blood samples without consent, while public health officials and investigators decried setbacks to research efforts after they were legally ordered to destroy their improperly obtained blood samples. 

Last November, the Minnesota Supreme Court clarified its state Genetic Privacy Act, holding that an individual’s blood sample contains biological information and biological information falls within the definition of genetic information.   That is, any statutory references to genetic information also applies to blood samples.  It appears that the majority adopted the Plaintiffs' argument  that a blood sample contains DNA and the structure of DNA is genetic information, which means statutory requirements governing the collection, use, storage, and dissemination of genetic information necessarily include blood samples.   

Although this seminal holding is jurisdictionally limited, defining the meaning and scope of biological specimen, blood sample, DNA, and genetic information requires painstaking semantic precision.  Furthermore, the concurrence/dissent in Bearder demonstrates even keen legal minds apply varying logic to interpret terminology and arrive at starkly divergent conclusions.  Defining these terms becomes even more pressing should this or similar state legislation pass because it carries the compliance incentive of a penalty structure for violation.  Legislators should take note of litigation in this area and aim to meticulously and unambiguously define relevant terminology so individuals, public health officials, and investigators can understand their interrelated rights, obligations, and statutory exemptions.  

--Katherine Drabiak-Syed

Privacy and Security Considerations for Emerging Health Information Exchanges: Notes from Utah and New York

Earlier this month the Utah Department of Health issued a press release describing a cyber attack on its server, in which hackers removed information for approximately 780,000 individuals. According the Department of Health, the information contained personal records of individuals within the state, including Medicaid and Children’s Health Insurance Plan recipients.

Permutations of this scenario- whether hacking into a computer server, losing a USB key, or a stolen laptop- are all familiar news headlines announcing a security breach of individuals' health and personal information. Human error and human opportunism make it likely that we will continue to see such information breaches in the future, despite steps to mitigate potential security threats.

As states begin to develop legislation and promulgate rules to govern their electronic health information exchanges (HIE), they should carefully balance residual security and privacy risks with the potential promises of a functional HIE when determining policies relating to how a system enters an individual’s electronic health record (EHR) and what portion of the EHR the state enters into the HIE.

Last month, the New York Civil Liberties Union (NYCLU) issued a report, Protecting Patient Privacy: Strategies for Regulating Electronic Health Records Exchange, which articulated numerous privacy, security, and functional concerns with the state’s emerging HIE. Currently, New York employs a blanket consent procedure for record access and enrolls patients of participating providers into the state's regional health information organizations (RHIOs). 

Among numerous concerns, NYCLU’s Report highlights two distinct issues with this approach:

(1) New York does not provide a mechanism for patients to limit sharing stigmatizing sensitive information such as substance abuse records or mental health treatment if they consent to participate in the exchange; and

(2) Although physicians must obtain consent to view patient information in the exchange, participating providers enter patient medical information into the exchange without patient consent and patients cannot opt-out of the record locator system.

The Office of the National Coordinator for Health Information Technology’s HIT Policy Committee has asserted that a form of granular control over health data can protect the confidentiality of narrow categories of sensitive health information while fostering patient autonomy, promoting trust in medical providers, and building confidence in the growing use of HIT. Although too much data segmentation or exclusion options could confuse patients and undermine the purpose of the HIE as a comprehensive record system, some groups, such as the NYCLU, argue that existing state law requires the capacity for granular control over statutorily identified categories of sensitive medical information. This assertion serves as a reminder that each state contains varied protected categories of sensitive medical information as well as different standards defining additional measures relating to sharing and accessing this information. Earlier this month, the New York Department of Health and the New York eHealth Collaborative established the State Health Information Network of New York Policy Committee to examine these and numerous other concerns over the state’s current policies and procedures governing the exchange.

Patients may also be wary of the security of their identifying records available in the HIE registry system, as a breach could reveal both personal information and the entirety of the patient’s medical records that providers have entered into the HIE. A breach of the HIE would not only invade the patient’s abstract notion of privacy over sensitive information, but could also expose the patient to quantifiable concrete harms such as identity theft, fraud, and the costs associated with investigation and mitigation.

Some victims involved in major medical security breaches have asserted that once information such as social security numbers, patient demographic information, and medical records are accessible in a breach, victims face an imminent and continuing risk arising from the security breach itself regardless of whether an outside party has used the information. Currently, some courts have ruled that even where a third party steals media containing patient information, if the victims cannot prove that a third party actually accessed or used the information, then claims for future financial harm arising from a security breach are insufficient to constitute an actionable injury. To address these legitimate concerns, jurisprudence should evolve with the recognition that potential third party use of this information may be difficult to identify and costly to monitor. Further, months may pass following the initial breach before victims notice fraudulent activity, such as in the substantial TRICARE data breach.

State legislatures should remain cognizant of both patients' desire for privacy and their corresponding wish to limit access to sensitive medical information as well as security concerns from both accidental as well as intentional breaches of patient information during the initiation or expansion of the state's HIE .

-Katherine Drabiak-Syed

Community Roundtable, April 9: Biobanking 101: What are they and how can the public participate?

If you're in central Indiana this coming April, you might want to attend a community event on biobanks. PredictER's Eric M. Meslin will be directing a roundtable discussion on biobanks on April 9 from 11:30 a.m. to 1 p.m. at the Indiana Historical Society, 450 W. Ohio St.

This event is sponsored by The Fairbanks Institute for Healthy Communities and the Indiana Clinical and Translational Sciences Institute Community Health Engagement Program.

Eric M. Meslin, PhD, is director of IU Center for Bioethics and associate dean for bioethics at the IU School of Medicine. He also co-directs the IU Center for Law, Ethics and Applied Research in Health Information and directs the Indiana CTSI Bioethics and Subject Advocacy Program.

Parking is free and lunch will be provided. To register, visit redcap.uits.iu.edu/surveys/?s=g6M4FP.

For more information, see the event flier.

The End of Embryonic Stem Cell Research in Europe? The European Court of Justice Decision, Case C-34/10, October 18, 2011

The European Court of Justice (“ECJ”) ruled in the case Brüstle v. Greenpeace (Case C-34/10) brought up by Greenpeace seeking annulment of the German patent – Patent No. DE19756864C1 – held by Mr. Brüstle concerning isolated and purified neural precursor cells, processes for their production from embryonic stem cells and the use of neural precursor cells for the treatment of neural defects. The main focus of the decision is the interpretation of Article 6(2)(c) of Directive 98/44/EC (1998 OJL (L213) 13-18) of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions.

The German Federal Patent Court (Bundespatentgericht, “BPatG”) ruled on December 5, 2006, Case 3 Ni 42/04, on the basis of Paragraph 22(1) German Patent Protection Act (“PatG”) in conjunction with Paragraph 21 Subsection 1 Point 1 PatG in conjunction with Paragraph 2 Subsection 2 Point 3 PatG, that the patent at issue is invalid in so far as it covers precursor cells obtained from human embryonic stem cells and processes for the production of those precursor cells. The court held that the patent also violates the German Embryonic Protection Act (“ESchG”), which prohibits research with human embryos. Mr. Brüstle appealed against the judgment to the German Federal Court of Justice (Bundesgerichtshof, “BGH”), December 17, 2009, Case Xa ZR 58/07.

In accordance with the guiding principles of European Union Law, the national law of the Member States must be interpreted in terms of the rules and regulations set by the European Union; the court held that the outcome of the application for the annulment of the patent de-pends on the interpretation of Article 6 of the Directive, which is implemented in the PatG as well as the ESchG. Thus, the BGH referred specific questions to the ECJ and requested a preliminary ruling regarding:

1. the interpretation of the term “human embryos” in Article 6(2)(c) of the Directive;
2. the interpretation of the expression “uses of human embryos for industrial or commercial purposes” and the question if this especially includes the use for the purposes of scientific research;
3. and if an invention is unpatentable even if the use of human embryos does not form part of the technical teaching claimed with the patent, but whose production necessi-tates the prior destruction of human embryos. See, in detail: Bundesgerichtshof [BGH] [German Federal Court of Justice], December 17, 2009, Case Xa ZR 58/07; ECJ, October 18, 2011, Case C-34/10, para. 23.

The Concept of Human Embryo

Because the Directive lacks a definition of the term “embryo” and after considering the preamble and the scope of the directive, the court ruled:

"any human ovum after fertilisation, any nonfertilised human ovum into which the cell nucleus from a mature human cell has been transplanted, and any nonfertilised human ovum whose division and further development have been stimulated by parthenogenesis constitute[s] a human embryo" (Case C-34/10, para. 53);

"stem cells obtained from a human embryo at the blastocyst stage, […] whether they are capable of commencing the process of development of a human being, […] are included within the concept of human embryo” (Case C-34/10, para. 37).

Human Embryos for Scientific Research

The Directive is limited to the patentability of biotechnological inventions; it does not regulate the use of human embryos in the context of scientific research directly. Considering Recital 14 of the Directive, the court ruled:

"[the] use of human embryos for industrial or commercial purposes' within the meaning of Article 6(2)(c) of the Directive also covers use for purposes of scientific research" and are not patentable;

"only use[s] for therapeutic or diagnostic purposes which [are] applied to the human embryo and are useful to it [are] patentable". (Case C-34/10, para. 46)

Inventions Based on the Destruction of Human Embryos

Taking into account that a human embryo is destroyed when a stem cell is removed during the blastocyst stage, for example, in the production of neural precursor cells (Case C-34/10, para. 48), the court held that when the destruction occurs at a stage long before the implementation of the invention it is irrelevant (Case C-34/10, para. 49). Therefore, the court ruled:

"an invention must be regarded as unpatentable, even if the claims of the patent do not concern the use of human embryos, where the implementation of the invention requires the destruction of human embryos" (Case C-34/10, para. 49);

"the fact that destruction may occur at a stage long before the implementation of the invention, as in the case of the production of embryonic stem cells from a lineage of stem cells the mere production of which implied the destruction of human embryos is, in that regard, irrelevant" (Case C-34/10, para. 49).

This recent decision may do more to impede the progress of embryonic stem cell research in Europe than any inherent limits in the state of science itself. The court used a very broad definition of the term “embryo” without using any scientific reference points. With its definition of “embryo” the court included nearly all possible stages in the development. Although, the court recognized that non-fertilized ova are incapable of developing into a human being, it nonetheless placed them on the same level as an embryo. The implications of this decision are widespread in Europe; the decision is binding and cannot be appealed. It remains to be seen how the German courts and legislature, as well as those of the other Member States will react and comply.

-- Bianca Buechner, Ph.D., LL.M. Candidate
Indiana University Robert H. McKinney School of Law