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The Good, the Bad and the Ugly - The Stem Cell Market in the USA

Thomas N. Tulenko, PhD

There has been growing appreciation that stem cell therapy has the potential to revolutionize the practice of modern medicine the world over. Stem cells are present in the newly fertilized egg and give rise to virtually every cell, tissue and organ in the body. It is reasonable therefore to suspect that we can capture this potential to cure a host of serious diseases, including those that are currently considered largely untreatable. One class of interesting stem cells, mesenchymal stem cells (MSCs), has become remarkably easy to obtain and appear to provide considerable relief for several common maladies including, but not limited to, various joint diseases and chronic wounds. I have been successfully treated with this therapy for hip and shoulder defects. My family members and close friends have had similar success with the same treatment for similar ailments. But, considering the recent rash of negative articles on “stem cell” therapy, you would never know there’s a good side to regenerative therapy. Not that the negative articles are not true. Indeed there is truth in their claims of widespread fraud, abuse and just plain bad medicine. However, the legitimate side of regenerative therapy has been completely left out of the press. How this all came about is a story in itself that needs to be told.

In 2006 the FDA issued a draft guidance (21 CFR 1271.10(a) and 21 CFR 1271.3(f)) describing their “regulation” of the use of human cells, tissues and tissue-based products (HCT/P’s). This document describes how they may be used for therapy so long as the product is 1) minimally manipulated (i.e., not subjected to cell culture or altered in any way), 2) does not contain any other added articles (e.g., antibiotics, growth factors, genes, etc.), and 3) is not used systemically (i.e., intravenously). Moreover, unlike gaining approval for “drugs” through expensive and lengthy clinical trials (hundreds of millions of dollars over 10-15 years) permission to produce this product is obtained by simply informing the FDA by letter of one’s interest in making this product available to physicians. Notably, evidence of safety and effectiveness via clinical trials was, and still is not required. As it stands now, there are only 2 pathways through the FDA to commercialization, the long and expensive path that drugs take (a “351” tissue designation of 1271.1,3 above) or the short and cheap path for cells and tissues that only requires a letter of notification of intent to do business (a “361” designation). Needless to say, the short path offered serious interest to numerous entrepreneurs hoping to quickly and inexpensively capitalize on the potential profits available in the medical industry.

Because of the FDA’s guidance regulating stem cells in 2006, numerous physicians or medical clinics began isolating MSCs from fat or bone marrow intending to treat all sorts of diseases and disorders without the benefit of any clinical trials documenting safety or effectiveness. Even though the FDA claims to “regulate” the use of these cells, they in fact do not. Its only when some naïve, dishonest or unscrupulous caregivers, of which there is no shortage, end up hurting the patients with these treatments that the FDA steps in.  In October of 2018 the FDA informed Livyeon regarding reports of adverse patient reactions to a product they manufactured initiating a recall of their ReGen Series products,, as well as US Stem Cell of Sunrise Florida   who blinded two women with retinal injections from fat-derived stem cells. So despite the good intentions of the 361 pathway there are now quite a few bad stem cell “clinics” and even uglier ones taking advantage of this easy path with new clinics entering the market almost daily. With the promise of therapeutic breakthroughs these bad and ugly enterprises are looking to make a handsome profit, always on a cash only basis by advertising cures for almost every bad disease known to exist. Taking advantage of desperate and vulnerable patients with Alzheimer’s disease, Parkinson disease, all kinds of cancers, ED, and even anti-aging claims is deplorable and needs to be stopped.

However, left out of the conversation altogether is a modest group of good operators in the US stem cell market. Among the earliest entries into the FDA regulated category 361 pathway was the injectable amniotic tissue allograft which is a combination of amniotic fluid to which small (microscopic) pieces of the amniotic membrane are added creating a slurry of sorts. It has been known for some time that amniotic fluid had considerable regenerative activity based largely on the presence of numerous fetal and extra-fetal MSCs, so it was natural for the stem cell therapy distributors to assume the presence of functional stem cells in amniotic tissue allograft. Interestingly, the flat amniotic membrane alone was first used in 1910 by a physician, Dr J. Davis at Johns Hopkins University Hospital. He reported over 550 cases in which he treated burn and chronic wounds with sheets of the amniotic membrane and found considerable pain relief and good regeneration of the skin in all the cases. His observation was repeated by others soon after as well as much later. Spurred by this observation, the ophthalmology community tried a similar approach to treating corneal regeneration by developing a contact lens device with a piece of amniotic membrane attached to the inner side of the contact lens-like application has been utilized for ocular surface disorders. This interesting approach to treating corneal defects resulted in a clinical trial and approval (via the longer 351 pathway) of the FDA for this corneal regeneration application in 1988.

 MSC stem cells isolated from fat, bone or amniotic fluid or amniotic membranes have enormous potential for therapy. However, because of a little known limitation, the kinds of clinical trials most doctors and institutions want to see, namely prospective, randomized, double blind, placebo controlled studies (i.e., “evidence-based medicine”) have never been done. The limitation is that there is nothing to patent in MSCs whether from fat, bone or placental tissues (they belong only to the donor). Hence, there is no incentive for MSC research by organizations like those in Big Pharma with pockets deep enough to afford the hundreds of millions of dollars in costs spread over 10-15 years that is required. Such studies would be great, but without patent protection and product ownership, it makes no sense to invest that kind of capital to make these treatments available for anyone to produce and sell. As a result, there is a little to no evidence of safety and effectiveness since the producers and distributors, mainly small operations, can’t generate the finances to support the kinds of clinical trials (i.e., “evidence-based medicine) the medical community wants to see.

As a retired stem cell scientist and now consultant in the stem cell industry, I have witnessed hundreds of successful treatments, not only to patients, but also friends, family and myself included. Moreover, we are gathering pre- and post- treatment outcome data in small trials conducted at a large academic medical center, with the injectable amniotic tissue allograft and noninjectable amniotic membrane. A problem we are having is providing the lengthy and in-depth data typically seen in the costly evidence-based clinical trials that journal reviewers want to see. Only elaborate data from the most expensive trials are deemed acceptable from a business sector occupied almost exclusively by small operators. It’s a catch 22! As mentioned, the amniotic membrane has a fairly rich clinical history for treating chronic wounds as first described by Davis in 1910. Moreover, the amniotic fluid is a source not only for fetal and extra-fetal MSCs but also, and more importantly their secretory products. As we show in a small clinical trial for chronic pelvic pain currently under peer review for publication in a medical journal, after preparation the amniotic fluid contains virtually no functional stem cells. Indeed they are present in fresh amniotic fluid, but some aspect of the FDA’s mandated production procedure somehow disrupts their regenerative functionality altogether. However, of interest, the amniotic tissue allograft, without any functional stem cells stills provides considerable relief to most patients and can last for several years following a simple injection. In other words, it’s the secretory products (“the secretome”) of the MSCs that do the tissue repair, not actual stem cells per-se, and this concept is largely already known in the stem cell community. Like the MSCs, the amniotic tissue allograft not only has considerable regenerative potential but also robust antibiotic, antiiflammatory and angiogenic functionality. This suggests an almost a ideal soup-to-nuts application to tissue injury in a single injection, and hundreds of thousands of patients have received this therapy since 2006 without a single reported serious adverse side effect. To be sure, like most therapies, not everyone responds, and of those responding, some last for many years while others last for only months to a few years (it can be re-injected) and some, of course, don’t respond at all. In patients with disorders that are untreatable and inflict a poor quality of life, like chronic pelvic pain, this outcome is far better than no treatment or treatments without effect. In addition, we see patients improving following treatment with the injectable amniotic tissue allograft (or membrane) for shoulder (rotator cuff) injuries, hip, knee and ankle degeneration repair, chronic (“neuropathic”) pain as well as surgical issues including surgical mesh placement and fistula repair, two difficult to treat conditions. To get a better sense of how these apparent successes are working we are now beginning small clinical trials to shed light on effectiveness to better inform physicians and scientists of potential regenerative therapies.

So, if in addition to the bad and ugly sides of regenerative medicine, there is indeed a good side, how can patients seek out the good side? One of the simpler ways is to ask about cost. Medically necessary amniotic tissue allograft described above and used by several reputable distributors is not only regulated by the FDA, but may also be eligible for coverage by select insurance carriers (depending on their plan) including Medicare. This is something that never comes up in the numerous warnings by investigative reporters and even the FDA issued warnings of stem cell therapy abuses. In fact, among reputable and compliant vendors, one of the amniotic tissue allograft distributors (Pathway Healthcare Solutions LLC, Morristown, NJ) on physician request helps benefit verify the patient's plan of coverage before treatment.  Such benefit verification helps the patient know whether or not their insurance plan includes possible amniotic tissue allograft benefits.  My personal health insurance experience offered a copay for an amniotic tissue hip injection in an attempt to avoid paying for a much more costly hip replacement.  My copay cost was $52 out of pocket, and that was 4 years ago. And, I’m still pain free - without any surgery. Same with my chronic shoulder rotator cuff pain, i.e., low copay with long lasting relief. And, of course, “buyer beware” with the cash only clinic. Physicians take the Hippocratic Oath on graduation from medical school, part of which says to provide good health care and do no harm. It doesn’t say only if the patient can pay cash; and, in my opinion the cash only clinic is crazy and as reported above, threatens the integrity of legitimate clinical medicine.

So, moving forward, it’s  my hope that the FDA starts regulating stem cell therapy and shutting down the bad and ugly players but leaving the good players in place. It would be disastrous for those of us who might get inexpensive (almost free!) regenerative therapy if the FDA shut down the whole industry. In my opinion, throwing out the baby with the bath water would increase health costs as  a big expensive mistake.  So, leave the good players inplace and urge health consumers to make wise decisions with their insurance benefits in place.