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FDA Warns Companies about Processing, Distributing and Marketing Unapproved Stem Cell Products

The U.S. Food and Drug Administration (FDA) has issued three letters (one warning letter and two untitled letters) over the last two months of 2019 directed at four different companies focused on the processing, distributing, and marketing of allegedly unapproved stem cell products derived from birth-related products, such as placentas, amniotic tissues, umbilical cords, and umbilical cord blood.

These products, which include human cells, tissue, and cellar and tissue-based products (also known as HCT products) are intended to treat a variety of orthopedic issues, autism, cardiac issues, dementia and arthritis. HCT products are considered “articles containing or consisting of human cells or tissues that are intended for implantation, transplantation, infusion, or transfer into a human recipient.” Examples of HCT products include “bone, ligament, skin, dura mater, heart valve, cornea, hematopoietic stem/progenitor cells derived from peripheral and cord blood, manipulated autologous chondrocytes, epithelial cells on a synthetic matrix, and semen or other reproductive tissue.”

The FDA has defined these particular HCT products as non-homologous — meaning that they perform the same function in the recipient as in the donor. One of the recent FDA letters stated that “because the umbilical cord blood products are not intended to perform the same basic function or functions … in the recipient as in the donor … using the umbilical cord blood products to treat orthopedic conditions is not homologous use…” These non-homologous products are regulated as both pharmaceutical products under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and as biological products under the Public Health Service Act (PHS Act). That letter also warned against deviations from requirements for current good tissue and current good manufacturing practices, including engaging in “deficient eligibility practices, inadequate aseptic practices, and deficient environmental monitoring.”

The letters are being sent within the final year of the FDA’s three-year period of “enforcement discretion” for regulatory applications and approvals for stem cell clinics, as detailed in the FDA’s November 2017 final guidance document entitled, “Regulatory Considerations for Human Cells, Tissues and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use.” The guidance document states that the FDA will exercise its “discretion under limited conditions with respect to investigational new drug (IND) applications and premarket approval (biologicals license application or BLA) requirements, for certain HCT [products].”

Using Precaution Moving Forward in the Stem Cell Products Industry

Stem cell products and science relating to these products have proliferated over the past decade. Investments in stem cell technology and science are on the rise. Experts expect the global stem cell market to reach $270 billion by 2025, growing at a compound annual growth rate of 13.8 percent. The North American market alone is expected be valued at $167 billion by that time, largely due to the rise in chronic diseases.


Companies should carefully review all applicable regulations to ensure FDA compliance. Not all HCT products are regulated by both the FD&C Act and the PHS Act. According to the 2017 guidelines, certain HCT products will be regulated only by the PHS Act, so long as they meet the following criteria pursuant to 21 CFR 1271.15(b) and 1271.10(a):

  • The product is “minimally manipulated,” which means:

    • For structural tissue, processing does not alter the original characteristics of the tissue relating to the tissue’s use for reconstruction, repair or replacement; and

    • For nonstructural tissues (e., cells), processing does not alter the relevant biological characteristics of cells or tissues

  • The manufacturers’ “objective intent” is that the product is intended for homologous use only

  • The manufacture of the product does not involve the combination of the cells or tissues with another article, with limited exceptions

  • The product either does not have a systemic effect and is not dependent upon the metabolic activity of living cells for its primary function, or if the product does have a systemic effect and is dependent upon metabolic activity of the cells for its primary function, the product must be for:

    • Autologous (obtained from the same individual) use

    • Allogenic (involving tissues or cells that are genetically dissimilar and immunologically incompatible, but from individuals of the same species) use; or

    • Reproductive use.

If a product does not meet all of this criteria, it will be regulated as “a drug, device, and/or biological product under the FD&C Act, and /or section 351 of the PHS Act … and premarket review will be required.”


Companies should keep in mind that the FDA requires any entity that performs at least one step in the manufacture of HCT products to register and submit a list of the products with the FDA. This registration must be updated annually.

The FDA provides two additional resources to help manufacturers understand how to obtain a recommendation or decision regarding the classification of HCT products pursuant to 21 CFR 1271:

  • The Tissue Reference Group, which provides an informal process to get a recommendation regarding the classification of an HCT product

  • Request for Designation, which may be submitted to the Office of Combination Products to get a formal decision regarding a classification.

Before investing in this challenging but exciting industry, companies should use all regulatory resources available.

© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume X, Number 14



About this Author

Michael Zogby, Drinker Biddle Law Firm, Florham Park, New York, Intellectual Property Litigation Attorney

Michael C. Zogby has an extensive trial and litigation practice encompassing products liability, medical device, class action, commercial, intellectual property, mass tort, and multidistrict proceedings. He has served as trial counsel, national liaison counsel, and discovery counsel in a variety of litigations throughout the United States.

Mike serves as a faculty member at the National Trial Advocacy College at the University of Virginia School of Law, an intensive hands-on- trial advocacy training program for practicing...

Emmanuel L. Brown Associate Philadelphia Litigation Product Liability Mass Tort

Emmanuel L. Brown represents a range of clients involved in litigation. He assists at various stages of legal proceedings and trial preparation, including legal research, writing motions, and drafting other memoranda.

Prior to joining our litigation group, Manny worked in the firm’s corporate and securities group for two years on matters related to finance, securities and mergers and acquisitions.

Manny also coordinates the firm’s volunteer efforts at the Philadelphia Family Court Help Center, which is a joint project of the Family Court, the family law...