123s of Stem Cell Therapy

September 30, 2017

Stem cell therapy has been used by physicians for over a decade.  Over the past five years the number of stem cell clinics in the United States has steadily risen according to numerous news reports.  The potential use of blood stem cells to treat diseases of the blood, or injury to the bone, skin, and surface of the eye has caused researchers to explore host of new avenues using stem cells in medicine.  Additionally, the growth of the stem cell market has brought more businesses into the medical market attempting to offer quick, alternative ways of improving an individual’s health.  Typically these stem cell clinics charge cash for the procedures, which can cost thousands of dollars.  This year the FDA issued a warning letter to a clinic for misleading its patients.  In a related press release, Food and Drug Administration (“FDA”) Commissioner Scott Gottlieb, M.D stated that “[s]tem cell clinics that mislead vulnerable patients into believing they are being given safe, effective treatments that are in full compliance with the law are dangerously exploiting consumers and putting their health at risk[.]”  According to the FDA’s website, it has not approved any stem cell-based products for use other than cord blood-derived cells.

It is well settled that the FDA does not have any control over a physician’s ability to prescribe “off-label” or conduct “experimental use” of a drug.  However, physicians taking such action are subjected to the oversight of their medical boards.  The Texas Medical Board (“TMB”) does allow limited use of stem cells that are not FDA approved if certain conditions are met, which include:

(1) Institutional Review Board approval for stem cell use; and,

(2) Special Informed consents from the patients on the use of unapproved investigational therapy.

Any person looking to develop these stem cell clinics should realize that diagnosing, developing the treatment plans, or the piercing of skin constitutes the practice of medicine in many states, including Texas.  While most of these stem cell procedures are not reimbursable by any insurance companies, under Texas law, all procedures that involve the injection of medication or substances are considered medical procedures.  As such, this limits the ownership of a “stem cell clinic” to a select number of licensed medical providers in many states due to the corporate practice of medicine doctrine and the supervision required of those health care practitioners providing medical services.  These concepts have been previously discussed in details in other articles. (See 1, 2, 3s of MedSpas, or 1,2,3s of IV Therapy Providers).

What the medical community is witnessing is the growing trend of patients attempting to find other methods, including nonsurgical methods, to alleviate pain and discomfort.  Based on the above limitations, those non-physicians wishing to enter into the medical market need to make sure they understand the ownership limitations and develop corporate models that are legal under state law.  For those physicians that determine that stem cell-based therapy is a viable alternative method of treatment for their patients, they need to make sure they are compliant with these same legal models and their state medical boards.

For more information and guidance on stem cell clinics email us at info@byrdadatto.com or call us at 214-291-3200.

ByrdAdatto Founding Partner Bradford E. Adatto

Bradford E. Adatto

Brad decided to become a lawyer during sixth-grade Career Day, when he promised to represent his best friend, a future doctor. A few decades later, he started his own law firm that focused on representing health care and corporate clients.

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