FTC Actions Against Stem Cell Clinics Making Deceptive Claims about Amniotic Fluid Products – Part Three

FTC Against Dr. Henderson

For the past two posts (Part One and Part Two), I have covered the case of Dr. Bryn Henderson, who was taken to court in October by the Federal Trade Commission (FTC) over his completely unsupported and deceptive claims concerning the miraculous therapeutic benefit of amniotic stem cells to treat every aliment known to mankind that he was offering in his stem cell clinics. I will continue my considerations of the court order by reviewing what I think are some of the implications not just about the obvious deceptiveness of treating patients with amniotic stem cells, but the approach the FTC took in making its case, and what the FDA might be attempting to do.

Related Posts: FTC Actions Against Stem Cell Clinics Making Deceptive Claims about Amniotic Fluid Products – Part One and Part Two

Obviously, the legal action taken by the FTC against Dr. Henderson, and his clinics, was welcomed by many, who hope it marks a turning point in how Federal Agencies approach the cheaters and con artists in the area of regenerative medicine. Previously, it was just the FDA doing battle against those who try to make money off the hype of regenerative medicine without actually treating patients with anything proven to be remotely regenerative as a therapy.

Some complained that Dr. Henderson got off lightly by only having to pay a fine of approximately $525,000 (about 16% of his reported earnings from 2014 through 2017) to resolve the FTC’s complaint, but he also had to agree to not engage in his fraudulent practices in the future. Nonetheless, the fact is this is the first fine against physicians and/or clinics by the FTC for engaging in deceptive practices in the field of regenerative medicine that I am aware of. Why did the FTC enter the fantasy world of regenerative medicine embraced by Dr. Henderson?

I am only guessing, but I suspect the FDA got tired of physicians and companies ignoring the various Untitled Letters, Warning Letters and Guidances they have been issuing for the past seven years or so. For example, Dr. Thomas Gionis received a Warning Letter from the FDA on December 30, 2015, telling him that the three stem cell therapy clinics he was operating in California, Florida and New York were treating patients with unapproved drugs—manufactured on-site by digesting a patient’s fat tissue to produce SVF (stromal vascular fraction). His ex-website indicated that he had worked with the Cell Surgical Network (CSN) at one point, although the FDA noted in its Warning Letter that Dr. Gionis had resigned recently from “an organization”. I suspect it was the CSN from which he resigned, so that the founders of that network could continue to say that CSN had no problems with the FDA, a pretense they no doubt kept up until the FDA went after them in court in 2018. In other words, despite the obvious issues raised in the Gionis Warning Letter, some folks in the regenerative medical community, especially those digesting fat to produce SVF, kept going as if nothing had changed.

Furthermore, given the collective yawn some in the regenerative medical community greeted the issuing of Final Guidances in November 2017 on important matters relating to point-of-care therapies (e.g., you can’t use adipose tissue to treat musculoskeletal conditions), I suspect the FDA decided it would be faster to have the FTC go after clinics making outrageous claims concerning the therapies they offer. From the Henderson case, it would seem the FTC is starting with clinics and clinicians who offer the most unsupported therapeutic composition—amniotic stem cells—currently floating around the regenerative medical community. But I am sure the FTC will find time to engage with the physicians who advertise their use of Wharton’s Jelly stem cells, cord blood stem cells, umbilical cord stem cells and all of the other completely unsupported and non-compliant human-derived cell preparations known to the field.

Another advantage of having the FTC drop the hammer on stem cell clinics and physicians offering clinically-unsupported regenerative therapies is their approach lends itself to quick replication. Although not all of the details have been revealed, it seems to me that the FTC reviewed the website claims Dr. Henderson made, probably confirmed with the FDA that there was no scientific or clinical merit in any of them, after which a deceptive advertising and deceptive claims case was borne. Thus, I suspect the next such case the FTC brings will be based on the website of a targeted physician/clinic who treats a wide variety of medical conditions with a single therapeutic composition, most likely amniotic stem cells. So, the only limit is how fast the FTC identifies suspect websites, which these days just requires a few seconds of Internet effort to find, and to assign the case to a team of fraud attorneys of which I think the FTC has quite a few. Easy, peasy.

Of course, the FDA is hoping that business-savvy physicians will take heed and stop their non-compliant practices of medicine, thereby relieving the FDA of the need to send in an auditing team to audit the offending clinic, record their observations of deficiencies, report their findings in a FDA Form 483, which will result in the FDA issuing a Warning Letter and waiting for the offending clinic’s legal counsel to drag out the interaction for a couple of years. As best I can tell, and it is just a guess, the FTC probably got onto Dr. Henderson at the end of 2017 or at the beginning of 2018, because the period over which the ill-gotten gains was calculated started in 2014 and finished up at the end of 2017. I suspect the FTC probably sent Dr. Henderson some kind of formal notice of his transgressions in early 2018, since there is a stipulation signed by Dr. Henderson dated July 27, 2018.

The Internet and social media are important means of increasing a clinic’s visibility, but what constitutes acceptable advertising after the Henderson decision? In the next post, I will cover some of the ramifications for physicians in view of the language contained in the Order that shuttered Dr. Henderson’s fantasy miracle cure clinics earlier this year and has raised serious issues of credibility for physicians who treat patients using amniotic stem cells.

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