California stem cell clinic to pay out $3.65M settlement to former patients for ineffective treatments
Four years after the FDA admonished stem cell clinic StemGenex for making dubious claims about its services in treating incurable diseases, and 3 years after the company first filed for bankruptcy, the clinic and its former CMO seem to have reached their final destination: a $3.65 million bill in a class action settlement.
Federal judge Anthony Battaglia in San Diego gave final approval to the deal in late February, with the insurance carriers for the now-dead clinic along with StemGenex’s former CMO and osteopath Andre Lallande footing the bill and paying 1,063 former clients. The insurance for the clinic will pay $1.15 million, and the insurer for Lallande, a rheumatologist, will pay $2.5 million.
“It’s been a rollercoaster ride watching this clinic for many years. From the start, what StemGenex was selling didn’t make much sense to me as a stem cell biologist. Now in the end, what’s surprising is that they got held accountable at all. Most stem cell clinics don’t,” Paul Knoepfler, a professor at UC Davis who wrote about the decision on his blog, told Endpoints News.
In exchange for the payments, charges against the clinic, the owner, and plastic surgeon Scott Sessions, who worked at StemGenex, were dismissed with prejudice.
The clients were plaintiffs in a class-action lawsuit originally filed in 2016, alleging that they were misinformed by StemGenex advertising and promotional material.
According to the LA Times, the clinic had claimed its treatment was effective against numerous medical conditions, including some hard-to-treat ones like Alzheimer’s and Parkinson’s.
The treatment, which involved removing fat from clients by liposuction, “treating” it to allegedly concentrate stem cells from the tissue, and then injecting the cells back into the clients, offered no significant benefit to the plaintiffs, according to the suit. The named plaintiffs had sought treatment for a multitude of different issues, such as lupus and multiple sclerosis.
“Unfortunately, it’s not quite a simple happy ending and it’s not clear if it’ll be much of a deterrent to other similar clinics. Insurance covered a good part of the settlement, and each clinic customer didn’t get much back,” Knoepfler added.
Leigh Turner, the executive director at UC Irvine’s bioethics center who has studied the proliferation of these clinics — and had been publicly critical of StemGenex for years, noted that the patients were not reimbursed for what they paid for their sham treatments.
“I’m glad to see StemGenex’s former patients receive some money from this settlement. They’ll receive about $1,935 per person. That sum is better than nothing, of course, but it’s important to put it in perspective and understand that each class member will receive just a small amount — an estimated 13% — of what they paid StemGenex,” Turner said to Endpoints. “Likewise, when StemGenex went through bankruptcy proceedings, there was little left for creditors at the end of this process.”
Additionally, Turner noted that the settlement includes no admission of wrongdoing or liability — and that leaves a gap, in his mind. He added:
However, given how much money StemGenex charged patients for purported stem cell treatments that were unproven and unapproved by the FDA, it does not seem to me that all wrongs have been righted and justice has been served. The case does show it is possible to bring class action lawsuits against such businesses and generate results for former patients. It also reveals how difficult it is to — actual punishment aside — simply make patients whole and pay them back after they spend large sums of money for supposed stem cell products that had never been approved by the FDA and should never have been sold in the U.S. marketplace.
The FDA has warned that stem cell therapy treatments, a form of “regenerative medicine therapies,” have not been approved for a whole host of ailments, such as all neurological disorders, lung diseases, and orthopedic conditions such as osteoarthritis.
And back in 2018, the FDA made that clear for StemGenex, following up on a 2017 promise to crack down on the stem cell clinic industry — especially the non-legit side hawking treatments for ALS and other diseases that don’t have treatments.
The agency issued the company a Form 483 at the time, pointing out numerous violations in a letter to the clinic.