What are HCT/Ps and How are they Regulated?

The Food and Drug Administration (“FDA”) regulates and categorizes human cell and tissue products (“HCT/Ps”) based on the public health risks they pose. HCT/Ps are biological products that are used to repair, replace or regenerate human tissues or organs, and can be derived from various sources, including human organs, tissues, cells or cell lines. Low and medium risk products are regulated solely under Section 361 of the Public Health Service (“PHS”) Act and do not require FDA approval. Products regulated under Sec 361 are those with homologous use (same individual), minimal manipulation, not combined with another article and have no systemic use. Those that do not meet these criteria are considered high risk products regulated under the Food, Drug & Cosmetic Act. These drugs/biologics require either an Investigational New Drug (“IND”) Application and FDA approval or a biological license application (“BLA”) under Section 351 of the PHS Act.[1] Essentially, low and medium risk HCT/Ps are subject to certain regulations, but do not require the same level of FDA approval as higher risk products.

Despite the FDA’s issuance of almost a dozen Guidance’s on HCP/P products, the regulatory framework remains complicated and continues to evolve as, in some cases, the practical application of the IND and BLA processes has proven to be difficult. The FDA is therefore considering whether a new regulatory pathway is needed for certain HCT/Ps. Many of the marketers of these products are small companies and clinics unable to conduct large scale clinical trials. In 2017, the FDA indicated it was going to be using enforcement discretion for these products. That ended in May 2021, mostly due to broad marketing of unapproved HCT/P products for various indications such as Alzheimer’s or Parkinson’s disease, as well as expansive growth of stem cell clinics’ marketing of HCT/Ps for therapeutic claims. Additionally, HCT/P products continue to be used for arthritic and other orthopedic conditions and procedures.

Over the past few years, the FDA has issued over 400 “It Has Come to Our Attention (“IHCTOA”) letters and dozens of Warning Letters to health care providers, clinical facilities and manufacturers. In 2023, the FDA appears to be stepping up enforcement. For example, in March, the FDA sent an untitled letter to a stem cell clinic for “regenerative therapy solutions” to treat various diseases/conditions as needing FDA approval.

Regulatory Challenges and Billing Issues for Prescribers and Pharmacists Surrounding HCT/Ps

Increasing numbers of newer products are becoming available, marketed for prescriber and/or pharmacy administration and dispensing pursuant to prescriptions. While in some cases the manufacturers of these products do seek FDA approval (e.g., stem cell eye drop products are in Phase III trials), in other cases, the manufacturers assert to the prescribers and pharmacies that the products are regulated under 361 and do not require approval. Several state Boards of Pharmacy have now alleged violations of state pharmacy rules for the dispensing of unapproved products. In one case, the state of Minnesota alleged that the prescriptions written were for a product that did not have FDA approval and/or that the pharmacy was obtaining products from a manufacturer not licensed in that state. The manufacturer had advertised the product as regulated solely under 361 and, therefore, not requiring FDA approval. Even though the determination of whether a product is regulated under 361 or under 351 is a manufacturer obligation, the FDA contacted the State Boards of Pharmacy with its concerns, and the Pharmacy Boards subsequently opened investigations of these pharmacies for alleged violations of the Pharmacy Practice Acts.

In other cases, we have seen prescriber billing issues for HCT/Ps such as amniotic fluid products used for orthopedic patients, in which the prescribers again received misinformation from the manufacturers claiming certain Medicare coverage of the products simply because there was a Q code. Q codes are used in the healthcare industry to identify and bill for specific medical products or services and are typically associated with Medicare coverage. In some cases, the manufacturers promoted the product to doctors for off-label indications, which caused the submission of false claims to federal payors. The government is building an aggressive case against prescribers and medical practices seeking repayment (i.e. claw backs). In some cases, the Centers for Medicare and Medicaid Services may be working with the Department of Justice (“DOJ”) to aid in their investigations. Allegations such as these are serious, and prescribers should seek legal counsel to defend themselves.

How Can Frier Levitt Help

To avoid issues that may later surface with Boards of Pharmacy, payors, and the DOJ, pharmacists and prescribers should request documentation from manufacturers indicating formal FDA decisions regarding the regulatory identity or classification of a product. Frier Levitt’s experienced healthcare attorneys are well-equipped to help you navigate the various regulatory frameworks employed by the FDA and other government agencies, and work to protect your interests, including during initial investigations and in litigation, when necessary. Contact us to ensure compliance with applicable federal and state laws and regulations to mitigate the risk of a government investigation.


[1] FDA Guidance for Industry. Current Good Tissue Practice (CGTP) and Additional Requirement for Manufacturers of Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/P). CBER. Dec. 2011.