The current status and the future of stem cell tourism – interview with Doug Sipp

by Alexey Bersenev on January 18, 2012 · 3 comments

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In the last 3 weeks, we have witnessed some interesting moves against so-called “stem cell tourism”. Crackdown on “stem cell treatment” fraud in US, popularization of the problem via “60 Minutes” broadcast and start of reforms in China.

I’ve asked Doug Sipp to comment on some recent events and on the problem in general. Here is my Q & A with him.

Doug Sipp – a Leader of Science Policy and Ethics Studies Unit at the RIKEN Center for Developmental Biology (Japan). He intensively writes on the problem of “stem cell tourism”, regulation and ethics of stem cell research and applications. He is the author of Stem Cell Treatment Monitor blog.

1. The first question about the current situation in China. The recent news about China’s government order to stop unproved stem cell treatments, made a buzz in mass media. But, what does it really mean? If I understand correctly, the China’s SFDA will stop to accept new applications for clinical trials involved stem cells (as Reuters reported) until a new regulation law. Will government’s order apply to new trials approval only? What will happen with ongoing trials? Why did they decide to start reforms from clinical trials? Trials is the right way to test stem cell treatments. Why halt this?

I have to admit that this recent development took me by surprise. I have not been able to get any behind the scenes details about what led to the new crackdown, but whatever the reason I can say that this is very welcome news! I do not believe that the new ruling applies only to new trials seeking approval, as other local news agencies have reported that “…all unauthorised and unproven stem-cell clinical trials and applications should be suspended immediately, and those approved by the State Food and Drug Administration should follow to the letter the authorities’ instructions, with changes to the trials and profit-seeking banned.” (South China Morning Post)

It is difficult to determine what effect this will have on ongoing legitimate trials and decidedly less legitimate business models– the MOH/SFDA clearly want to put limits on the ability of trial sponsors to tweak or turn a profit on clinical studies that have been approved already, and they specifically state that there should be no charges to patients who enter an approved trial. That said, many medical regulations in China are honored mainly in the breach, and the situation is complicated even further by the fact that hospitals operated by the military, or by organizations charged with promoting development in designated “special economic zones,” operate in effectively separate regulatory domains. In fact, while all such national regulations are established by central government agencies, the enforcement is generally carried out by local authorities (at the level of province, prefecture, or municipality), which results in a highly variable enforcement landscape, despite apparently uniform regulations.

I don’t have access to the reasoning behind this recent decision, so I cannot say with confidence why the MOH and SFDA have taken the extreme measure of putting an across the board hold on clinical trials, but I suspect it was motivated by the widespread abuse of the system by profiteering clinics and individuals, which has harms the reputation of Chinese stem cell basic and clinical research. An enormous number of hospitals, many of them operated by branches of the Chinese military, have made a mockery of legitimate stem cell clinical research, and I think the Ministry is responding directly to this challenge. That said, the ruling does not seem to have had an immediate effect, as a large number of hospitals continue to advertise stem cell treatments for which there is no scientific evidence of safety and/or efficacy in both Chinese and English. Only time will tell whether the new regulations will prove to be more effective than the Advanced Medical Technologies Law passed in 2009.

2. It seem to me that China should start from prohibition of unproven treatments, which are currently offered by commercial clinics and big hospitals without official market authorization. Were commercial stem cell treatments offered as a part of clinical trials or were unregulated at all? What is your take on this?

I agree that it makes sense to prohibit the delivery of untested stem cell products and procedures outside the context of clinical trials. What appears to have happened in China, however, is that there has been such widespread abuse of registered clinical trials involving stem cell applications that the entire system has become corrupted. I believe this is why the authorities made an explicit statement to the effect that “all clinical trials of stem-cell therapies should be free,” meaning that research subjects should not be charged for their participation in medical experiments in which the risks and benefits are, by definition, unknown.

In other countries as well, several clinics and industry-led organizations have attempted to justify “fee-for-service” clinical research and “self-regulatory” oversight schemes. This has led to widespread abuses of patient trust in the interests of profit. The Chinese government is right to be concerned about such abuses, and is justified in taking extreme measures to allow it the time needed to develop its ability to enforce the existing laws on clinical research.

3. Seem like a few noticeable organizations in China, which are conducting clinical trials, have a big impact on stem cell tourism and international reputation. Shenzhen Beike Bio – a company, which is currently conducting at least 5 trials, registered in international databases. Guangzhou Military Command Hospital and General Hospital of Chinese Armed Police Forces are conducting 4 and 5 trials respectively. Almost all of these trials are involving exclusively allogeneic mesenchymal stromal cells derived from umbilical cord. How are they currently regulated and how new ruling will impact their activities? I also wonder why they pay so much attention to the one particular stem cell source?

China has historically been one of the major players in the global “stem cell tourism” industry, as you note. The system under which treatment centers have been able to operate with impunity remains opaque and confusing, even to researchers in China. As I understand it, the problem is not so much with the rules, but with their enforcement, which has been negligible to date. For example, in the 2009 law on advanced medical technologies (which specifically included novel stem cell treatments), the only penalty for violation was a fine with a maximum Yuan amount equivalent to several hundred USD, which is unlikely to dissuade companies that charge tens of thousands of dollars per patient. In any case, it appears that enforcement is carried out in a scattershot fashion, and that many companies have been able to operate in the open with effective immunity from the law. The total picture is one of a dysfunctional system – I think that the MOH/SFDA are now acknowledging this and have, in effect, hit the Reset button.

This sort of action is becoming more and more important as the country’s investments into legitimate scientific research in the field of stem cells is beginning to bear real fruit (I have recently co-authored a paper, published in this month’s issue of Cell Stem Cell, which highlights many of the positive developments in China’s stem cell research). I think the Chinese government realizes that if its real scientific contributions are to be taken seriously by the international scientific community, it needs to weed out the many unscientific groups making loud, but unsupported, claims about the present-day clinical efficacy of stem cells.

Regarding the focus on allogeneic MSCs, I think this a reflection of the large holdings of such cells in government-funded bone marrow and cord blood banks around the country, which appear to have worked with (or at least sold cell resources) to companies that engaged in stem cell tourism. Beike Biotech famously (infamously?) received direct funding from the Chinese government to establish what they claimed was the world’s largest stem cell and processing facility.

4. Can you estimate how much “stem cell tourism” business can make in profit?

Given the secretive and deceptive nature of the business models at work in the vast majority of companies that operate in this industry, it is impossible to make a high-confidence estimate of profits; I am unaware, for example, of any company marketing unproven stem cell treatments that makes its balance sheets public.

I think it is possible, however, to estimate revenues for companies that report average patient costs and numbers of patients treated. As of 2010, for example, Beike Biotechnology claimed to have treated over 9000 patients. The average fee charged to foreign patients was $26,000, while the average for domestic Chinese patients was apparently one-third that (I have this information from someone familiar with the company’s operations). Approximately half of Beike’s patients were foreign, while the other half were from within China (information from the same source). If these numbers are correct – which is impossible to verify, given the secrecy of the company, and the duplicity of its leadership – the revenue on 9000 patients would exceed $150 million. Again, this is a back of the envelope figure at best (based on figures from a questionable company), and in any case, does not reflect costs of cell storage and processing, general overhead, or treatment. It was reported to me that Beike would pay the treating hospital between $10,000 and $12,000, which (if true) would indicate that costs were considerable, but nonetheless part of a business scheme capable of yielding profits in the tens of millions of dollars.

In extreme cases, profits may approach 100% – we have seen from legal actions filed against Frank Morales, and the recent revelation by 60 Minutes of the quality of StemTech’s “stem cells” that products advertised as stem cell therapy are of unreliable quality, at best, suggesting that costs for quality control are minimal, and that in some cases, vials containing only saline or fragments of dead cells are being sold to patients.

It is a mistake to approach companies engaged in stem cell tourism as if they are simply conducting science by alternative means. A growing body of evidence shows that many people who market unproven stem cell treatments directly to patients are simply engaged in fraud, and abuse both the high regard and trust that patients and the general public have for science, and the inherently trusting mechanisms that scientists use to judge each others’ work (in the sense that scientists are expected at a minimum to honestly report their data and exert their best, honest efforts in interpreting them objectively), in the interests of profit. Having studied this industry intensively for several years now, it is my considered opinion that the claims of any company or group that sells or otherwise promotes such putative “stem cell” products or services should be greeted with the deepest possible skepticism.

5. Many commercial clinics and companies use “stem cell” as a brand or marketing tool. How the claim “use of stem cells” close to reality? I wonder if independent expertise of cells which were injected into the patients was ever done.

This is the key question. Clearly, there is an enormous amount of legitimate research into stem cells, both fundamental and clinical, already underway. Given that the results of these cautious, responsible, ethical experiments are not yet conclusive, I think it is irresponsible to speculate publicly on how close we are to seeing expanded use of stem cells beyond their current indications in diseases of the blood and immune system. It is important to point out, however, that the answer to this question for at least some medical conditions for which stem cells are currently under study may be “Never.”

What is clear is that the net effect of the “stem cell tourism” phenomenon has been to be unnecessarily confuse the field and jeopardize it with a combination of unsustainable enthusiasm on the part of some and, increasingly, profound skepticism on the part of others. The scientific method was developed for a reason, which is primarily to minimize the impact of human biases and cognitive fallacies, conscious and unconscious, on the interpretation of experimental results. Introducing unregulated personal and business interests into a nascent scientific field has not produced positive results in the past, and will most certainly not do so in this case either.

Regarding the question of whether independent scientists have ever analyzed cells injected into a patient, there appears to have been very little in the way of such studies. But this is only to be expected, due to the highly variable, uncontrolled and unreliable conditions under which such “treatments” are carried out in the first place. Who would pay for such a post hoc study to be done, and what could we hope to learn from it? In any event, how would the injected cells be identified, particularly in cases in which an unregulated clinic uses autologous cells. There was the famous case of the Israeli boy who was inject with a slurry of unsorted fetal cells for the “treatment” of ataxia telangiectasia, which was only studied after it gave rise to tumors of the nervous system, the cells of which were found to be donor-derived.

This again shows the importance of having a well-developed and adequately enforced system of regulations governing the introduction of novel interventions, such as stem cells, into the clinic. Groups and organizations that operate within the systems already established in places like the US, EU, UK, Canada, Australia, and Japan are required to such follow-up studies themselves in the context of registered trials subject to independent oversight.

Again, I think it is a mistake to treat these fundamentally unscientific, and in many cases anti-scientific, commercial outfits as if they are doing something potentially beneficial. I suppose someone might seek a grant from the NCCAM to fund such a study, but there are enough interesting legitimate research questions to be asked without diverting one’s attention to answering the dubious claims of pseudoscientists and profiteers. Carl Sagan famously said, “Extraordinary claims require extraordinary evidence,” and, crucially, the onus of providing such evidence is on the person making the claim – anyone making such egregiously profit-motivated marketing claims and then asking others subsequently to provide the evidence should be viewed as parasitic at best, and an outright fraud at worst.

6. One of the big downsides of uncontrolled “stem cell tourism” is inability to collect and analyze clinical data properly. Many clinics don’t provide detailed information about cell product or patients. Maybe they don’t inject stem cells at all! We also lack of information about adverse events or complications of unproven stem cell therapy. By some reasons, patients don’t share this information on Internet. How big is the problem of adverse events or “lack of efficacy” in unproven stem cell therapy? How do you think we can track these events and collect the information in order to avoid such things in development of new regulated cell products?

As with the previous questions, it is impossible to know the extent of adverse events and levels (if any) of efficacy, because the organizations operating under this particular business model are inherently unscientific, and design their “experiments” in a way that permit and sometimes exacerbate the long, long list of fallacies, biases and errors that well-controlled studies are designed to minimize.

A particular problem is the notion that “fee-for-service” model of clinical research in which the patient/research subject pays to participate, is capable of generating meaningful results. There are too many fundamental problems with this notion to go into detail here, but the Chinese MOH and SFDA were very wise to explicitly state that, “all clinical trials of stem-cell therapies should be free.”

The problem of badly designed “research” is a longstanding one in the history of medicine, not only in the field of stem cells. The placebo response is perhaps the most famous confounding factor, but selection bias, reporting bias, regression to the mean, justification of effort (or investment), and other forms of systematic error in human cognition, experimental design, and interpretation of data need to be controlled for adequately – efforts to introduce medicines without doing so are extremely likely to yield only false promise (but, unfortunately, massive profits). This is the basis for the success of so-called “alternative” medicine, which are consistently shown to perform no better than placebo in controlled studies, but which nonetheless have vocal advocates who swear by their safety and efficacy. What can we learn from this? Humans are fallible, and clinical research needs be designed properly and subject to independent oversight. But real scientists already know these things, so I am doubtful that rogue companies that engage in unethical business practices mislabeled as research have anything else to offer. It can be useful to think of “stem cell tourism” companies as televangelist preachers who claim to cure with the power of prayer. There are thousands, possibly millions, of people who passionately believe their claims, who will pay money to be “treated” by them, and who swear that such healing is safe and effective, but despite the formidably large number of anecdotes and testimonials, the phenomenon is not likely to serve as a source of useful knowledge for scientists seeking to develop something real. Groups that are sincere in the desire to track outcomes will find an extremely well-developed system for doing so under the auspices of any of the many regulatory agencies around the world that have been set up to facilitate and govern the development and marketing of new forms of medicine.

On a related note, what we do see quite a lot of is irresponsible clinics and promoters of unregulated stem cell medicine taking media reports of interesting preclinical research, or promising results from scientifically designed clinical studies, ad claiming that these somehow justify the immediate, unregulated commercialization of some form of stem cells for some (generally extensive) menu of medical conditions by their particular firm. This is a particularly offensive practice in that it intentionally seeks to profit from the scientific efforts of others in the present day, and will inevitably result in an epidemic of “I told you so” claims in the future if stem cells are shown through actual research to have additional clinical uses.

7. What is your prognosis for the status of stem cell tourism in the next 3-5 years? What trends will be? Will it shrink or proliferate?

That’s a tough one. There has been some positive news in the form of clinic closings, regulatory developments, and arrests of people who abuse the clinical reputation of stem cells to financially exploit patients, but these have only made a modest dent in the industry. Much will ride on the success of the US and Chinese governments in reining in these predatory businesses. One worrisome trend in the US has been the explosive growth of private clinics and companies that market “autologous stem cell” injections (typically using putative “adipose-derived stem cells”), for orthopedic repair, cosmetic surgery or so-called “anti-aging” purposes. There is an active case (USA v Regenerative Sciences) in which one such company is contesting the FDA’s authority to regulate point of care re-injections of autologous cells which, along with the lobbying efforts of various industry groups, appears to have emboldened a number of US physicians impatient with the existing scientific process.

The recent arrests in the Stowe/Morales case, which included one academic scientist accused of processing cells for unapproved clinical use, may be a sign that the US federal government is taking the issue more seriously, and may cause some doctors who previously felt comfortable flouting the law to reconsider. That said, even if China and the United States are both effective in regulating the clinical application of stem cells in those countries, there will always be other, less well-regulated jurisdictions where entrepreneurs can set up clinics and lure international patients with impunity. It is unrealistic to think that the problem will disappear completely – the question is whether for-profit clinical uses of stem cells that have no basis in scientific evidence will be permitted in otherwise well-regulated and scientifically advanced countries, or whether they will be consigned, as they should be, to parts of the world where science-based medicine and the rule of law have not yet taken root.

8. Stem cells could be one of examples of hype cycle in biology and medicine. But did previous hype cycles give such phenomena as “trade on hope” or “medical tourism” or “branding”? For example, I can’t tell that about gene therapy or antibodies. Is it exclusive attribute of stem cells? What do you think?

I agree that neither gene therapy nor monoclonal antibodies have been confronted with the problems facing premature uses of stem cells in the clinic and product marketing, but I don’t think that stem cells are unique in this regard. Tim Caulfield, who has done some excellent studies of the stem cell tourism phenomenon, has frequently pointed out that there were numerous and extremely popular claims of clinical benefit for electricity, magnetism, radium, etc. when these were relatively young discoveries. Marketing moves much faster than science, and this is exactly what we are seeing today.

What I do think is unique about the global commercialization of stem cell pseudomedicine, is that it has taken full advantage of the revolutions in communications (internet) and transportation (international travel) to target the largest possible market at the lowest possible cost, while evading scientific and regulatory oversight. It also appears that many people feel greater familiarity with the concept of cells as fundamental units of the body, which is played upon by companies that suggest cells function as interchangeable “bricks” or “Lego blocks.” There was a pseudomedical fad for “live cell” or “fresh cell” (Frischzellen) injections of material from fetal animals in Europe and the US starting in the 1920s, and it appears to have been based similar claims as we see in stem cell pseudomedicine today. (Unsurprisingly, a “fresh cell” revival is now under way, in which the marketing claims for decades-old rabbit-, sheep- or shark-cell quackery have been updated to suggest that these were stem cells, or stem cell activators, all along.)

9. As I emphasized on my blog, professionals (researchers and physicians) should also do something about unproved stem cell treatment. Obviously, it has a huge negative impact on credibility of stem cell research and reputation of the field in general. What measures, do you think, should be taken by professional community? What our focus should be?

I definitely agree that researchers in the field should be aware of this shadow industry, and at the very least be responsive to inquiries from patients and their families. The International Society for Stem Cell Research (ISSCR) has conducted several public initiatives to set the record straight about the current state of stem cell science and its medical applications, such as through the publication of a Patients Handbook on Stem Cell Therapies (.pdf), and the Closer Look at Stem Cell Treatments website. The International Society for Cell Therapy (ISCT) has also published a position paper on the problem of stem cell tourism (.pdf) and numerous other scientific societies, patient associations, disease advocacy groups, and media organizations have also published critical perspectives and warnings on the issue of stem cell fraud. David Resnick and Zubin Master published an overview of the growing industry of companies marketing scientifically baseless “stem cell” treatments in which they called for greater scientific responsibility, such as closer scrutiny over the distribution and sharing of cellular resources.

At the end of the day, the problem is that scientists are busy with their own work, and must make time for any such outreach activities (which can quickly become extremely time-consuming), whereas many of the companies engaged in selling unproven stem cell treatments to patients invest enormous amounts of time in marketing and spreading disinformation, as this is the foundation of their profit model (in the form of new patients/customers/victims).

I cannot stress strongly enough the fact that stem cell pseudomedicine is fundamentally different from stem cell research. A number of recent cases have highlighted the fact that it has more in common with various forms of criminal fraud, than it does with any form of scientific or medical activity. Scientists can only do so much in setting the record straight – at some point combating this becomes more a matter for law enforcement than for peer review and statements of concern.

Thank you very much for the interview!

{ 3 comments… read them below or add one }

Ангиогненез January 18, 2012 at 7:04 pm

China is so expensive for stem cell tourism. Tai is cheap.


Paul January 20, 2012 at 1:41 am

Excellent Q&A , Alexey and Doug. Very informative and timely!


Duped by Don January 30, 2012 at 7:54 pm

Why is there no mention of Don Margolis? I see his name everywhere. That scoundrel is a scam artist – plain and simple. Don Margolis promotes his cronies in the stem cell world for personal gain under the guise of “helping patients”. I have it on good authority that Don is running around Bangkok cheating investors in his stem cell company and also cheating on his wife. I was one of his victims :(. You have been warned.


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