Keller and Heckman Secures Important District Court Victory for Vitti Labs in FDA Tissue Product Classification Dispute

Keller and Heckman LLP Partners Frederick (Rick) Stearns and Eric Gotting successfully represented Vitti Labs, LLC, a tissue bank and life sciences company, in a significant federal court decision vacating the U.S. Food and Drug Administration’s (FDA) refusal to classify one of the company’s umbilical cord tissue products under development as a Human Cell, Tissue, and Cellular and Tissue-Based Product (HCT/P) under Section 361 of the Public Health Service Act (a “Section 361 HCT/P”).

Vitti Labs’ product would be the result of processing umbilical cord tissue into small sheets designed for use during surgical procedures to cover and protect nerves and tendons. As part of developing the product, Vitti Labs sought a formal designation from FDA confirming that the product qualified as a Section 361 HCT/P under FDA regulations. This regulatory framework is intended to encourage the development of tissue-based products that pose minimal health risks, without subjecting them to unnecessarily burdensome regulatory requirements.

FDA denied Vitti Labs’ request and instead concluded that the product should be regulated as a 'biologic,' subjecting it to a far more onerous approval pathway. In reaching this conclusion, FDA relied on a narrow interpretation of its regulations governing whether human tissue products are more than “minimally manipulated” by focusing solely on the “original relevant characteristics” of the tissue in the donor, rather than considering the potential use in the recipient.  This interpretation has, for years, significantly limited the ability of companies to bring similar tissue products to market without undertaking extensive and costly regulatory processes.

Rick and Eric challenged FDA’s determination, arguing that the agency’s position conflicted with the plain language of its own regulations. In a summary judgment ruling, the U.S. District Court for the Western District of Missouri agreed. The court held that FDA’s interpretation of the “minimal manipulation” criterion was unlawful under the Administrative Procedure Act, vacated the agency’s decision, and remanded the matter back to FDA for further consideration. 

The court’s ruling effectively rejects a longstanding FDA policy that had made it difficult for manufacturers of human tissue products to proceed without seeking approval as a drug or biologic. Subject to appeal, the decision should give companies like Vitti Labs more flexibility to bring innovative Section 361 HCT/Ps to market efficiently and expeditiously.