Court halts company's use of unapproved product from Russia

FDA Consumer, March-April, 1998 by John Henkel

The provider of an experimental diabetes treatment was permanently barred by court order from dealing in a product containing human and rabbit cells imported from Russia.

Loran Medical Systems Inc. was effectively put out of business Oct. 16 when Judge Stephen Wilson, of the U.S. District Court for the Central District of California, imposed a permanent injunction on the Oxnard, Calif., company. Despite warnings from FDA, the company had failed to correct a two-year history of violations.

The injunction prohibits the company from importing from Russia an experimental cell product made up of rabbit and human fetal and organ cells and injecting it into human patients. Loran claimed that the product could stimulate diabetic patients' own production of insulin and allow them to reduce or eliminate their need for insulin injections.

FDA considered Loran's cell product to fit the legal definition of a new drug because it was used to treat human disease. The product also fit the legal definition of a biologic because it was "analogous to a toxin and antitoxin," according to FDA regulations, and intended to treat disease through a specific immune process. So, to use the product in patients, the company needed either an approved investigational new drug application or a biologic license.

FDA officials say the agency put Loran on notice several times for violating the law before taking legal action against the company. When Loran failed to respond adequately, FDA initiated proceedings that led to a temporary restraining order in June 1996, a preliminary injunction the following month, and, most recently, the permanent injunction.

The case began in January 1995, when a routine inspection of Loran by FDA!s Los Angeles district office turned up promotional material revealing that the company intended to treat diabetic patients with human and animal cell material from Russia. In April, FDA sent Loran a letter advising the company not to administer the cell product because it was an unapproved new drug and an unlicensed biologic. FDA also warned Loran that promotional materials for prospective patients contained false or misleading safety and effectiveness claims.

In a letter a month later, Loran replied that it didn't consider the cell product to be a biologic or a drug and felt it wasn't subject to FDA regulation.

An FDA inspection of Loran in November and December 1995 revealed numerous violations of clinical testing requirements, including promotion and sale of unapproved drugs, failure to follow import requirements, lack of adequate informed consent procedures, and failure to keep adequate records.

In a January 1996 letter, FDA again warned Loran citing the company's lack of conformance with procedures for conducting investigational studies because its product was an unapproved new drug and unlicensed biological product.

Again, Loran argued that its product was not a biological product or drug under existing statutes. In a March 1996 reply, FDA stated that it would proceed with enforcement action if the company didn't change its behavior.

In May 1996, an FDA investigator posing as a patient called a Loran representative, who told the investigator that Loran was planning to treat patients with the imported cell product the following month. The representative gave the investigator other information, including the history of the procedure. The representative also said the procedure would cost $20,000. Several days later, the investigator received promotional materials from Loran that claimed the procedure could effectively treat diabetes. At month's end, the company, still maintaining that it was breaking no laws, confirmed to FDA its plans to treat additional patients with the Russian product. This prompted the agency to seek the temporary restraining order, granted on June 20, 1996.

"We needed to put a quick stop to this scheduled treatment," says Mary Davis Lopez, compliance officer in FDA's Center for Biologics Evaluation and Research. She explains that FDA took immediate action because the agency, fearing possible patient exposure to communicable disease, saw the planned treatments as a potential health hazard. The later court actions put a permanent end to Loran's unapproved activity.

John Henkel is a staff writer for FDA Consumer.