MFDS: No Defect in Denying NatureCell's 'JointStem' Product Approval

The Ministry of Food and Drug Safety (MFDS) stated on the 13th that there is "no fact violating laws and regulations" regarding suspicions that there were serious defects in the process of rejecting the product approval for the degenerative arthritis stem cell treatment 'Jointstem.'

The MFDS explained this in response to suspicions that a review committee member who was subject to disqualification under the relevant Pharmaceutical Affairs Act attended the Central Pharmaceutical Affairs Committee that deliberated on the product approval of Jointstem. An MFDS official told Asia Economy on the same day, "It was confirmed that the committee member in question does not fall under the disqualification criteria according to the Enforcement Decree of the Pharmaceutical Affairs Act and the Pharmaceutical Affairs Committee regulations."

Ministry of Food and Drug Safety [Image source=Yonhap News]

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The suspicion was raised by shareholders of NaturesCell, a KOSDAQ-listed company holding the domestic distribution rights for Jointstem. According to the shareholders, Mr. B, the committee member in question, is a well-known private medical school professor and also serves as the CEO of a competitor company to NaturesCell. Their claim is that it is absurd and procedurally flawed for the CEO of a competing company to participate in deliberations on product approval.

Article 14-3 of the current Enforcement Decree of the Pharmaceutical Affairs Act stipulates the disqualification, avoidance, and recusal criteria for committee members of the Pharmaceutical Affairs Committee through six clauses. The shareholders argue that Mr. B violates two of these six clauses because he made statements regarding the agenda item (Jointstem) and has direct conflicts of interest. In fact, Mr. B is reported to have expressed several negative opinions about Albio, the developer of Jointstem, through the media in the past.

Nature Cell

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The MFDS explained, "The decision of the Pharmaceutical Affairs Committee is made through the resolution of all committee members, not just one member." This means that even if Mr. B expresses a negative opinion on the product approval of Jointstem, he cannot unilaterally influence the overall decision of the committee. According to the minutes of the Pharmaceutical Affairs Committee meeting in September last year, confirmed by Asia Economy, there were a total of 10 committee members (excluding attendants) including Mr. B present at the meeting.

However, the shareholders maintain their position that the authenticity of the alleged collusion between Mr. B and MFDS employee Mr. A, who attended as an attendant on the day of the meeting, should be verified.

Yoon Yong-jin, the legal representative of the shareholders, said, "The essence of this suspicion is that Mr. B, who has established a position in the stem cell treatment industry, has maliciously obstructed the market release of NaturesCell’s treatment by maintaining a close relationship with the MFDS." Through Yoon, the shareholders also filed a complaint with the prosecution on the 10th, accusing Mr. A and Mr. B of dereliction of duty and obstruction of business by deception.

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