On October 3, 2023, the U.S. Food and Drug Administration (FDA) published a proposed rule to regulate laboratory-developed tests (LDTs). The rule, if finalized, would amend FDA regulations to broaden the definition of “in vitro diagnostic products” (IVDs) to include laboratories that manufacture such products, thus making LDTs subject to the same medical device regulatory oversight by the FDA under the Federal Food, Drug, and Cosmetic Act (FD&C Act).
What Are LDTs?
LDTs are tests exclusively developed, produced, and utilized within a single laboratory certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). These tests are commonly used in clinical diagnostic procedures, such as diagnosis of certain infectious diseases, or genomic evaluations of cancer for informing cancer treatment decisions. A significant proportion of genetic tests are on the market as LDTs, without any FDA premarket review.
Currently, the Centers for Medicare & Medicaid Services (CMS) is tasked with regulating the quality of clinical laboratories and the clinical testing processes, in accordance with CLIA, while the FDA has authority in regulating the safety, effectiveness, and quality of diagnostic tests, in accordance with its authority under the FD&C Act.
A Long Time Coming
Though the FDA has maintained that it has clear regulatory authority over LDTs, the FDA has traditionally exercised enforcement discretion over LDTs—choosing not to enforce applicable statutory and regulatory requirements with respect to such tests—meaning that most of these tests have neither undergone premarket review nor received FDA clearance or approval before they are commercialized in the U.S. Up until now, the FDA has primarily concentrated its regulatory efforts on commercial IVD kits, which have widespread distribution, while generally not actively enforcing premarket regulations for LDTs. Nevertheless, over the past two decades, the FDA has expressed its intention to oversee LDTs in a risk-based manner, driven by the growing quantity, importance, and intricacy of LDTs.
In June 2010, after failing to finalize guidelines pertaining to a particular category of LDTs referred to as In Vitro Diagnostic Multivariate Index Assays, the FDA declared its intention to oversee all LDTs. In 2014, the FDA introduced draft guidance that would require registration of LDTs and premarket approval of certain higher-risk LDTs. Under the guidance, the determination to continue enforcement discretion—or to enforce regulatory requirements—for an LDT would be based on an evaluation of LDT risk. In January 2017, the FDA issued a discussion paper summarizing the comments it received for the draft guidance. While the discussion paper said that the FDA would not be issuing a final guidance at the request of certain stakeholders to allow for further public discussion, the paper did include a proposed framework for an approach to LDT oversight that would focus on “new and significantly modified high and moderate risk LDTs.”
Since passage of the 21st Century Cures Act, various legislative approaches to FDA regulation of IVDs and LDTs have been considered. In early 2017, a discussion draft for the Diagnostic Accuracy and Innovation Act (DAIA) was released, outlining a regulatory approach for IVDs that was risk-based and flexible. The FDA responded to DAIA in August 2018 with a proposal for a novel regulatory approach, including a mechanism for precertifying certain related tests to streamline premarket requirements. In December 2018, the Verifying Accurate Leading-edge IVCT Development (VALID) Act—a new draft bill based on DAIA and incorporating FDA’s feedback—was released and kept alive through 2021. In 2022, the VALID Act was incorporated into the Senate user fee bill, but it did not pass.
In October 2022, FDA Commissioner Robert Califf expressed his frustration with the fact that Congress had not passed the VALID Act and said that, if VALID wasn’t passed, the FDA may use its rulemaking authority to create a regulatory framework for IVDs and institute a new pathway for LDT oversight. Almost exactly one year later, the FDA made good on its word and released this proposed rule.
Proposed Rule’s Phaseout Approach
The FDA argues that its enforcement discretion policy was instituted at a time when LDTs were created for simple tests for low-risk conditions. Since then, the tests have become more complex and are used to diagnose serious diseases while relying on high-tech instrumentation and software and are manufactured in large volumes. As a result, the FDA says oversight is needed to ensure Americans are not left vulnerable to making important healthcare choices based on potentially faulty or inaccurate test results. The proposed rule would potentially subject many clinical laboratories, software developers, reagent and chemicals manufacturers, and other entities to regulation along the medical device manufacturer continuum for the first time.
The proposed rule calls for a five-stage, four-year phaseout of the FDA’s current LDT enforcement discretion policy, which the FDA says will help avoid disruptions to the testing market. The FDA also said that it is aware of industry concern that regulation of LDTs will limit test development and innovation, as well as harm patient access to testing particularly for tests meant for small patient populations or rare conditions for which FDA-regulated IVDs do not yet exist. However, FDA rebutted, under its device authorities, premarket review would only be required for certain tests (generally class II or class III devices), which FDA estimates is approximately 50 percent of LDTs.
The FDA said it intends to publish the final phaseout policy in the preamble of the final rule. The five stages of the phaseout would start one year after issuance of the final rule and end three years thereafter:
The FDA considers its current medical device oversight authority to extend to the following types of tests, and therefore is not giving manufacturers of these test types the benefit of any gradual phaseout:
Under the proposed rule, the FDA would continue to use its enforcement discretion for certain types of LDTs, including:
Specific Questions Posed by the FDA
The FDA is soliciting feedback on the following questions:
Next Steps
Members of the industry can submit comments on the proposed rule here—comments are due by December 4, 2023. As described above, the FDA indicated that it might consider enforcement discretion for other categories of tests, including low- and moderate-risk LDTs currently on the market and LDTs offered by AMCs, and the FDA seeks comments to that effect. Some members of the industry theorize that this interest in additional exceptions is rooted in the FDA’s lack of funding and resources to provide oversight to all LDTs.
Given the strong pushback against the passage of the VALID Act, the FDA will likely face significant challenges in the coming years, including judicial challenges. The American Clinical Laboratory Association (ACLA) has already issued a statement opposing the FDA’s proposed rule, arguing that this proposed rule exceeds the FDA’s current authority. This proposed rule may exert greater pressure on Congress to take legislative action.
We will continue monitoring the note and comment process for the proposed rule. If you are interested in submitting comments to the FDA or have questions, please contact Georgia Ravitz, James Ravitz, Eva Yin, Andrea Linna, Paul Gadiock, Shawn Lichaa, Marissa Hill Daley, or any member of the firm’s FDA regulatory, healthcare, and consumer products practice.
Eva Yin, Paul Gadiock, and Marissa Hill Daley contributed to the preparation of this alert.