October 18, 2023
Introduction
After years of FDA discussion and failed congressional efforts to assert greater oversight of laboratory developed tests (LDTs), FDA has proposed a rule that would require many LDTs to comply with FDA’s requirements for in vitro diagnostic devices (IVDs).[1]
Prior Regulatory and Legislative Action on LDTs
The proposed rule is part of an ongoing saga in FDA’s efforts to further regulate LDTs. FDA describes LDTs as “[IVDs] that are intended for clinical use and are designed, manufactured, and used within a single clinical laboratory” that meets certain laboratory requirements, including being certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and authorized to perform high complexity testing. Between 2010 and 2014, FDA proposed further oversight of LDTs through guidance documents, which were met with both strong support and equally strong opposition by various clinical laboratory, IVD, and healthcare groups. After congressional subcommittees held hearings on LDTs, the House Committee on Appropriations asked FDA not to move forward with its plans to assert regulatory oversight because those efforts were outside of the formal rulemaking process and because it would change expectations for relevant parties. Following the 2016 presidential election, FDA announced that it was suspending its work on the guidance documents in favor of allowing for further public discussion and providing Congress with an opportunity to develop relevant legislation. More recently, in 2021, proposed legislation outlined a regulatory framework for LDTs, but this legislation ultimately was not included in the user fee legislation that frequently serves as the vehicle to make significant changes to the Federal Food, Drug, and Cosmetic Act. This year a bill similarly proposing LDT regulation has been reintroduced in the House and is still pending in Committee. Despite these legislative efforts, FDA’s proposed rule makes clear that the Agency is taking charge and moving forward in the rulemaking process.
Key Features of FDA’s Proposed Rule
Recognizing that the proposed rule will be subject to significant industry scrutiny, and likely litigation, FDA takes great pain in the proposal to provide a detailed explanation for why it is moving from a lengthy period of enforcement discretion for LDTs (i.e., wherein the agency generally has not enforced what it might view as applicable requirements with respect to most LDTs) to an approach that would apply substantial regulatory requirements to LDTs and FDA oversight. Although some of the discussion is intended to address potential legal weaknesses that the Department of Health and Human Services (HHS) articulated in 2020 (and later withdrew in 2021), other arguments are aimed at justifying FDA’s change from its decision to use enforcement discretion. Specifically, FDA emphasizes that the LDT market today differs significantly from the manually processed, lower risk LDTs it assessed decades ago when it began its policy of enforcement discretion. According to the Agency, today, LDTs are both increasingly reliant on complicated instruments and software and used for guiding critical healthcare decisions (including for serious medical conditions such as heart disease and cancer). Significantly, FDA expresses its concern that there is “fundamental uncertainly in the marketplace” about whether LDTs “provide accurate and reliable results.” FDA also highlights that LDTs are increasingly seen as a potential commercialization pathway, thereby discouraging innovation through other more traditional regulatory pathways.
If finalized, the rule would begin a four-year phased process to bring LDTs under FDA’s medical device oversight. In a change from earlier proposals, FDA is calling for greater regulation of several categories of tests, including low-risk tests, currently available tests, and rare-disease tests. FDA’s proposal excludes, however, several groups of LDTs, including, for example, direct-to-consumer tests intended for use without the meaningful involvement by a healthcare professional; Human Leukocyte Antigen (HLA) LDTs when they are used in connection with organ, stem cell, and tissue transplantation to perform HLA allele typing; and tests intended solely for forensic (law enforcement) purposes.
For applicable tests, FDA would end its general enforcement discretion policy over five stages:
FDA’s phased approach is intended to allow companies to work toward compliance and provide industry an opportunity, as needed, to develop additional data, determine appropriate regulatory pathways, and consult with FDA. The stage 4 premarket approval requirements generally would not be enforced until after FDA had completed its review of a Premarket Approval application, and similarly, FDA does not intend to enforce stage 5 requirements until after FDA had completed its review of a company’s premarket submission, provided the submission was received by FDA before the announced deadline.
Challenges and Superseding Legislation?
The proposed rule is likely to face challenges as it moves forward. These challenges include FDA’s statutory authority over LDTs and challenges related to FDA’s apparent change in position on its enforcement discretion and whether the proposed approach meets scrutiny under the “major questions doctrine,” which requires that federal agencies have authorization from Congress to impose regulations that have vast economic and political significance.[ii] Such judicial challenges may delay the implementation of any finalized rule. Of course, ongoing congressional action could also moot the proposed regulation if legislation establishes a legal framework for LDTs.
Considerations for the Proposed Rule
Although the approach and scope of regulating LDTs is likely to continue to develop, industry stakeholders will likely want to begin to consider a number of key actions related to FDA’s proposal:
[1] Medical Devices; Laboratory Developed Tests, 88 FR 68006-01, https://www.federalregister.gov/documents/2023/10/03/2023-21662/medical-devices-laboratory-developed-tests
[2] The Supreme Court recently invoked the major questions doctrine in holding that the EPA had exceeded its authority in regulating greenhouse emissions. W. Virginia v. Env’t Prot. Agency, 142 S. Ct. 2587 (2022).