May 2, 2024 | A much-anticipated rule to regulate laboratory developed tests (LDTs) as medical devices has arrived, with significant implications for the diagnostic industry and patient care. Here’s a closer look at the historical context underlying the new rule, the debate leading up to this moment, recent updates, and the road ahead.
On Apr. 29, the U.S. Food and Drug Administration (FDA) announced a final rule amending the agency’s regulations to clarify that in vitro diagnostics (IVDs), including tests made by laboratories, are considered medical devices under the Federal Food, Drug, and Cosmetic Act.
“Today’s action is a critical step toward helping to ensure the safety and effectiveness of LDTs, while also taking into account other public health considerations, including continued access to critical tests patients rely upon,” said Jeff Shuren, director of the FDA’s Center for Devices and Radiological Health.
The FDA also issued a policy to phase out, over several years, its general enforcement discretion approach for LDTs as well as targeted enforcement discretion policies for certain categories of IVDs that are made by laboratories.
Following this phaseout period, “the FDA generally will expect IVDs made by either a non-laboratory or laboratory to meet the same requirements, though certain IVDs manufactured by laboratories may fall within one of the agency’s targeted enforcement discretion policies,” the news release noted.
“The rule will limit access to scores of critical tests, increase health care costs, and undermine innovation in new diagnostics,” American Clinical Laboratory Association (ACLA) President Susan Van Meter said in response to the final rule announcement. “The rule also exceeds FDA’s statutory authority, as Congress has never granted the agency authority to regulate laboratory developed testing services offered by laboratory professionals,” she added.
Meanwhile, the Center for Science in the Public Interest largely applauded the final rule, calling the move a “critical step forward” that “closes a longstanding regulatory loophole.” Although the consumer advocacy group highlighted some perceived shortcomings, it also expressed broad support of the new rule, including specific aspects such as the registration and listing requirements for all of the products covered by the new rule.
Peter Lurie, president and executive director of the Center, told Diagnostics World that legislation intended to regulate LDTs called the Verifying Accurate, Leading-edge IVCT Development (VALID) Act has been introduced in Congress but never passed over the course of recent years, so by taking this action the FDA is essentially saying it can wait no longer.
Lurie, who formerly worked at the agency, anticipates that this rule may be followed by other guidance that will provide additional information regarding the FDA’s plans considering the VALID Act included extensive detail that is not present within the rule. He also said it is possible that there will be legislation or litigation still to come.
Historical Background and Justification for Greater Oversight
The FDA has pointed out that conversation about the increased oversight of LDTs has taken place for some time now, highlighting a 2010 workshop, a 2014 proposal of draft guidance documents, and a 2017 discussion paper, in addition to its interactions with industry and congressional stakeholders over the years.
Some critics have suggested that LDT concerns should be addressed through alternative routes, such as expanding the Clinical Laboratory Improvement Amendments of 1988 (CLIA).
However, FDA and Centers for Medicare & Medicaid Services (CMS) do not see this as a viable solution. Whereas both agencies provide oversight meant to ensure test results are accurate, they have differing roles, and the CLIA program differs in purpose and scope from FDA oversight. “CMS does not have the expertise to assure that tests work; the FDA does,” noted a news release.
The FDA’s approach was created “half a century ago when tests made and used in single labs were generally simple, often made to address local individual needs, and mostly manufactured in small volumes,” the news release pointed out. As such, the agency did not generally enforce requirements for LDTs. These tests have evolved, however, and from the agency’s vantage point, an increased risk to patients has led to the need for reconsideration of this approach.
For instance, the FDA has become aware of tests offered as LDTs that may have led to over or under-treatment for heart disease; cancer patients who either missed out on therapies or were exposed to inappropriate treatment; and incorrect diagnoses of rare diseases, autism, and Alzheimer’s Disease. The agency has also highlighted its experience with tests meant to diagnose COVID-19. All things considered, the FDA suggests “the situation is getting worse.”
The main thought behind the new rule is that patients and providers need to know that the tests they rely upon to make healthcare decisions are safe and effective. Without greater oversight, the FDA feels these assurances have been increasingly lacking. In September of 2023, the FDA announced a proposed rule to regulate LDTs as medical devices, and in a news release, expressed its concern over the performance and accuracy of some LDTs.
“A growing number of clinical diagnostic tests are being offered as laboratory developed tests without assurance that they work,” said FDA Commissioner Robert Califf. “The stakes are getting higher as these tests are increasingly being used to drive treatment decisions.” To emphasize this point, he cited a figure indicating that roughly 7 in 10 medical decisions rely upon lab test results.
The FDA believes eliminating an existing disincentive could be a boon to innovation for both laboratory and non-laboratory IVD manufacturers. Non-laboratory manufacturers that meet FDA requirements and compete with laboratory manufacturers that do not meet these requirements lack the incentive to innovate, according to the agency. “Rectifying the current imbalance in oversight may foster innovation by manufacturers who are positioned to make safe and effective novel tests available to many labs,” the news release noted.
Furthermore, the FDA’s economic analysis revealed that the new rule would lead to financial benefits that would outweigh the costs. For example, phasing out the general enforcement discretion approach for LDTs would lead to fewer expenses tied to healthcare decisions that are based on results from ineffective or unsafe tests.
Some Argue Rule Could Cause More Harm than Good
An array of healthcare stakeholders responded to the proposed rule with a flurry of reactions, both supportive and critical. In general, supporters tended to argue that greater oversight is needed to ensure patient safety and testing accuracy, and that the rule will ultimately help support better care. Critics, meanwhile, expressed concern that greater regulatory burden may hinder innovation and limit the availability of certain tests. In addition, some argued the FDA lacks the authority to regulate LDTs under its medical device designation.
For example, the American Hospital Association (AHA) argued that these tests are not devices but rather “diagnostic tools developed and used in the context of patient care.” AHA called the proposed rule “too broad,” said it lacked sufficient detail, and indicated that regulating LDTs using the device regulatory framework could raise costs for hospitals and hinder their ability to provide quality care to patients.
A commentary piece published in the Journal of Clinical Microbiology (DOI: 10.1128/jcm.01488-23) by co-authors from Henry Ford Health, the UNC School of Medicine, and the American Society for Microbiology outlined several concerns, too.
“This rule, if finalized, will negatively impact the diagnostic services currently offered by clinical and public health laboratories and, therefore, patients and the providers who care for them,” they wrote. They argued that putting an end to enforcement discretion will hurt diagnostic innovation and negatively impact access to testing.
Several Yale experts, meanwhile, asserted that new LDT regulations could lead to unintended consequences, such as reduced access to rare disease testing or an inability to respond efficiently to future public health emergencies. Because the process manufacturers go through to create FDA-cleared commercial tests can be time-consuming and expensive, manufacturers generally only undergo this process for the tests they think will provide returns on that investment. “For tests that won’t be as high-volume, it doesn’t make financial sense,” said Marie-Louise Landry, professor of laboratory medicine and of medicine (infectious diseases).
“We try to fill that gap with LDTs,” she noted. Yale’s virology lab has developed over 30 of them intended to detect various viruses, for example, and all of them would potentially be subject to an extensive approval process under the new rule.
According to Hui Zhang, associate professor of genetics and co-director of the Yale School of Medicine’s DNA Diagnostic Lab, the new rule could adversely impact care delivered to patients with rare conditions, including genetic diseases.
In addition, the researchers highlighted how LDTs enable labs to respond quickly to public health emergencies. During the 2009 swine flu pandemic, Yale New Haven Hospital was the only hospital across Connecticut that could provide testing for the virus.
It was also the only hospital statewide that was able to offer testing in the early weeks of the COVID-19 pandemic. “We wouldn’t have been able to do that if we had to wait for a commercial test to become available,” Landry added.
The final rule, issued after considering the many comments received in response to the proposed rule, has included various “carve outs” for certain types of LDTs, which will enable the FDA to continue with some level of enforcement discretion.
Examples include “1976-type LDTs,” tests made by and performed within the Veterans Health Administration or Department of Defense, and existing IVDs offered as LDTs and marketed before the final rule was issued, among others, explained the Regulatory Affairs Professionals Society.
Looking ahead, the FDA intends to initiate its implementation process. The phaseout would take place in five stages over the course of four years, James Mullally, vice president of In-Vitro Diagnostic Regulatory Affairs at advisory firm MCRA, told Diagnostics World.
“If unchallenged, those laboratories that wish to market an LDT in the U.S. will need to come into compliance with FDA laws and regulations, including premarket submission,” noted Mullally, who formerly worked for the FDA. This would likely lead to hiring needs at FDA to handle the anticipated influx of new submissions.
However, because many legal observers have questioned whether the agency has the constitutional authority to issue this sort of rule, some anticipate that legal challenges may wind up delaying implementation of the new rule, he added.
Paul Nicolaus is a freelance writer specializing in science, nature, and health. Learn more at www.nicolauswriting.com.