United States: FDA Laboratory Developed Test Oversight: What Stakeholders Need To Know About Proposed Overhaul

After years of enforcement discretion, the U.S. Food and Drug Administration (FDA) published aproposed ruleon October 3, 2023 under which the agency articulated its intent to increase regulatory oversight of laboratory developed tests (LDTs).

If the proposed rule is finalized without changes, FDA will regulate all LDTs as medical devices. Comments to the proposal are due byDecember 4, 2023.

What are LDTs?

LDTs are in vitro diagnostic products (IVDs) that are designed, manufactured, and used within a single clinical laboratory. IVDs, including LDTs, are laboratory tests using specimens that have been taken from the human body, such as blood, saliva, or tissue.

Current Regulatory Oversight

FDA has historically regulated LDTs differently than other IVDs. For decades, FDA has generally exercised enforcement discretion over most LDTs because FDA has viewed LDTs as lower risk due to the small volume and specialized needs of the single clinical laboratory's patient population. Enforcement discretion means that FDA does not currently enforce requirements for laboratories offering LDTs to comply with FDA regulatory requirements for medical devices, such as pre-market notifications, medical device reporting, and device registration and listing requirements.

Currently, LDTs are primarily regulated by the Centers for Medicare and Medicaid Services (CMS) under the Clinical Laboratory Improvement Act statute and regulations (CLIA), which primarily focus on laboratory processes and do not require or assess documentation of clinical validity (i.e., that the test results accurately inform the diagnosis of patients). Rather, CLIA requires laboratories to document analytical validity (i.e., that the test can reliably detect a biomarker). FDA's stated position in the proposed rule is that without additional oversight FDA cannot ensure that LDTs are able to generate accurate test results. Inaccurate test results can mislead patients and providers who rely on the results when making medical decisions, which can cause harm if the patient is over- or under-treated or alternative treatments are overlooked.

Previous attempts at increasing oversight of LDTs have failed. FDA proposed aregulatory frameworkin 2014, but, ultimately, the draft guidancewas never finalized. Congress then took a legislative approach to increasing oversight. The Verifying Accurate Leading-edge IVCT Development Act (the VALID Act) has been in process since 2018. If passed, the VALID Act would amend the Federal Food, Drug, and Cosmetic Act (FD&C Act) to establish a new, risk-based framework for diagnostic tests. Even with bipartisan support, there have been concerns regarding disrupting the current LDT framework and the VALID Act continues to face headwinds.

Why Now?

FDA has stated that the risks associated with LDTs are much greater today than they were when the agency began exercising enforcement discretion in the 1970s. In the proposed rule, FDA notes that "today's LDTs are generally, among other things, used more widely, by a more diverse population, with an increasing reliance on high-tech instrumentation and software, and more frequently for the purpose of guiding critical healthcare decisions." FDA believes that increasing oversight of LDTs will help assure the safety and effectiveness of these products.

COVID-19 significantly increased FDA's oversight and interaction with LDTs. Notably, FDA's enforcement discretion approach did not, and currently does not, apply for LDTs submitted for emergency use authorizations (EUAs), and laboratories seeking an EUA must submit analytical and clinical data. As a result, FDA received many EUA requests for COVID-19 diagnostics, and points to examples in the proposed rule where it represented that the data often highlighted significant issues in test design or validation. These examples ignore, however, the critical role that laboratories played in the early stages of the pandemic and the large number of laboratory tests that were brought online in a short period of time.

The Proposed Rule

The proposed rule seeks to amend FDA's regulations to clarify that IVDs are medical devices under the FD&C Act. Along with this amendment, FDA is proposing a policy through which FDA would gradually phaseout its policy of enforcement discretion.

At a high level, the rule outlines a process involving 5 stages over a four-year period after the finalization of the rule:

FDA has invited stakeholders to provide specific feedback on the following topics, among others:

• Whether FDA should maintain its current enforcement discretion approach with respect to premarket review and some or all QS requirements for LDTs already on the market.
• How the proposed phaseout policy may have unintended consequences for certain patient populations (e.g., Medicare beneficiaries, rural populations) and what steps could be taken to alleviate those consequences.
• Public health rationales for having a longer phaseout period for LDTs offered by laboratories with annual receipts below a certain threshold (e.g., $150,000).
• The definition of Academic Medical Center (AMC) and whether FDA should implement a different phaseout approach for AMC laboratories.
• How FDA might leverage programs such as the New York State Department of Health Clinical Laboratory Evaluation Program or those within the Veterans Health Administration as part of the phaseout approach.
• Any implications of continued enforcement discretion for LDTs used for law enforcement purposes and any factors that FDA should consider – particularly as it relates to civil rights and equity – regarding the scientific validity and accuracy of such tests.

Why it Matters and Next Steps

While it remains possible that the guidance may not be finalized or may not be finalized as proposed, the proposed guidance has highlighted to stakeholders that a new LDT regulatory framework is likely on the horizon, regardless of whether the change is initiated by FDA or Congress.Some lawmakers view the proposed rule as an opportunity to reignite the VALID Act. U.S. Representatives Larry Bucshon, M.D. (R-IN) and Diana DeGette (D-CO)released a bipartisan statementin response to the proposed rule with a call to action to push through the VALID Act to solidify FDA's authority to regulate these tests and modernize FDA's regulatory framework for diagnostics.

Stakeholders can prepare themselves for any upcoming changes by staying up to date with legislative and regulatory action on this issue. FDA invites stakeholders to submit their feedback on the proposed rule via public comment due byDecember 4, 2023.

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