Related Advisories/Arnold & Porter Events:
Webinar, FDA's New LDT Rule: What You Need to Know, April 30, 2024.
Advisory, FDA Intends To Regulate Many Clinical Labs as Medical Device Manufacturers: What You Need To Know About the Laboratory Developed Test Final Rule, May 7, 2024.
As most readers are aware, two cases challenging the U.S. Food and Drug Administration's (FDA) authority to regulate laboratory-developed tests (LDTs) were filed over the summer.1 With a second Trump administration coming in January, we felt an update on the current state of the litigation opposing the LDT rule would be of interest. We briefly summarize the current state of the two consolidated cases against FDA and end with some thoughts on where the new administration's policy prerogatives may lead us as we seemingly enter yet another chapter in the long history of FDA's attempts to fully regulate LDTs as medical devices.
Case Status as of December 3, 2024
On October 25, 2024, FDA filed its cross-motion for summary
judgment and opposition to Plaintiffs' Motions for Summary
Judgment in the consolidated cases: American Clinical
Laboratory Association v. FDA and Association for
Molecular Pathology v. FDA. FDA argues that the Federal Food,
Drug, and Cosmetic Act (FDCA) allows FDA to regulate LDTs (which
the brief calls "IVD Test Systems Made by Laboratories")
and that no textual or non-textual arguments undermine the final
rule. FDA reiterates policy arguments made in the preamble to the
final rule and in the proposed rule. Namely, FDA describes how LDTs
are "no longer simple, well-characterized tests" and that
they are "in widespread use beyond the laboratory that
designed them — just like the IVD test systems that
non-laboratory manufacturers have produced for decades"
outside of FDA's enforcement discretion
approach.2
Plaintiffs filed their reply briefs on November 25, 2024, which
focus on the definition of a "device," the major
questions doctrine, the Centers for Medicare & Medicaid
Services' (CMS) authority to regulate LDTs under the Clinical
Laboratory Improvement Amendments (CLIA), and FDA's lack of
authority to regulate the practice of medicine.
FDA's Arguments
FDA begins its argument that Plaintiffs are incorrect in
describing LDTs as a "professional service" by pointing
to the FDCA's definition of a device. FDA argues that an in
vitro diagnostic (IVD) test system is comprised of components
that function together to produce a result and unequivocally fall
within the statutory definition of a device.3
The brief also cites non-statutory sources such as the dictionary
to define "system."4 Moreover, FDA
cites to other agency recognition of LDTs as devices, pointing
specifically to the text of CLIA and Medicare payment provisions
administered by CMS.5
Further, FDA explains that the legislative history of the Medical
Device Amendments clearly contemplate IVD systems as devices rather
than professional services and that the final rule remains
consistent with FDA's own interpretation of "Device"
as that term is defined in the FDCA.6 Moreover,
FDA points to other devices that are marketed on a fee-for-service
basis and are undoubtedly within FDA's jurisdiction, explaining
that the way a device is paid for is a business decision that does
not affect whether a product meets the definition of a device under
the FDCA.7
FDA's primary point in opposition of the Plaintiffs'
argument that CLIA "has somehow displaced FDA's
jurisdiction to regulate laboratory-made IVDs like any other device
subject to the FDCA" is that the FDCA and CLIA are
complementary.8 For example, FDA notes that the
FDCA and CLIA regulate different things and even under CLIA, FDA
and CMS have different authorities.9 CMS
determines compliance with CLIA by a laboratory and its personnel
whereas FDA revises, evaluates, and categorizes tests for purposes
of CLIA.10 Moreover, FDA explains that
FDA's review is significantly different than CMS' because
it looks at the test's safety and effectiveness and is
"more in-depth and more comprehensive than review of
analytical validity under CLIA."11
To dismiss Plaintiffs' arguments that the rule is subject to
the Major Questions Doctrine, FDA argues instead that there is no
statutory ambiguity and therefore the final rule is unambiguously
federal regulation pursuant to congressional authorization. FDA
argues that the final rule does not implicate a matter of great
political significance, FDA is not uncovering a power that
"conveniently enables it to enact a program that Congress
considered and rejected multiple times," and FDA argues that
Plaintiffs have not shown that the case presents a major economic
question.12 The brief does describe
congressional attempts at legislation over the years, but
distinguishes them as creating an entirely new subchapter to the
FDCA rather than rejecting the existing authority FDA argues it has
over IVDs.13
Finally, FDA addresses the argument that its phaseout of the
general enforcement discretion approach is arbitrary and
capricious. FDA argues that it is not, and that the targeted
enforcement discretion policies announced in guidance alongside the
final rule are likewise not arbitrary and capricious because FDA
considered the available evidence, reliance interests, and patient
access, and concluded that the final rule is a "prudent public
health measure taken based on changed circumstances documented in a
thorough rulemaking record."14 To support
its position, FDA cites to changes it made to the final rule based
on comments to the proposed rule about reliance interests in
addition to similar arguments in opposition to the Association for
Molecular Pathology's claims.15
Plaintiffs' Arguments on Reply
The Plaintiffs' reply briefs echo arguments which seasoned
opponents of FDA LDT oversight have raised in comments to the Final
Rule and in other venues.
Concerning the definition of "device" within the meaning
of the FDCA, Plaintiffs argue that a device is a tangible object
rather than a professional service and, relying also on the
definition of "manufacture," argue that an assortment of
physical objects that are never packaged together or sold as a kit
cannot constitute a manufactured device.16 To
further support this argument, Plaintiffs make a policy argument
that if the Court were to accept FDA's interpretation that an
LDT is a device, then virtually every medical service would
constitute the manufacturing of a device (e.g., a nurse uses a
stethoscope and blood-pressure cuff during a physical
examination).17 Moreover, the Plaintiffs
emphasize that the FDCA prevents FDA from regulating the practice
of medicine and as such cannot regulate LDTs since LDTs are
services performed by medical professionals within their practice
of medicine.18
The Plaintiffs also argue that FDA's interpretation of the
FDCA triggers the major questions doctrine by reinterpreting the
statute and bypassing a "skeptical Congress" all while
imposing tens or hundreds of billions of dollars in compliance
costs and classifying as criminal the widespread, longstanding
practices of a respected medical profession.19
Relatedly, the Plaintiffs further posit that Congress established
CLIA to regulated LDTs since LDTs are laboratory services carried
out by trained medical professionals and CLIA ensures both
analytical and clinical validity of LDTs.20
What Could Happen Next?
The new Trump administration is likely to take a different approach to LDT oversight than the outgoing Biden administration, and there are a number of ways in which this could impact the ongoing litigation. As we noted previously, the LDT Final Rule was promulgated in time to escape Congressional Review Act scrutiny; however, the executive branch and a Republican-controlled Congress have other tools to limit or vitiate FDA's authority. These include, in no particular order:
- The U.S. Department of Health and Human Services (HHS) could revoke the LDT Final Rule. The recission of a rule is treated the same as the promulgation of a new rule.21 If HHS revokes the final rule, the cases will likely be dismissed as moot. The timing of such action is uncertain at this time.
- FDA could extend or revise its policies of enforcement discretion. LDTs are currently subject to FDA's phaseout policy which has five stages, the last of which begins in May 2028. Specific categories of IVDs will continue under an enforcement discretion policy indefinitely as described in the preamble to the final rule. HHS could quickly issue such a revised policy or policies without prior public comment if it determines such policy meets the threshold in 21 CFR 10.115(g)(2).
- Congress could act. With a Republican-controlled House and Senate to start the new Trump administration, there is a chance that efforts to legislate the regulation of LDTs could be reignited. Based on prior congressional efforts, it is likely that such legislation would place LDTs under control by CMS and CLIA, rather than require LDTs to comply with FDA requirements.
- HHS could let the litigation continue. The new administration may view the U.S. District Court for the Eastern District of Texas to be sympathetic to the Plaintiffs' arguments and therefore proceed unabridged assuming the final rule will be struck-down, if that is indeed the deregulatory objective of the new administration.
- The U.S. Department of Justice (DOJ) could act concerning the litigation. DOJ options are constrained by ethics rules but DOJ could request to amend its filings, pause the case pending rule-making proceedings, or take other actions intended to stall or moot the litigation in a deregulatory fashion.
We will continue to monitor all developments concerning LDTs and FDA's regulation of IVDs more generally.
Footnotes
1. American Clinical Laboratory Association v. FDA, Case No. 4:24-cv-479-SDJ, filed May 29, 2024 in the Texas Eastern District (ACLA); Association for Molecular Pathology v. FDA, Case No. 4:24-cv-824-SDJ, filed August 19, 2024 in the Texas Southern District (AMP). The cases were consolidated on September 20, 2024 in the Texas Eastern District Court, Hon. District Judge Sean D. Jordan presiding.
2. Brief at 1.
3. Brief at 19.
4. Id.
5. Id. at 20.
6. Id. at 18-21.
7. Id. at 29-31.
8. Brief at 3.
9. Id. at 36.
10. Id.
11. Id.
12. Id. at 44-46.
13. Id. at 45-46.
14. Brief at 4.
15. Id. at 48-50.
16. AMP Brief at 7-9; ACLA Brief at 4-10.
17. ACLA Brief at 11-15.
18. AMP Brief at 12-15; ACLA Brief at 15-17.
19. AMP brief at 2-6; ACLA brief at 17-21.
20. AMP Brief at 15-23; ACLA Brief at 15-17.
21.See Perez v. Mortg. Bankers Ass'n, 575 U.S. 92, 101 (2015) (explaining that the definition of "rule making" in the APA "mandate[s] that agencies use the same procedures when they amend or repeal a rule as they used to issue the rule in the first instance".
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