On March 31, 2025, a judge in the Eastern District of Texas struck down a 2024 Final Rule (the "Final Rule") by the Food and Drug Administration ("FDA") that exerted jurisdiction over the regulation of laboratory-developed tests ("LDTs"). The court found that the Final Rule exceeded the FDA's authority under the Federal Food, Drug, and Cosmetic Act ("FDCA").
Regulatory Background
In May 2024, FDA finalized a rule regarding LDTs, which purported to amend the 21 CFR 809.3(a) definition of "in vitro diagnostic products" to specify that such definition "[includes] when the manufacturer of these products is a laboratory." The Final Rule was intended to bring LDTs within the ambit of FDA medical device regulation. The Final Rule adopted a four-year, five-stage phaseout of its general enforcement discretion policy FDA has maintained with respect to most LDTs.
The Final Rule Challenged: American Clinical Laboratory Ass'n v. U.S. Food and Drug Administration
The American Clinical Laboratory Association and the Association for Molecular Pathology, along with impacted laboratories and providers, challenged the Final Rule. The plaintiffs primarily argued that the Final Rule was beyond the scope of the FDA's statutory authority, that FDA acted arbitrarily and capriciously in violation of the Administrative Procedure Act, and that implementation would cause significant economic harm and hurt innovation.
In its March 31 ruling, which consolidated the two cases, the court held that the FDA cannot regulate laboratory tests because laboratory tests are not medical devices but rather professional testing services, to which the FDCA, and thus FDA jurisdiction, does not apply. The court distinguished laboratory services from devices, stating that "laboratory tests" are not the sum their product parts, but instead a "methodology or process by which a laboratory generates biochemical, genetic, molecular, or other forms of clinical information about a patient...." The court opined that Congress did not intend for LDTs to be regulated by the FDA, noting that laboratory tests are regulated under the Clinical Laboratory Improvement Amendments of 1988 ("CLIA"), and duplicative FDA regulation would render CLIA pointless. The court also cited to repeated failures by Congress to pass an act requiring FDA regulation of laboratory tests, most recently in 2022 with the VALID Act. The court concluded that the Final Rule exceeded the FDA's statutory jurisdiction, and issued a final judgment to vacate and remand it for "further consideration in light of this opinion."
Looking Forward
The conversation may not be over, but it is clear the FDA must rethink its approach in light of the court's decisions. Although the Final Rule is a Biden-era rule, during oral arguments on both parties' cross-motions for summary judgment, the Trump administration defended the FDA's ability to regulate laboratory tests. The government has 60 days to appeal the decision, but it remains to be seen whether it will do so.
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