The Business of Testing

HHS Orders FDA to Resume EUA Review of Laboratory Developed Tests for COVID-19

Oh no you don’t! A month after the U.S. Food and Drug Administration (FDA) announced its decision to discontinue review of applications for Emergency Use Authorization (EUA) submitted by test makers for laboratory developed tests (LDTs) to diagnose COVID-19, the Department of Health and Human Services (HHS) has ordered the agency to resume LDT EUA applications and to do so in a “timely manner.” The new HHS mandate is the latest and perhaps most decisive twist in what has become a somewhat bizarre battle within the administration over regulation of LDTs.

The COVID-19 EUA Regulatory Roller Coaster

One of the unforeseen results of the public health emergency has been to accelerate the long-running debate over FDA regulation of LDTs. Some of the most innovative and important new COVID-19 tests to receive EUA in the early days of the pandemic were LDTs created by testing companies, universities and medical centers. The demonstrated ability of laboratories to create new COVID-19 tests at a time of desperate need seemed to vindicate the case for relaxing FDA regulation in the interest of innovation and public health.

The other impetus to rapid change was the current administration’s policy to cut regulatory red tape for business. Historically protective of its regulatory authority over LDTs, the FDA needed a little prodding to loosen the reins. That prodding came on Aug. 19 when the HHS announced that the FDA would no longer require premarket review for LDTs but that laboratories could still seek EUA voluntarily. In addition, the FDA would now have to use the notice and rulemaking process to create new rules and could no longer regulate LDTs via website notices and other informal methods.

On Oct. 7, the FDA fired back by announcing that it was bowing out of EUA review for any LDTs to “make the best use” of its review resources. The decision applied not just to new submissions but also to LDT EUA applications already in the pipeline.

While supportive of the initial HHS policy, the laboratory industry criticized the FDA response. In a statement, American Clinical Laboratories Association (ACLA) president Julie Khani called on the FDA to continue to let laboratories continue to voluntarily seek EUA for COVID-19 LDTs, noting that many of the tests that had already received EUA are precisely the kinds of “innovative, high-throughput [tests] that have reduced reliance on supplies and been integral to expanding testing capacity” that the new FDA policy is purportedly designed to promote.

The New HHS Back to Work Order

The most recent twist came on Nov. 16 when HHS Assistant Secretary for Health and White House coronavirus testing czar Brett Giroir ordered the FDA to resume EUA review of COVID-19 LDTs and do it fast. The agency’s orders are to clear the backlog of submissions created by its decision to cease review within 14 days. If, as is highly likely to prove the case, the FDA is unable to meet that deadline, the National Cancer Institute (NCI) will step in to help.

“We recognize the FDA has a huge workload,” Giroir noted. “That’s why we’re trying to provide additional resources. I don’t think anybody can question the scientific integrity of the NCI.”

What Is At Stake

The reason the HHS has chosen to intervene is the fear that laboratories will not create new LDTs for COVID-19 unless they can secure EUA because of potential liability exposure if the product does not work as planned. Explanation: Normally, new diagnostics and medical products must undergo long and extensive clinical review before they can reach the market. But in times of public health emergency, it becomes necessary to accelerate the standard review protocols. The upside with abbreviated vetting is that products become available faster; the downside is that they carry greater than normal risks to users. Accordingly, producers are at higher risk of being sued for products liability.

To ensure that fear of liability does not chill innovation, a federal law called the Public Readiness and Emergency Preparedness Act (PREP) provides immunity to test makers and other producers that create medical products in response to a public health emergency. Thus, the FDA decision not to perform EUA review of LDTs for COVID-19 strips test makers of their PREP immunity and makes them a sitting duck for trial lawyers and products liability lawsuits if something goes wrong with the test.

Giroir acknowledged that this was behind the order for FDA to resume EUA review of COVID-19 LDTs, noting on a media call that “without an EUA, although the tests can be used, they cannot receive liability protection under the PREP Act.” Giroir added that the goal is to ensure that universities and other LDT makers are “given the same liability protection as major corporate developers and manufacturers.”

Takeaway

Although not cited by HHS, there is another factor that makes the new policy so important and beneficial to makers of COVID-19 LDTs, namely, reimbursement. The Families First Coronavirus Response Act (FFCRA) requires commercial payors to cover medically necessary SARS-CoV-2 testing without cost sharing, but only if those tests have EUA from the FDA. Consequently, laboratories developing new SARS-CoV-2 LDTs without securing EUA status face the prospect of not being reimbursed for their tests.

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