The Diagnostics Pipeline: FDA Proceeds without Congress Over LDTs Reform

A year ago, Congress came close to passing legislation that would have finally imposed order over FDA regulation of laboratory-developed tests (LDTs).¹ Although the Verifying Accurate Leading-edge IVCT Development (VALID) Act is back on the table and might pass this year, the FDA is not waiting for Congress to act.² On July 26, the agency sent its own proposed LDTs regulation rule to the White House Office of Information and Regulatory Affairs (OIRA) for review.³ Although the proposal has yet to be made public, it may have significant ramifications for the future of LDTs in the US.

The Diagnostic Challenge

There were an estimated 3.3 billion in vitro diagnostic (IVD) tests, including both LDTs and FDA-cleared tests performed in the US in 2021, according to the Pew Charitable Trusts.⁴ The global market for LDTs has expanded significantly with an estimated 2022 value of US $10.04 billion, expected to reach $16.72 billion by 2030.⁵

The problem is that clinical utilization of LDTs is running far ahead of their regulation. The original Federal Food, Drug, and Cosmetic Act establishing the FDA’s authority to regulate drugs and medical devices does not address laboratory tests. The FDA has historically claimed that LDTs and IVD products are an extension of its jurisdiction over medical devices.⁶ But some argue that LDTs are actually “laboratory services” subject to Centers for Medicare & Medicaid Services (CMS) oversight under the Clinical Laboratory Improvement Amendments (CLIA).⁷

As neither of these theories has ever been tested in court, the FDA, with CMS’s consent, has exercised de facto oversight of LDTs. In so doing, the agency has created the rules via announcements and postings on its websites rather than following the proposed process that federal regulations require government agencies to use to gather public feedback when promulgating new regulatory requirements. As became clear during the early days of the pandemic, this lack of regulatory certainty has thwarted the innovation and development of LDTs, according to test developers.

The Twisted Road to LDT Reform

Many agree that the current LDTs regulatory system needs fixing, but reform has been a slow and unfruitful process. It began in 2014, when the FDA published draft guidance proposing to phase in a new risk-based regulatory system for LDTs.^8,9 The laboratory industry criticized the plan for being overly onerous and the agency eventually withdrew the proposal in 2016.¹⁰

At that point, the impetus shifted to Congress, which proposed a series of LDT reform bills, none of which passed. The most recent proposal, the VALID Act, would create a comprehensive framework for FDA approval of LDTs and IVD tests based on the level of risk the product involves.¹¹ See the G2 Intelligence July 2022 Laboratory Industry Report article, “Bill to Regulate LDTs Advances, but Is No Slam Dunk for Final Passage,” for more information.¹

After last year’s narrow miss, many believe that VALID could pass this year.¹² However, industry reaction to VALID has been mixed and it is unclear whether the currently constituted bill is the right solution.

FDA Seeks to Take Back Control Over LDTs Reform

After remaining on the sideline for nearly six years, the FDA has decided to take the initiative. On March 1, the FDA’s Elizabeth Hillebrenner, MSE, said that the agency considers the LDTs situation to be a serious public health problem. While the FDA would prefer to regulate LDTs under new legislation passed by Congress, Hillebrenner said that rather than waiting for a solution from government, the agency is “moving forward with rulemaking.” The remarks, reported by BioWorld, came during the American Clinical Laboratory Association’s annual meeting.¹³

It now appears as if the FDA was not bluffing, having sent an LDTs reform proposal to the OIRA. This is a procedural hurdle a federal agency must clear to publish a new rule in the Federal Register. The proposed notice indicates that the agency will unveil the new rule in August 2023, but that could be delayed if the OIRA does not approve the proposal immediately.¹⁴

What Happens Next

Though it won’t be clear what will happen until the FDA reveals the proposed rule, any attempt by the agency to implement LDTs regulation on its own without a clear legislative mandate from Congress could result in a legal challenge testing the agency’s authority to regulate LDTs and IVD tests. Such “ultra vires” lawsuits contending that government agencies have overstepped their bounds are common. Though not involving LDTs, in one recent case, three doctors sued the FDA, claiming that the agency’s statements on off-label use of the drug ivermectin impaired their ability to practice medicine.¹⁵ Of course, Congress could make this a moot point by adopting the VALID Act or alternative reform bill, which may be the very outcome the FDA is seeking in pushing its own regulatory proposal.

Bottom Line: It appears as if the LDTs situation may be finally heading to a resolution. However, it is impossible to predict what the conclusion will be and how long it will take to reach.

References:

1. https://www.g2intelligence.com/bill-to-regulate-ldts-advances-but-is-no-slam-dunk-for-final-passage/
2. https://www.congress.gov/bill/118th-congress/house-bill/2369
3. https://www.reginfo.gov/public/do/eoReviewSearch
4. https://www.pewtrusts.org/en/research-and-analysis/reports/2021/10/the-role-of-lab-developed-tests-in-the-in-vitro-diagnostics-market
5. https://www.grandviewresearch.com/industry-analysis/laboratory-developed-tests-market-report
6. https://www.fda.gov/medical-devices/in-vitro-diagnostics/laboratory-developed-tests
7. https://www.regulations.gov/document/FDA-2013-P-0667-0001
8. https://www.fda.gov/media/89841/download
9. https://www.g2intelligence.com/lab-execs-air-concerns-over-fda-regulation-of-ldts/
10. https://www.g2intelligence.com/wp-content/newsletters/nir/2016-03-10-NIR.pdf
11. https://www.congress.gov/bill/118th-congress/house-bill/2369/text
12. https://www.advamed.org/industry-updates/news/advamed-statement-on-introduction-of-bipartisan-valid-act/
13. https://www.bioworld.com/articles/694701-hillebrenner-says-fda-no-longer-waiting-on-congress-for-ldt-regulation
14. https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202304&RIN=0910-AI85
15. https://www.lexology.com/library/detail.aspx?g=b6a15165-dcab-4151-8920-78e07d4fda11

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Here are the key new laboratory testing and diagnostics product clearances announced since mid-July 2023:

New FDA Approvals & Emergency Use Authorizations (EUAs)

New CE Marks & Global Certifications

Notable European CE certifications announced during the period:

New Approvals in Europe

Other international clearances announced during the period: