FDA Takes Definitive Step Toward the Regulation of LDTs

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On October 3, the U.S. Food & Drug Administration (FDA) published a highly anticipated proposed rule (Proposed Rule) to regulate laboratory-developed tests (LDTs) as medical devices. LDTs are tests that are developed and offered by a single clinical laboratory and they make up the substantial majority of clinical laboratory testing today. The Proposed Rule envisions that by 2028, most LDTs, which are not currently regulated by the FDA under its policy of enforcement discretion, will have to comply with applicable regulatory controls just like other medical devices regulated by the FDA, including, potentially, premarket notification, current good manufacturing practice requirements (CGMPs), reporting requirements, establishment and device listing requirements, and labeling requirements, among others.

In the Proposed Rule, the FDA outlines its intention to do the following:

  • Clarify that in vitro diagnostic products (IVDs) are medical devices regardless of whether they are manufactured by a laboratory or another entity, and,
  • Phase out the agency’s historic policy of regulatory enforcement discretion that has long spared LDTs from FDA oversight.

This marks the agency’s most significant attempt to regulate LDTs since its abandoned controversial 2014 Draft Guidance and has already elicited industry opposition and significant media attention.

Background

The FDA has the authority to regulate the safety and effectiveness of medical devices. IVDs are a broad category of medical device diagnostic products of which LDTs are only a subset. For nearly 50 years, however, the FDA has exercised enforcement discretion with respect to LDTs, meaning that laboratories were not obligated to inform the FDA of their activities, comply with FDA regulations applicable to medical devices, or otherwise secure FDA approval before marketing LDTs for patient care. This policy shielded LDTs from regulatory oversight even when comparable IVDs manufactured in a non-laboratory setting otherwise required approval.

The FDA explains that when this policy originated in 1976, LDTs relied on well-established, non-complex techniques that were primarily used in smaller laboratory settings on limited patient populations. At that time, enforcement discretion enabled laboratories to be agile and responsive in their development and use of innovative diagnostic products in house without first securing agency clearance, approval, or marketing authorization.

But the FDA now argues in the Proposed Rule that public safety concerns warrant a change, particularly given how the testing landscape has evolved. LDTs are now relied upon in making medical decisions in the most complicated and sensitive areas of medical practice. In addition, LDTs often rely on complex instrumentation and software to generate results, are marketed nationwide, are used in laboratories outside of the patient’s healthcare setting, are manufactured at high volumes for large and diverse populations, and are commonly developed with instruments or other components not legally marketed for clinical use.

Citing academic studies, its own experience, patient litigation and other anecdotal evidence, the FDA argues the reliability of some LDTs is highly variable and greater oversight is necessary to ensure the accuracy, safety and effectiveness of IVDs offered as LDTs. The agency highlights examples of individuals making life-altering healthcare decisions based on inaccurate screening tests and the consequences of false negatives common in genetic screenings, cancer screenings and infectious diseases screenings. The FDA believes the Proposed Rule is necessary to protect public health and close what it views as an “alternative pathway to market” for high-risk, high-complexity tests that no longer support the agency’s justification for enforcement discretion.  

Amendment to Regulatory Definition of IVD

The FDA is proposing a tweak to the existing regulatory definition of IVD by adding the phrase “including when the manufacturer of these products is a laboratory.” This change makes explicit that IVDs are medical devices, even when manufactured by a laboratory, and must comply with the FDA’s medical device regulations. The comprehensive legal analysis of this proposed amendment attempts to create a strong textual basis for the FDA to pursue enforcement actions or otherwise defend against constitutional challenges should the Proposed Rule be finalized.

Phase Out of Enforcement Discretion Policy

The primary impact of the FDA’s Proposed Rule is not the proposed textual edit to its regulation but its proposal to phase out over the course of four years the enforcement discretion policy it has maintained for almost half a century. This change will bring most modern laboratory tests within the purview of FDA regulation in some manner. Specifically, the FDA proposes to end enforcement discretion of certain medical device requirements in stages, giving laboratories an anticipated timeframe within which they will need to bring their testing, policies and procedures into compliance with each set of requirements. As proposed, the stages are as follows:

Stage One: Within one year from the date the final rule becomes effective, laboratories would need to comply with medical device event reporting requirements (e.g., adverse event reporting for causing or contributing to death or serious injury).

Stage Two: Within two years from the date the final rule becomes effective, laboratories would need to comply with registration and listing requirements, labeling requirements and investigational use requirements.

Stage Three: Within three years from the date the final rule becomes effective, laboratories would need to comply with CGMPs, which cover nearly all aspects of the manufacturing process, including design, production, purchasing, storage and handling, and labeling and packaging, among others. The FDA intends to further amend these regulations in advance of this Stage Three compliance deadline to more closely align with international consensus standards set by the International Organization for Standardization.

Stage Four: Within three and a half years after the final rule becomes effective, but not before October 1, 2027, laboratories would have to comply with premarket review requirements for high-risk LDTs only (i.e., those LDTs that are likely to be classified as Class III medical devices). This would require submission of a premarket approval (PMA) application for those LDTs categorized as Class III medical devices and approval prior to their distribution. The FDA did not give details on how it plans to classify specific LDTs; rather, in the Proposed Rule, the FDA encourages laboratories to “work with” the FDA to determine whether applications are required for their LDTs. In addition to compliance with CGMPs, premarket review submissions must include full safety and effectiveness data; statements of all components, ingredients, proprieties, and operations of the device; the methods used and facility controls imposed on the manufacture, processing, or packing of devices; device samples; and proposed labeling. However, the FDA indicated it does not intend to “interrupt access” to high-risk LDTs already on the market and available to patients, and thus—assuming compliance with this timeline—would generally only take enforcement action against high-risk LDTs after an application for premarket approval is submitted and the FDA completes its review of the submission.

Stage Five: Within four years after the final rule becomes effective, but not before April 1, 2028, laboratories would have to comply with premarket review requirements for medium-risk LDTs (i.e., those that are likely to be classified as Class II medical devices) and low-risk LDTs (i.e., those that are likely to be classified as Class I medical devices) that would otherwise require premarket submissions. While PMA requirements mentioned above apply to Class III medical devices, some Class I medical devices and many Class II medical devices, if not otherwise exempt, require premarket notification, called a “510(k)” submission, to demonstrate that the device is substantially equivalent to another legally marketed device. Even if Class I and Class II devices are exempt from premarket notification requirements, they must still adhere to applicable regulatory controls. Also included under this Stage Five are de novo submissions, which may be submitted for devices with no legally marketed substantial equivalent or to seek classification as a Class I or Class II device. The FDA estimates approximately 50% of IVDs offered as LDTs would not require premarket review. Assuming laboratories comply with the timeline, the FDA indicated that it does not intend to take enforcement action against Class I and Class II IVDs offered as LDTs until after a 510(k) or de novo request has been submitted and the FDA completes its review of the submission.

Importantly, the FDA also states that despite its proposal to end its current general enforcement discretion gradually, the phase-out policy does not alter the fact that it is illegal to offer IVDs without complying with applicable requirements and that the agency retains discretion to pursue enforcement action at any time against violative IVDs when appropriate.

Scope of Phase-Out Plan and Exceptions

Not all LDTs will be subject to this new enforcement discretion phase-out policy. Specifically, FDA proposes to apply this policy to LDTs offered by laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) to perform high-complexity testing, even if those IVDs do not fall within the agency’s traditional understanding of an LDT because they are not designed, manufactured, and used within a single laboratory.

The agency also identified certain LDTs it plans to exclude from this policy because they are already excluded from its general enforcement discretion approach, meaning they are already required to comply with applicable FDA regulations. These LDTs include:

  • Tests intended as blood donor screening or human cells, tissues, and cellular and tissue-based products donor screening tests required under 21 C.F.R. §§ 610.40 and 1271.80(c), respectively, or for determination of blood group and Rh factor required under 21 C.F.R. § 640.5;
  • Tests intended for emergencies, potential emergencies, or material threats declared under 21 U.S.C. § 360bbb-3 (e.g., tests approved pursuant to an emergency use authorization, or EUA); and,
  • Direct-to-consumer tests.

The FDA also explained that it intends to continue adopting enforcement discretion policies for certain types of IVDs in certain circumstances, citing past guidance issued with respect to COVID-19 and Monkeypox tests during declared public health emergencies. Other categories of tests for which the FDA plans to continue to apply its general enforcement discretion approach include:

  • So-called “1976-Type LDTs” that retain characteristics comparable to the low-tech, low-risk LDTs upon which the agency’s enforcement discretion policy was originally based, which rely on manual techniques (g., without automation), are performed by laboratory personnel with specialized expertise, use components legally marketed for clinical use, and are used within a single laboratory CLIA-certified for high complexity testing;
  • Human Leukocyte Antigen (HLA) tests that are designed, manufactured, and used in a single laboratory CLIA-certified for high complexity histocompatibility testing;
  • Tests intended solely for forensic (law enforcement) purposes; and,
  • Tests intended solely for public health surveillance.

What Next?

Comments on the Proposed Rule must be submitted by December 4, 2023. The Proposed Rule contains a number of topics upon which the FDA is specifically seeking comment, suggesting there are at least some areas where the FDA is still considering continued enforcement discretion, including, for example, to address public health concerns, the potential disproportional impact of the Proposed Rule on smaller laboratories or academic medical centers (AMCs) given their unique circumstances, and the potential leverage of state programs aimed at ensuring accuracy and reliability of clinical lab test results.

The agency notes, however, that to the extent commentators suggest any alternative regulatory approach or that any subsets of LDTs should be subject to continued enforcement discretion, the commentators should respond to the agency’s discussion of public safety concerns and otherwise provide a public health rationale, including supporting data, for its suggestions.

Some of the questions specifically posed to potential commenters by the FDA include:

  • Whether there are other public health scenarios (e.g., COVID-19, Monkeypox) where enforcement discretion policies would be appropriate for IVDs offered as LDTs?
  • Whether a public health rationale exists for a longer phase-out period for IVDs offered at smaller laboratories?
  • What are the characteristics of AMC laboratories and do these characteristics distinguish them from other laboratories?
  • Whether the agency should continue enforcement discretion with respect to any requirements for tests manufactured by AMC laboratories, and whether there are any additional considerations that should be accounted for in such an approach if adopted?
  • Whether the FDA should leverage programs such as the New York State Department of Health Clinical Laboratory Evaluation Program or programs within the Veterans Health Administration and continue its general enforcement discretion policy, such that the FDA generally would not enforce any applicable device requirements where such programs have approved LDTs?
  • What are the specific characteristics of and activities within such programs that would justify an enforcement discretion approach?
  • Should the scope of enforcement discretion be more limited for each such program in question (i.e., enforce some requirements but not others)?

Overall, this Proposed Rule presents the most comprehensive and decisive step the FDA has taken toward regulating LDTs, and its experience regulating COVID-19 diagnostic tests seems to have only strengthened its resolve to regulate LDTs. There are strong opinions on both sides of the debate regarding whether the FDA can and should regulate LDTs.

Some stakeholders have already issued statements in response to the FDA’s Proposed Rule. For example, in a statement made in response to the Proposed Rule, the American Clinical Laboratory Association reiterated its longstanding doubts over the FDA’s authority to regulate LDTs as medical devices and argued that FDA regulation of LDTs requires legislative action through Congress. Whereas the Advanced Medical Technology Association stated, they are still evaluating the proposed rule but generally support FDA regulation of LDTs.

Either way, for now, laboratories should consider submitting comments on the Proposed Rule to the FDA prior to December 4, 2023.

If you have questions about how the Proposed Rule may impact your organization or patient care, or if you would like assistance in submitting a comment on the Proposed Rule, please contact the authors.

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Firm Publication

On October 3, the U.S. Food & Drug Administration (FDA) published a highly anticipated proposed rule (Proposed Rule) to regulate laboratory-developed tests (LDTs) as medical devices. LDTs are tests that are developed and offered by a single clinical laboratory and they make up the substantial majority of clinical laboratory testing today. The Proposed Rule envisions that by 2028, most LDTs, which are not currently regulated by the FDA under its policy of enforcement discretion, will have to comply with applicable regulatory controls just like other medical devices regulated by the FDA, including, potentially, premarket notification, current good manufacturing practice requirements (CGMPs), reporting requirements, establishment and device listing requirements, and labeling requirements, among others.

In the Proposed Rule, the FDA outlines its intention to do the following:

  • Clarify that in vitro diagnostic products (IVDs) are medical devices regardless of whether they are manufactured by a laboratory or another entity, and,
  • Phase out the agency’s historic policy of regulatory enforcement discretion that has long spared LDTs from FDA oversight.

This marks the agency’s most significant attempt to regulate LDTs since its abandoned controversial 2014 Draft Guidance and has already elicited industry opposition and significant media attention.

Background

The FDA has the authority to regulate the safety and effectiveness of medical devices. IVDs are a broad category of medical device diagnostic products of which LDTs are only a subset. For nearly 50 years, however, the FDA has exercised enforcement discretion with respect to LDTs, meaning that laboratories were not obligated to inform the FDA of their activities, comply with FDA regulations applicable to medical devices, or otherwise secure FDA approval before marketing LDTs for patient care. This policy shielded LDTs from regulatory oversight even when comparable IVDs manufactured in a non-laboratory setting otherwise required approval.

The FDA explains that when this policy originated in 1976, LDTs relied on well-established, non-complex techniques that were primarily used in smaller laboratory settings on limited patient populations. At that time, enforcement discretion enabled laboratories to be agile and responsive in their development and use of innovative diagnostic products in house without first securing agency clearance, approval, or marketing authorization.

But the FDA now argues in the Proposed Rule that public safety concerns warrant a change, particularly given how the testing landscape has evolved. LDTs are now relied upon in making medical decisions in the most complicated and sensitive areas of medical practice. In addition, LDTs often rely on complex instrumentation and software to generate results, are marketed nationwide, are used in laboratories outside of the patient’s healthcare setting, are manufactured at high volumes for large and diverse populations, and are commonly developed with instruments or other components not legally marketed for clinical use.

Citing academic studies, its own experience, patient litigation and other anecdotal evidence, the FDA argues the reliability of some LDTs is highly variable and greater oversight is necessary to ensure the accuracy, safety and effectiveness of IVDs offered as LDTs. The agency highlights examples of individuals making life-altering healthcare decisions based on inaccurate screening tests and the consequences of false negatives common in genetic screenings, cancer screenings and infectious diseases screenings. The FDA believes the Proposed Rule is necessary to protect public health and close what it views as an “alternative pathway to market” for high-risk, high-complexity tests that no longer support the agency’s justification for enforcement discretion.  

Amendment to Regulatory Definition of IVD

The FDA is proposing a tweak to the existing regulatory definition of IVD by adding the phrase “including when the manufacturer of these products is a laboratory.” This change makes explicit that IVDs are medical devices, even when manufactured by a laboratory, and must comply with the FDA’s medical device regulations. The comprehensive legal analysis of this proposed amendment attempts to create a strong textual basis for the FDA to pursue enforcement actions or otherwise defend against constitutional challenges should the Proposed Rule be finalized.

Phase Out of Enforcement Discretion Policy

The primary impact of the FDA’s Proposed Rule is not the proposed textual edit to its regulation but its proposal to phase out over the course of four years the enforcement discretion policy it has maintained for almost half a century. This change will bring most modern laboratory tests within the purview of FDA regulation in some manner. Specifically, the FDA proposes to end enforcement discretion of certain medical device requirements in stages, giving laboratories an anticipated timeframe within which they will need to bring their testing, policies and procedures into compliance with each set of requirements. As proposed, the stages are as follows:

Stage One: Within one year from the date the final rule becomes effective, laboratories would need to comply with medical device event reporting requirements (e.g., adverse event reporting for causing or contributing to death or serious injury).

Stage Two: Within two years from the date the final rule becomes effective, laboratories would need to comply with registration and listing requirements, labeling requirements and investigational use requirements.

Stage Three: Within three years from the date the final rule becomes effective, laboratories would need to comply with CGMPs, which cover nearly all aspects of the manufacturing process, including design, production, purchasing, storage and handling, and labeling and packaging, among others. The FDA intends to further amend these regulations in advance of this Stage Three compliance deadline to more closely align with international consensus standards set by the International Organization for Standardization.

Stage Four: Within three and a half years after the final rule becomes effective, but not before October 1, 2027, laboratories would have to comply with premarket review requirements for high-risk LDTs only (i.e., those LDTs that are likely to be classified as Class III medical devices). This would require submission of a premarket approval (PMA) application for those LDTs categorized as Class III medical devices and approval prior to their distribution. The FDA did not give details on how it plans to classify specific LDTs; rather, in the Proposed Rule, the FDA encourages laboratories to “work with” the FDA to determine whether applications are required for their LDTs. In addition to compliance with CGMPs, premarket review submissions must include full safety and effectiveness data; statements of all components, ingredients, proprieties, and operations of the device; the methods used and facility controls imposed on the manufacture, processing, or packing of devices; device samples; and proposed labeling. However, the FDA indicated it does not intend to “interrupt access” to high-risk LDTs already on the market and available to patients, and thus—assuming compliance with this timeline—would generally only take enforcement action against high-risk LDTs after an application for premarket approval is submitted and the FDA completes its review of the submission.

Stage Five: Within four years after the final rule becomes effective, but not before April 1, 2028, laboratories would have to comply with premarket review requirements for medium-risk LDTs (i.e., those that are likely to be classified as Class II medical devices) and low-risk LDTs (i.e., those that are likely to be classified as Class I medical devices) that would otherwise require premarket submissions. While PMA requirements mentioned above apply to Class III medical devices, some Class I medical devices and many Class II medical devices, if not otherwise exempt, require premarket notification, called a “510(k)” submission, to demonstrate that the device is substantially equivalent to another legally marketed device. Even if Class I and Class II devices are exempt from premarket notification requirements, they must still adhere to applicable regulatory controls. Also included under this Stage Five are de novo submissions, which may be submitted for devices with no legally marketed substantial equivalent or to seek classification as a Class I or Class II device. The FDA estimates approximately 50% of IVDs offered as LDTs would not require premarket review. Assuming laboratories comply with the timeline, the FDA indicated that it does not intend to take enforcement action against Class I and Class II IVDs offered as LDTs until after a 510(k) or de novo request has been submitted and the FDA completes its review of the submission.

Importantly, the FDA also states that despite its proposal to end its current general enforcement discretion gradually, the phase-out policy does not alter the fact that it is illegal to offer IVDs without complying with applicable requirements and that the agency retains discretion to pursue enforcement action at any time against violative IVDs when appropriate.

Scope of Phase-Out Plan and Exceptions

Not all LDTs will be subject to this new enforcement discretion phase-out policy. Specifically, FDA proposes to apply this policy to LDTs offered by laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) to perform high-complexity testing, even if those IVDs do not fall within the agency’s traditional understanding of an LDT because they are not designed, manufactured, and used within a single laboratory.

The agency also identified certain LDTs it plans to exclude from this policy because they are already excluded from its general enforcement discretion approach, meaning they are already required to comply with applicable FDA regulations. These LDTs include:

  • Tests intended as blood donor screening or human cells, tissues, and cellular and tissue-based products donor screening tests required under 21 C.F.R. §§ 610.40 and 1271.80(c), respectively, or for determination of blood group and Rh factor required under 21 C.F.R. § 640.5;
  • Tests intended for emergencies, potential emergencies, or material threats declared under 21 U.S.C. § 360bbb-3 (e.g., tests approved pursuant to an emergency use authorization, or EUA); and,
  • Direct-to-consumer tests.

The FDA also explained that it intends to continue adopting enforcement discretion policies for certain types of IVDs in certain circumstances, citing past guidance issued with respect to COVID-19 and Monkeypox tests during declared public health emergencies. Other categories of tests for which the FDA plans to continue to apply its general enforcement discretion approach include:

  • So-called “1976-Type LDTs” that retain characteristics comparable to the low-tech, low-risk LDTs upon which the agency’s enforcement discretion policy was originally based, which rely on manual techniques (g., without automation), are performed by laboratory personnel with specialized expertise, use components legally marketed for clinical use, and are used within a single laboratory CLIA-certified for high complexity testing;
  • Human Leukocyte Antigen (HLA) tests that are designed, manufactured, and used in a single laboratory CLIA-certified for high complexity histocompatibility testing;
  • Tests intended solely for forensic (law enforcement) purposes; and,
  • Tests intended solely for public health surveillance.

What Next?

Comments on the Proposed Rule must be submitted by December 4, 2023. The Proposed Rule contains a number of topics upon which the FDA is specifically seeking comment, suggesting there are at least some areas where the FDA is still considering continued enforcement discretion, including, for example, to address public health concerns, the potential disproportional impact of the Proposed Rule on smaller laboratories or academic medical centers (AMCs) given their unique circumstances, and the potential leverage of state programs aimed at ensuring accuracy and reliability of clinical lab test results.

The agency notes, however, that to the extent commentators suggest any alternative regulatory approach or that any subsets of LDTs should be subject to continued enforcement discretion, the commentators should respond to the agency’s discussion of public safety concerns and otherwise provide a public health rationale, including supporting data, for its suggestions.

Some of the questions specifically posed to potential commenters by the FDA include:

  • Whether there are other public health scenarios (e.g., COVID-19, Monkeypox) where enforcement discretion policies would be appropriate for IVDs offered as LDTs?
  • Whether a public health rationale exists for a longer phase-out period for IVDs offered at smaller laboratories?
  • What are the characteristics of AMC laboratories and do these characteristics distinguish them from other laboratories?
  • Whether the agency should continue enforcement discretion with respect to any requirements for tests manufactured by AMC laboratories, and whether there are any additional considerations that should be accounted for in such an approach if adopted?
  • Whether the FDA should leverage programs such as the New York State Department of Health Clinical Laboratory Evaluation Program or programs within the Veterans Health Administration and continue its general enforcement discretion policy, such that the FDA generally would not enforce any applicable device requirements where such programs have approved LDTs?
  • What are the specific characteristics of and activities within such programs that would justify an enforcement discretion approach?
  • Should the scope of enforcement discretion be more limited for each such program in question (i.e., enforce some requirements but not others)?

Overall, this Proposed Rule presents the most comprehensive and decisive step the FDA has taken toward regulating LDTs, and its experience regulating COVID-19 diagnostic tests seems to have only strengthened its resolve to regulate LDTs. There are strong opinions on both sides of the debate regarding whether the FDA can and should regulate LDTs.

Some stakeholders have already issued statements in response to the FDA’s Proposed Rule. For example, in a statement made in response to the Proposed Rule, the American Clinical Laboratory Association reiterated its longstanding doubts over the FDA’s authority to regulate LDTs as medical devices and argued that FDA regulation of LDTs requires legislative action through Congress. Whereas the Advanced Medical Technology Association stated, they are still evaluating the proposed rule but generally support FDA regulation of LDTs.

Either way, for now, laboratories should consider submitting comments on the Proposed Rule to the FDA prior to December 4, 2023.

If you have questions about how the Proposed Rule may impact your organization or patient care, or if you would like assistance in submitting a comment on the Proposed Rule, please contact the authors.

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