On May 6, 2024, following more than a decade of discourse with interested stakeholders on potential approaches to regulation of laboratory developed tests (LDTs), the U.S. Food and Drug Administration (FDA) published its final rule setting forth its framework for oversight of LDTs. The final rule and accompanying policy to phase out the agency’s general policy of “enforcement discretion” for LDTs comes roughly six months after FDA published its proposed rule that outlined the agency’s proposed approach to increasing oversight over LDTs.

As detailed in our prior analyses of the proposed rule (see here and here), FDA proposed to implement a phaseout policy that would, across five stages and within four years, apply to clinical laboratories offering tests as LDTs the same regulatory requirements applicable to in vitro diagnostics (IVDs). The proposed rule received more than 6,500 comments, and while FDA did not change its amendments to the regulation or meaningfully modify the phaseout timeline, FDA has significantly modified its phaseout policy to extend full or partial enforcement discretion to additional categories of LDTs, creating a framework whereby the agency intends to take a more targeted enforcement approach, particularly in the near-term, to addressing LDTs.

In this Insight, we highlight the key features of the final rule and five-stage phaseout policy.

What Changes Were Made to FDA’s Regulations?

In the final rule, FDA finalized its proposal to make a small but significant change to its regulations that reflects the agency’s stance that LDTs are “devices” as defined under the Federal Food, Drug, and Cosmetic Act (FDCA) and are therefore subject to FDA’s authority. Specifically, the final rule adds only eight words into FDA’s regulation defining “in vitro diagnostic products” (21 C.F.R. § 809.3(a)) to make explicit its interpretation that IVDs are “devices” as defined in Section 201(h)(1) of the FDCA, even when “the manufacturer of these products is a laboratory.”

The final rule is effective on July 5, 2024.

The remainder of the 160-page final rule, as published in the Federal Register, is dedicated to describing FDA’s five-stage phaseout policy as well as addressing the numerous public comments received from stakeholders. The public comments are addressed in 307 separate responses and cover, among other topics, the need for the rule, the legal authority for the rule and other legal comments, the impact of the rule and updated policy on small businesses, pricing, access and innovation, and the details of the final phaseout policy.

What Tests are Subject to FDA’s Final Phaseout Policy?

Consistent with the proposed phaseout policy, FDA’s final phaseout policy applies to “IVDs offered as LDTs,” which comprise a broader set of tests than FDA’s traditional understanding of an LDT.

Conversely, consistent with the proposed phaseout policy, the final rule makes clear that certain tests are excluded from the final phaseout policy and remain subject to active regulation since they were never considered to qualify for FDA’s general enforcement discretion approach for LDTs.

For tests intended for emergency use, FDA has generally expected emergency use authorizations (EUAs) for LDTs after a declared emergency. However, FDA has issued a draft guidance entitled “Consideration of Enforcement Policies for Tests During a Section 564 Declared Emergency” (May 2024) on factors to consider in adopting enforcement discretion policies relating to uses of unauthorized tests in future public health emergencies. Further, FDA has issued a draft guidance entitled “Enforcement Policy for Certain In Vitro Diagnostic Devices for Immediate Public Health Response in the Absence of a Declaration under Section 564” that proposes a new enforcement discretion policy for certain “immediate response” tests manufactured and offered by laboratory manufacturers in the absence of a declared emergency under Section 564 of the FDCA.

Last but not least, FDA clarifies in the preamble to the final rule that LDTs offered for a use that is the same as a companion diagnostic (CDx), including those LDTs described in FDA’s “Oncology Drug Products Used with Certain In Vitro Diagnostics Pilot Program,” are subject to the final phaseout policy that generally applies to “IVDs offered as LDTs.”

What Tests Will Generally Remain Under Full Enforcement Discretion?

The final phaseout policy confirms that FDA will continue exercising full enforcement discretion (i.e., generally not enforce all applicable FDA requirements) for the four types of tests originally described in the proposed rule as well as LDTs manufactured and performed within the Veterans Health Administration (VHA) or the Department of Defense (DoD).

What Tests Will Generally Remain Under Partial Enforcement Discretion?

The final rule has added a number of significant categories of tests that will remain under some degree of enforcement discretion. Specifically, FDA is adopting several new “targeted enforcement discretion policies” for the following.

What is the Timeline for the Final Phaseout Policy?

FDA plans to phase in the various regulatory requirements for “IVDs offered as LDTs” that do not fall under a continued enforcement discretion policy as described above across five stages and within four years as outlined below.

Stage 1: One year after publication of the final rule, FDA will phase in medical device reporting (MDR) requirements, reports of correction and removal requirements, and QS complaint file requirements.

Stage 2: Two years after publication of the final rule, FDA will phase in all other medical device requirements not covered in the phaseout policy, including investigational use requirements, registration and listing requirements, and labeling requirements.

Stage 3: Three years after publication of the final rule, FDA will phase in the QS requirements in 21 C.F.R. Part 820 (excluding the QS complaint file requirements, which are included in Stage 1).

For LDTs (i.e., when all manufacturing activities occur within a single laboratory and the test is not transferred outside that laboratory), this is limited to the phase in of requirements covering design controls, purchasing controls (including supplier controls), acceptance activities (receiving, in-process, and finished device acceptance), corrective and preventive action (CAPA), and records requirements.

Stage 4: Three and a half years after publication of the final rule, FDA will phase in the premarket review requirement for high-risk “IVDs offered as LDTs” and will begin enforcing the premarket approval (PMA) requirement.

FDA has announced its intention to complete reclassification of certain Class III IVDs to Class II IVDs in advance of this deadline.

Stage 5: Four years after publication of the final rule, FDA will phase in the premarket review requirement for moderate-risk and low-risk “IVDs offered as LDTs” (that require premarket submissions) and will begin enforcing the premarket notification (510(k)) and de novo request for classification requirements.

With respect to the premarket review requirements in Stages 4 and 5, FDA does not generally intend to enforce against “IVDs offered as LDTs” for lacking premarket clearance or approval if an appropriate premarket submission is received by the beginning of the applicable stage. Instead, FDA intends to continue exercising enforcement discretion for the pendency of the agency’s review of the submission.

What’s Next?

It is anticipated that laboratory associations and individual laboratories will consider pursuing legal action against FDA and seek to enjoin the agency from implementing the final rule. Further, it remains to be seen whether the issuance of the final rule will spur further discussions of legislative approaches to regulating LDTs.

While the final rule has created several new and notable categories for ongoing enforcement discretion for LDTs, it is notable that such ongoing enforcement discretion is not guaranteed. As stated (and reiterated) in the final rule:

“… regardless of this or any other enforcement discretion policy, FDA retains discretion to pursue enforcement action at any time against violative IVDs when appropriate. We intend to carefully monitor LDTs falling within this policy and intend to take action regarding such LDTs as appropriate taking into account any public health concerns as evaluated on a case-by-case basis.”

Indeed, as stated in the final rule, FDA intends to “take targeted steps” to address Currently Marketed IVDs Offered as LDTs that are problematic, including those that the agency views to be potentially inaccurate or poorly validated. As part of this initiative, FDA states that it intends to, by May 6, 2026, collect labeling from laboratories offering Currently Marketed IVDs Offered as LDTs. Further, FDA states that the agency “generally intends to take action where the labeling of a currently marketed IVD offered as an LDT is false or misleading, and/or the IVD offered as an LDT lacks the appropriate assurance of safety and effectiveness for its intended uses as a result of any such claims that are not adequately substantiated.” FDA similarly intends to request labeling for NYS CLEP LDTs and Same Healthcare System/Unmet Need LDTs.

Therefore, it is important for laboratories developing and offering LDTs to carefully consider FDA’s new framework for oversight and to appropriately adjust their regulatory strategy and compliance plans.

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