The U.S. Food and Drug Administration's (FDA) recent announcement of a final rule extending regulatory oversight to laboratory developed tests (LDTs) has sparked controversy. As discussed in a previous Holland & Knight alert, the final rule places LDTs – which are developed and utilized within individual laboratories – within the same regulatory framework as medical devices and other in vitro diagnostic products (IVDs) used across various healthcare facilities and laboratories.
However, the final rule has elicited mixed reactions within the medical community. Though some argue that it is essential for ensuring patient safety and standardization in testing procedures, others, including national laboratory and hospital organizations, express concerns about its potential limitations and consequences.
Mixed Reactions to the Final Rule
Critics highlight notable shortcomings in the final rule. For example, it generally exempts currently marketed IVDs offered as LDTs that were first marketed prior to the final rule's issuance from FDA oversight, although FDA plans to collect relevant information to identify and address tests that raise public health concerns. Moreover, exemptions for tests approved by external programs such as the New York State Clinical Laboratory Evaluation Program raise questions about the adequacy of alternative regulatory mechanisms.
Organizations such as the American Clinical Laboratory Association (ACLA) have voiced strong opposition, suggesting the final rule may limit access to essential tests, increase healthcare costs and impede innovation in diagnostics. Further, ACLA claims the implementation of FDA regulation on LDTs will affect the accessibility of innovations aimed at smaller patient populations that might not immediately attract commercial interest. ACLA also claims the final rule exceeds FDA's statutory authority, as Congress has never granted FDA authority to regulate LDT services offered by laboratory professionals.
Additionally, concerns have been raised by the American Hospital Association (AHA) about the potential impact on hospital and academic labs, which may face obstacles in developing tests that are crucial for patient care. According to AHA, applying FDA's device regulations to LDTs, even with the proposed four-year phaseout of the current enforcement discretion, would pose nearly insurmountable burdens and costs on FDA, as well as hospital and health system laboratories. AHA believes this outcome would likely lead to a decline in the rate of clinical innovation, negatively impacting the country's ability to maintain its healthcare system at the forefront of discovery, provide quality care to patients and respond quickly to emerging public health risks.
Although FDA exempts LDTs manufactured and performed by a laboratory integrated within a healthcare system to meet an unmet need of patients receiving care within the same healthcare system when an FDA-authorized test is not available, AHA continues to urge FDA to apply its enforcement discretion to all hospital and health system LDTs. Specifically, AHA advocates deferring regulation of these tests mainly to the Centers for Medicare & Medicaid Services' (CMS) strict Clinical Laboratory Improvement Amendments (CLIA) oversight, the College of American Pathologists accreditation and state law. AHA asserts another matter of particular concern is that the final rule might hinder hospital and academic labs from developing tests that, while essential for patient care as prescribed by doctors, are not marketed as IVDs.
Another issue is the inevitability of litigation to challenge the final rule. Many labs developing new LDTs or planning modifications to existing LDTs would need to conduct new studies to support premarket submissions for their new or modified tests. One significant consideration is whether they will conduct the studies now or wait until any potential litigation is resolved.
Conclusion
In sum, although FDA's effort to regulate LDTs aims to improve patient safety and testing quality, concerns persist regarding its potential impact on innovation and accessibility. Collaborative efforts between regulatory agencies, healthcare organizations and stakeholders will be crucial in navigating these challenges effectively.
FDA intends to hold a webinar on May 14, 2024, to provide an overview of the final rule and phaseout policy.
