The US Food and Drug Administration (FDA) on April 29, 2024 announced its Final Rule on laboratory-developed tests (LDTs). This marks the beginning of the end of FDA’s broad and long-established enforcement discretion policy for LDTs, under which most LDTs were not expected to meet the premarket or postmarket regulatory requirements. The Final Rule makes clear that LDTs are now considered regulated medical devices and that FDA will phase out its LDT enforcement discretion policy over a four-year period.

This LawFlash discusses the key takeaways from the LDT Final Rule, FDA’s phaseout policy for LDT enforcement discretion, and potential consequences.

IVD DEFINITION REVISED TO MAKE CLEAR LDTS ARE REGULATED DEVICES

Although the Federal Register notice announcing this monumental regulatory shift for LDTs is well over a hundred pages, the change to FDA’s regulations consisted of adding only 10 words to the end of the regulatory definition for in vitro diagnostic (IVD) products:

“In vitro diagnostic products are those reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae. Such products are intended for use in the collection, preparation, and examination of specimens taken from the human body. These products are devices as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act (the act), and may also be biological products subject to section 351 of the Public Health Service Act, including when the manufacturer of these products is a laboratory.” 21 C.F.R. § 809.3 (emphasis added).

As revised, this regulation now makes clear that LDTs are included within the definition of IVDs and thus qualify as devices subject to FDA’s oversight and regulation under the Federal Food, Drug, and Cosmetic Act.

SCOPE OF PHASEOUT POLICY

The scope of tests eligible for the LDT phaseout program include not only tests that qualify as LDTs per FDA’s traditional definition (i.e., tests designed, manufactured, and used at a single Clinical Laboratory Improvement Amendments (CLIA)-certified laboratory location certified for high complexity testing), but also tests that were manufactured by high complexity, CLIA-certified labs and offered as LDTs by the lab. The latter category includes tests that may not have fully met FDA’s definition for an LDT (e.g., because the test was designed at a different laboratory location).

However, FDA explicitly states that the following types of tests are not eligible for the phaseout program, as FDA has previously stated that such tests do not qualify for LDT enforcement discretion. As such, FDA has and continues to require these types of tests to fully meet the applicable FDA requirements:

• Direct to consumer tests
• Tests intended for donor screening for blood or for human cells, tissues, and cellular and tissue-based products (HCT/Ps)
• Tests intended for emergency use per Section 564 of the Federal Food, Drug, and Cosmetic Act
• Tests manufactured or used outside of a clinical laboratory

FOUR-YEAR PHASEOUT APPROACH

FDA is phasing out its blanket enforcement discretion policy for LDTs over the course of four years in five stages. At each stage, FDA expects LDTs to come into compliance with specific regulatory requirements, as set forth below:

• Stage 1: Compliance with requirements for medical device reporting (MDR), corrections and removals reporting, and complaint handling starting one year after Final Rule publication date
• Stage 2: Compliance with other regulatory requirements—including establishment registration, device listing, labeling, and investigational use—required starting two years after Final Rule publication date.
• Stage 3: Compliance with the quality system regulation (QSR), which sets forth the good manufacturing practices for medical devices, starting three years after Final Rule publication date
• Stage 4: Compliance with premarket review requirements for high-risk LDTs, starting three and a half years after Final Rule publication date
• Stage 5: Compliance with premarket review requirements for low and moderate-risk LDTs, starting four years after Final Rule publication date

NEW ENFORCEMENT DISCRETION FOR GRANDFATHERED LDTS

In a move certain to provide relief for many laboratories that offer LDT testing services, FDA added a new, limited enforcement discretion policy for LDTs that “were first marketed prior to the date of issuance of the rule and that are not modified, or that are modified in certain limited ways.” These pre-existing LDTs will not be required to comply with FDA’s premarket review or QSR requirements, but other regulatory requirements will apply (e.g., MDR, complaint handling, registration, and listing). In addition, FDA states that it will request that laboratories offering pre-existing LDTs submit labeling to FDA.

FDA also has created several other new, limited enforcement discretion policies for certain other types of LDTs, including, for example, “1976-Type LDTs” (i.e., tests that have certain characteristics common among LDTs offered in 1976), LDTs approved by the New York State Department of Health’s Clinical Laboratory Evaluation Program, and LDTs manufactured and performed solely within the Veteran’s Health Administration or US Department of Defense.

SUPPLIERS OF LDT COMPONENTS MAY FACE MORE SCRUTINY

In the preamble to the Final Rule, FDA made clear that a laboratory manufacturing or assembling an LDT from third-party components, such as software, kits, instruments, and reagents, is responsible for determining the necessary specifications for such components and implement purchasing and acceptance controls. Thus, third parties that supply components used for LDTs should be aware that their laboratory customers may seek to impose more requirements (including quality requirements) and controls via contract in order to meet these obligations.

For example, software developers that provide software products or services used in LDTs may find customers imposing requirements for software validation, the sharing of other data/information to support that the software functions as intended, and reporting of changes that could impact an LDT subject to the grandfathered enforcement discretion policy (e.g., addition of artificial intelligence or machine learning to the software algorithm).

THE VALID ACT AND POTENTIAL LITIGATION

It is unclear whether—or to what extent—FDA’s new Final Rule will impact efforts to pass the Verifying Accurate, Leading-edge IVCT Development (VALID) Act currently pending in US Congress. The VALID Act would create a new regulatory framework for IVDs, including LDTs, separate from the current regulatory scheme for medical devices. The VALID Act has been introduced in Congress for several years in a row, but has not yet had sufficient support to move forward.

It has generally had the support of the medical device industry, and it is possible that clinical laboratory stakeholders, now faced with a timeline for LDTs to start complying FDA’s medical device regulations, may view an alternative IVD regulatory scheme more favorably and throw their support in as well.

In addition, comments to the proposed rule (described in our prior LawFlash) suggested that FDA does not have the authority under the Federal Food, Drug, and Cosmetic Act. Considering pending US Supreme Court litigation Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce questioning deference afforded to regulatory agencies in rulemaking, it is possible that private litigants will challenge the LDT rulemaking thereby at a minimum potentially delaying implementation of the rule.

The LDT Final Rule will become effective on July 5, 2024.

[View source.]