Laboratory-Developed Tests: FDA Publishes Highly Anticipated Proposed Rule

On September 29, 2023, the US Food and Drug Administration (FDA) published a long-awaited proposed rule on laboratory-developed tests (LDTs). If FDA finalizes this rule as proposed, FDA will regulate virtually all LDTs as medical devices.

It has long been FDA’s position that the Food, Drug, and Cosmetic Act gives it authority to regulate LDTs as medical devices. Historically, FDA has exercised enforcement discretion with respect to most LDTs and has not required the laboratories offering such tests to comply with FDA regulatory requirements for medical devices. In the proposed rule, FDA proposes to modify its regulations to explicitly state that in vitro diagnostics (IVDs) are devices, including when the manufacturer of the IVD is a clinical laboratory.

IN DEPTH

If finalized as proposed, this change will impose significant new regulatory requirements on nearly all clinical laboratories currently offering tests as LDTs. Key aspects of the agency’s proposal include the following:

• Enforcement discretion would end in five stages over a four-year period from the date FDA publishes a final rule:
  • Phase 1 (effective one year post-finalization): Labs must comply with medical device (adverse event) reporting and correction/removal reporting requirements.
  • Phase 2 (effective two years post-finalization): Labs must comply with all other device requirements (e.g., registration/listing, labeling, investigational use), except for quality systems and premarket review.
  • Phase 3 (effective three years post-finalization): Labs must comply with quality systems requirements.
  • Phase 4 (effective three and a half years post-finalization, but not before October 1, 2027): Labs must comply with premarket review requirements for high-risk tests (i.e., tests subject to premarket approval (PMA) requirement).
  • Phase 5 (effective four years post-finalization, but not before April 1, 2028): Labs must comply with premarket review requirements for moderate- and low-risk tests (i.e., tests subject to de novo or 510(k) requirement).

Tests offered as LDTs—including those that fall outside of FDA’s historically narrow definition of what constitutes an LDT (i.e., a test intended for clinical use that is designed, manufactured and used within a single high-complexity Clinical Laboratory Improvement Amendments (CLIA) laboratory)—may remain on the market until FDA completes its review of the lab’s application.

In the interim, FDA notes that it “retains discretion to pursue enforcement action at any time against violative IVDs when appropriate.”

• There would be no grandfathering for existing tests, including tests performed at academic medical centers (AMCs), but the agency requests comments on this approach. In previous agency statements (e.g., its 2017 discussion paper), FDA expressed its willingness to grandfather many existing tests from most or all FDA regulatory requirements. The proposed rule, however, does not include any express grandfathering provision. Anticipating that it will receive comments on this point, the agency requests that any comments supporting grandfathering include both an explanation of the public health rationale for grandfathering (including supporting data) and an outline of steps to help support a grandfathering approach, including ideas to help address FDA’s concerns about grandfathered test performance.

FDA also requests information on how it might leverage the New York State CLEP and Veterans Administration programs, respectively. In particular, FDA requests comments on whether it should continue to exercise enforcement discretion with respect to tests that successfully participate in those programs.

FDA also requests comments on whether it should continue enforcement discretion for tests offered at AMCs.

• Tests offered in a single CLIA-certified laboratory would be subject to a subset of the usual “device” quality systems requirements. For tests where all manufacturing activities occur within a single CLIA-certified clinical laboratory and for which distribution does not occur outside that single laboratory, FDA expects compliance with some, but not all, quality systems requirements. Specifically, labs must comply with the following:
  • Design controls (21 CFR 820.30)
  • Purchasing controls (21 CFR 820.50)
  • Acceptance activities (21 CFR 820.80 and 820.86)
  • Corrective and preventive actions (820.100)
  • Records requirements (21 CFR 820, Subpart M).

For all other IVDs offered as LDTs, FDA proposes to end enforcement discretion for all quality systems requirements three years after finalization.

The proposed rule is open for comment until December 2, 2023.

Analysis

If finalized as proposed, the rule would impose significant new regulatory requirements on clinical laboratories offering LDTs.

The agency’s proposal also raises several critical (and unanswered) questions:

• Does the agency have legal authority to regulate LDTs? Notwithstanding the agency’s contention, this issue has not been conclusively addressed by the courts. Any final rule will almost certainly be subject to legal challenge(s) by interested laboratory stakeholders.
• How will FDA address the practical issues associated with regulating LDTs as medical devices? Unlike an IVD test kit, an LDT is not a physical item that is transferred in interstate commerce. Therefore, what is the regulated “device” within the laboratory test operation? To whom would LDT labeling be addressed—the performing laboratory or the ordering physician? And perhaps most importantly, how will FDA find the resources necessary to timely review the additional submissions that would come in under the framework?
• Will the proposed rule change the industry’s (or Congress’s) position on the Verifying Accurate, Leading-edge IVCT Development (VALID) Act)? FDA and other interested stakeholders have been working on a legislative approach specific to diagnostics that would clarify FDA’s authority over LDTs. Compared to FDA’s proposal, VALID includes several provisions that are more favorable to clinical laboratories, including explicit grandfathering and an extended timeline for compliance. For a high-level comparison between the proposed rule and VALID, please see this chart. While Congress was close to a compromise on VALID at the end of 2022, no final agreement was reached. The leaders of VALID are reviewing this proposed rule and possibly renewing their efforts to pass the legislation. While some lawmakers, including lead Republicans on the US House of Representatives and US Senate committees of jurisdiction, have already released statements raising questions and concerns on the proposed rule, it is unclear if they would support a legislative effort.
• Will FDA maintain the proposed phase-in timeline in a final rule? The timeline in the proposed rule is substantially more aggressive than the timeline in the FDA’s 2014 draft guidance (up to nine years, for certain tests). The volume of tests has increased substantially since 2014, making it questionable whether FDA has the resources to review a large volume of premarket review submissions within the timeframe indicated. Stakeholders likely will seek a longer timeframe for compliance or congressional direction to delay implementation.
• Will the agency reverse course and allow some type of grandfathering for existing tests? And if so, to what extent?
• What guidance will FDA make available to clinical laboratories? How will laboratories know whether their tests are high risk (and subject to the PMA requirement within three and a half years) or moderate/low risk (and subject to the 510(k) or de novo requirement within four years)? Clinical laboratories have not historically been subject to FDA quality systems requirements and therefore may find it difficult to come into compliance with such requirements (particularly design controls). The extent to which the agency will provide laboratories with additional guidance to facilitate their compliance with such requirements is unclear.