AdvaMed, ACLA working on 11th hour bid for diagnostics reform in FY23 budget

Updated 16 December 2022 to clarify language ACLA has been able to negotiate into the VALID Act.

With only days to go, industry groups and patient advocates are lobbying Congress to include diagnostics reform in the upcoming FY 2023 budget bill.
 
The medical device industry group AdvaMed, the Pew Charitable Trusts and seven other medicine-related groups wrote to the chairs and ranking members of the Senate Health, Energy, Labor and Pensions (HELP) and the House Energy and Commerce (E&C) committees on 12 December, advocating the inclusion of the Verifying Accurate Leading-edge IVCT Development (VALID) Act in the upcoming budget bill. If passed, it would allow the FDA to regulate laboratory-developed tests (LDT) currently overseen under the Clinical Laboratory Improvement Amendments (CLIA) certification.
 
“The VALID Act would be an important step forward for patients and their clinicians who expect the highest quality innovative tests available to diagnose and treat illnesses,” they wrote. “Absent these reforms, the current, outdated oversight of the development and quality of these tests will lead to inaccurate and unreliable tests and undermine clinical decision making and patient health outcomes.”

The FDA traditionally has used its regulatory enforcement discretion regarding LDTs as they were simpler tests that were not used to diagnose serious diseases or conditions. Over the years, however, the tests have become more complex, are for riskier diseases, and have been mass manufactured for sale across state lines, according to the agency.
 
Congressional leaders are on the verge of passing a continuing resolution (CR) to keep the government operational until 23 December while the budget negotiations can continue. If the VALID Act is to be included in that bill, legislators will need to do so by 16 December.
 
Passage of the VALID Act would be a “net positive” for the medical device industry, according to AdvaMed.
 
“The VALID Act is an important policy priority for the diagnostics industry as it continues to innovate and grow,” Zach Rothstein, executive director of AdvaMedDx, a division of AdvaMed, told Focus. “We need a modern, risk-based regulatory approach that is tailored specifically for diagnostic tests and will ensure developers can continue to meet the needs of patients and clinicians into the future.”
 
Academic medical centers—where many LDTs are developed and used—generally oppose the VALID Act and could seek to have the legislation excluded from the CR, according to industry sources. They argue that the additional regulatory oversight would be burdensome and deprive patients of tests; further, they seek to have LDTs used in the academic setting to be excluded from the VALID Act.
 
Proponents of the VALID Act, on the other hand, note that it contains exceptions for situations where the tests are for smaller populations, meant to address unmet needs, and that not all tests will be required to submit a premarket application (RELATED: Experts look to VALID for diagnostic reforms, offer reassurance to lab industry, Regulatory Focus, 26 October 2022).
 
In the past, the American Clinical Laboratory Association (ACLA) has been one of the biggest opponents of FDA regulation of LDTs. That position, however, has evolved and the group sees a legislative pathway as the only way to a diagnostic specific framework and their work to engage on the bill continues.
 
"We have not endorsed the VALID Act,” ACLA President Susan van Meter told Focus. “We're continuing to talk to the Hill leads on it.
 
"ACLA determined some time ago that we do need certainty for regulatory oversight for clinical laboratories and we do not believe LDTs could be or should be regulated under the current medical device framework; we do not think the authority exists for that and diagnostics are not medical devices,” she added. “A framework specific to diagnostics is needed."
 
Van Meter, who joined ACLA in March after having served as AdvaMedDx executive director, said the group is working with legislators, committee leadership and other stakeholders to update the proposed legislation.
 
"When you look at the version of the VALID Act that was on the table prior to the May HELP mark-up of the [FDA Safety and Landmark Advancements] Act, there are significant improvements that have been made,” she said. “A lot of that has to do with our engagement with the committees, discussions with other stakeholders... We've seen those improvements there and we want to hold on to those."
 
Van Meter said ACLA’s advocacy has resulted in improvements to the bill, including grandfathering of currently used tests and a 5–6-year implementation period if the VALID Act becomes law. It also appreciates the improvements made on modifications policy and technology certification, as well as an allowance for an extension of the transition period for certain tests.
 
"There's no question the VALID Act would be a very heavy lift for clinical laboratories, and there will be significant costs associated with that,” said Van Meter.
 
ACLA also is talking to congressional leaders about the need for more reimbursement for LDTs from the Centers for Medicare and Medicaid Services (CMS), Van Meter said, noting that labs are facing a 15% reduction in reimbursement from CMS for 800 tests starting in January. The group has been lobbying for the Saving Access to Laboratory Services Act to ensure they continue to have the resources they need to do their job.
 
Van Meter acknowledged that some of ACLA members will have "disparate perspectives" on the bill but, ultimately, they’ve been able to include key provisions intended to benefit all test developers including those with rare disease tests and those who produce low volumes of tests.
 
The VALID Act contains language about user fees that would come into effect only when the next Medical Device User Fee Amendment (MDUFA VI) is implemented.
 
While VALID tops AdvaMed’s regulatory priorities, it also wants Congress to pass legislation including one that clarifies when the FDA must issue Certificates to Foreign Governments (CFGs) to show that devices meet the agency’s requirements and another that gives the FDA authority to allow change control protocols for artificial intelligence and machine learning (AI/ML) products as part of the CR. (RELATAED: AdvaMed seeks diagnostics reform in December budget bill, Regulatory Focus, 13 October 2022)
 
Earlier this year, FDA Commissioner Robert Califf threatened to use the agency’s arduous rulemaking process to oversee LDTs if the VALID Act was not passed; however, he said he would prefer it if Congress explicitly gave the agency the authority it needs (RELATED: Califf: FDA may use rulemaking for diagnostics reform if VALID isn't passed, Regulatory Focus, 25 October 2022).
 
Jeff Shuren, director of the FDA Center for Devices and Radiological Health (CDRH), also expressed his frustration to Focus earlier this year that despite strong bipartisan support for the legislation, VALID failed to make it into the MDUFA V package. (RELATED: Shuren talks cybersecurity, calls for pre-cert and diagnostic reform legislation, Regulatory Focus, 27 October, 2022)
 
“There's almost the point of what do I need to do? Do I need a pile of dead bodies before somebody says enough is enough,” he said. “LDTs are absolutely critical in healthcare, but patients and providers don't care who makes the tests, they just care that the tests work, and we've got LDTs that just don't work and there isn't that oversight in place to assure that they do… As a physician, that deeply concerns me.”

* The updated version of the story adds clarifications to the legislative changes ACLA has been able to negotiate in the VALID Act.