FDA proposes long-awaited LDT enforcement rule

The US Food and Drug Administration (FDA) has published a much-anticipated proposed rule that aims to end its enforcement discretion of laboratory-developed tests (LDT) and make it explicitly clear that the products will be regulated by the agency as medical devices. FDA argues that the rule will encourage innovation while saving patient lives and billions in healthcare costs.

Almost a year ago, FDA Commissioner Robert Califf expressed his frustration with the fact that despite years of trying, Congress had not passed the Verifying Accurate, Leading-edge IVCT Development (VALID) Act to create a regulatory framework for in-vitro diagnostics (IVD) and institute a new pathway for LDT oversight (Related: Califf: FDA may use rulemaking for diagnostics reform if VALID isn't passed, Regulatory Focus 25 October 2022).

That day has come. On 29 September, FDA proposed a rule that would start to phase out its LDT enforcement discretion policy from the 1970s by explicitly stating LDTs are medical devices and listing instances when the test manufacturer is a laboratory. The agency argues that its enforcement discretion policy was instituted at a time when LDTs were created for simple tests for low-risk conditions. Since then, the tests have become more complex and are used to diagnose serious diseases while relying on high-tech instrumentation and software and are manufactured in large volumes.

“These widely used tests are generally not coming to the FDA for review or otherwise complying with FDA requirements,” said Califf during a press conference. “This leaves Americans vulnerable to making important healthcare choices based on potentially faulty or inaccurate test results. This should not continue.

“Laboratory-developed tests play a central role in US healthcare, and many are similar to [diagnostics] that do come into the FDA for review,” he added. “This approach no longer makes sense and puts US patients at risk.”

Jeff Shuren, director of the Center for Devices and Radiological Health, has long lobbied to end FDA’s enforcement discretion of LDTs, arguing that many of the tests have shown to be ineffective and have led to patient deaths or unnecessary medical procedures. He said that he worries that while the American public and caregivers trust the tests, the FDA has little understanding of their safety and efficacy. There are no safeguards to stop bad tests from getting to market or monitoring their performance (RELATED: Shuren talks cybersecurity, calls for pre-cert and diagnostic reform legislation, Regulatory Focus 27 October 2022).

"That means no one truly knows how many of these tests are out there, or who makes which one, let alone which tests have a track record of inaccurate results and problems and which don't,” Shuren said during the press conference. “Patients and consumers deserve better."

The agency said it plans to phase out its enforcement discretion to avoid disruptions to the testing market. That means LDTs would need to meet the same regulatory requirements as other IVDs unless they meet certain Clinical Laboratory Improvement Amendments (CLIA) requirements.
FDA is proposing to phase out its enforcement discretion in five stages and over five years. The first stage would require LDT manufacturers to start complying with medical device reporting, correction and product removal reporting requirements within a year of the rule being finalized. By the fourth stage, manufacturers of high-risk LDTs would be required to follow quality system (QS) requirements and comply with premarket review requirements within three and a half years or by 1 October 2027. In the fifth stage, low- to moderate-risk LDT manufacturers will have four years to comply with the same requirements and ensure they comply by 1 April 2028.

The rule would not apply to all LDTs currently on the market, according to FDA.

“FDA is aware of other arguments that ending the general enforcement discretion approach for LDTs would interfere with test innovation and patient access due to the potential need for premarket review of new tests,” said the agency. “However, under FDA’s device authorities, FDA premarket review is only required for certain tests (generally those classified into class II or class III), and FDA estimates that approximately 50% of IVDs offered as LDTs would not require premarket review.”

If the rule is finalized as written, FDA said it will continue to use enforcement discretion for certain LDTs, such as those used for blood or tissue screening, those used in emergencies, direct-to-consumer tests, and those used for forensics.

Shuren noted that FDA is asking stakeholders to offer alternative enforcement approaches to LDTs, such as potentially allowing continued enforcement discretion for premarket review and quality system requirements while requiring medical device reporting requirements. The agency is also open to a potential tailored regulatory oversight requirement, or even a carve-out, for LDTs made in academic medical center laboratories. It may consider allowing longer phase-out periods for smaller laboratories to reduce their administrative burdens.

"We've certainly tried to work with academic medical centers over the years to get a better perspective on the rationale and if there are some kinds of additional flexibilities and what that would look like," said Shuren. He added that he hopes to hear from the centers in the public comments.

Academic medical centers have been the biggest opponents of ending FDA’s enforcement discretion and allowing VALID to become law. Califf noted that he has spent most of his career in medical academia and disagrees with many of his colleagues who argue that the tests they use work well and there's no need for FDA to regulate them. Furthermore, he acknowledged that the medical centers are concerned that they will no longer be able to provide tests because of the added administrative burdens.

Shuren said the agency is also interested in potentially leveraging existing LDT oversight programs, such as those used by the New York State Department of Health and the US Department of Veterans Affairs, and maybe using the agency’s Third-Party Review Program to oversee the tests.

Another benefit FDA of regulating LDTs, according to FDA, is that it would remove a disincentive for traditional IVD manufacturers who don’t want to develop tests while competing with laboratories manufacturing unregulated tests for the same diagnoses.

"Leveling the playing field may foster innovation by non-laboratory manufacturers who are positioned to make safe and effective novel tests available in many labs but are choosing not to due to the current bifurcated approach," said Shuren.

It could take a significant amount of time for FDA to go through what could be a large volume of public comments on the proposed rule, offer a final rule, and have that cleared by the Office of Management and Budget (OMB) before it is implemented. While that is happening, Congressional leaders may ultimately pass the VALID Act that would make the proposed LDT rule moot, according to an FDA official who spoke with Focus.

As it is currently proposed, the VALID Act would create a new regulatory framework for IVDs because they would no longer be considered medical devices but diagnostic devices.

"The rule is just clarifying our existing authority, and we don't need new authority for the oversight of laboratory-developed tests,” said the official. "What some of the Congressional members put together in VALID was a series of changes in the [regulatory] framework that may work, but they all kind of work together… VALID would provide similar clarity [to the rule], so we would not need to have this rule in place.”

Stakeholders can comment on the proposed rule on regulations.gov under docket no. FDA-2023-N-2177 until 2 December.

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FDA proposes long-awaited LDT enforcement rule

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