Medtech Is Missing the Forest for the Trees in the LDT Debate – But So Is FDA

Not for the first time, laboratory developed tests (LDTs) are at the center of a power struggle between FDA and industry.

In vitro diagnostics (IVDs) are regulated by FDA while, LDTs, which are IVDs designed, made, and used in a single lab, are held to the Clinical Laboratory Improvement Amendments of 1988 (CLIA) standards, overseen by CMS. The problem is that, over time, LDTs have evolved from the simple tests they were at the time of the Medical Device Amendments of 1976. Today's LDTs are more complex, have a wider reach, and have high-risk uses compared to the LDTs of the past. The line between LDTs and IVDs is blurred so much over the past 47 years the only difference between most LDTs and IVDs is where they are manufactured.

In October 2014, FDA published draft guidance outlining a new framework for regulatory oversight for LDTs. The draft was met with heavy criticism from industry as well as a former MD+DI regulatory columnist, Jim Dickinson, who called the move "an audacious and potentially futile power grab."

Dickinson's primary criticism at the time was that FDA chose the guidance document route rather than a notice of proposed rulemaking.

Fast forward to October 2023 and the agency is again fighting for its right to LDT oversight. Only this time, FDA did take the proposed rulemaking route. So the pushback from industry and the American Clinical Laboratory Association (ACLA) has focused on the age-old debate of whether LDTs meet the definition of a medical device, and on the potentially negative consequences the rule could have on scientific advancements in diagnostics.

ACLA President Susan Van Meter argues that FDA hasn't provided a sound justification for its action and that FDA oversight would reduce patient access to essential testing, including for rare diseases, and hamper innovation.

These are valid concerns. But FDA's concerns are also valid. Frankly, both sides are missing the forest for the trees here.

"Some of the critics have pointed out that for infectious disease that can have local impact, for example, sometimes it's really important to have that local testing capability and efficient testing capability," Kyle Faget, a Boston-based partner and a healthcare and life sciences lawyer with Foley & Lardner, recently told me.

But, she pointed out, LDTs today are being used to diagnose and guide treatment decisions for things like cancer, rather than a locally focused infectious disease.

"In some ways, the FDA would have been wise to defer to the VALID Act, which would have been a congressional movement towards clarifying ... because some people out there are criticizing FDA saying, "Have you overreached? Is this really in your domain?' And if Congress had acted under the VALID Act, which they still might, it would be very clear FDA can act here."

What strikes me as interesting in this debate is that FDA has consistently expanded its reach as technology has evolved. For instance, FDA didn't always regulate AI-powered medical devices and other emerging technologies impacting healthcare. But, as such technology continued to seep into medtech, the regulatory agency published guidance to outline how it intended to regulate such devices. So why should LDTs, which have clearly evolved in recent decades, be any different?

"I'm not sure it is that different to be honest," Faget told m when I posed the question to her. "Your analogy is a good one ... I think when something is new to the market, FDA is pretty committed to taking a risk-based approach to regulation. So, in the context of AI, if they're low-risk products than FDA isn't going to regulate. I think it's similar here. LDT's when thought of as being lower risk and add-on that there is another regulatory body that provided oversight. I think FDA thought, 'Hey, that's good enough,' and then the pandemic showed evidence otherwise."

Still, industry is right to question how a shift in oversight of LDTs will impact patient care and innovation. If lab-developed tests are subject to FDA review, there will be added costs for manufacturers, and the time it takes to bring a new test to market will be significantly longer.

There must be a way to differentiate between LDTs that are being used to diagnose diseases like cancer and LDTs in the infectious disease space where time is typically of the essence.