LDT Oversight Gets Long-Awaited FDA Final Rule

A ruling has been made on one of the most controversial topics in the diagnostics space, the oversight of laboratory-developed tests (LDT). Recently, FDA announced it would amend its regulations to make explicit that in vitro diagnostic products (IVD) are medical devices subject to rules under the Federal Food, Drug, and Cosmetic Act (FD&C Act). Along with the amendment, the agency also issued a policy to phase out its general enforcement discretion approach for LDTs, over the course of four years, and issued targeted enforcement discretion policies for certain categories of IVDs manufactured by laboratories.

What’s an LDT?

LDTs are IVDs intended for clinical use and designed, manufactured, and used within a single clinical laboratory which meets regulatory requirements. These IVDs have played an increasingly important role in healthcare of the last decade, especially. They are used in the collection, preparation, and examination of specimens taken from the human body, like blood, saliva, or tissue.

“A LDT is a type of assay that is ordered by a physician and conducted on a biological specimen, such as bodily fluid or tissue samples, in a clinical laboratory using various equipment to process the specimen and analyze specific proteins, genetic material, or other biomarkers, typically for the purpose of aiding the diagnosis of a patient,” Benjamin Zegarelli, counsel at Mintz, previously told MD+DI. “Specifically, FDA defines an LDT as an in vitro diagnostic test, or IVD, that is designed, manufactured, and used within a single clinical laboratory licensed under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, to perform high complexity testing. Currently, there are LDTs for a broad range of intended uses, from measuring vitamin or mineral deficiencies to aiding the diagnosis of cancer or other life-threatening conditions.”

FDA’s previous LDT enforcement vs now

After FDA implemented its authority to regulate LDTs under the FD&C Act in 1976, the agency also established an enforcement discretion policy because, at the time, LDTs were seen as mostly low-complexity assays for single analytes and considered lower-risk. The enforcement discretion meant that the agency generally did not enforce applicable requirements to most LDTs. In 1988, LDTs were added to the Clinical Laboratory Improvement Amendments of 1988 standards, which is overseen by the Centers for Medicare and Medicaid services and state agencies.

“LDTs and the clinical laboratories that develop and commercialize them have had to comply with CLIA and state laws relating to laboratory operations, but they were not required to comply with FDA's medical device regulations due to the agency's historical policy of enforcement discretion for LDTs,” he recently told MD+DI.

Now in the 2020s, LDTs are no longer considered lower-risk, and are used more widely, for larger and more diverse populations. Now, large laboratories are accepting specimens from across the country, and LDTs are increasingly relying on high-tech instrumentation and software, are testedd in large numbers, and are more frequently used to guide critical medical decisions, according to FDA.  

FDA also reported that there is a growing body of evidence that demonstrates that some IVDs offered as LDTs could have public health ramifications, “for example, they do not provide accurate test results or do not perform as well as FDA-authorized tests, including from published studies in the scientific literature, the FDA’s own experience in reviewing IVDs offered as LDTs, news articles and class-action lawsuits,” according to the release announcing the final ruling. “The FDA is aware of numerous examples of potentially inaccurate, unsafe, ineffective or poor quality IVDs offered as LDTs that caused or may have caused patient harm, including tests used to select cancer treatment, aid in the diagnosis of COVID-19, aid in the management of patients with rare diseases and identify a patient’s risk of cancer.”

This is why, according to the agency, greater oversight of the safety and effectiveness of LDTs is needed.

“FDA's Final Rule marks a watershed moment where LDTs will be officially regulated as medical devices and the clinical laboratories will be responsible for compliance with FDA, CLIA, and relevant state regulations relating to their facilities and tests,” Zegarelli said.

Under the new increased requirements — premarket review, quality system requirements, adverse event reporting, establishment registration and device listing, labeling requirements, and investigational use requirements — patients and healthcare providers will be in a better position to have confidence in IVDs regardless of where it is manufactured.

“With increased oversight, FDA will also be able to help promote adequate representation in validation studies, as well as transparency regarding potential differential performance and unknown performance in certain patient populations, which may ultimately help advance health equity,” the agency wrote in the release.

The implementation of the new rules will take place over a period of four years to assure safety and effectiveness of the tests while also avoiding unnecessary product disruptions. FDA said that it may also “foster test innovation and facilitate the collective efforts of the scientific and medical communities to identify promising technologies, new therapies or areas worthy of future research.”

The phaseout period will be broken into five stages:

“Many LDT developers will become subject to FDA regulations that are already applicable to other medical devices, including other in vitro diagnostic devices, such as requirements to register manufacturing facilities and list commercial devices with FDA, applying compliant labeling to commercial devices, reporting certain device adverse events and malfunctions, and implementing a compliant quality system,” Zegarelli said. “In addition, once the rule becomes effective, FDA will have the authority to inspect clinical laboratories that develop and offer LDTs to monitor compliance with applicable regulations. If LDT developers are noncompliant, FDA could issue Warning or Untitled Letters or take more stringent enforcement actions, such as seizure of products, obtaining an injunction to halt production and commercialization of LDTs, or even seek civil fines or criminal charges for the most egregious violations.”

Controversy

While some are welcoming the updated requirements, there has been pushback from those fearing burdensome and expensive changes to clinical laboratory operations, leading to lower revenues as labs implement new quality systems and obtain marketing authorization for moderate- and high-risk assays. Additionally, separate authorization for many types of modifications to devices will also be required, adding additional constraints on laboratory flexibility to adapt assays to differing customer needs, such as adding specimen types, accommodating different lab equipment, or multiplexing in new biomarker detections.

“Implementing a quality system that complies with FDA's device regulations, which requires developing extensive procedures and controls for product design, development, manufacturing, testing, documentation, and labeling, is a burdensome requirement for most new device manufacturers,” Zegarelli told MD+DI. “Such processes will likely be especially difficult for a clinical laboratory that has been operating without a quality system and does not yet have the resources necessary to develop one. Clinical laboratories that must implement a quality system after FDA's final rule is implemented and the enforcement discretion phaseout period is complete should start early to learn the applicable requirements and hire or consult with qualified quality engineers to begin developing a compliant quality system in preparation.”

IVD manufacturers, which are already regulated by FDA as medical devices because no enforcement discretion was ever applied to them, are seemingly on board with the new rules, arguing that the increased FDA oversight will lead to higher quality tests and lower risks to patients while also allowing for increased development of test kits and single-lab assays due to direct market competition.

In response to the final ruling, industry associations have been split. The Regulatory Affairs Professional Society reported that, on one hand, the American Clinical Laboratory Association (ACLA) said it was “disappointed” with FDA’s decision to move forward with the ruling, writing, “Clinical laboratories are already subject to robust regulation and oversight, and ACLA maintains that new legislation would be required for the FDA to regulate laboratory developed testing services.”

The Advanced Medical Technology Association (AdvaMed), however, praised the ruling as representing “significant progress”.

What’s next?

While it may seem like the fight between FDA and industry is finished, laboratory and healthcare industry associations have previously said they would challenge the final rule in federal court in an attempt to prevent it from becoming effective.

“Whether the courts will ultimately strike the final rule down completely is a much larger question, but it’s possible that courts will prevent the rule from becoming effective until a final decision is reached, meaning that FDA may not be able to start phasing in regulatory requirements for LDTs in 2024 as described in the NPRM,” Zegarelli previously said.