FDA set to unveil new rule on Laboratory Developed Tests this August

Quick Background: The Unified Agenda

• The Unified Agenda is updated twice per year. The editions are titled the “Spring” and “Fall” Unified Agendas, but their actual publication timelines rarely align with their actual publication.
• The Agenda is intended as a roadmap of regulation, listing all of the regulations that the different federal Departments and agencies are actively working on for publication in the coming year (or years). The Agenda lists the regulation’s working title, stage (proposed, final) offers a brief description, and a target date for publication, among other critical details.
• While the Agenda includes target date for publication, these dates are generally aspirational and aren’t binding. However, some regulations are associated with legal requirements for publication imposed by Congress.
• For a full analysis of what’s in the new “Spring” June edition of the Unified Agenda, see AgencyIQ’s analysis here.

The new Spring 2023 Unified Agenda lists a new proposed rule on Laboratory Developed Tests

• According to the record: “This proposed rule would propose to amend the Food and Drug Administration’s regulations to make explicit that laboratory developed tests (LDTs) are devices under the Federal Food, Drug, and Cosmetic Act.” The notice has a (non-binding) anticipated publication date of August, 2023.

How did we get here? Let’s recap.

• Per the FDA, LDTs are a kind of in vitro diagnostic (IVD) “that [are] designed, manufactured and used within a single laboratory.” The clinical laboratories in which LDTs are developed and used are regulated under the Clinical Laboratory Improvement Amendments (CLIA), which splits up regulatory oversight between FDA, the Centers for Medicare and Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC). The laboratories themselves, known as CLIA labs, are also often subject to accreditation from entities like the College of American Pathologists (CAP).
• Breakdown between agencies: Under CLIA, FDA, CMS and CDC have different roles in overseeing laboratories and diagnostic products. CDC maintains the CLIA Advisory Committee (CLIAC) and provides analysis and technical assistance, develops standards, and monitors testing practices. Separately, CMS is tasked with overseeing the laboratories themselves, including a specific credentialing system for laboratories based on their technical capacity. The CMS certification of a laboratory is intended to inform what kinds of tests a laboratory or laboratory system can run, from high-complexity tests to “Waived” tests in sites or facilities with a CLIA Waiver (e.g., some point-of-care sites). For its part, FDA is tasked with categorizing the tests themselves based on complexity – from high to moderate to Waived – which will then determine what level of CLIA credentialing a laboratory would need to run the test.
• So, where do LDTs fall? LDTs are, by definition, high-complexity tests. This is because these products do not come through FDA, and are instead “designed, manufactured and used within a single laboratory.” Under CLIA, laboratories that are certified by CMS as high-complexity labs have the technical expertise to design or adjust tests as needed for specific uses; these are LDTs.
• Are LDTs a medical device? That’s a matter of debate. IVDs, of which LDTs are a subset, are considered by the FDA to be a medical device. However, when the current medical device frameworks were put in place in the late 1970s, the FDA began a policy precedent of expressing “enforcement discretion” over LDTs. In effect, the agency did not exert its regulatory authority over LDTs or apply the regulatory requirements to these labs/products, while still maintaining that they were technically subject to the regulations that FDA was not enforcing at that time. As the agency has since discussed, the impetus for that decision was the idea that LDTs were considered to be “home brewed” tests, used within the same high-complexity laboratory in which they were designed and made, and only intended for use in a small volume of patients. [Read AgencyIQ’s recent compressed timeline of LDT policy in the U.S.]
• In the last decade, the FDA’s view on that enforcement discretion has shifted. As clinical laboratories and diagnostic science have grown more advanced, the FDA has questioned whether this enforcement discretion continues to be appropriate. In 2014, the agency issued draft guidance that would have established a framework for the regulatory oversight of LDTs, but this guidance was never finalized given significant concern from laboratories and industry about the FDA’s legal authority in this space. In 2017, the agency followed this up with a Discussion Paper on LDT policymaking. That paper again asserted the FDA’s position that the FDA does have authority over LDTs as medical devices, but indicated that the agency would support a legislative solution to the diagnostics policy debate. The paper outlined a risk-based framework for building out oversight over LDTs in a phased-in approach that focuses on the higher-risk products.
• The pandemic changed the FDA’s perspective on LDT policy. As noted above, the FDA does not usually enforce its regulatory requirements over LDTs, but there is a key exception: in the case of an emergency. As AgencyIQ discussed throughout the pandemic (see this analysis from 2020), this means that the FDA had been requiring at least some regulatory engagement for Covid-19 LDTs during the pandemic. However, this action caused some consternation amongst politicians who saw FDA’s interference in laboratory practice as an interference in the practice of medicine, and creating barriers to Covid testing at the height of the emergency. In August 2020, HHS (then under President Trump) issued a policy memo stating that the FDA could not require Emergency Use Authorizations (EUAs) for LDTs, and the FDA responded by “declining” to review all EUAs for LDTs in October of that year. In November 2020, then-HHS Assistant Secretary Brett Giroir sought to override the FDA’s decision in policy that was considered “legally incoherent” by some experts.
• The original August 2020 policy memo from HHS included interesting phrasing, although it’s not clear if then-HHS leadership necessarily understood its significance. As AgencyIQ noted at the time, that notice stated that FDA “will not require premarket review of laboratory developed tests (“LDT”) absent notice-and-comment rulemaking, as opposed to through guidance documents, compliance manuals, website statements, or other informal issuances.” In effect, then-HHS leadership seemed to indicate that it was the position of the Department that the FDA could exert regulatory authority over LDTs through rulemaking, rather than needing a legislative solution.
• In November 2021, a new LDT policy was announced by the Biden administration: HHS Secretary Becerra released a statement in November 2021 that revoked the Trump administration’s LDT policy, stating that “HHS no longer has a policy on LDTs that is separate from FDA’s longstanding approach in this area.”

So what’s happening now, and why?

• Attempts to reach a legislative solution haven’t been successful: The most recent iteration of the diagnostics reform bill, the Verifying Accurate and Leading-edge IVCT [In Vitro Clinical Test] Development (VALID) Act has struggled to gain traction. This legislative proposal would create a new classification of product type regulated by the FDA known as IVCTs, which incorporate both IVDs and LDTs, with regulatory frameworks separate from the medical device system. However, the bill was not advanced as part of the 2023 omnibus, and faces an uphill climb in the new Congress.
• CDRH leadership had recently hinted that they’re looking at regulatory action. In particular, CDRH Associate Director for Scientific and Regulatory Programs Elizabeth Hillebrenner said at the BIO conference in June that the agency would be looking to take “administrative action” on diagnostics policy. This followed several speaking engagements in recent weeks that have acknowledged that the legislative option is still FDA’s “preferred approach” but that the agency “can’t stand by” and wait.
• The proposed rule would, per the description, seek to codify FDA’s perspectives that LDTs are medical devices. While the FDA can’t update the statutory definitions in the Food, Drug, and Cosmetic (FD&C) Act directly, the proposed rule would theoretically add a clause or section within the FDA’s IVD regulations that would specify that LDTs are a kind of IVD, and therefore a medical device. The IVD regulations can be found at 21 CFR 809. While it’s not clear what, exactly, the proposed rule would do, AgencyIQ would speculate that the agency could propose to add a definition of LDT within 21 CFR 809.3 (“Definitions”) and clarify that they are a type of IVD.
• The way that gets implemented would still need to be worked out. For example, the 2017 Discussion Paper offered a system by which the agency would implement regulatory oversight “that focuses on new and significantly modified high and moderate risk LDTs.” Notably, not all of these “new and significantly modified” LDTs would need to adhere to the device regulations (premarket review, quality systems, registration and listing) in all circumstances, but the agency offered a “risk-based, phased-in” approach with a four-year timeline, starting with adverse event reporting in Year One. Going forward, it’s not yet entirely clear what would need to happen through rulemaking and what could be worked out with guidance – or how the clinical laboratory industry or Congress will respond.
• A key thing to note: The clinical laboratory industry was generally in support of the VALID Act, with the American Clinical Laboratory Association (ACLA) deeply involved in the crafting of the legislation and publicly expressing support for that approach to diagnostic regulatory reform. However, without a legislative pathway to create an IVCT system separate from the device category, any action from the FDA would have to work within the device framework. Notably, the pandemic experience did shine a light on how generally unfamiliar CLIA labs are with working with the FDA, or basic medical device policies and expectations. Going forward, this is likely to continue to be a contentious issue on all sides.

To contact the author of this item, please email Laura DiAngelo ( ldiangelo@agencyiq.com).
To contact the editor of this item, please email Alexander Gaffney ( agaffney@agencyiq.com)

Key Documents and Dates

• • • Medical Devices; Laboratory Developed Tests
    • Pandemic reauthorization starts to move ahead – without FDA priorities