The frothy days of anything goes Laboratory Developed Tests are well behind us and consistent with a long established pattern regulations are now being imposed. yesterday, the Food and Drug Administration released its final rule on the Laboratory Developed Tests.
For a couple of decades, the FDA has exercised enforcement discretion, which means they assert they have authority to regulate LDTs but they choose not to. Today, they declared that period over and issued its rule. The primary contours of the rule are:
- Beginning one year from yesterday, the FDA will begin regulating In Vitro Device LDT as devices on a phased in schedule. The schedule:
- Stage 1: beginning 1 year after the publication date of the final rule compliance with Medical Device Reporting requirements, correction and removal reporting requirements, and Quality System requirements;
- Stage 2: beginning 2 years after the publication date of the final rule, compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements;
- Stage 3:beginning 3 years after the publication date of the final rule, compliance with Quality System other that that addressed in Stage 1;
- Stage 4: beginning 3½ years after the publication date of the final rule, compliance with premarket review requirements for high-risk IVDs offered as LDTs unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion during its review; and;
- Stage 5: beginning 4 years after the publication date of this final rule, compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that require premarket submissions), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion during its review.
- There are exceptions and those are:
- Tests developed and performed at the VA and DoD.
- Tests approved by the New York State Clinical Laboratory Evaluation Program
- Tests performed by a laboratory integrated with a health system for unmet patient needs being treated at the hospital. (i.e. no outreach lab tests)
- Tests marketed before yesterday and not modified or modified in certain limited ways
- Test performed for rare blood cell antigen at a blood laboratory.
These exceptions are not blanket exclusions from regulation but rather exemptions from some of what would be otherwise required. For example, the exception for existing tests only extends to premarket review and Quality System regulations. Things like registration and listing would still be required.
As you might have guessed from DGX's performance since last week, the benefit will accrue to large labs with experience getting regulatory approval for test kits which have been deemed devices for some time. Some labs are just going to go away because they offer tests that could not pass regulatory review. In their comments on the rule, the New York State Clinical Laboratory Evaluation Program indicated they returned 46% of first submission.
It appears the FDA is particularly concerned about LDTs used in clinical trials that might corrupt the result. That probably means that LDTs performed at Academic Medical Centers that engage in clinical research are probably going to have to be performed somewhere else like LH and DGX.
The FDA's oversight also begs the question of reimbursement. Payers have been struggling for years - with the smart ones relying on Concert Genetics good work - to make sense of the proliferation of lab tests. FDA clearance opens a door to certainty that a LCD at MolDx just doesn't provide.
Of course, this is a controversial rule. Congress tried to pass the VALID Act because they believe that the FDA does not have authority to regulate LDTs. Labs are also likely to object, especially those with little experience in device approval. We could see, then, a legislative override that addresses some of the concerns of fitting a round peg into a c. 1976 round hole.
Let me know what you think.
Emily Evans
Managing Director – Health Policy
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