On October 3, 2023, the U.S. Food and Drug Administration (FDA) published a proposed rule to regulate laboratory-developed tests (LDTs). The rule, if finalized, would amend FDA regulations to broaden the definition of “in vitro diagnostic products” (IVDs) to include laboratories that manufacture such products, thus making LDTs subject to the same medical device regulatory oversight by the FDA under the Federal Food, Drug, and Cosmetic Act (FD&C Act).

What Are LDTs?

LDTs are tests exclusively developed, produced, and utilized within a single laboratory certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). These tests are commonly used in clinical diagnostic procedures, such as diagnosis of certain infectious diseases, or genomic evaluations of cancer for informing cancer treatment decisions. A significant proportion of genetic tests are on the market as LDTs, without any FDA premarket review.

Currently, the Centers for Medicare & Medicaid Services (CMS) is tasked with regulating the quality of clinical laboratories and the clinical testing processes, in accordance with CLIA, while the FDA has authority in regulating the safety, effectiveness, and quality of diagnostic tests, in accordance with its authority under the FD&C Act.

A Long Time Coming

Though the FDA has maintained that it has clear regulatory authority over LDTs, the FDA has traditionally exercised enforcement discretion over LDTs—choosing not to enforce applicable statutory and regulatory requirements with respect to such tests—meaning that most of these tests have neither undergone premarket review nor received FDA clearance or approval before they are commercialized in the U.S. Up until now, the FDA has primarily concentrated its regulatory efforts on commercial IVD kits, which have widespread distribution, while generally not actively enforcing premarket regulations for LDTs. Nevertheless, over the past two decades, the FDA has expressed its intention to oversee LDTs in a risk-based manner, driven by the growing quantity, importance, and intricacy of LDTs.

In June 2010, after failing to finalize guidelines pertaining to a particular category of LDTs referred to as In Vitro Diagnostic Multivariate Index Assays, the FDA declared its intention to oversee all LDTs. In 2014, the FDA introduced draft guidance that would require registration of LDTs and premarket approval of certain higher-risk LDTs. Under the guidance, the determination to continue enforcement discretion—or to enforce regulatory requirements—for an LDT would be based on an evaluation of LDT risk. In January 2017, the FDA issued a discussion paper summarizing the comments it received for the draft guidance. While the discussion paper said that the FDA would not be issuing a final guidance at the request of certain stakeholders to allow for further public discussion, the paper did include a proposed framework for an approach to LDT oversight that would focus on “new and significantly modified high and moderate risk LDTs.”

Since passage of the 21st Century Cures Act, various legislative approaches to FDA regulation of IVDs and LDTs have been considered. In early 2017, a discussion draft for the Diagnostic Accuracy and Innovation Act (DAIA) was released, outlining a regulatory approach for IVDs that was risk-based and flexible. The FDA responded to DAIA in August 2018 with a proposal for a novel regulatory approach, including a mechanism for precertifying certain related tests to streamline premarket requirements. In December 2018, the Verifying Accurate Leading-edge IVCT Development (VALID) Act—a new draft bill based on DAIA and incorporating FDA’s feedback—was released and kept alive through 2021. In 2022, the VALID Act was incorporated into the Senate user fee bill, but it did not pass.

In October 2022, FDA Commissioner Robert Califf expressed his frustration with the fact that Congress had not passed the VALID Act and said that, if VALID wasn’t passed, the FDA may use its rulemaking authority to create a regulatory framework for IVDs and institute a new pathway for LDT oversight. Almost exactly one year later, the FDA made good on its word and released this proposed rule.

Proposed Rule’s Phaseout Approach

The FDA 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. As a result, the FDA says oversight is needed to ensure Americans are not left vulnerable to making important healthcare choices based on potentially faulty or inaccurate test results. The proposed rule would potentially subject many clinical laboratories, software developers, reagent and chemicals manufacturers, and other entities to regulation along the medical device manufacturer continuum for the first time.

The proposed rule calls for a five-stage, four-year phaseout of the FDA’s current LDT enforcement discretion policy, which the FDA says will help avoid disruptions to the testing market. The FDA also said that it is aware of industry concern that regulation of LDTs will limit test development and innovation, as well as harm patient access to testing particularly for tests meant for small patient populations or rare conditions for which FDA-regulated IVDs do not yet exist. However, FDA rebutted, under its device authorities, premarket review would only be required for certain tests (generally class II or class III devices), which FDA estimates is approximately 50 percent of LDTs.

The FDA said it intends to publish the final phaseout policy in the preamble of the final rule. The five stages of the phaseout would start one year after issuance of the final rule and end three years thereafter:

• Stage I: one year after publication of a final rule, the FDA would end enforcement discretion around safety reporting requirements and correction and removal reporting requirements (i.e., where laboratories offering IVDs as LDTs would need to report certain adverse events and malfunctions regarding such tests, as well as instances where they remove or correct a test to reduce a risk to health or remedy a violation of the FD&C Act).
• Stage II: two years after publication of a final rule, the FDA would end enforcement discretion except for around quality system (QS) and premarket review requirements.
• Stage III: three years after publication of a final rule, the FDA would end enforcement discretion for QS requirements (which have not yet been finalized).
• Stage IV: three-and-a-half years after publication of a final rule (but not before October 1, 2027), the FDA would end enforcement discretion for premarket review requirements for high-risk LDTs.
• Stage V: four years after publication of a final rule (but not before April 1, 2028), the FDA would end enforcement discretion for premarket review requirements for moderate- and low-risk LDTs that require premarket submission.

The FDA considers its current medical device oversight authority to extend to the following types of tests, and therefore is not giving manufacturers of these test types the benefit of any gradual phaseout:

• direct-to-consumer tests;
• blood donor screening tests or human cells, tissues, and cellular and tissue-based product donor screening tests required for infectious disease testing under 21 C.F.R. §§ 610.40 and 1271.80(c), respectively, or tests for the determination of blood group and Rh factors required under 21 C.F.R. § 640.5;
• tests intended for declared emergencies, potential emergencies, or material threats under section 564 of the FD&C Act; and
• IVD manufacturing activities occurring outside of a CLIA-certified laboratory (such as in a case where the same entity owns both the laboratory and a separate manufacturing facility).

Under the proposed rule, the FDA would continue to use its enforcement discretion for certain types of LDTs, including:

• “1976-Type LDTs,” which it defines as tests that feature “use of manual techniques (without automation) performed by laboratory personnel with specialized expertise; use of components legally marketed for clinical use; and design, manufacture, and use within a single CLIA-certified laboratory that meets the requirements under CLIA for high complexity testing”;
• Human leukocyte antigen (HLA) tests “designed, manufactured, and used in a single laboratory certified under CLIA that meets the requirements to perform high-complexity histocompatibility testing when used in connection with organ, stem cell, and tissue transplantation to perform HLA allele typing, for HLA antibody screening and monitoring, or for conducting real and 'virtual' HLA crossmatch tests”;
• law enforcement forensics and for public health surveillance; and
• tests exclusively used for public health surveillance where: 1) they are intended solely for use on systematically collected samples for analysis and interpretation of health data in connection with disease prevention and control, and 2) test results are not reported to patients or their healthcare providers.

Specific Questions Posed by the FDA

The FDA is soliciting feedback on the following questions:

• With regard to general enforcement discretion approach with respect to premarket review and QS requirements for currently marketed LDTs (“grandfathering”):
  • Given the information in the “Need for the Rule” section of this preamble in particular, what would be the public health rationale for generally exercising enforcement discretion with respect to premarket review and some or all QS requirements, for LDTs that are being offered as of the date of issuance of this proposed rule and are not changed with respect to indications for use or performance after that date?
  • If commenters suggest maintaining the general enforcement discretion approach with respect to premarket review and QS requirements for a subset of LDTs (e.g., low- and moderate-risk LDTs) currently on the market that are being offered as of the date of issuance of this proposed rule and are not changed with respect to indications for use or performance after that date, what would be the public health rationale to support such an approach?
• With regard to the phaseout of general enforcement discretion with particular regard to small laboratories, is there a public health rationale to have a longer phaseout period for IVDs offered as LDTs by laboratories with annual receipts below a certain threshold (e.g., $150,000)?
• With regard to laboratories that identify as Academic Medical Center (AMC) laboratories:
  • What are the characteristics of AMC laboratories? Do the characteristics included above accurately describe AMC laboratories and in fact distinguish them from other laboratories?
  • Should the FDA continue the general enforcement discretion approach with respect to any requirements, such as premarket review requirements, for tests manufactured by AMC laboratories?
  • Should an FDA-cleared or approved test be available for the same intended use as the test manufactured by an AMC laboratory?
  • If the FDA should continue the general enforcement discretion approach with respect to any requirements, such as premarket review requirements, for tests manufactured by AMC laboratories, are there any additional considerations that should be taken into account with respect to this approach, for example, whether an FDA-cleared or approved test is available for the same intended use as the test manufactured by an AMC laboratory?
  • If the FDA should have a different policy for AMC laboratories, what would be the public health rationale to support such a policy?
  • If the FDA should have a different policy for AMC laboratories, is there evidence to support such a policy?
• With regard to leveraging state and federal programs such as the New York State Department of Health Clinical Laboratory Evaluation Program or those within the Veterans Health Administration (VHA):
  • Should the FDA continue the general enforcement discretion approach, such that the FDA generally would not enforce any applicable device requirements, where outside programs can be leveraged?
  • What specific characteristics of and activities within these programs justify such an approach?
  • Should the scope of such a policy be more limited for each program in question? For example, should the FDA continue enforcement discretion for premarket review requirements and intend to enforce other requirements, such as reporting adverse events?
  • Are there any additional considerations that should be taken into account?

Next Steps

Members of the industry can submit comments on the proposed rule here—comments are due by December 4, 2023. As described above, the FDA indicated that it might consider enforcement discretion for other categories of tests, including low- and moderate-risk LDTs currently on the market and LDTs offered by AMCs, and the FDA seeks comments to that effect. Some members of the industry theorize that this interest in additional exceptions is rooted in the FDA’s lack of funding and resources to provide oversight to all LDTs.

Given the strong pushback against the passage of the VALID Act, the FDA will likely face significant challenges in the coming years, including judicial challenges. The American Clinical Laboratory Association (ACLA) has already issued a statement opposing the FDA’s proposed rule, arguing that this proposed rule exceeds the FDA’s current authority. This proposed rule may exert greater pressure on Congress to take legislative action.