Bipartisan VALID Act Re-Introduced in Congress: Is Diagnostics Reform on the Horizon?

In our most recent year-end blog post on devices and diagnostic products at the Food and Drug Administration (FDA), we summarized the tumultuous events of 2020 with respect to laboratory developed tests (LDTs) and clinical laboratory testing in general during the COVID-19 public health emergency (see that prior post here). We highlighted at the time an August 2020 Trump Administration order barring FDA from requiring premarket review for any LDT unless the agency goes through formal rulemaking procedures. We also speculated that although “the regulatory framework and policies surrounding LDTs will be a prominent topic of debate in 2021…there will be no quick resolution of these issues, either at a legislative or agency policy level, in the short term and that LDTs will likely remain in a gray area of FDA regulation and policy for the foreseeable future.”

Halfway through the year, our earlier statements continue to be true and clinical laboratories offering LDTs continue to operate with a degree of uncertainty regarding whether and how the FDA intends to regulate such diagnostic offerings. The Biden Administration, under the leadership of Health and Human Services (HHS) Secretary Xavier Becerra, has not taken affirmative steps to rescind or renounce the previous administration’s August 2020 announcement, although the policy statement does appear to have been taken down from the HHS website where it had originally appeared. (The statement had not been formally published in the Federal Register.) And while several members of Congress and public health advocates alike have called on Secretary Becerra to clarify the current regulatory landscape for LDTs and “restore” power to FDA, to date neither the Department nor the FDA itself has made any pronouncements one way or the other regarding what the new administration’s thinking is regarding the oversight of LDTs.

Perhaps, they are thinking, this will be the year that Congress finally reaches a compromise solution that is workable for all stakeholders in this complex debate – from the laboratory community to kit-based in vitro diagnostic (IVD) manufacturers, from the pathologists and clinicians seeking solutions for their patients to the agency. To be fair, moreover, other groups have also communicated to the HHS Secretary that constantly shifting enforcement statements and shaky legal grounds for FDA to assert jurisdiction over lab-developed tests is not the most prudent or workable way to set federal regulatory policy on such an important segment of the health care economy. Groups with that viewpoint continue to push a comprehensive legislative solution, which does seem to be getting closer to reality as the unsettled situation drags on and clinical labs continue to lack the certainty necessary to plan with confidence future business operations and diagnostic test research and development.

On June 24, 2021, bipartisan members of both the House and Senate reintroduced a revised version of the Verifying Accurate Leading-edge IVCT Development (VALID) Act, following up on its initial introduction in March 2020 in the prior session of Congress. We summarized the first iteration of the VALID Act, which aims to reform the federal oversight regimes for both LDT and IVD products, in a prior post (see here). The general framework for the proposed new system for FDA’s regulation of in vitro clinical tests (IVCTs) has not been re-imagined in the 2021 version of the bill compared to the 2020 version; however, there are several important changes to the proffered legislative solution that all stakeholders will be considering and debating in the coming months. Some of the most significant changes include the following:

• The technology certification program provisions have been expanded so that more types of tests would be eligible to come to market through this new pathway, and procedural improvements have been made based on the feedback from the clinical laboratory community. For example, FDA would be required to implement the technology certification program through notice-and-comment rulemaking, rather than via agency guidance, and certification orders would expire after 4 years with the option to be renewed. The prior version would have given FDA discretion to set an expiration period for such orders as long as it was no more than 4 years.
• The effective date for the new IVCT regulatory system was clarified, and the current version of the legislation sets that date as 4 years after the date of the bill’s enactment. The prior version did not provide for a clear effective date because it was drafted in relation to the federal government’s fiscal year, such that the law would have gone into effect between 3 and 4 years after enactment.
• FDA would also be directed to publish final rules to implement the various provisions of the VALID Act within 2 years of its enactment, and as noted above for the technology certification program, rulemaking by the agency rather than guidance would be required for all substantive components of the new IVCT regulatory system. These administrative enhancements may have been made in response to the August 2020 HHS announcement that revoked any and all previous FDA guidance pertaining to LDTs and ordered the agency to regulate lab-developed diagnostics only after going through the more arduous notice-and-comment rulemaking process.

With bipartisan and bicameral attention to this long-standing thorn in FDA’s side heating up, and public awareness about the importance of clinical lab testing acutely heightened as a result of the COVID-19 pandemic, legislative reform seems more likely than ever. We will continue to monitor the developments on Capitol Hill and inform our readers as the VALID Act moves through committee hearings and mark-ups and then…maybe, someday…to a vote. In the meantime, if any of our readers have questions about the potential impact of this major diagnostic legislation on their business or anything else, please reach out to your regular Mintz contact or one of the authors of this blog post.

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