FDA Opens a Pilot Program to Scrutinize Certain Laboratory Developed Tests, But Will It Generate Sufficient Interest?

The U.S. Food and Drug Administration (FDA) announced a new pilot program on June 21, 2023 that gives sponsors of oncology products the opportunity to submit validation and performance data for laboratory developed tests (LDTs) intended to support patient selection for such drugs. Although the pilot is limited to only nine participants, it is unclear based on the requirements of the program whether it will generate sufficient interest among oncology product sponsors to meet the objectives that the agency has established for it.

It is no secret that FDA is ramping up efforts to end its policy of enforcement discretion for LDTs and regulate such assays as medical devices. After Congress failed to enact the Verifying Accurate Leading-edge IVCT Development (VALID) Act multiple times, including with the December 2022 omnibus appropriations bill, FDA officials have made public statements regarding the agency’s intent to promulgate new regulations for LDTs through the notice-and-comment rulemaking process. In fact, FDA’s Spring 2023 Unified Agenda, which was recently published by the Office of Management and Budget (OMB), shows that issuing a proposed rule to “make explicit” the agency’s authority over LDTs is a “significant” priority item for later this year. While those burdensome rulemaking activities are ongoing, the newly announced pilot program appears to be FDA’s attempt to jump back into active participation in the LDT industry after its intermittent regulation of LDTs to detect SARS-CoV-2 infections during the pandemic.

The pilot program’s guidance document, titled Oncology Drug Products Used with Certain In Vitro Diagnostic Tests: Pilot Program, explains that the program is intended for sponsors of oncology products that require an in vitro diagnostic assay for patient selection and where the anticipated benefits of the therapeutic product candidates outweigh the risk of not having an FDA-authorized companion diagnostic. Typically, FDA expects the sponsor of an oncology product to develop the product and a required companion diagnostic simultaneously. However, the agency will agree to approve an oncology product without a co-developed companion diagnostic in certain cases, such as when the product treats a serious or life-threatening condition for which there is no alternative treatment and the product’s benefits clearly outweigh the risks from not having an authorized companion diagnostic.

The LDT assays for evaluation under the program must use the same technology as a previously approved companion diagnostic, such as polymerase chain reaction (PCR), next-generation sequencing (NGS), or immunohistochemistry, and there must be a well-validated reference method, well-validated comparator, and/or well-characterized materials to support the accuracy of the subject LDT. The agency’s stated rationale for establishing this pilot program now is that: “Many tests used in selection of oncology drugs in clinical practice employ established technologies and have appropriate methods and materials to support leveraging clinical validity established for another test of the same type. Further, there is an urgent public health need to recommend minimum performance characteristics for tests used to identify patients for oncology treatment to address safety risks posed by the use of LDTs that are not properly validated and/or are unable to identify the appropriate population for the corresponding drug products.”

Accordingly, FDA plans to develop and publish minimum analytical performance characteristics from its evaluation of the pilot program LDTs, in order to enable others to develop similar in vitro diagnostic tests. In addition, participating sponsors are expected to publish the LDT performance characteristics in the labeling for the approved drug or biologic product. FDA hopes that this (unique but untested) collaborative approach may serve to “bring new treatment options to appropriate patients sooner.”

Based on the design of the pilot program, it is difficult to identify any compelling incentive for a therapeutic product sponsor to participate. A sponsor typically collaborates with an independent high-complexity CLIA-certified laboratory to develop this kind of patient selection assay, meaning that the laboratory develops the relevant intellectual property for the assay. Under the pilot program, however, the sponsor’s laboratory partner would have to provide a right of reference to the validation and performance data of the assay and would have to allow FDA to publish such data to aid assay development by other entities. This framework eliminates one of the key advantages of an LDT, which is that the assay’s methods and performance characteristics are proprietary trade secrets, making it much more difficult for competitors to develop similar assays.

Moreover, sponsors may choose to avoid participating in the pilot simply because FDA is not yet actively regulating LDTs. If FDA will approve the sponsor’s oncology product without concomitant approval of a companion diagnostic, there is no compelling reason for the sponsor to take on the added burden of finding a laboratory partner willing to share its assay data with FDA or providing the additional compensation necessary to overcome a laboratory partner’s resistance to such an arrangement. Given that FDA has announced its intent to publish a proposed rule for active regulation of LDTs, it seems more likely that the vast majority of drug sponsors and laboratories will wait to see what happens next, rather than jump into a pilot program that involves agency review of LDTs and subsequent publication of proprietary assay information.

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