Five Observations from FDA’s Responses to Comments in the Final Rule on LDTs
Now that the final rule on laboratory developed tests (LDTs) has been available for over a month and the stages of the enforcement discretion phaseout process and the Food and Drug Administration’s (FDA’s) newly proposed policies for continuing limited enforcement discretion for certain types of LDTs have been thoroughly described and dissected (including by us in our previous post), it’s high time to dig into FDA’s perspectives on the comments it received on the proposed rule.
Even though the revision to FDA regulations described in the rule is relatively short (recall that only 10 words are being added to one definition), the proposed rule generated over 6,500 comments from the public, and the agency’s summary of the comments and its responses take up almost 121 pages in the Federal Register. As expected, FDA offers a vigorous defense its authority to regulate LDTs as medical devices and explains how the new limited enforcement discretion policies address many stakeholder concerns submitted in response to the proposal. However, there are some interesting broad-based observations, as well as smaller details, that deserve some additional attention. We focus on five such observations and details below.
1. FDA Draws a Distinct Boundary Between Regulation of Assay Performance and the Design and Development of New Tests
One argument against FDA’s purported authority over LDTs expressed by many commenters is that clinical laboratory oversight by the Centers for Medicare and Medicaid Services (CMS) (and various State agencies) under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) completely occupies the field and any regulation by FDA in the laboratory space would be redundant. FDA’s consistent response to this argument is fairly clearcut: CLIA established laboratory certification requirements and standards for laboratory operations and personnel but not requirements for the design and manufacture of a diagnostic assay or standards for determining clinical validity and whether a test have adequate assurance of safety and effectiveness, which are the sole purview of FDA. Essentially, CMS makes sure the laboratory personnel are appropriately qualified and performing well, but FDA ensures that the tests are designed in accordance with relevant quality standards. Although the agency has been repeating this point, even prior to the beginning of the rulemaking process (and CMS very clearly agrees and supports a test-focused regulatory regime as being complementary and missing from its current oversight of laboratories under CLIA), it bears emphasizing given the amount of overwhelming misunderstanding of the division of responsibility between CMS and FDA in the diagnostic testing space.
In addition, some stakeholders engaging with FDA through the rulemaking process asserted that: (1) most, if not all, LDTs are low-risk tests due to the involvement of licensed physicians to integrate the results into patient care plans, and (2) certain subsets of low-risk tests should be under general enforcement discretion (e.g., because they are performed at academic medical centers or the type of test is generally considered low-risk). FDA pointedly refuses to consider LDTs as inherently low-risk products and states that the statutory risk-based framework for devices can be applied to LDTs just as it does to other in vitro diagnostics (IVDs). For example, the agency states that:
- FDA does "not agree that currently marketed IVDs offered as LDTs that are already integrated into clinical practice pose a minimal safety risk" (See FDA Response #120)
- “Overall, IVDs that may be considered low- or moderate-risk still inform decisions by patients and their healthcare providers, and uncertainty about whether IVDs offered as LDTs provide accurate and reliable results can significantly impact public health.” (See FDA Response #241)
In its responses, the agency also explains that LDTs are fundamentally no different from other IVDs in terms of risks associated with design, development, and manufacture and points out that physicians are involved in the design and prescription of IVDs for which FDA has not previously exercised enforcement discretion.
2. Emphasis on New Enforcement Discretion Policies
Throughout the final rule, FDA repeatedly emphasizes its new enforcement discretion policies (e.g., for LDTs marketed prior to the publication date of the final rule or those authorized through the New York State Clinical Laboratory Evaluation Program, or NYS CLEP) to dismiss comments citing the extraordinary challenges, timing and costs associated with implementation of compliance systems to comply with FDA’s medical device regulations at clinical laboratories. The agency also uses those new policies to deflect claims that it will face challenges reviewing the large number of marketing applications that will be submitted as a result of the final rule. In general, FDA appears to lean heavily on the enforcement discretion policies in the final rule to justify its position that the burdens on clinical laboratories due to the phase-in of medical device regulatory requirements are not excessive.
However, it is important to note that nowhere does FDA acknowledge that implementation of even a partial quality management system (i.e., complaint handling and record-keeping) is a significant undertaking for many clinical laboratories and may require expensive new resources, including potentially significant onboarding of new personnel. The number of qualified and experienced quality assurance professionals is relatively limited and many small to mid-sized laboratories will likely be competing to hire such professionals.
Furthermore, even laboratories whose tests are under enforcement discretion because they were marketed before the publication date of the final rule or because they have received NYS CLEP approval, for example, will need to implement procedures to review any updates or changes to such tests to determine whether the new version of the test will qualify for continued enforcement discretion, and such systems may require new resources and training.
3. Clinical Lab Accreditation Organizations May Become Third Party 510(k) Review Organizations
In response to comments relating to FDA’s 510(k) Third Party Review Program, the agency mentioned that certain third-party accreditation organizations under CLIA (e.g., the College of American Pathologists, or CAP) have expressed interest in becoming accredited Third Party Review Organizations (“3P510k Review Organizations”) for premarket notification submissions for moderate-risk LDTs (see FDA Response #282). This is an interesting development because many clinical laboratory industry commenters asserted that meeting the standards of a CLIA accreditation organization, which are typically more stringent than the requirements for CLIA certification through CMS, should exempt a laboratory and its LDTs from FDA’s device requirements, such as premarket authorization. However, if CLIA accreditation organizations become 3P510k Review Organizations, such entities could then evaluate the clinical validity and safety of LDTs for which a 510(k) is required for marketing, and laboratories could continue working with familiar oversight teams with respect to such submissions. Of course, FDA must review and make a final determination on the clearance of any device submitted to the 510(k) Third Party Review Program, but the involvement of well-established organizations in the clinical laboratory field with robust quality standards will likely improve the efficiency of such final reviews by the agency.
4. FDA Regulation May Help Coverage and Reimbursement for LDTs
FDA notes that multiple payors submitted comments in support of the LDT rule “given the proliferation of [LDTs] and concerns about the reliability of certain LDTs,” (see Comment #207) implying that payors are less likely to authorize coverage and reimbursement of a test that does not have certain objective indications of safety and effectiveness (e.g., FDA authorization). Such payor comments should cause clinical laboratories to think twice about the balance of pros and cons of the final rule because FDA oversight and authorization could help support coverage determinations for many LDTs. Greater availability of coverage and reimbursement for LDTs would make such tests more widely available to patients and would likely defray the cost associated with an increase in applicable regulatory compliance requirements.
5. Possible Plans to Increase Regulatory Oversight of Direct-to-Consumer (DTC) IVDs?
Diagnostic tests that are offered directly to consumers—such as where test kits are sent to consumers, the tests are performed at home or a specimen is collected by the consumer and sent directly to the lab for process, and test results are provided to the consumer, all without physician interaction or a physician order for the test—are not considered to be LDTs for the purpose of FDA’s exercise of enforcement discretion, and therefore they have always been subject to device regulations. Nonetheless, some commenters mentioned that DTC tests should be prioritized for enforcement action. In agreeing with these comments, FDA stated that it “believes there is a heightened need for oversight of tests where test results are used by consumers to make potentially significant healthcare decisions without the involvement of a learned intermediary in a legitimate healthcare practitioner-patient relationship” (see FDA Response #229). This response by the agency to public input is worth noting because it may signal an imminent increase in enforcement activity against companies that offer DTC test products, especially when such tests involve high-risk diseases like cancer or neurological conditions.
Conclusion
The final rule includes extensive commentary and analysis from FDA in response to public comments on the LDT proposed rule and provides much insight into the agency’s thinking on the regulation of LDTs. Although the final rule offers numerous arguments in favor of FDA’s authority to regulate LDTs, we have used this post to highlight some additional, less obvious observations from the agency’s responses to various comments.
Of course, the ultimate implementation of the final rule depends on the outcome of the lawsuit seeking its injunction brought by the American Clinical Laboratory Association. Furthermore, the demise of Chevron deference under the Supreme Court’s recent decision captioned Loper Bright Enterprises v. Raimondo marks a significant shift against judicial deference to the statutory interpretations of federal agencies and will likely increase FDA’s burden to demonstrate that the final rule is appropriately within the agency’s statutory authority.
However, until judicial review of the FDA’s action is completed, clinical laboratories should continue to prepare to comply with applicable device regulations and evaluate resource, training, and other needs to ensure compliance.
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