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20 July 2023 • 7 minute read
FDA moves to restructure LDT regulation through notice of proposed rulemaking and oncology LDT pilot program
Laboratory developed tests (LDTs), described by FDA as “a type of in vitro diagnostic that is designed, manufactured and used within a single laboratory,” have been a hot topic for both Congress and FDA for over a decade. FDA maintains that it has had the authority to regulate LDTs as medical devices since 1976, when Congress clarified that in vitro diagnostics (IVDs) were medical devices, but that it has exercised purposeful enforcement discretion over LDTs and has taken action only under certain circumstances, such as during declared public health emergencies.
Despite FDA’s insistence that it has always had authority to regulate LDTs as medical devices, many, including FDA, believed that congressional action was the best path forward to explicitly clarify the Agency’s ability to regulate LDTs. However, various attempts at legislative proposals that address comprehensive programs for in vitro diagnostics, including the most recent Verifying Accurate Leading-Edge IVCT Development Act (VALID Act), have been unsuccessful in achieving congressional alignment, leading FDA to announce two key actions that will move toward stronger regulation of LDTs without a statutory change.
FDA’s enforcement discretion policy for LDTs
In 1976, Congress amended the Food, Drug, and Cosmetic Act to create a system for FDA regulation of medical devices used in humans. The definition of a medical device under these amendments specifically included language to encompass in vitro reagents.
In 2014, FDA issued a set of draft guidance documents titled, “Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs)“ and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs).” In the documents, the Agency defined LDTs as “an IVD that is intended for clinical use and designed, manufactured and used within a single laboratory.” The draft guidances further stated that “[t]he definition of a device applies equally to IVDs manufactured by conventional device manufacturers and those manufactured by laboratories.”
While these draft guidance documents were controversial and never finalized, they provide useful insight into the Agency’s thinking behind regulatory enforcement of LDTs – specifically, that LDTs are included in the definition of a medical device and, accordingly, FDA has regulatory authority over them, although the Agency has largely “opted to exercise enforcement discretion.”
LDT technology has significantly evolved in the past decades, and FDA may see the absence of regulatory oversight as creating the potential for increased risk to patients. If the Agency were to pivot from its practice of enforcement discretion over LDTs and start exercising regulatory oversight, several requirements would likely be imposed on laboratories developing LDTs.
First, these laboratories would be subject to Registration and Listing requirements, FDA establishment inspections, as well as FDA’s Quality System Regulation. Second, LDT developers likely would be required to make a premarket submissions, based on risk characterization, to FDA before making their tests available for use. FDA almost certainly would establish a grace period for phasing in these new requirements.
Congressional action on LDTs
The most recent legislative history surrounding LDTs relates to Congress’s consideration of the VALID Act, which was introduced in both the Senate and the House of Representatives. This legislation established a regulatory pathway for in vitro clinical tests, including LDTs, recognizing the relative risks of such tests and tailoring review requirements accordingly. The stakeholders potentially impacted by the proposed regulatory framework for in vitro clinical tests are wide-ranging and include test kit manufacturers, reference laboratories, or hospitals and academic medical centers with laboratories developing tests for patients. Many remained unconvinced that the risks posed by certain tests warranted FDA oversight.
In June 2022, the Senate Health, Education, Labor, and Pensions Committee included the VALID Act in a legislative package that was voted favorably out of committee by a vote of 13-9. However, stakeholders remained divided, and the bill was not considered before the House Energy and Commerce Committee, making it difficult to gain the consensus needed to pass both chambers.
The lack of congressional action to clarify FDA’s authorities over LDTs and create a regulatory pathway that accounts for the risks and benefits of such tests has put the ball back in FDA’s court.
Notice of proposed rulemaking and oncology LDT pilot program
FDA has taken two new steps in an effort to reconsider LDT enforcement discretion. First, in late June of this year, the Office of Management and Budget (OMB)’s Unified Agenda included a Notice of Proposed Rulemaking (NPRM) for August 2023 stating, “This proposed rule would propose to amend the Food and Drug Administration’s regulations to make explicit that laboratory developed tests (LDTs) are devices under the Federal Food, Drug, and Cosmetic Act.”
Second, on June 20, 2023, FDA announced the launch of a pilot program for selected CDER-regulated oncology drug products with biomarkers. The details of the voluntary pilot program are outlined in the guidance document, “Oncology Drug Products Used with Certain In Vitro Diagnostic Tests: Pilot Program,” which states that the pilot is “intended to improve oncology patient care by providing transparency regarding minimum performance necessary for in vitro diagnostic tests used with oncology drug products enrolled into the pilot program.”
FDA’s announcement of the pilot program explains that in vitro companion diagnostic tests currently provide information for the safe and effective use of a corresponding treatment – for example, a test that may be used to identify patients who may or may not benefit from certain cancer treatments. In rare circumstances, FDA may approve a life-saving treatment requiring the use of an in vitro companion diagnostic even if a corresponding in vitro companion diagnostic has not yet received marketing authorization, and in these rare cases LDTs are being used for treatment decisions. FDA has become increasingly concerned that these LDTs are less accurate and less reliable compared to FDA-authorized tests, and this could negatively impact treatment decisions.
Under the pilot program, FDA will request performance information for the tests that were used to enroll patients into clinical trials that support drug approval (the clinical trial assays or CTAs) from the drug manufacturers. FDA will then post “the minimum performance characteristics recommended for similar tests that may be used to select patients for treatment with the approved drug” to its website. Laboratories then can use this information to guide the development of their LDTs.
The pilot program began on June 20, 2023, and its initial phase is anticipated to last up to one year, during which FDA will consider up to nine drug product sponsors to be accepted into the program.
The program signals FDA’s intent to move away from the “one-drug-one-diagnostic” model, which has been the model of targeted cancer therapies in the past decade but that, in FDA’s view, has failed to serve patients well. In the past, FDA typically approved companion diagnostics bundled with specific cancer drugs in order to ensure clinical validity, but this model often requires patients to undergo multiple tests for the same biomarker because each drug has its own diagnostic test.
Moving away from this paradigm, however, requires the establishment of a minimum performance standard for diagnostics used with the oncology drug products that are the subject of the pilot program.
Going forward
While it is significant that FDA is taking matters into its own hands by announcing that it intends to pursue notice-and-comment rulemaking to regulate LDTs, this change may be a long and complex path for the Agency.
Potential legal challenges include jurisdictional issues – that is, that LDTs are services and not products, and that LDTs do not enter interstate commerce; arguments that the development and use of LDTs should be considered the practice of medicine; and arguments that LDTs already are regulated by the Clinical Laboratory Improvement Amendments (CLIA) and several state agencies (such as the New York State Department of Health) and therefore FDA regulation is unnecessary.
Potential public policy challenges include arguments that many critical tests are available only as LDTs; that FDA regulation will impede and slow important innovation and patient access; and that other solutions to address FDA’s concerns are available and superior to FDA regulation and oversight of LDTs.
For more information on adapting to this evolving regulatory landscape, please contact your DLA Piper relationship partner or the authors of this alert.
Despite FDA’s insistence that it has always had authority to regulate LDTs as medical devices, many, including FDA, believed that congressional action was the best path forward to explicitly clarify the Agency’s ability to regulate LDTs. However, various attempts at legislative proposals that address comprehensive programs for in vitro diagnostics, including the most recent Verifying Accurate Leading-Edge IVCT Development Act (VALID Act), have been unsuccessful in achieving congressional alignment, leading FDA to announce two key actions that will move toward stronger regulation of LDTs without a statutory change.
FDA’s enforcement discretion policy for LDTs
In 1976, Congress amended the Food, Drug, and Cosmetic Act to create a system for FDA regulation of medical devices used in humans. The definition of a medical device under these amendments specifically included language to encompass in vitro reagents.
In 2014, FDA issued a set of draft guidance documents titled, “Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs)“ and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs).” In the documents, the Agency defined LDTs as “an IVD that is intended for clinical use and designed, manufactured and used within a single laboratory.” The draft guidances further stated that “[t]he definition of a device applies equally to IVDs manufactured by conventional device manufacturers and those manufactured by laboratories.”
While these draft guidance documents were controversial and never finalized, they provide useful insight into the Agency’s thinking behind regulatory enforcement of LDTs – specifically, that LDTs are included in the definition of a medical device and, accordingly, FDA has regulatory authority over them, although the Agency has largely “opted to exercise enforcement discretion.”
LDT technology has significantly evolved in the past decades, and FDA may see the absence of regulatory oversight as creating the potential for increased risk to patients. If the Agency were to pivot from its practice of enforcement discretion over LDTs and start exercising regulatory oversight, several requirements would likely be imposed on laboratories developing LDTs.
First, these laboratories would be subject to Registration and Listing requirements, FDA establishment inspections, as well as FDA’s Quality System Regulation. Second, LDT developers likely would be required to make a premarket submissions, based on risk characterization, to FDA before making their tests available for use. FDA almost certainly would establish a grace period for phasing in these new requirements.
Congressional action on LDTs
The most recent legislative history surrounding LDTs relates to Congress’s consideration of the VALID Act, which was introduced in both the Senate and the House of Representatives. This legislation established a regulatory pathway for in vitro clinical tests, including LDTs, recognizing the relative risks of such tests and tailoring review requirements accordingly. The stakeholders potentially impacted by the proposed regulatory framework for in vitro clinical tests are wide-ranging and include test kit manufacturers, reference laboratories, or hospitals and academic medical centers with laboratories developing tests for patients. Many remained unconvinced that the risks posed by certain tests warranted FDA oversight.
In June 2022, the Senate Health, Education, Labor, and Pensions Committee included the VALID Act in a legislative package that was voted favorably out of committee by a vote of 13-9. However, stakeholders remained divided, and the bill was not considered before the House Energy and Commerce Committee, making it difficult to gain the consensus needed to pass both chambers.
The lack of congressional action to clarify FDA’s authorities over LDTs and create a regulatory pathway that accounts for the risks and benefits of such tests has put the ball back in FDA’s court.
Notice of proposed rulemaking and oncology LDT pilot program
FDA has taken two new steps in an effort to reconsider LDT enforcement discretion. First, in late June of this year, the Office of Management and Budget (OMB)’s Unified Agenda included a Notice of Proposed Rulemaking (NPRM) for August 2023 stating, “This proposed rule would propose to amend the Food and Drug Administration’s regulations to make explicit that laboratory developed tests (LDTs) are devices under the Federal Food, Drug, and Cosmetic Act.”
Second, on June 20, 2023, FDA announced the launch of a pilot program for selected CDER-regulated oncology drug products with biomarkers. The details of the voluntary pilot program are outlined in the guidance document, “Oncology Drug Products Used with Certain In Vitro Diagnostic Tests: Pilot Program,” which states that the pilot is “intended to improve oncology patient care by providing transparency regarding minimum performance necessary for in vitro diagnostic tests used with oncology drug products enrolled into the pilot program.”
FDA’s announcement of the pilot program explains that in vitro companion diagnostic tests currently provide information for the safe and effective use of a corresponding treatment – for example, a test that may be used to identify patients who may or may not benefit from certain cancer treatments. In rare circumstances, FDA may approve a life-saving treatment requiring the use of an in vitro companion diagnostic even if a corresponding in vitro companion diagnostic has not yet received marketing authorization, and in these rare cases LDTs are being used for treatment decisions. FDA has become increasingly concerned that these LDTs are less accurate and less reliable compared to FDA-authorized tests, and this could negatively impact treatment decisions.
Under the pilot program, FDA will request performance information for the tests that were used to enroll patients into clinical trials that support drug approval (the clinical trial assays or CTAs) from the drug manufacturers. FDA will then post “the minimum performance characteristics recommended for similar tests that may be used to select patients for treatment with the approved drug” to its website. Laboratories then can use this information to guide the development of their LDTs.
The pilot program began on June 20, 2023, and its initial phase is anticipated to last up to one year, during which FDA will consider up to nine drug product sponsors to be accepted into the program.
The program signals FDA’s intent to move away from the “one-drug-one-diagnostic” model, which has been the model of targeted cancer therapies in the past decade but that, in FDA’s view, has failed to serve patients well. In the past, FDA typically approved companion diagnostics bundled with specific cancer drugs in order to ensure clinical validity, but this model often requires patients to undergo multiple tests for the same biomarker because each drug has its own diagnostic test.
Moving away from this paradigm, however, requires the establishment of a minimum performance standard for diagnostics used with the oncology drug products that are the subject of the pilot program.
Going forward
While it is significant that FDA is taking matters into its own hands by announcing that it intends to pursue notice-and-comment rulemaking to regulate LDTs, this change may be a long and complex path for the Agency.
Potential legal challenges include jurisdictional issues – that is, that LDTs are services and not products, and that LDTs do not enter interstate commerce; arguments that the development and use of LDTs should be considered the practice of medicine; and arguments that LDTs already are regulated by the Clinical Laboratory Improvement Amendments (CLIA) and several state agencies (such as the New York State Department of Health) and therefore FDA regulation is unnecessary.
Potential public policy challenges include arguments that many critical tests are available only as LDTs; that FDA regulation will impede and slow important innovation and patient access; and that other solutions to address FDA’s concerns are available and superior to FDA regulation and oversight of LDTs.
For more information on adapting to this evolving regulatory landscape, please contact your DLA Piper relationship partner or the authors of this alert.
