FDA Cannot Claim Regulatory Authority Over LDTs – But Labs Must Be Mindful, and Public Health Remains a Priority

On August 19, 2020, HHS settled a debate that began nearly 30 years ago: FDA cannot regulate laboratory developed tests (LDTs) until and unless the agency presents its authority to do so through notice-and-comment rulemaking. This decision by HHS includes LDTs related to COVID-19, as well as all other LDTs.[1] HHS’ decision ends FDA’s use of Guidance Documents and enforcement discretion to address LDTs, which also ends decades of confusion and uncertainty for the entire laboratory industry. LDT developers now have certainty about which laws, regulations, and standards apply to their tests and facilities, and public health protections will still be applied and enforced.

The response to HHS’ decision has been as divided as FDA’s oversight of LDTs itself. Why is it so controversial, and how are LDT developers impacted?

FDA’s Authority Over LDTs Had Never Been Clear

FDA has authority under the Federal Food, Drug, and Cosmetic Act (FDCA) to regulate devices. The definition of “device” includes an “in vitro reagent, or other similar or related article… intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease.”[2] There is general agreement that diagnostic tests satisfy this definition and fall under FDA’s authority. But, there are two broad categories of diagnostic tests: commercial in vitro diagnostics (IVDs) and LDTs.

IVDs are diagnostic tests that manufacturers sell to laboratories as complete “kits.” IVDs come with all components – reagents, controls, and procedures – that a laboratory needs to perform the test. LDTs are designed, manufactured, and performed entirely within a single laboratory. This distinction presents the legal and jurisdictional issue at the center of the LDT debate.

The FDCA does not provide FDA with authority over laboratories. That authority is given to the Centers for Medicare & Medicaid Services (CMS) through the Clinical Laboratory Improvement Amendments of 1988 (CLIA). CLIA sets forth strict quality standards, categorization, and certification requirements for all laboratories and laboratory tests in the United States that test human samples. CLIA was enacted after FDA was given authority over “devices,” which supports the argument that Congress did not intend for FDA to regulate laboratories.[3]

Rulemaking is a Clearer Path for FDA

FDA’s authority over laboratories has been challenged since the agency asserted it in a Draft Compliance Policy Guide in 1992.[4] In the face of challenges and continuing debate, FDA did not pursue notice-and-comment rulemaking, i.e., what HHS now requires. Instead, FDA issued Draft Guidance documents in 2006 and 2014, and has still not issued Final Guidance.[5] In 2017, FDA released a “Discussion Paper” that synthesized feedback from the 2014 Draft Guidance and follow-up meetings with stakeholders, but specifically disclaimed representing any agency position.[6] FDA’s Discussion Paper has no force of law. Even when final, Guidance documents are not enforceable and do not bind FDA or industry.

While continuing to assert that it had authority over LDTs, the agency has largely exercised “enforcement discretion,” which has not been a workable solution. Stakeholders who believe FDA should be regulating LDTs have been angry that the agency has not been using the authority it purports to have. Meanwhile, LDT developers have been living with the uncertainty of whether enforcement discretion will end. Does a laboratory make plans for being regulated by FDA or not? Though FDA’s regulations and CLIA’s regulations have the same goal of ensuring high quality standards, there are key differences between the two regulatory systems. Not knowing whether FDA is going to start regulating a laboratory or its test(s) can present significant strategic and operational consequences for LDT developers.

If FDA pursues notice-and-comment rulemaking, any resulting regulation will be binding, have the force of law, and apply to every entity subject to jurisdiction. None of that is true with Draft Guidance, Final Guidance, Discussion Papers, other policy statements, or enforcement discretion. If notice-and-comment rulemaking results in formal authority over LDTs and laboratories, then at least it will be consistent and predictable.

What Should Laboratories Do Now?

LDT developers are still subject to all applicable requirements and categorization under CLIA. Additionally, laboratories are subject to the authority of other government agencies, and FDA may still have reason to keep its eyes on LDTs, whether the tests are for COVID-19 or any other disease or health condition.

All information that test developers and laboratories release about their LDTs is still subject to government review and enforcement. For example, all claims and representations made about an LDT, including on a website, in a brochure, at a conference, or another public venue fall under the jurisdiction of the Federal Trade Commission (FTC). The FTC requires that all claims are truthful; not misleading; not unfair; and, for products like laboratory tests, substantiated by scientific evidence. Moreover, even though FDA cannot regulate or exert any authority over LDTs, the agency may continue to review materials about such tests to ensure they are truly “LDTs.” If not, FDA may have jurisdiction after all.

Therefore, it is crucial that LDT developers and laboratories continue to be mindful to represent their LDTs truthfully and accurately, and to continue to comply with all applicable requirements under CLIA.

[1] See HHS, “Rescission of Guidances and Other Informal Issuances Concerning Premarket Review of Laboratory Developed Tests” (Aug. 19, 2020).

[2] 21 U.S.C. § 321(h).

[3] The Medical Device Amendments of 1976 amended the FDCA by clearly distinguishing devices from drugs, and establishing the regulatory system for devices still in place today. See Pub. L. No. 94-295, 90 Stat. 539.

[4] See FDA, “Draft Compliance Policy Guide: Commercialization of Unapproved In Vitro Diagnostic Devices Labeled for Research and Investigation” (Aug. 1992).

[5] See FDA, “Draft Guidance for Industry, Clinical Laboratories, and FDA Staff: In Vitro Multivariate Index Assays” (Sept. 7, 2006); FDA, “Draft Guidance for Industry, FDA Staff, and Clinical Laboratories: FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs)” (Oct. 3, 2014); FDA, “Draft Guidance for Industry, FDA Staff and Clinical Laboratories: Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs)” (Oct. 3, 2014).

[6] FDA, “Discussion Paper on Laboratory Developed Tests (LDTs)” (Jan. 13, 2017).