Update | FDA's Risk-Based Laboratory Developed Tests Proposal Formally Issued: Would Transform the Regulation of Diagnostic Testing in the US

On September 30, 2014, the US Food and Drug Administration's (FDA or Agency) Center for Devices and Radiological Health (CDRH) formally released the two draft guidance documents which detail how the Agency plans to regulate the laboratory developed tests (LDT) industry.

• Draft Guidance: Framework for Regulatory Oversight of Laboratory Developed Tests
• Draft Guidance: Food and Drug Administration Notification and Medical Device Reporting for Laboratory Developed Tests

The draft framework guidance is nearly identical to the proposal FDA released on July 31, 2014, as part of its notification to Congress of its intent to actively regulate the LDTs. A full analysis of FDA's proposal is available in our August 2014 Advisory, "FDA's Risk-Based Laboratory Developed Tests Proposal Would Transform the Regulation of Diagnostic Testing in the US."

While the release of the two draft documents represents the next formal step in the Agency's proposal to regulate LDTs since the July notification to Congress, many affected parties have been actively discussing and debating the issue. At a September 9, 2014, hearing of the House Energy and Commerce Health Subcommittee, FDA and representatives of both the clinical laboratory industry and the traditional diagnostic kit manufacturers offered testimony and opinions on the impact and legality of FDA's proposal.

On behalf of the clinical laboratory industry, American Clinical Laboratory Association President Alan Mertz summed up the LDT industry's major concerns with and opposition to the policy. Mr. Mertz clarified his organization's fundamental disagreement with the policy and its belief that FDA lacks the statutory authority to regulate LDTs. On the other side of the issue, Andrew Fish, Executive Director of AdvaMedDx, a trade association representing manufacturers of traditionally FDA regulated medical diagnostic tests testified to his groups' general support for the Agency's efforts to actively regulate LDTs and highlighted the current dichotomy between regulatory oversight of LDTs and diagnostic test kits.

As expected, FDA defended its proposed policy but also spent time answering questions on why the policy was communicated through guidance rather than notice and comment rulemaking subject to a full economic analysis, as some have argued is required under the Administrative Procedure Act.

While the content of FDA's draft guidance proposal has not substantively changed since the release of the Congressional notification documents, FDA's tone with respect to the rigidity to the original proposal has softened. On its webpage¹ and in the Federal Register Notice announcing the Framework Guidance,² FDA has flagged five specific modifications to the published guidance that it is seeking comment on. If adopted, these modifications would represent lesser degrees of regulation than originally proposed. Each potential modification is aimed at either expanding an area of continued enforcement discretion or modifying the proposed requirements to allow for more flexibility in its implementation.

Summary of Potential Modifications for Which FDA is Seeking Comment

1. Potential modification to the definition of a "Traditional LDT" for which FDA proposes to continue exercising enforcement discretion.

As currently drafted, FDA proposes to continue to exercise enforcement discretion for premarket review and quality system regulation requirements (QSR) for LDTs that meet FDA's definition of a Traditional LDT. As originally proposed, Traditional LDTs are:

• LDTs designed, manufactured and used within a single laboratory;
• manufactured and used by a health care facility laboratory (such as one located in a hospital or clinic) for a patient that is being diagnosed and/or treated at that same health care facility or within the facility's healthcare system;
• comprised only of components and instruments that are legally marketed for clinical use; and
• interpreted by qualified laboratory professionals without the use of automated instrumentation or software for interpretation.

Presumably in response to the informal comments already received by the Agency, FDA is now requesting comments on a revised definition which would eliminate the 2nd element from the definition and place a stronger emphasis on the Clinical Laboratory Improvement Amendments regulations³ governing training of the laboratory professionals who will be interpreting test results. These potential amendments to the definition of a Traditional LDT could open up this category of premarket review and QSR enforcement discretion to a much larger number of LDT labs than previously proposed.

2. Potential modification to the definition of LDTs used for rare diseases for which FDA proposes to continue exercising enforcement discretion.

As currently drafted, FDA proposes to continue to exercise enforcement discretion for premarket review and QSR requirements for LDTs used for rare diseases. As originally proposed, LDTs used for rare diseases are LDTs that meet the definition of a Humanitarian Use Device (HUD) under 21 C.F.R. 814.102(a)(5). FDA is now seeking feedback on whether factors other than the HUD definition should be used as the basis for determining whether an LDT should fall within the rare disease enforcement discretion category. While this potential revision could expand or contract the current scope of this category, it seems unlikely FDA would take a more narrow view of LDTs used for rare diseases than it does for traditionally regulated medical devices in the same context.

3. Potential modification to the factors used to determine areas of enforcement discretion that were limited to use in a "healthcare system."

As currently drafted, the Agency has identified factors it intends to consider in exercising enforcement discretion for premarket review and QSR with regard to Traditional LDTs and "LDTs of Unmet Needs." One factor identified by FDA is whether the LDT is both manufactured and used by a healthcare facility laboratory (such as one located in a hospital or clinic) for a patient that is being diagnosed and/or treated at that same health care facility or within that facility's healthcare system. FDA further clarifies that the "healthcare system" refers to a collection of hospitals that are owned and operated by the same entity and that share access to patient care information for their patients. FDA now seeks comment on whether the proposed definition of a healthcare system is too narrow and seeks suggestions on the types of facilities that should also fall within the scope of these enforcement discretion categories.

4. Potential modification to the phase-in timeline for compliance with QSR requirements for the highest risk LDTs.

As currently drafted, FDA proposes that for the highest-risk LDTs, FDA would begin enforcing the premarket review and QSR requirements of the Federal Food, Drug, and Cosmetic Act 12 months following publication of the final framework guidance. FDA is now seeking comment on extending the enforcement discretion period for QSR compliance for the highest-risk LDTs for an additional 12 months, i.e., 24 months after publication of the final guidance.

5. Potential modification to the notification requirement for labs operating under the control of the same parent entity.

As currently drafted, FDA proposes that each lab conducting an LDT separately notify FDA of the LDT activities they are performing and provide basic information regarding each LDT. FDA now seeks comment on whether some laboratory networks that offer the same test in multiple laboratories throughout their network should be allowed to submit a single notification indicating that the test is offered at multiple sites.

Conclusion

At the time the original framework document was released, there was much speculation regarding the timeline FDA would follow. Some anticipated that the release of the notification would serve a starting point for open discussions on this issue between industry and FDA with a draft guidance withheld until those discussions had occurred. While the addition of the five potential areas for modification flagged by FDA does signal a willingness to work with the laboratory industry to develop an appropriate risk-based regulatory scheme, the issuance of the draft guidances on the first eligible day (61 days after the notification to Congress)⁴ indicates an eagerness on FDA's part to put a policy in place. It is still possible FDA intends the draft guidance to serve as a starting place for negotiations in the future, but by moving quickly it also retains the ability to finalize the draft guidance and policy in a timely fashion – and before the next presidential election.

With the potential for quick action and finalization of the this policy, it is even more important for affected stakeholders to make their voices heard by FDA. Starting October 3, 2014, FDA will begin a 120-day comment period on the draft guidances. During this time, we can expect the debate on both the need for additional regulatory oversight and the scope of that oversight to continue. FDA has already signaled a need for further discussion and plans to host a public meeting on this topic in January 2015. While the final scope of FDA's oversight of LDTs is still unclear, the Agency is now one step closer to its goal of actively regulating LDTs.