LDT Regulation by FDA: Balancing safety, innovation and patient access to testing

Our precision medicine expert, Dr Jayeta Saxena shares her concerns about the potential impacts of the new LDT regulation proposed by FDA.

Background

In Sep 2023, FDA proposed a rule on oversight of Laboratory Developed Tests (LDTs) after failing to regulate the space in its previous attempts, for e.g. through VALID Act in 2022. The proposed rule is aimed to ensure the effectiveness, accuracy and safety of LDTs, as FDA cited concerns raised including receiving unnecessary treatment or not receiving correct treatment based on inaccurate test results.

Proposed regulations

The proposed rule will phase out the current enforcement discretions policy for LDTs and treat them as In Vitro Diagnostics (IVDs) subject to regulatory requirements as medical devices. The rule proposes a phased approach, with LDT manufacturers required to comply with regulatory requirements in five stages as detailed below:

Timelines

• Stage 1: One year after final policy is published - Implementation of adverse event reporting
• Stage 2: Two years after publication - Implementation of manufacturer registration and test information listing, labeling requirements, and investigational device exemptions
• Stage 3: Three years after publication - Implementation of Quality System Regulation (QSR) - good manufacturing practices applicable to medical devices.
• Stage 4: Three and a half years post publication - no earlier than Oct 2027- Premarket review of high risk (Class III) tests (ie PMA submissions)
• Stage 5: Four years after publication - no earlier than Apr, 2028 - Moderate-risk and low-risk LDTs would have to comply with premarket review requirements, (i.e., submit a 510(k) or a De Novo application)

Diaceutics Opinion

Expected Impact

The frustration of FDA about failing to regulate the LDT space in its previous attempts, including through legislative measures, is evident. There is industry pushback raising questions over the FDA authority to legislate over LDTs and validity of the concerns raised. However, the joint statement with FDA and CMS, released last week reinforces that FDA will have oversight of LDTs and there are no plans to expand the authority and scope of CLIA (Clinical Laboratory Improvement Amendments of 1988). Diaceutics opinion, the proposed regulations have a very high probability of being finalised by FDA this year.

The most critical objection to the proposed regulations is the cost of submitting review applications (2024 user fee for a PMA is $483,560) as many small labs will not be able to cope with the financial burden and may withdraw their LDTs. Therefore, there is a legitimate concern that the costs associated will disproportionately impact small players and drive further consolidation within the diagnostics industry. This will also disincentivise innovation and stifle the rapid evolution in diagnostic tests necessary in fields like oncology. The removal of tests, especially low-volume tests including those for rare diseases and the lack of available commercial tests will reduce testing ability, affecting patient access to appropriate testing.

There is also an additional administrative burden for labs for collecting evidence, reporting AEs, complying with the new listing, labelling and QSR requirements and preparing applications for FDA review, that would add to the costs and the workforce requirements. On the other hand, FDA will also need substantial human resources to manage the LDT review process, considering the sheer numbers of tests that would require FDA scrutiny. Although, FDA has proposed the use of their Third Party Review program to mitigate this challenge, the implementation of LDT regulation may still overwhelm the FDA, creating a significant bottleneck. However, although no clear provisions are currently included for grandfathering, there is a general desire to maintain access to LDTs already in the market and clearer guidelines may be published in the near future.

In nearly 7000 public comments submitted in response to the proposed regulations, American Clinical Laboratory Association (ACLA), American Medical Association (AMA), American Health Association (AHA) along with several laboratories and providers have overwhelmingly opposed the agency’s plans. However, larger Dx companies such as Foundation Medicine that already have approved Foundation One CDx and Liquid CDx in the market, have supported “a single, risk-based regulatory framework for all tests”. The Association for Clinical Oncology (ASCO), the largest group of oncology providers in US, along with insurers Blue cross, Blue Shield and AHIP, issued strong support for the proposed rule, arguing that FDA oversight of LDTs is "necessary to ensure the safety and effectiveness of LDTs used for directing critical treatment decisions”.

Our Recommendations

For diagnostics labs, it is safer to work on the assumption that the new regulations will be enforced after the publication of the final policy and start planning for gap analysis and strategies to meet the new regulatory requirements.

For pharmaceutical industry, especially for those planning for a biomarker-based drug launch in the next 5 years, it is crucial to monitor this space closely and plan for mitigating any disruption to patient testing. Investing early in securing adequate access to FDA approved diagnostic tests and choosing the right diagnostic partner may be critical to minimise any patient leakage.

Contact us ?to learn more about the impact on your current and upcoming biomarker drug launches and strategize with our experts to navigate these new regulatory challenges.

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