Greenlight Guru Medical Device Podcast: The Theranos Loophole and LDTs - I have thoughts

The good folks at Greenlight Guru recently released a two-part episode of their Medical Device Podcast titled "The Theranos Loophole and LDTs". This is an area of intense interest to me, and one that I’ve spent a tremendous amount of time working on. In addition, my employer is mentioned so I feel obligated to share a few thoughts!

1.??????First up, let’s talk about the podcast title. Theranos tends to be the poster child that pro-FDA regulation stakeholders bring up as evidence of the need for greater oversight. The problem with that argument is that Theranos wasn’t a well-meaning laboratory that made a good faith effort to develop and perform laboratory tests that just didn’t quite work out. Theranos was committing fraud. Full stop. I have no trouble believing that even if Theranos had been regulated by the FDA, they would’ve happily forged data and continued on their merry way until the house of cards came crashing down.

2.??????This is minor, but Mike questioned whether “laboratory” is defined anywhere when discussing the perceived grey area between LDTs and IVDs. The Clinical Laboratory Improvement Amendments (CLIA), the regulations for operating a clinical laboratory, clearly defines a laboratory:

Laboratory means a facility for the biological, microbiological, serological, chemical, immunohematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings. These examinations also include procedures to determine, measure, or otherwise describe the presence or absence of various substances or organisms in the body.

3.??????The podcast outlined a few arguments that LDTs and IVDs are different, for example the practice of medicine implications. In addition, there’s an argument that LDTs don’t enter into interstate commerce (as they are by definition only used within the facility in which they were developed) so would fall outside of FDA’s purview. Finally, an important distinction is that IVDs are physical things that are sold – bottles of reagents, consumable materials, etc. LDTs can be considered more like recipes, so-called Laboratory Developed Protocols, that are not “devices” in the physical sense and so therefore could not be considered IVDs. Note that I’m not advocating one way or the other on these, but they are outstanding questions that may ultimately need to be hashed out in court and/or in Congress.

4.??????Mike mentioned a few times that companies may consider bringing a test to market as an LDT as a “shortcut” compared to going through the FDA. If a company is thinking that way, they don’t know what they’re talking about. Performing an LDT as a clinical laboratory requires a CLIA certificate and compliance with all the requirements in CLIA. Yes, you don’t need to submit your LDT to the FDA, but you need to develop a quality system and laboratory operations to be compliant with CLIA, so it’s still a lot of work. You can’t sell an LDT to someone else, but if the companies in question aren’t looking to perform the test themselves but are considering just labeling their test kit as an RUO, that does indeed get around the need to submit to FDA. However, doing so raises other thorny issues for the company, beyond likely limiting their sales potential; see the FDA guidance Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only.

5.??????Throughout the podcast, CLIA is mentioned somewhat dismissively (in my opinion), noting it’s not as “stringent” as FDA review. Ask any laboratorian and I think we’d all say CLIA is plenty stringent. Instead, I think its fairer to say that FDA regulations and CLIA regulations are different. FDA is completely focused on test design and validation, while CLIA looks at that to a lesser extent but also focuses heavily on laboratory operations. My point isn’t that FDA regulation would be bad per se, but it’s important to recognize that FDA regulation is ONE option for increased oversight of LDTs, but updating CLIA could be another. CLIA is over 30 years old, I don’t think anyone would argue it doesn’t need some updating. The Association for Molecular Pathology has put a lot of thought into this idea .

6.??????There also seemed to be some handwaving around concerns about administrative burden, particularly by hospital and/or academic medical center laboratories. That’s not nothing. These labs are not billion dollar companies with massive quality and regulatory departments solely tasked with filling out regulatory paperwork. They tend to run on lean budgets, so both the cost of paying someone to fill out the additional voluminous paperwork, as well as any fees for the submission, ARE burdensome. I’ve heard from many colleagues that their laboratories would need to significantly decrease test development if FDA regulation is too burdensome, which negatively impacts innovation and patient access. A happy medium is certainly possible, but it’s a legitimate concern.

I’ll close with stating that I really appreciate Greenlight Guru devoting two podcasts to the topic of LDTs. It’s been a longstanding, complicated, vexing topic of regulatory conversation. Personally, I think the VALID Act went a long way to addressing safety and accuracy concerns while balancing a least-burdensome regulatory model. There were things I still wasn’t happy within the final version of the legislation but was disappointed that it wasn’t included in the omnibus package. One thing is certain – this conversation isn’t over!