It's Happening. FDA Issues Final Rule for Regulating LDTs

It’s a red-letter day for the genetic testing industry. We all said we’ll believe it when we see it. Well, we can now see it.

This week, the FDA published its long-awaited rules for LDTs. After decades of exercising “enforcement discretion” and waving flags about using enforcement, they have finally gone through with it.

The final rule mandates that all IVDs, including those developed in laboratories such as genetic tests, comply with the same FDA requirements as other medical devices.

The FDA says it will phase out its policy of enforcement discretion for LDTs in five stages over the next four years.

In their always timely and incisive newsletter, Sensitive and Specific, Mara Aspinall and Liz Ruark review the announcement. Mara is a partner at Illumina Ventures and Liz is a freelance medical writer and content strategist. Here’s what they wrote about the exemptions to the new rule:

The FDA will continue to “exercise enforcement discretion” over six categories of tests. (“Exercising enforcement discretion” is FDA-speak for “we won’t enforce the rule in these cases.”)

• LDTs already on the market as of May 6, 2024, the date the final rule will be officially published

• LDTs with full or conditional approval from the New York State Clinical Lab Evaluation Program (NYS – CLEP)

• LDTs manufactured and performed by a lab within a health system where there is an unmet medical need and no FDA-approved tests for a patient in that health-care system (exemption for academic medical centers)

• 1976-type LDTs that use manual techniques (example: immunohistochemistry testing)

• Forensic (law enforcement) testing

• LDTs manufactured or performed by the Veterans Health Administration or Department of Defense

And here they are on implementation:

Implementation will happen in five stages over the course of four years. Any LDT launched and marketed after the publication of the final rule on May 6, 2024 can stay on the market as long as the lab that makes it meets the requirements listed below.

• Stage 1: Beginning on May 6, 2025, FDA expects compliance with medical device reporting (MDR) requirements, correction and removal reporting requirements, and quality system (QS) requirements regarding complaint files.

• Stage 2: Beginning on May 6, 2026, FDA expects compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements.

• Stage 3: Beginning on May 6, 2027, FDA expects compliance with the rest of the QS requirements (compliance with requirements regarding complaint files is part of Stage 1).

• Stage 4: Beginning on November 6, 2027, FDA expects compliance with premarket review requirements for high-risk in vitro devices (IVDs) offered as LDTs, unless a premarket submission is received by the beginning of this stage. In that case, FDA intends to continue to exercise enforcement discretion while the test is under review.

• Stage 5: Beginning on May 6, 2028, FDA expects compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs.

What the agency has done here is to divide its approval process into separate parts for this transition and put them on a longer-than-usual timeline. Once May 6, 2028 hits, new LDTs will be fully subject to this new rule, including the premarket review requirements, reporting and quality systems.

Their commentary goes on to say that they think the FDA is underestimating the costs of compliance for an industry that suffers from low-profit margins. However, Mara and Liz write that they are “broadly supportive” but raise the following concerns:

• The FDA must be appropriately staffed in order to keep up with the work this rule adds to the agency’s plate, both in numbers and in expertise. Staffers must understand the nuances of diagnostic technology and lab operations.

• Turnaround time for the approval process must be rapid. This is clearly related to staffing but cannot be taken for granted. Speedy review and approval is necessary for maintaining the pace of innovation in the industry. It’s also critical for industry acceptance of the process and lab respect for it.

• The approval process must be predictable. That’s critical for the venture capital industry’s continued investment in diagnostic testing companies.

• Fees must be reasonable in next User-Fee negotiations.

• Adverse-event reporting and Quality Systems requirement needs to be specific and tailored to diagnostic test - not just a copy of traditional device requirements. (e.g. definitions, process, timelines, repercussions).

• Diagnostic testing and screening / surveillance testing should have different approval requirements. (Unlikely to happen now.)

The authors end with two wishes: First, this will lead to much better reimbursement by payers who have used the excuse, “This test is not FDA-approved, so how do we know that it is useful and accurate?” Second, the FDA would no longer need to call tests “devices” because they would be regulated under a new Center for Diagnostics at the FDA.

Now that it’s here, I’m wondering if the new rule will outlast any new litigation, legislation or leadership.

How will the news be received by the testing and medical industries? How will testing companies begin to prepare for the new requirements? What will enforcement look like over the next few years? We promise to bring you all those stories, beginning with an FDA interview on the new guidance.

Read Mara and Liz’s entire article here.