By April 2024, FDA plans to finalize its October 2023 proposed rule seeking to assert regulatory authority over LDTs, according to the Department of Health and Human Services (HHS) Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions. While the timeline is ambitious, and these dates are often missed and may be revised given the volume of comments logged in the docket, FDA has expressed urgency in moving forward. We summarized the proposal online here, highlighting multiple hurdles that FDA would need to overcome before they could enforce any changes based on this rule, including:

• Overcoming pushback from industry stakeholders, as demonstrated by the more than 6,000 comments FDA received during the 60-day comment period (which the agency surprisingly declined to extend). Indeed, finalizing the proposal by April will leave FDA with little time to review the thousands of comments.

  • The comments includes hundreds of responses from infectious disease professionals and personalized medicine advocates who mostly criticized the rule, with some asserting that LDTs are medical services, not devices, and therefore should not be scrutinized by FDA.

• Successfully defending against lawsuits that would challenge FDA’s authority to regulate LDTs (i.e., lawsuits contending that the Federal Food, Drug, and Cosmetic Act (FDCA) does not grant FDA the authority to regulate LDTs) – which we continue to anticipate.

• Avoiding Congressional action to affirmatively remove LDTs from FDA’s oversight, which U.S. Representatives continue to promote.[1] However, FDA’s rush to finalize the proposed rule may be aiming to avoid a lookback period for so-called “midnight rules” under the Congressional Review Act (CRA), by which Congress could use a joint resolution to disapprove regulations submitted for Congressional review during the last sixty legislative days of any presidential term.

• Inadequate agency resources to launch a new oversight program and to implement the phaseout policy, and anticipated challenges with Congress for increased appropriations or user fee authorization.

FDA’s somewhat understated announcement of its speedy LDT proposal finalization plans come after the agency held a webinar on the proposed rule on October 31. We observed the following key takeaways from that meeting, which suggest that several key questions remain unanswered by the agency as it pushes forward with its plans to assert authority over laboratory developed tests:

• Grandfathered IVDs. FDA has not weighed in on whether it will craft any “grandfathered” status for currently marketed LDTs, despite anticipating in the proposed rule that commenters will say FDA should continue to maintain the current general enforcement discretion approach with respect to premarket review – as well as some or all Quality Systems (QS) requirements – for currently-marketed LDTs that do not pose a significant safety concern (i.e., “grandfathering”). Nevertheless, we predict the final rule will include some form of a grandfathering policy to benefit currently-marketed LDTs.

• IVDs requiring incorporated bioinformatics. In Vitro Diagnostic (IVD) test systems integrating bioinformatics and other software that meet the definition of a device were not covered by the proposed rule’s enforcement discretion policy, and therefore would not be covered during the phaseout period under the rule. Speaking on the proposed rule webinar, FDA indicated that the agency’s normal enforcement policies would continue to apply to such manufacturers and products, which means that LDTs that incorporate such software are at risk of being regulated sooner as “combination devices” (i.e., LDT plus software with an non-LDT purpose) if FDA chooses to take enforcement action under this approach.

• Resource allocation. Questions remain over how FDA would pay for any new LDT review program, and how it would increase staffing in time to implement the rule. FDA’s Preliminary Regulatory Impact Analysis of the proposal estimates that anywhere from 20,000-80,000 tests would be added to the mix of the FDA’s regular premarket submission review workload under the rule, which would require significantly more agency resources than are presently available. In addition, FDA conservatively expects it would review about 4,000 new tests annually under the rule. FDA cannot depend on user fees until the rule takes effect; therefore, under the rule, more would be required of the already-overworked “OHT7” reviewers, without additional agency resources. This could certainly further delay current FDA submissions beyond Medical Device User Fee and Modernization Act (MDUFMA) target dates. In addition, the proposed policy likely would need support from the presidential administration after the 2024 election, otherwise the agency may face challenges to prioritizing implementation of any program.

• Compliance regulatory paradigm. FDA did not clarify how it would partner with the LDT industry to tailor existing compliance requirements for medical devices to LDTs. For example, it is unclear whether LDTs would be subject to all QS Regulations (QSR), and how manufacturing inspections would overlap with CMS inspections under the rule. The agency has also not revealed whether future changes to these regulatory paradigms would be instituted through guidance or via notice-and-comment rulemaking. Further, the industry has sought clarity on how FDA would be willing to help established companies operating in the LDT space transition their policies to ensure compliance with the new rules, especially with regards to QSR, taking into account regulatory flexibility for products that have already been designed and developed.

Next steps

We have assisted several clients with comments on the proposed rule, and are continuing to analyze its implications on medical product development and manufacturing. If you have any questions about regulatory requirements for laboratory developed tests, feel free to contact any of the authors of this alert or the Hogan Lovells attorney with whom you regularly work.

Authored by Randy Prebula, Lowell Zeta, and Blake Wilson