Last month, FDA finalized its landmark proposed rule that would amend the definition of “in vitro diagnostic (IVD) products” in 21 CFR 809.3, effective May 6, 2024, to make explicit that IVDs are medical devices under the Federal Food, Drug, and Cosmetic Act (FDCA), “including when the manufacturer of the IVD is a laboratory.” In summarizing the final rule online here at the time, we predicted that litigation against the rule was likely. Indeed, now in the first salvo of that legal battle, the ACLA and its member company, HealthTrackRx, filed a lawsuit against FDA in the Eastern District of Texas.

HealthTrackRx’s complaint claims Congress has never granted FDA the authority to regulate LDTs, and that they instead have been properly regulated by the Centers for Medicare and Medicaid Services (CMS) under the Clinical Laboratory Improvement Amendments (CLIA). The complaint stresses:

The FDCA has never applied medical device regulation to laboratory testing services. And for good reason: Those tests are not physical products sold and distributed by manufacturers. Instead, they are professional healthcare services offered by highly skilled and trained laboratory professionals that are outside FDA’s regulatory expertise and are subject to different regulatory requirements.

The complaint contends that LDTs are processes for deriving clinical information, performed by professionals in a laboratory as a service to prescribing physicians, rather than physical products over which FDA has authority. Further to this point, the complaint takes significant issue with the numerous enforcement discretion policies which FDA established in conjunction with the final rule, in an effort to limit its negative impacts and provide time for LDT manufacturers (and laboratories) to come into compliance. Specifically, the plaintiffs assert that these broad carve-outs from the general rule both undermine FDA’s stated legal and public health rationale for regulating LDTs as devices and create significant uncertainty for those in the space. The complaint further argues that the final rule violates the Administrative Procedure Act (APA), stands contrary to law, exceeds FDA’s statutory authority (as outlined above), and represents arbitrary and capricious rulemaking.

In a statement announcing the lawsuit, ACLA president Susan Van Meter said FDA’s medical device framework is inappropriate for regulating LDTs, and asserted that the rule would create “negative consequences for the entire health care system, including millions of vulnerable patients who depend on the essential clinical testing services that only laboratory professionals can provide.” Relatedly, the complaint claims that the final rule threatens innovation, particularly for tests designed to serve smaller patient populations, because seeking FDA clearance or approval is a costly and lengthy process, which will be made worse by potential delays from agency review and approval of what could be a significant number of new and modified LDTs.

We see the venue choice in Texas as a logical place for the ACLA to file its lawsuit. The case has been assigned to the Honorable Sean D. Jordan, who was appointed to serve in the Eastern District of Texas in 2019. As the litigation moves forward, the plaintiffs may seek a preliminary injunction to prohibit FDA from enforcing the final rule, though there are open questions as to what constitutes irreparable harm given the five-step phaseout plan starting May 2025. We predict that regardless of the outcome, the court’s decision will be likely to be appealed to the Fifth Circuit. Also, it is unclear whether FDA will push forward while the case is working its way through the courts or if the Agency will delay enforcing the final rule’s effective date.

This lawsuit comes against the backdrop of Congressional denunciations of FDA’s final rule in both the U.S. House and Senate. Sen. Rand Paul (R-KY) stated: “This is yet another brazen power grab by the FDA under the direction of President Biden. … Unnecessary regulations on lab developed tests threaten to delay critical diagnostics and undermine healthcare innovation. This CRA [resolution] is a step towards preserving the innovation and flexibility needed to address emerging medical challenges and safeguard patient health.”

In Congressional hearings considering the LDT final rule last month, Rep. Brett Guthrie (R-KY) criticized FDA, and Rep. Larry Bucshon (R-IN), who sponsored a bill to establish explicit FDA authority for regulation of LDTs by FDA via legislation, instead of rulemaking (the VALID Act), asked CDRH Director Jeff Shuren whether he supports Congress’s intervening. Dr. Shuren responded that while the agency is happy to work with Congress, as long as there is no such current legislative framework, FDA is continuing to see problematic LDTs.

We will continue to monitor litigation and developments surrounding the laboratory developed tests rule, and keep you apprised of significant updates. If you have any questions about current and possible future regulatory requirements for LDTs, as well as planning for the potential future state, 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, Jodi Scott, Suzanne Levy Friedman, and Wil Henderson