The action follows a federal court order that vacated the 2024 rule, reinstating FDA’s prior policy of enforcement discretion for laboratory-developed tests.
The US Food and Drug Administration (FDA) has issued a final rule that rescinds a 2024 regulation that applied medical device rules to laboratory-developed tests (LDTs). The action, effective Sept 19, 2025, aligns with a federal court decision and reverts regulatory oversight to its prior state of enforcement discretion for these tests.
The reversal stems from a March 31, 2025, ruling by the US District Court for the Eastern District of Texas, which vacated the FDA’s May 2024 rule. That rule had amended the definition of “in vitro diagnostic products” to explicitly include those manufactured by a laboratory, a change that would have subjected many hospital-based tests to the same requirements as commercially manufactured medical devices.
Industry groups like the American Hospital Association (AHA), which had previously urged the FDA not to apply the rule to hospital and health system LDTs, supported the withdrawal.
“The return to enforcement discretion for LDTs rightly recognizes that applying the device regulations to these tests would likely prompt many hospital laboratories, particularly small ones, to stop offering safe and effective tests upon which patients and their communities rely,” says Roslyne Schulman, AHA director of outpatient payment, emergency readiness, and public health policy, in a post. “This action will help to assure patient access to innovative and targeted diagnostic tests while reducing regulatory burden and costs for both hospitals and the federal government.”
According to the FDA’s official notice in the Federal Register, vacating the rule results in significant cost savings. The agency estimates the total annualized cost savings are approximately $1.44 billion at a 7% discount rate, reversing the economic burden the regulation would have imposed on the healthcare sector. The FDA described its action to formally remove the text from the Code of Federal Regulations as “ministerial in nature,” given the court’s prior order.
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