At a public workshop, stakeholders have their say about FDA regulation of LDTs
By David M. Hoffmeister, JD; Vern Norviel, MS, JD; and Charles J. Andres, PhD, JD
In US clinical laboratories, laboratory-developed tests (LDTs) are ubiquitous. FDA defines such tests—also known as “home-brew” or “in-house developed” tests—as in vitro diagnostic devices that are “intended for clinical use and designed, manufactured, and used within a single laboratory.”1 It is estimated that 2,000 US laboratories currently offer LDTs of some kind, all together totaling some 11,000 tests.2
FDA has long asserted that it has statutory authority to regulate LDTs, under powers granted with the enactment of the Medical Device Amendments of 1976. Nevertheless, the agency has historically exercised “enforcement discretion” in this area, meaning that it has generally chosen not to actively regulate LDTs. The agency’s rationale for exercising such discretion rested on its judgment that most LDTs were provided by local community laboratories; met the needs of a local patient population; were similar to well-characterized, standard diagnostic devices; and were typically used and interpreted directly by the physicians and pathologists who were treating patients in the facility performing the tests.
But now, FDA believes that times have changed, and a new set of factors is influencing the development and use of LDTs. Specifically, FDA believes that today’s LDTs are frequently manufactured using components and instruments that are not legally marketed for clinical use, and often rely on high-technology instrumentation and software to generate results and clinical interpretations. Moreover, the agency also believes that LDTs have become increasingly critical in making clinical management decisions for high-risk diseases and personalized medicine, yet are now often used independently of the healthcare delivery entity. In a review of the field, FDA “identified problems with several high-risk LDTs, including claims that were not adequately supported with evidence; lack of appropriate controls, yielding erroneous results; and falsification of data.”3
Accordingly, FDA has now decided to exercise its statutory authority to regulate LDTs. The agency’s decision will directly and significantly affect thousands of laboratories and the LDTs they currently offer, as well as a very large number of tests now in development.
In order to begin the process of bringing LDTs under FDA regulation, in October 2014 the agency formally published two proposed guidance documents on the regulation of LDTs. The Framework Guidance provides FDA’s plan to phase in and prioritize, based on risk, the regulation of LDTs.1 The Notification Guidance explains how clinical laboratories will be required to notify FDA about the LDTs they manufacture, and describes the medical device reporting requirements for LDTs.4
However, creating a further FDA layer of LDT regulation—on top of the existing layers of regulations and requirements administered by individual states, by the Clinical Laboratory Improvement Advisory Committee, and by laboratory accreditation entities such as the College of American Pathologists (CAP)—has proven to be controversial.5,6
LDTs have been regulated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) since the first set of implementing regulations were released in 1990. The CLIA regulations help to ensure reliable test results by focusing on the quality of laboratory procedures and personnel, and ensuring that tests—including LDTs—accurately detect the presence or absence of target analytes in patient specimens (analytical validity).
While somewhat overlapping in scope, FDA’s newly proposed regulation differs from the CLIA regulations, in that it would regulate the safety and efficacy of the test, and for certain LDTs would require reporting of adverse events. For some LDTs, FDA’s proposed regulation would require proof that the presence or absence of the target analytes is associated with a specific diagnostic or clinical outcome, such as the presence or absence of a disease, or that a patient with a specific genetic mutation would do better with a specific drug (clinical validity). For high-risk LDTs, FDA’s proposed regulation would also require the laboratory to obtain FDA market authorization via the agency’s premarket approval (PMA) or premarket notification (510(k)) pathways.1
THE LDT WORKSHOP
This January, FDA hosted a 2-day workshop to elicit public feedback on its proposed framework for regulatory oversight of LDTs.7 Some stakeholders who welcome increased LDT regulation by FDA cited two broad reasons for additional regulatory oversight.
First, LDTs have an expanding geographic and clinical reach. Tests that were once run only for local patients are now routinely run on patient samples taken from across the nation. Also, LDTs have increasing importance in disease diagnosis and therapy selection. A faulty LDT test result can, for example, fail to provide early cancer detection, or prompt some patients to undergo unnecessary, traumatic surgeries. As an example, Laura Koontz, director of policy at the Ovarian Cancer National Alliance, described the repercussions from use of one unvalidated LDT in 2008, when a woman went to the hospital complaining of pelvic pain, urinary symptoms, and bloating, and an ultrasound revealed a lump on one of her ovaries:
Her doctors at that time used a new test called OvaSure to determine whether or not that lump was ovarian cancer, and the test results came back positive, so she underwent a complete hysterectomy, including removal of her ovaries. [She] got the pathology report back, only to find out that she didn’t actually have ovarian cancer. But by that point in time, the damage was already done, and the repercussions were real: early menopause, cardiovascular disease, and a high risk of osteoporosis. This isn’t really a hypothetical example. This actually happened to many women in the fall of 2008 when OvaSure, an LDT, was put onto the market without any independent verification that it actually worked, despite the objections of the Society for Gynecologic Oncology and FDA at the time.7
A second reason for supporting additional regulation, according to proponents, is that LDTs are becoming more complex, often simultaneously evaluating multiple biomarkers. Adding additional biomarkers and complex algorithms can be a double-edged sword. On one hand, these additions may increase the sensitivity and specificity of the LDT. On the other hand, as LDTs become more complex, it is at least theoretically more likely that they may provide a faulty result.
Other stakeholders are strongly opposed to FDA regulation of LDTs. These opponents maintain that FDA’s proposed regulation is unlawful because the agency does not have the statutory authority to regulate LDTs. Moreover, even if such authority existed, the agency would still be required to conduct an economic impact analysis and initiate regulation through notice-and-comment rule-making—not guidance documents. At the workshop, this position was articulated forcefully by Alan Mertz, president of the American Clinical Laboratory Association (ACLA):
By promulgating such sweeping changes through guidance, FDA bypasses the requirements of the Administrative Procedure Act. In doing so FDA is avoiding assessing the potentially devastating economic impact of its proposal and avoiding determining whether the benefits it would supposedly provide justify the cost it would undoubtedly impose.7
Other arguments marshaled in opposition to FDA’s regulation of LDTs are consequence-based, suggesting a number of potentially negative outcomes, including that such regulation is unnecessary, wasteful, duplicative, and incapable of keeping pace with LDT development. Opponents also argue that FDA regulation will result in increased regulatory burdens, higher costs, decreased innovation, job loss, fewer LDT choices, and diminished patient care. “The regulatory burden that’s represented by this proposal on a small laboratory like ours is substantial,” said Lawrence Hertzberg, MD, medical director of CSI Laboratories, Alpharetta, Ga. “We, in essence, completely lack the resources necessary to submit any 510(k) documentation to FDA.”
The real concern is that if all of these things are implemented, that we will in essence, at some point in time, be driven out of business. This will mean the loss of all the jobs. It will mean I will have to go look for another job. All of my colleagues who are here will have to go to look for another job.7
Both extreme proponents and opponents of FDA regulation gave presentations at the January workshop, as did a number of stakeholders occupying the continuum between the extremes. The workshop was structured around six topics:
- Components of a test and LDT labeling considerations;
- Clinical validity and intended use;
- Categories for continued enforcement discretion;
- Notification and adverse event reporting;
- Public process for classification and prioritization; and
- Quality system regulation.
The following sections highlight these workshop topics, with commentary on those thought to be of greatest interest to the clinical laboratory community. Transcripts and slides from the workshop are available from FDA.7
LEGAL AUTHORITY TO REGULATE LDTS
Several positions were put forth regarding FDA’s proposed regulation of LDTs. These included:
- FDA does not have the legal authority to regulate LDTs;
- FDA has legal authority to regulate LDTs, but must do so through the mechanism of notice-and-comment rulemaking, and must also provide an economic impact analysis, as required by the Administrative Procedure Act;
- Regardless of whether it has legal authority to regulate LDTs, FDA has not shown there is a need to regulate LDTs. FDA should not regulate LDTs until such showing is convincingly made;
- FDA should regulate LDTs, but only the highest-risk tests. FDA should exercise enforcement discretion for lower-risk LDTs; and
- FDA should regulate all LDTs.
Because FDA long ago announced its intention to exercise enforcement discretion with regard to LDTs, the agency’s claim of authority to regulate such tests has never been seriously contested. With FDA’s recent change in position, however, it is likely that the agency’s claims will now be challenged in the courts. Separately, the agency’s effort to effect regulation via guidance instead of notice-and-comment rulemaking may also bring about a court challenge.
Even before FDA’s workshop, ACLA took a significant step toward litigation by retaining Paul D. Clement, JD, a former US solicitor general and partner in the firm of Bancroft PLLC, and Laurence H. Tribe, JD, a professor of constitutional law at Harvard University, for representation on matters relating to FDA’s proposed regulation.8 With FDA apparently not backing down, and ACLA taking active steps toward litigation, it seems more than probable that the threatened court challenges will take place. Even if the agency prevails, such challenges could significantly delay implementation of its proposed regulation.
As the number of LDTs offered by clinical laboratories is continuing to increase, several workshop speakers questioned the sufficiency of FDA’s resources to effectively regulate so many LDTs in a timely manner—even with a phased-in, multiyear approach. “We also have very serious concerns about FDA ever having the resources necessary to expeditiously review even a fraction of the estimated tens of thousands of LDTs,” said ACLA’s Mertz. “For example, in 2013 FDA approved only 21 PMA applications for therapeutic and diagnostic devices, and only four of those were IVD test kits.”7
FDA’s proposed regulation describes a risk-based approach to the regulation and prioritization of LDTs. The agency intends to rely on the existing medical device classification system to assess the risk of a category of LDTs. LDTs will be classified as low risk (Class I), moderate risk (Class II), or high risk (Class III).1
Correspondingly, there will be three regulatory levels for LDTs: LDTs subject to full enforcement discretion (minimal regulation); LDTs subject to partial enforcement discretion (moderate regulation); and LDTs subject to full FDA regulation. Classification is important to companies planning to offer LDTs, because it determines the level of FDA’s review. The application of more stringent review criteria translates into longer review times and greater expense to bring the LDT to market.
FDA probably does not have adequate resources to regulate LDTs. Thus, if the agency were to begin regulating LDTs today, test providers might find themselves working furiously to meet premarket submission deadlines, only to wait for years before receiving the agency’s response. At least initially, user fees from the new submissions will probably not bolster agency resources sufficiently to mitigate delays.
FDA intends to regulate LDTs as medical devices, making laboratories also subject to its medical device quality system regulation (QSR).9 Implemented in 1997 as an expansion of the agency’s good manufacturing practices requirements for medical device manufacturers, the QSR formally guides the medical device development process from design through manufacturing, with specialized requirements devoted to packaging, labeling, storage, installation, and servicing.
At the workshop, speakers raised questions regarding how FDA would adapt device-centric quality systems requirements to LDTs, and how those requirements would be applied to LDTs already on the market. Several speakers indicated that their companies did not have the expertise or resources necessary to incorporate QSR practices into their current and future LDTs. Others requested that FDA limit its application of the QSR when dealing with LDTs.
Speaking on behalf of the Association for Molecular Pathology (AMP), Andrea Ferreira-Gonzalez, PhD, chair of the division of molecular diagnostics in the department of pathology at Virginia Commonwealth University Health System, and a past president of AMP, suggested that FDA limit application of the QSR to only those laboratories that have submitted premarket approval applications for Class III tests:
Application of manufacturing regulations intended for medical devices or in vitro diagnostic test kits that are manufactured, packaged, labeled, and sold to a wide variety of users throughout the country—and over which the vendor has no control—is inappropriate for most LDPs. Not only are such regulations duplicative with preexisting CLIA regulations, but unlike CLIA, they are focused on monitoring documentation of intermediate activities and steps like design control, rather than the accuracy and reliability of the test results themselves. . . . Preexisting CLIA regulations ensure a test gives accurate results and, therefore, inherently ensure proper test performance and design.7
It will be important for FDA to translate “device speak” regulations into language that LDT providers can readily understand and implement. For example, FDA’s QSR requirements for devices include:
- Design and development plan;
- Design input (performance requirements, use of voluntary standards);
- Design output (labeling, device master record);
- Design verification and validation;
- Design reviews (documented systemic review to identify problems and assess the product’s ability to meet specified requirements);
- Design changes (documented validation of changes before implementation); and
- Design history file (records that describe the history of the finished device).
Laboratories that expect to seek FDA market authorization for Class II or Class III LDTs should plan on meeting such QSR requirements in all aspects of their design, development, and provision activities.
Strategies for FDA to translate device speak into the language of LDT providers might include a formal overview and introduction to the concept of following a planned and documented development process from beginning to end, and providing checklists to make sure proper development processes are followed. For example, if a laboratory could follow the unique or corresponding requirements of a CLIA checklist, a CAP checklist, and an FDA checklist, test developers would have reasonable assurance that their LDTs met all relevant requirements.10 Also, because of their inherently brief format, checklists can readily identify areas of overlap that could be assigned to one regulatory authority, thereby eliminating a double regulatory burden.
PREMARKET REVIEW, CLASSIFICATION, AND HARMONIZATION
FDA intends to phase-in LDT regulation according to risk, with Class III LDTs being regulated first, and Class II and Class I LDT regulation phasing in at a later date. Generally, Class III devices require a PMA, while Class II devices require a 510(k) submission.
A number of speakers indicated that FDA should provide additional guidance regarding how LDTs will be classified, as classification directly affects the degree of regulation. Suggested factors included the level of patient risk associated with false outcomes, the importance of the LDT in guiding diagnosis or treatment, LDT algorithm complexity, and LDT complexity (eg, single biomarker or multiple biomarker analysis).
For certain approved LDTs, FDA also intends to require medical device reporting (MDR), a means of postmarket surveillance used to identify and track adverse events involving patients. A number of speakers indicated that their companies did not have the expertise or resources (personnel or financial) to assemble the necessary data and documents to support PMA or 510(k) submissions, or to engage in regular MDR analysis.
Many speakers requested that FDA publish new guidance on harmonization of its proposed LDT regulation with existing CLIA regulations. Such guidance should describe where FDA regulations differ from CLIA regulations, where they overlap, and how FDA’s LDT regulation might mesh with and complement CLIA oversight. Several speakers indicated that checklists such as those provided by CAP were useful, and that FDA should strongly consider providing similar lists.
The addition of QSR requirements, adverse event reporting, and premarket review requirements will require LDT providers to allocate significant additional resources toward navigating FDA regulatory hurdles. Many LDT providers may be unable to provide these resources, and may therefore cease providing LDT services.
FDA’s entry into LDT regulation could thus result in significant industry consolidation. In the aftermath of such consolidation, LDT providers that have been able to allocate additional regulatory resources could prove to be big winners and end up controlling a significant share of the LDT market.
LDTs are frequently and extensively modified. Common modifications include:
- Performing the LDT on a different instrument (eg, moving from one next-generation sequencing platform to another);
- Introducing new reagents or substituting investigational use only (IUO) or research use only (RUO) reagents into the LDT;
- Modifying the LDT’s algorithm;
- Adding, deleting, or switching one or more biomarkers; and
- Changing the sample input or method of sample preparation.
As currently envisioned, FDA could require LDT providers to file new premarket submissions for any such modifications that significantly affect the safety or efficacy of the test.
Some modifications are more likely than others to trigger a requirement for supplemental submissions. Adding, deleting, or switching one or more biomarkers can affect a test’s sensitivity and specificity, and would therefore likely require a new premarket submission. Similarly, the degree to which an LDT’s algorithm is modified could proportionately increase the likelihood of FDA requiring a new premarket submission.
When an LDT modification should trigger a requirement for a new premarket submission is a contentious issue. Also, some LDT modifications may result in significantly improved test performance (eg, improved sensitivity, specificity, or both). In such a situation, it is unclear how FDA will respond when two approved tests for the same intended use have very different performance characteristics. For example, will the agency withdraw its approval or clearance for the inferior test, or will it rely on market forces to migrate to the greatly improved LDT? LDT providers should anticipate significant additional regulatory requirements when tests are materially modified.
LDT EXEMPTIONS AND MULTISITE LDTS
In its draft guidance, FDA proposed to continue exercising enforcement discretion for “traditional LDTs” and LDTs for rare diseases. Tests that qualify for inclusion in one of these groups would be exempt from such FDA requirements as premarket review submissions and QSR compliance. At the January workshop, however, the best way of defining the tests deserving exemption under these headings was a matter of some disagreement.
One criterion FDA proposed for determining whether an LDT is “traditional” is whether the test results can be interpreted by qualified laboratory professionals without the use of automated instrumentation or software. However, several speakers urged FDA to recognize the ubiquity of computers and algorithms in LDTs, and to mitigate or do away with this criterion. Other speakers took the opposite view, maintaining that any LDT that relies on a computer algorithm should be subject to stricter FDA oversight.
As drafted, FDA’s guidance would provide a rare disease exemption for LDTs that also meet the definition of a humanitarian use device (HUD). In practice, HUD status is limited to tests that are performed nationwide fewer than 4,000 times per year. At the workshop, multiple speakers suggested that this is the wrong metric, and that FDA should adopt one or more alternative metrics. One such alternative could be the metric used by the agency’s Center for Drug Evaluation and Research to determine orphan drug status: that is, a condition that affects fewer than 200,000 people in the United States. Another alternative, avoiding the difficulty of requiring a specific number of patients, could be to link the status to the estimated prevalence of a disease or condition in the population.
The scope of any exemptions incorporated into the final version of FDA’s LDT regulation will be important. Broader exemptions will mean more enforcement discretion on the part of the agency, and therefore a greater number of LDTs that will be minimally regulated.
Because FDA is concerned about the clinical validity of LDTs, however, the agency will likely make its exemptions as narrow as possible, consistent with allowing for the continued development and deployment of rare disease and unmet medical need LDTs.
The unmet medical needs proposal, if enacted, could create a competitive advantage for companies working in this area. Should FDA adopt the position that a first approval removes unapproved LDTs from the marketplace, the first FDA-approved tests will have a significant ability to capture and retain market share.
Regulation of LDTs is complex, evolving, nuanced, and multilayered, as it involves state law, CLIA oversight, CAP accreditation, and (potentially soon) FDA regulation. Companies will likely need to dedicate significant resources to achieve compliance with FDA LDT regulations.
Additionally, for companies marketing or planning to market LDTs for profit, patent protection (including patent term extension) and post-grant patent challenges should be considered as part of an overall strategy to protect intellectual property and maximize market share.
Finally, companies should use regulation as a tool to optimally position LDTs for reimbursement from both private, third-party insurers and government agencies such as the Centers for Medicare and Medicaid Services.
David M. Hoffmeister, JD, is a partner and leader in the drug and device regulatory and healthcare law practice; Vern Norviel, MS, JD, is a partner and leader of the patents and innovation counseling practice; and Charles J. Andres, PhD, JD, is an associate in the intellectual property practice, of Wilson Sonsini Goodrich & Rosati, a law firm headquartered in Palo Alto, Calif.
- Draft Guidance for Industry, Food and Drug Administration Staff, and Clinical Laboratories: Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs) [Framework Guidance]. Silver Spring, Md: Office of In Vitro Diagnostics and Radiological Health, Center for Devices and Radiological Health, FDA, 2014. Available at: http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM416685.pdf. Accessed February 19, 2015.
- Pollack A. FDA acts on lab tests developed in-house. The New York Times. July 31, 2014. Available at: http://www.nytimes.com/2014/08/01/business/fda-to-regulate-lab-developed-test-kits.html?_r=0. Accessed February 19, 2015.
- “Laboratory Developed Tests” [online]. Silver Spring, Md: Center for Devices and Radiological Health, 2014. Available at: http://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/InVitroDiagnostics/ucm407296.htm. Accessed February 17, 2015.
- Draft Guidance for Industry, Food and Drug Administration Staff, and Clinical Laboratories: FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs) [Notification Guidance]. Silver Spring, Md: Office of In Vitro Diagnostics and Radiological Health, Center for Devices and Radiological Health, FDA, 2014. Available at: http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM416684.pdf. Accessed February 17, 2015.
- Clinical Laboratory Improvement Amendments of 1988. 42 USC 263a (PL 100-578).
- “Accreditation” [online]. Chicago: College of American Pathologists, 2014. Available at: http://www.cap.org/web/home/lab/accreditation?_adf.ctrl-state=mlbxqb7bu_4&_afrLoop=66118910993518. Accessed February 25, 2015.
- Public Workshop: Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs). Bethesda, Md: FDA, January 8–9, 2015. Transcripts available at: http://www.fda.gov/downloads/MedicalDevices/NewsEvents/WorkshopsConferences/UCM431392.pdf [Day 1]; and http://www.fda.gov/downloads/MedicalDevices/NewsEvents/WorkshopsConferences/UCM431422.pdf [Day 2]. Accessed February 17, 2015.
- “ACLA Retains Attorneys Paul D. Clement and Laurence H. Tribe to Represent ACLA in Opposing FDA’s Proposal To Treat Laboratory Developed Tests (LDTs) as Medical Devices” [press release]. Washington, DC: American Clinical Laboratory Association, 2014. Available at: http://www.acla.com/acla-retains-attorneys-paul-d-clement-and-laurence-h-tribe-to-represent-acla-in-opposing-the-fdas-proposal-to-treat-laboratory-developed-tests-ldts-as-medical-devices. Accessed February 17, 2015.
- Medical Devices; Current Good Manufacturing Practice (CGMP) Final Rule; Quality System Regulation [21 CFR 820]. 61 Federal Register 52654–52662 (October 7, 1996). Available at: www.gpo.gov/fdsys/pkg/FR-1996-10-07/pdf/96-25720.pdf. Accessed February 25, 2015.
- “Hematology and Coagulation Checklist” [online sample]. Chicago: College of American Pathologists, 2011. Available at: http://www.cap.org/ShowProperty?nodePath=/UCMCon/Contribution%20Folders/WebContent/pdf/sample-checklist.pdf. Accessed February 17, 2015.