Future of Lab-Developed Tests Still Taking Shape

As the new Congress and a new administration start up, the fate of FDA-issued regulations on laboratory-developed tests (LDTs) is one of many issues that health advocates and lobbyists will be watching closely.

LDTs are — as the name implies — clinical tests developed by individual labs in doctors’ offices and hospitals to be used in patient care. These include tests such as immunohistochemical stains to detect antigens in cells.

One might think that these tests are already regulated by the Clinical Laboratory Improvement Amendments (CLIA). And they are — sort of, explained Don Karcher, MD, president of the College of American Pathologists (CAP). “CLIA regulates how labs operate — it makes sure they have properly trained personnel, all the bells and whistles in place to maintain the highest quality of testing, and that it’s accurate and timely,” Karcher said in a phone interview. “But it has no authority to oversee specific tests — and there’s no language in CLIA that labs must prove the clinical validity of that test — that is, when you get a certain result, it has X meaning for that patient, or means that the patient has a disease or does not, or that a patient should get a certain chemotherapeutic agent.”

FDA Weighs In

To fill in that gap, the FDA finalized regulations last spring to further oversee LDTs. Tests that fall under the FDA’s final rule — unless they are specifically exempt — would need to go through either a 510(k) clearance process or FDA premarket approval (PMA) before the labs could start using them. Many of the affected tests are cancer-related, while others generally fall into the infectious disease category, Karcher said.

The rule has five different parts, with the first part taking effect this May. That provision requires labs to have procedures in place to give the FDA a list of the tests they are running, their intended use, and their procedures to report a problem with the test and to stop running the test if the problem is significant.

However, many of the tests that laboratories were using before the rule came out will be exempt from the regulations, noted Bruce Quinn, MD, PhD, a health policy consultant in Los Angeles who follows the lab testing industry. “The FDA and attorneys avoid the word ‘grandfathered,’ because that implies nothing happens to those tests,” Quinn said in a phone interview. “Those tests do have to [be registered] with the FDA and [be subject to] certain kinds of reporting, but the tests do not have to go through the 510(k) or PMA process.”

Lab Groups Challenge the Rule

CAP agrees that more oversight of LDTs is needed, Karcher said — but only for the very highest-risk tests. “All others can be dealt with in ways we already deal with them,” he said. “Under CLIA, some bad tests have slipped through and have harmed patients, causing them to have unnecessary surgery or to not be treated for diseases they needed to be treated for … That’s why FDA decided to regulate these tests.”

The problem, Karcher added, is that the FDA’s rule doesn’t clearly specify which types of tests would be included. “Most LDTs, more than 95%, their clinical validity is well-established in clinical literature,” he said. “We feel very strongly that only a very small sliver of LDTs meet the definition of high-risk — those are tests that use proprietary algorithms and methodologies that are not standard.”

The American Clinical Laboratory Association (ACLA), a trade group for commercial laboratories, objected to the rule even more; in fact, the ACLA sued FDA in federal court on May 29, 2024, arguing that the regulations “inappropriately” seek to regulate LDTs.

“The medical device framework is inappropriate and ill-suited for regulating laboratory-developed tests, which are services provided by trained professionals rather than manufactured products,” ACLA president Susan Van Meter said in a press release. “These professional services incorporate the latest scientific advances to offer innovative testing solutions to physicians and the patients they serve. The rule will disrupt this paradigm, creating negative consequences for the entire healthcare system, including millions of vulnerable patients who depend on the essential clinical testing services that only laboratory professionals can provide.”

CAP agrees with some of the ACLA’s contention and filed a “friend of the court” brief last October, Karcher said. However, he added, the group’s support of the ACLA lawsuit — along with another suit filed last August by the Association for Molecular Pathology — “is to stop the final rule. There are side issues in those suits that we do not support.”

What Will the White House and Congress Do?

It appears that ACLA and CAP may get some support from the incoming Trump administration. “The first Trump administration definitely did not want FDA to regulate LDTs in this way,” Quinn, the consultant, said. “So the question is, after a 4-year hiatus, will [the second] Trump administration take the same position? It’s certainly more likely that Trump will [slow down or stop] the hand of FDA than if it had been a second Democratic administration, but I don’t think anybody wants to make a firm prediction of what Trump will do.”

In fact, in the first Trump administration, “his transition team put all new [FDA] regulations on hold, so they could not release their framework,” CAP’s Karcher said. “Then Trump’s FDA released a white paper that said Congress needs to decide what the [regulatory] framework is.”

Congress’s role is indeed hugely important, observers say. For years, members of Congress have been working on legislation that came to be known as the Verifying Accurate Leading-edge IVCT Development (VALID) Act; that legislation would still require the FDA to regulate LDTs, but would exempt tests that are low-risk, those that are just for public health surveillance, those that have received emergency use authorization, or those that are covered by a “technology certification” — a group of tests that use a single technology that may be evaluated using a representative test.

The bill, however, failed to gain traction in Congress, and now a group of stakeholders known as the Coalition for Effective Diagnostics is working to come up with legislation it hopes will be more successful, Karcher said. Members of the coalition include the Mayo Clinic, CAP, Friends of Cancer Research, and test manufacturers such as Roche and Thermo Fisher. “We’re hopeful that what we can come up with could be an acceptable compromise for everyone,” he said, adding that it probably will be called something other than the VALID Act, and that part of the legislation would include a provision to vacate the current FDA final rule.

Even the Biden administration didn’t really want to release the regulation in its current form; its hand was forced when Congress failed to weigh in, Karcher said, noting that “Biden’s FDA has said the same thing” as the Trump administration about Congress needing to decide on the proper regulatory framework.

“We want to keep the regulatory burden and costs down” for healthcare providers, he said. “We do feel that if what we’re advocating were to take place — and that needs to happen via legislation — labs would be able to continue to develop 95% of LDTs as they do now.” But if the current FDA rules come into effect and labs have to undergo a 510(k) clearance or get PMA from the FDA, there’s a danger that they’ll stop developing new tests, Karcher said.

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