On May 6, 2024, the US Food and Drug Administration (FDA) finalized a new rule to regulate laboratory-developed tests (LDTs). An LDT is a reagent, instrument, or system used for diagnosis or treatment that is designed, manufactured, and used by a single laboratory. LDTs are generally thought to fall within the legal definition of a medical device, which includes any "instrument" or "apparatus" for diagnosing disease.
LDTs fall into a regulatory gray zone; for almost 5 decades, the FDA exerted minimal regulatory oversight over these products because of their perceived low risk. However, companies are now offering LDTs on larger scales and seeking to serve patients across the nation. The more than 80 000 LDTs that the FDA estimates are circulating in the US market are used to diagnose a wide variety of clinical conditions, including cardiac disease, cancer, and Alzheimer disease.
In the early 2010s, the FDA became increasingly concerned about reports that some LDTs were giving rise to inaccurate results. According to estimates from the US Centers for Disease Control and Prevention, 70% of clinical decisions rely on laboratory results, implying that erroneous test results may deprive patients of care or expose patients to unnecessary care. In 2015, the FDA released a series of 20 case studies wherein it elaborated on the risks of LDTs to public health. In addition, according to a New York Times investigation, 5 common prenatal genetic tests evaluated by the newspaper gave rise to positive results that were incorrect approximately 85% of the time, on average. In many of these cases, women pursued abortion without obtaining follow-up testing. Additional examples of problematic tests are abundant. In this Viewpoint, we explain the new effort by the FDA, which has struggled to gain a regulatory foothold in this space.
The FDA's new rule will place LDTs in a category under FDA oversight. Medical device requirements will be applied to LDTs through a 4-year phase-in process. In stage 1, the FDA will prioritize gathering information about LDTs by enforcing requirements to report adverse events and any correction or market removal of LDTs. Similarly, in stage 2, the FDA will enforce registration and listing, which will inform the FDA about the universe of marketed LDTs, and several other miscellaneous requirements. Stages 3 through 5 are more substantive. In stage 3, the FDA will require compliance with quality-system provisions, which ensure manufacturing quality. In stages 4 and 5, the FDA will phase in premarket review requirements, starting with high-risk devices. The new policy exempts at least 9 categories of tests. FDA oversight will be funded through user fees (ie, fees paid by device manufacturers).
The FDA rule carries considerable benefits. In addition to avoiding misdiagnosis and associated under- and overtreatment of medical conditions, it is possible that this new oversight will foster innovation. Biomedical companies can be disincentivized from developing tests in certain areas, given competition from unregulated manufacturers of LDTs. A similar issue surfaced in 1962, when drugs were first subjected to an efficacy requirement. Congress made the FDA retroactively review thousands of approved drug formulations, which some have argued helped clear the market of hundreds of ineffective drugs and created market space for new entrants. It is possible that this rule will produce a similar effect with regard to LDTs.
However, the benefits to innovation and public health may be blunted by 2 important exemptions: the health care system exemption and the preexisting exemption. These exemptions remove premarket review requirements and most quality-system requirements for LDTs that predate May 6, 2024, and for LDTs developed by academic health centers and used in-house for unmet patient needs.
The health care system exemption may stem from comments from groups like the American Medical Association, which wrote in a letter to the FDA that although the new rule supports the agency's broader goals, it would "cause significant upheaval" by requiring thousands of existing hospital-based tests to be validated. The exemption for preexisting LDTs may reflect a concern that the agency does not have the staff to review some 80 000 preexisting tests. Unfortunately, exempting vintage products has dampened the public health impact of other regulatory regimes. Without drawing too strong an analogy, one can see similar dynamics in the Tobacco Control Act, which exempted cigarettes, arguably the most deadly tobacco product on the US market. Preexisting LDTs can remain on the market, foreclose new entrants, and cause inaccurate results that damage public health.
A different problem is that the 4-year phaseout of enforcement discretion may run headlong into the political realities of a potential change of administration. The FDA experienced this problem when it asserted authority to regulate e-cigarettes in 2016 at the tail end of the Obama administration, only to see its e-cigarette oversight postponed by the Trump administration, during which time youth e-cigarette use surged. The Trump administration also withdrew the FDA's authority over LDTs.
The rule also has been attacked in the courts, and it is not clear whether it will survive. With the Supreme Court taking an increasingly aggressive approach to reviewing agency rules, including overruling the Chevron doctrine in June 2024, which protected agencies' expertise-based legal decisions from judicial intrusion, the risk is increased that a judge will invalidate the LDT rule. The most likely grounds would be that Congress did not clearly grant the FDA authority over clinical laboratory testing. Some buttress this claim by arguing that laboratory tests constitute professional services, not products, and point to the overlapping purview of the Clinical Laboratory Improvement Amendments (CLIA), a laboratory test regulatory framework managed by multiple agencies, including the FDA. However, the legal definition of a medical device, which includes any "instrument," "apparatus," or "reagent" for diagnosing disease, seems to clearly encompass LDTs. Many medical devices require skilled personnel to operate them, such as ultrasound machines and electrocardiograph electrodes; however, the FDA still regulates these devices. And as the FDA notes, CLIA does not require proof of clinical validity (ie, clinical accuracy), does not regulate certain aspects of manufacturing, and does not mandate adverse event reporting. In several respects, CLIA is narrower in scope than the FDA's oversight.
While we believe that the FDA is moving in the right direction as to the regulation of LDTs as medical devices, some view that regime as itself too lax. Experts have argued that "the vast majority of medical devices escape formal scrutiny of safety and efficacy" as a result of lowered evidentiary standards at the FDA and lenient programs that circumvent robust premarket consideration. In addition, the FDA's hope to fund the oversight of LDTs with user fees renews a perennial debate about the propriety of funding the FDA with industry dollars. Although regulating LDTs as devices risks importing these problems, given current congressional gridlock, the FDA rule constitutes a clever approach in a difficult climate.
Although the rollout of a long-anticipated LDT policy might not be easy, the FDA is attempting to rectify years of inaction, bring stability to the clinical testing market, guard the public from companies that are marketing dubious products, and ensure that biomedical companies have an incentive to innovate in the testing space without the threat of competition from unvetted products. However, the FDA's decision to exempt preexisting LDTs from key parts of the rule may blunt the overall public health impact.
Corresponding Author: Daniel G. Aaron, MD, JD, S.J. Quinney College of Law, University of Utah, 383 S. University St, Salt Lake City, UT 84112 ([email protected]).
Conflict of Interest Disclosures: Dr Cohen reported serving as chair of the ethics advisory board for Illumina, member of the Bayer Bioethics Council, and advisor to World Class Health and receiving compensation for speaking at events organized by Philips with the Washington Post and the Doctors Company; attending the Transformational Therapeutics Leadership Forum organized by Galen/Atlantica; and being retained as an expert in health privacy, reproductive technology, and gender-affirming care lawsuits. No other disclosures were reported.