FDA Proposes New Rule to Regulate LDTs as IVDs: Here’s What’s at Stake

On October 3, 2023, the Food and Drug Administration (FDA) published a proposed rule seeking to amend FDA’s regulations to bring Laboratory Developed Tests (LDTs) under the same regulatory umbrella as in vitro diagnostic (IVD) devices.

This is a huge development that has been a long time coming, and I want to walk through what’s happening, why it’s happening, and what it means for the makers of LDTs going forward.

What are Lab Developed Tests and are they different from IVDs?

Here’s how FDA defines in vitro diagnostics:

In vitro diagnostic products are those reagents, instruments, and systems intended for use in diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae. Such products are intended for use in the collection, preparation, and examination of specimens taken from the human body.

IVDs are defined as “devices” and, like other medical devices, must comply with premarket and postmarket controls and are subject to FDA enforcement. 

Laboratory Developed Tests, to a certain degree, can be considered a subset of IVDs. The difference between LDTs and IVDs, from a regulatory standpoint, is who manufactures them. 

IVDs are produced by device manufacturers that must comply with the premarket and postmarket controls I mentioned earlier. 

LDTs, on the other hand, are manufactured by laboratories and fall under the jurisdiction of the Center for Medicare & Medicaid Services (CMS). They currently are not subject to the same regulations as IVDs. Instead, they are subject to the Clinical Laboratory Improvement Amendments (CLIA). 

This has been the case for several decades now, and the reason for the differing regulatory frameworks for the same type of products stems from how LDTs were originally used. In the ‘70s and ‘80s, when the current regulatory framework was being created, LDTs were typically low-risk, low-volume, and used for a local patient population. That’s why FDA has traditionally exercised what it refers to as “enforcement discretion” over LDTs, essentially carving out an exemption for IVDs developed in laboratories. 

Now, FDA wants to change that. The proposed rule would end that enforcement discretion and bring LDTs under the same regulatory umbrella as the rest of the IVDs on the market. 

Why is FDA proposing this change to LDTs now?

As I alluded to earlier, while this is a big change, it’s not an entirely shocking one. Bringing LDTs into FDA’s regulatory fold has been on the table for years now. The agency may have hoped that Congress would take action, but the VALID Act—a bipartisan act which would have brought both LDTs and IVDs under a single, diagnostic-specific regulatory framework and give FDA explicit authority to regulate LDTs—has been languishing in the capitol since 2020. 

In the meantime, FDA has been amassing evidence regarding the effect of LDTs on patient safety. The agency has laid out its arguments over several pages of the proposed rule, and I’d encourage you to read through them carefully. 

Here’s the gist of it:

• The LDT landscape has changed. LDTs are no longer limited to low-risk, low-volume, products used for a local population. Labs can now accept specimens for testing from across the country, often perform large volumes of tests, and use LDTs for higher-risk testing that guides a broad range of critical healthcare decisions.

• FDA also cites troubling and shockingly high rates of false negatives and false positives in high-risk LDTs, such as those screening for cancer and helping determine cancer treatment. Insufficient clinical validation is also called out as a problem, and the agency believes these problems and their harmful effects on patients are worsening. 

• FDA additionally states that, as a result of the enforcement discretion on the FDA’s part, there is now an unofficial “alternative pathway to market” whereby tests are launched as LDTs to get around IVD regulations. FDA points out that this places IVD manufacturers at a competitive disadvantage and believes this discourages innovation on the part of IVD manufacturers.

Those in the IVD and LDT community will likely point out that these examples are anecdotal and not indicative of a wider problem in the industry, but FDA clearly disagrees, and sees the proliferation of LDTs as a threat to patient safety.

Some commentators have suggested that reform to CLIA could accomplish the same goal for a fraction of the price. However, FDA points out that this would mean two different agencies are in charge of the same products and would create a confusing and complex regulatory scheme. 

What is FDA proposing to change, and when will it happen?

The agency proposes to amend the definition of “in vitro diagnostic products” to state that IVDs are devices under the FD&C Act “including when the manufacturer of these products is a laboratory.”

The agency seems to recognize the magnitude of this change and has proposed a four-year schedule for ending its enforcement discretion for LDTs. The goal here is to avoid “undue disruption” in the testing market. 

Whether that goal will be achieved is up for debate, but FDA’s proposed timeline looks like this:

• Stage 1: End the general enforcement discretion approach with respect to MDR (Medical Device Reporting) requirements and correction and removal reporting requirements 1 year after FDA publishes a final phaseout policy, which FDA intends to issue in the preamble of the final rule.

• Stage 2: End the general enforcement discretion approach with respect to requirements other than MDR, correction and removal reporting, QS (Quality System), and premarket review requirements 2 years after FDA publishes a final phaseout policy.

• Stage 3: End the general enforcement discretion approach with respect to QS requirements 3 years after FDA publishes a final phaseout policy.

• Stage 4: End the general enforcement discretion approach with respect to premarket review requirements for high-risk IVDs 3 1/2 years after FDA publishes a final phaseout policy, but not before October 1, 2027.

• Stage 5: End the general enforcement discretion approach with respect to premarket review requirements for moderate risk and low risk IVDs (that require premarket submissions) 4 years after FDA publishes a final phaseout policy, but not before April 1, 2028.

Remember, this is still a proposed rule and you have until December 4, 2023 to submit a formal comment. In fact, at some points, FDA explicitly calls for such comments on issues such as a “grandfathering” provision for some LDTs, a longer phaseout period for LDTs from smaller labs, and continuing enforcement discretion for LDTs in Academic Medical Centers (AMCs).

It’s interesting to note that FDA repeatedly asks what the “public health rationale” for these arguments would be—indicating they want answers on those terms. 

What does this mean for labs making LDTs going forward?

While it’s not absolutely certain that this rule will be finalized, if you’re a laboratory making LDTs, it would be prudent to prepare for this change ahead of time.

That means keeping a pulse on updates from FDA and/or Congress regarding changes to LDT enforcement, but it also means thinking about some basic questions regarding your operations. Questions like:

• What will our new regulatory requirements be if FDA does begin regulating us as IVD manufacturers? 

• How will we meet the Quality System requirements that differ from how we currently  operate our quality system?

• How will we establish and maintain design controls and risk management for our product?

We can’t predict exactly what’s going to happen in the LDT space in the next few years, but it does seem probable that there will be some type of new regulatory enforcement within the industry, and this proposed rule has set out the FDA’s position on the matter. 

The ball is in motion. Now is the time to make sure you’re ready for the changes when they happen.

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Change is always scary, but it doesn’t have to be a threat to your business. If you’re worried about the impending regulatory oversight of your LDTs, know that there’s a MedTech-specific QMS solution that provides the software and support you need to stay compliant and audit-ready at all times. 

Our Design Control workflow allows you to document, track, and trace all aspects of your design controls and easily maintain a living design history file (DHF). Even better, it includes intuitive connections with our Risk Management workspace—meaning you can seamlessly integrate risk management into your design controls for effortless compliance.

Want to learn more about how we can help prepare you for FDA regulations? Get your free demo of Greenlight Guru Quality today!