Stepped Up Regulation of Lab-Developed Tests Has Products Liability Implications

Courtney A. Stevens, Esq. | Senior Attorney, Medmarc Loss Control

Significant advances in science, and particularly in genomic medicine, have catapulted lab-developed tests (LDTs)–diagnostic tests designed, manufactured, and used in the same laboratory–past the benign uses they fulfilled decades ago. When LDTs were used with relative infrequency and often for a crucial segment typically neglected by in vitro diagnostic (IVD) manufacturers–namely, rare diseases–they received lax oversight from the FDA under what the Agency deems its “enforcement discretion.”

Now though, in the wake of well-publicized disasters like Theranos and the realities of both (1) the huge cost incentives to use these “home brew” tests over FDA approved tests that can cost as much as ten or twenty times as much; and (2) the transformative effect of genomic testing advances which have meant LDTs are now employed to test everything from birth defects to ovarian cancer, the FDA has undertaken to significantly step up its oversight and require pre-market approval for many such LDTs.

According to the first of three draft guidance documents on the Agency issued on the subject in the last two years, Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs), it proposes a risks-based oversight strategy under which those tests the wrong result or interpretation of which would have the greatest implications for patient mortality or morbidity would receive the most stringent oversight and have to obtain pre-market approval prior to their use.

This stepped-up oversight isn’t merely burdensome to labs making LDTs; it has real products liability implications. For one thing, a company’s misstep with the FDA in the form of an enforcement action or inspection is often either an initial attractant or a catalyst for plaintiffs’ attorneys. Knowing that these kind of regulatory missteps are helpful at trial to paint a picture of a non-compliant, careless manufacturer, plaintiffs’ attorneys may seek grounds for suits after learning of a company’s FDA trouble.

Additionally, standards and regulations are useful to products liability plaintiffs in establishing a standard of care, one hurdle of a negligence case (the next being showing that the defendant deviated from that standard of care). The more detailed and complex the regulations, the easier it is to find some lapse in consistency with them.

LDT makers must be quick to recognize the burdens of their new regulatory environment and adapt accordingly. Quality assurance/regulatory affairs personnel should be hired or engaged as soon as possible to avoid regulatory and products liability consequences.


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