FDA Closes EUA Program to Lab-Developed Tests

The question of whether the FDA has the authority to regulate lab-developed tests (LDTs) boiled into plain view in August when the Department of Health and Human Services directed the agency to stand down on its regulation of LDTs. The predicament took another turn Oct. 7 when the FDA announced it would no longer review LDTs under the emergency use authorization (EUA) program, a change that was not well received in some quarters.

The HHS order to the FDA arrived with a reference to two executive orders from the Trump administration, but the notice also stated that developers of LDTs could voluntarily file for an EUA or a conventional premarket review. One of the more significant drawbacks described in the rescission order was that any LDTs that did not go through the FDA would not enjoy immunity from litigation under the Public Readiness and Emergency Preparedness (PREP) Act. At the time of the HHS announcement, however, there was no signal from the FDA that it would refuse to review LDT filings under the EUA program.

The FAQ page for testing stated, “we are currently in a different phase of the pandemic with respect to tests than we were previously, where many COVID-19 tests are now authorized to be run in labs.” The update states that the agency is prioritizing review of EUA requests for considerations such as public health need and availability of the product.

Among the priorities cited by the FDA are testing that would increase accessibility, such as point-of-care tests and home collection test kits, and tests that consume relatively few supplies. The statement said the FDA was declining to review EUA requests for LDTs “at this time,” suggesting the policy can be reversed if circumstances dictate.

Three members of the House of Representatives took the news as a negative, casting the FDA’s decision as “a grave mistake” that was prompted by officials at HHS. The letter described the change as reckless and as increasing the risk of false negative test results. Another concern voiced by Reps. Anna Eshoo (D-Calif.), Frank Pallone (D-N.J.) and Diana DeGette (D-Colo.) was the abruptness of the announcement, which did not allow the FDA to make changes to previously posted policy announcements.

The American Clinical Laboratory Association (ACLA) provided a brief Oct. 7 statement, making the argument that many of the LDTs that have been granted EUAs are known for reducing the reliance on supplies and for increasing testing capacity. ACLA President Julie Khani said these “are exactly the kinds of tests the FDA has stated it wants to prioritize,” adding that the FDA should continue to review LDTs under the EUA program. Khani also said the announcement “creates unnecessary confusion.”

CMS Cracking Down on CLIA Certification

Two days after the FDA announced its change in policy for LDTs, the Centers for Medicare & Medicaid Services announced it is targeting clinical laboratories that have lapsed certifications or are conducting tests not included in their certifications. The agency directed these labs to immediately cease any violative testing, although no enforcement action was spelled out in the statement.

The CMS said it has issued 171 cease and desist letters to labs since Aug. 12, 66% of which were for labs that were conducting tests that fell outside their certifications under the Clinical Laboratory Improvement Amendments (CLIA) Act. The other 34% were conducting tests with no CLIA certification at all, and recipients of the CMS letters were required to certify that they had desisted from the violative testing activity. The agency indicated that it had offered labs an expedited review process early in the COVID-19 pandemic, but said there is concern that these labs’ operations could lead to errant tests that would worsen the pandemic. However, the letters were sent with instructions on how to amend the oversights, assuming the recipient lab is interested in resuming the violative testing protocols.

HHS Orders FDA to Stand Down on LDTs

The Department of Health and Human Services issued an Aug. 19 rescission order to the FDA directing the agency to cease requiring any premarket reviews for lab-developed tests (LDTs), a change the administration said is consistent with two executive orders (EOs). The order mentions the COVID-19 pandemic, but seems intended to endure beyond the existing declaration of public health emergency.

The question of the FDA’s statutory authority to regulate LDTs has dated back at least as far as the early 1990s. In 2006, the Washington Legal Foundation (WLF) resurrected the question in a citizen’s petition that makes reference to a similar petition filed in 1992. According to the 2006 petition, the FDA waited six years to respond to the earlier petition, and WLF cited “an urgent need for FDA to comply with the Administrative Procedures Act (APA). The APA is also a timely theme, given the Department of Justice’s recent public pronouncement about whether the underlying statute is in need of a legislative update.

The HHS announcement states that the FDA is not authorized to require premarket review of any sort for LDTs absent the use of the rulemaking process. This would supplant the FDA’s use of guidances, immediately-in-effect policy declarations, and any other informal mechanisms. The notice advises, however, that LDTs practiced for testing for the COVID-19 pandemic will not enjoy immunity from product liability under the Public Readiness and Emergency Preparedness (PREP) Act without an emergency use authorization or submission of a regulatory filing under a conventional premarket review path.

At present, there are two competing legislative responses to the impasse making the rounds on Capitol Hill, such as H.R. 6102, the Verifying Leading-edge IVCT Development (VALID) Act of 2020, which has a companion bill in the Senate. While previous iterations of the VALID Act included language directed toward a pre-certification program that seemed to parallel the precert program for software as a medical device, this latest version describes a technology certification process that would ease the demands ordinarily imposed by FDA premarket review. Neither the House nor the Senate version has come up for a vote in committee, however.

Conversely, the Verified Innovation Testing in American Laboratories (VITAL) Act of 2020, sponsored by Sen. Rand Paul (R-Ky.), would place sole authority for LDT regulation under the Centers for Medicare & Medicaid Services. S. 3512 keys on laboratory staffing qualifications to ensure that tests are appropriately developed and conducted, but also has provisions related to the pandemic, such as a requirement that CMS update the related CLIA regulations to address future pandemics. This bill, too, has failed to gain enough traction to merit a vote in the committee of jurisdiction.

PTO Revisiting IPR Rules of Practice

The U.S. Patent and Trademark Office is considering an amendment to the rules of practice for several patent procedures as indicated by an entry at the electronic dashboard for the Office of Information and Regulatory Affairs at OMB. The entry is titled to reflect an examination of the rules of practice in trials before the Patent Trial and Appeal Board, the entity charged with handling inter partes reviews (IPRs). There is little additional information as to the nature of the proposed changes, however.

The IPR process has come under fairly constant fire in the years since passage of the America Invents Act, including in a 2017 article describing the process as “a patent killing field.” The authors of the article claimed that despite the numbers posted by the PTO, the IPR process proved substantially more hostile toward claims than litigation conducted in Article III courts.

The docket for this proposal lists four meetings, the first of which took place Aug. 4 with members of the Computer & Communications Industry Association. Included in the documents for that Aug. 4 meeting is a file by PTO suggesting that IPR institution rates have dropped from 87% in fiscal year 2013 to 56% to date in fiscal 2020. However, the sheer volume of petitions for IPRs rose from 220 in that first year to more than 1,500 three fiscal years later. The current total for FY 2020 is 854 petitions, 478 of which have been instituted.

PTO Eyes Prioritized Patents to Combat Covid-19

The FDA and other agencies at the U.S. Dept. of Health and Human Services have taken a number of measures to push back against the COVID-19 pandemic, but an agency at the Dept. of Commerce is also getting into the fight. The Patent and Trademark Office recently unveiled a prioritized patent examination pilot that will put COVID-fighting applications to the front of the queue, with a special emphasis on small and micro entities.

The May 8 PTO statement indicates that the agency will waive the fees ordinarily associated with priority patent applications, but also that these applications will be processed within six months, assuming the applicant responds to PTO queries promptly. PTO director Andrei Iancu said small businesses and independent inventors “are often the difference makers when it comes to cutting-edge technology,” but “are also in most need of assistance” as the pandemic wears on.

In the accompanying Federal Register notice, PTO said the scope of the program is limited to products that are subject to an FDA premarket review process, such as emergency use authorizations, premarket approvals and new drug applications. Biologics license applications are also within the scope of the program, but continuing original patent applications are apparently excluded. Filings must include no more than four independent claims and no more than 30 total claims. Multiple dependent claims are also out of consideration, and applicants that file for an extension for time to file a reply will lose their place in this expedited program.

FDA Resets Serology Test Policy for Pandemic

The FDA has maintained a steady pace of policy changes in connection with the COVID-19 pandemic, including a May 4 policy that calls on makers of some serological tests to file for an EUA for their tests. The change followed congressional criticism that many of these tests did not work as advertised, but also followed an extended period during which a large number of tests came to market and thus there was a less pressing need for a relaxed policy.

In an accompanying statement, the FDA said the original testing policy under the emergency use authorization program was borne of a need to provide sufficient regulatory flexibility to bring surveillance testing to the medical front lines. A number of serology tests have arrived with claims of FDA approval or authorization despite lacking such a regulatory acknowledgment, but other tests were shown to perform poorly despite otherwise avoiding the agency’s ire.

Consequently, commercial test developers have 10 days to file for authorization under the EUA program after notifying the agency of the results of test validation, or 10 days after the date of publication of the May 4 policy. High-complexity labs that develop their own tests must still forward validation data to the agency, although they are not required to seek authorization via the EUA program. The FDA recommends they do seek inclusion in the EUA listing, however.

The testing policy was updated again May 9 with the news that the first antigen test for the SARS-CoV-2 virus had gained a place in the EUA policy, and the FDA said more such tests will soon be thus authorized. The anticipation regarding antigen testing is that it will rapidly increase the total volume of tests made to the American public, a critical piece in the effort to bring the pandemic under control. However, the agency advised that antigen testing is even more prone to false negatives than molecular testing for viral RNA, and a negative result for an antigen test may have to be checked by a molecular test – usually a polymerase chain reaction (PCR) test – prior to any clinical decision-making.

Still, the FDA noted that antigen tests are less expensive to deploy than PCR tests and usually provide more rapid turn-around. Antigen tests may boost overall testing capacity by millions per day, but the FDA noted that these are intended as diagnostic tests even as the agency noted that they may also aid in the effort to “identify infection rates closer to real time.”

EMA Proposes Delay of MDR Implementation

As the world grapples with the newest version of the coronavirus, regulatory agencies across the globe are reacting with a number of moves, mostly to relax existing regulatory requirements. In contrast, the European Medicines Agency is considering a delay in the implementation date of the as-yet unimplemented Medical Device Regulations, a change that would ease device makers’ concerns on several fronts.

MedTech Europe had posted a plea for a delay from the implementation date, originally set for May 26, 2020, citing the need to address the COVID-19 pandemic. However, device makers were already wary of the practicalities of that original implementation date, largely because of the difficulty in enlisting a sufficient number of notified bodies. The association’s plea was seconded by a range of members of the European Parliament, who made the case that the priority should be device availability until the pandemic becomes manageable.

The proposal to delay implementation for a year was announced March 25, with the acknowledgement that the notion would have to clear the European Parliament. MedTech Europe lent the development its full-throated support, stating March 25 that this change would allow industry to maintain the pressure on the pandemic. Nonetheless, MedTech Europe made the argument that a similar delay is called for in connection with the In Vitro Diagnostic Regulation as well, given the demands of the pandemic on the testing capacity in the EU member states.

Congress Pressing FDA on Serological Testing

The FDA has granted emergency use authorization to a number of diagnostics for the SARS-CoV-2 virus, but until recently, those have all been molecular tests conducted with polymerase chain reaction methods. That approach has drawn the interest of at least one member of Congress, who is urging the FDA to take a more active role in ensuring that serological testing becomes more widely available.

Rep. Diana DeGette (D-Colo.), who is a member of several subcommittees of the House Energy and Commerce Committee, said in an April 10 statement that she had previously made known her views on serological testing to several senior Trump administration officials. She said serological testing for antibodies will prove crucial in returning the country to more routine economic activity, and urged FDA commissioner Stephen Hahn to press the case for serological testing with President Trump. Specifically, DeGette recommended that Hahn suggest the use of the Defense Production Act to boost production of the equipment and supplies needed for serological testing, which would allow those who have already been exposed and have recovered to return to work without incurring any undue hazard.

DeGette may or may not be concerned about the FDA’s stance on the question of false positives associated with serological testing, but the agency said in an April 7 statement that it has been in contact with more than 70 test developers about serological tests. The statement, attributed to Hahn, acknowledges the role that serological tests will play in the months ahead, but also points to concerns about false claims regarding FDA approval or emergency authorization.

Whether the FDA has sufficient data to back the use of serological testing as a population-level surveillance strategy is not entirely clear, but it has an ally in that effort in the form of the National Institutes of Health. NIH said in an April 10 statement that it will commence with a study of the presence of antibodies for SARS-CoV-2 in those who have had no prior confirmed diagnosis, but there is a question of how quickly these data will become available.

According to the NIH, the study will enroll as many as 10,000 subjects who will be consented via telephone, although enrollment is limited to those aged 18 years and older. The study will tests for two immunoglobulins via enzyme-linked immunosorbent assay, and enrollees can handle the blood draw via a home collection kit. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the study should shed light on the “true magnitude of the COVID-19 pandemic” by characterizing the rate of non-diagnosed illness.

The registration of this study at clinicaltrials.gov indicates that enrollment may be completed with as few as 1,000 patients despite the ten-fold higher number noted in the NIH press release. Whether the final enrollment volume will be closer to the lower or upper stated enrollment targets will not be clear for some time, as the estimated primary completion date is March 31, 2022, the same date as the projected full study completion date.

FDA Reacts to Coronavirus as Stimulus Bill Passes

The FDA is scrambling to meet the demands imposed by the COVID-19 outbreak, including a series of guidances dealing with a variety of issues. However, the predicament has also prompted two pieces of legislation, one an economic stimulus package and the other a bill that would tie the FDA’s hands where regulation of lab-developed tests is concerned.

After considerable wrangling, the U.S. Senate and the House of Representatives sent the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, or H.R. 748) to the Oval Office, which President Trump signed into law March 27. This was the latest – but perhaps not the last – of legislative packages to offset the damage done by the SARS-CoV-2 virus.

The FDA has ramped up a series of guidance documents to deal with the pandemic. One of the earliest policy documents was a Feb. 29 guidance by the FDA’s device center, which the agency updated March 16 to give the states more leeway to ramp up testing. The pandemic was widely seen as potentially crimping ongoing clinical trials, leading the FDA to post a guidance to deal with such concerns. In a March 18 statement, the agency acknowledged that protocol deviations may be unavoidable, and that study protocols may thus have to be amended. One of the related changes the FDA will allow is the use of telemedicine for some patient follow-up appointments.

Another piece of the regulatory puzzle for coronavirus in the U.S. is the FDA’s enforcement policy for ventilators and other respiratory devices. This policy guidance spells out the conditions under which product labels and device functionality of ventilators and other respiratory devices would not be subject to the usual enforcement standards. The emphasis here, the agency said, is to allow manufacturers to add production lines to existing sites and to allow manufacturing at alternate sites. Among the 13 product codes listed within the scope of the document are those for oxygen conservers and anesthesia gas machines.

The agency’s device center has routinely updated a coronavirus FAQ for diagnostic testing, including updates on swabbing procedures and sites that would be acceptable for testing. In a March 23 statement, the FDA made note of a concern that the SARS-CoV-2 virus could be passed along during fecal microbiota transplantation procedures. There is also some concern that cancer patients may be at greater risk of contracting COVID-19 due to compromise of their immune systems.

The FDA also took action on respirator masks in a March 27 statement to the CDC, which authorizes the use of all disposable filtering facepiece respirators that have been approved by the National Institute for Occupational Safety and Health. The scope of this policy includes NIOSH-approved respirators that have passed product expiry, assuming these items are not damaged and have been stored in the appropriate conditions. Two days earlier, the FDA dropped an enforcement policy document for the use of face and respirator masks, which includes some conditions for reprocessing of these items.

Bill Would Ban FDA Regulation of LDTs

Sen. Rand Paul (R-Ky.) has drafted a bill that would disallow FDA regulation of lab-developed tests, at least in part a reaction to the agency’s laggardly response to the SARS-CoV-2 virus. Paul said in a March 18 statement that S. 3512 would remove “unnecessary government barriers that have drastically slowed the response to the COVID-19 outbreak. The Verified Innovative Testing in American Laboratories (VITAL) Act of 2020 would affirm that the Public Health Service Act “governs all aspects” of lab-developed testing procedures, according to the associated fact sheet.

The bill states that “all aspects of a laboratory-developed testing procedures shall be regulated” under Section 353 of the Public Health Service Act, and that “no aspects of laboratory-developed testing procedures shall be regulated under the Federal Food, Drug, and Cosmetic Act.” This would apply during public health emergencies as well as during periods of normal activity.

Paul’s bill comes shortly after two members of the House of Representatives resurrected the Verifying Accurate, Leading-edge IVCT Development (VALID) Act, which has been modified from previous iterations to address the COVID-19 outbreak. Reps. Diana DeGette (D-Colo.) and Larry Bucshon (R-Ind.) said their legislation would create a new product category for diagnostic and lab tests, but they also point to the need to allow labs to respond quickly to public health crises. The bill would allow developers to electronically file their tests for FDA review.

There is a companion bill for the VALID Act in the Senate, but there is also some question as to whether either of these bills will pick up any traction this year, given the impact of the coronavirus on congressional schedules. It might be noted that discussions regarding the fiscal 2021 budget have been displaced by the COVID-19 outbreak at least for the time being, and that the upcoming election is likely to bring a halt to routine legislative activity by the end of August.

Congress Sets Aside $8.3 Billion for Coronavirus

The U.S. federal government’s response to the COVID-19 outbreak has been criticized in some quarters as laggardly, but Congress sent a supplemental spending package to the White House in early March to address the disease. The package provides $8.3 billion to combat the coronavirus disease 2019 (COVID-19), which would expand telehealth and give the FDA $61 million to deal with the virus.

The bill, passed March 4 by the House of Representatives and signed March 6 by President Donald Trump, provides $7.8 in discretionary spending along with another $500 million in reallocated mandatory funds. A breakdown provided by the Congressional Budget Office confirms that the FDA would receive $61 million, an amount that comes with no expiration date. Some of the other funds are limited in term, although the spend-by date for most of these funds is Sept. 30, 2023, giving the related agencies ample time to make use of the monies.

Telehealth will receive a considerable boost under the terms of the House bill, with $490 million allocated over the current and next two fiscal years. The CBO document notes that this set of funds appears as authorizing legislation rather than appropriations legislation, although this spending would not be subject to the usual pay-go spending rules. CMS announced March 17 a set of guidelines for the use of telehealth under the newly expanded authorities.

The COVID-19 outbreak has prompted the FDA to issue an immediately-in-effect guidance for testing, which gives labs 15 days to notify the agency of the use of a test upon validation. In an accompanying statement, FDA commissioner Stephen Hahn said the policy “strikes the right balance,” given the urgency of the matter, and that the FDA will follow up with a “critical independent review” of any tests conducted under the emergency use authorization (EUA) program. That policy was updated March 16 to allow state governments to oversee labs in their states, and to allow for the use of serological tests despite concerns about elevated rates of false negative results.

The Centers for Medicare & Medicaid Services said it has approved a second code under the Healthcare Common Procedure Coding System (HCPCS) for the test for filing claims. The agency said in a March 5 statement that HCPCS code U0002 will handle tests conducted at non-CDC labs, while the previously announced code, U0001, is used for testing handled by CDC labs.

New LDT Regulation Bill Emerges

The FDA has made clear its interest in regulating lab-developed tests for decades, but that interest has not always translated into a practicable regulatory regime. That may all change sometime over the next two years thanks to a revised version of the Verifying Accurate, Leading Edge IVCT Development (VALID) Act, which Reps. Larry Bucshon (R-Ind.) and Diana DeGette recently unveiled.

The March 5 statement by Degette and Bucshon, the authors of the previous version of the VALID Act, states that the bill would enable precision medicine and give the FDA more leeway to make use of the EUA mechanism to speed test development in crises. A companion bill is also underway in the Senate, suggesting that passage is of both bicameral and bipartisan interest.

The legislation offers express preemption over state law, although it is not clear whether this would be similar to the preemption already in existence for non-diagnostic PMA devices where state liability law is concerned. One of the key questions for this legislation – as well as any legislation dealing with the FDA’s software precertification program – is the question of timing. Much of this type of legislation is typically handled via the legislation authorizing new FDA user fee agreements, but the next agreement will not need passage until 2022.

The common run of things for promulgation of new regulations is a minimum of six months for the posting of a draft regulation and the associated feedback, although an entirely new regulatory framework might consume a year. The process for development of enacting guidance would likely add to that.

Whether Congress can get past its institutional tensions and the suite of distractions long enough to pass the VALID Act before the end of CY 2020 is anyone’s guess, but the upcoming elections suggest that this bill will have to move to the Oval Office before the August congressional recess unless stakeholders are on board with the bill as is. However, the American Clinical Laboratory Association has made the demand that any legislation make a distinction between lab-developed tests and in vitro diagnostics, a position that is almost certain to be opposed by other trade associations and by the FDA, both of which have made the case for a level playing field between the two.

Glaxo Draws Support in Petition for Cert

GlaxoSmithKline LLC of London has filed a petition for cert with the Supreme Court over an attempt by the state of Louisiana to sue the drugmaker separately over allegations the company thwarted the availability of generic versions of a sinus medication. At stake is the question of whether the Eleventh Amendment allows states to work a legal end-around of the outcome of class actions in federal courts, even when the state in question benefited by the class action.

The State of Louisiana had declined to opt out of a federal class action against Glaxo, which revolved around the issue of the company’s alleged interference with the FDA’s efforts to approve a generic version of Flonase. In 2013, the company arrived at a settlement with private and indirect purchasers in the amount of $150 million, but Louisiana’s attorney general filed a suit over the matter the following year.

The State of Louisiana had received a notice of the outcome in 2013 as stipulated by the Class Action Fairness Act (CAFA), but did not receive the notice of settlement approved by the U.S. District Court for the Eastern District of Pennsylvania. In its decision on the matter, the District had purportedly enjoined all states, including Louisiana, from taking further action on the matter, but the Louisiana attorney general successfully argued that the Eleventh Amendment does not allow states to be bound to a class action. The case then moved from the district court to the U.S. Court of Appeals for the Third Circuit, which arrived at essentially the same determination. In its Dec. 22, 2017, decision, the three-judge panel at the Third Circuit said the state did not waive its sovereign immunity merely by its receipt of the CAFA notice.

This isn’t the first time Glaxo Louisiana have tangled. The two settled for $45 million in 2013 over allegations the company had illicitly marketed and/or promoted several drugs for a number of indications, including Avandia and Wellbutrin. This settlement was a separate conclusion to the cases filed jointly by a number of other states, and followed a $3 billion settlement with the federal government the previous year, in part for promotion of off-label use.

Glaxo petitioned the Supreme Court for cert after the Third Circuit declined to grant an en banc hearing, stating in the July 6 petition that states have not enjoyed sovereign immunity “when they are aligned as plaintiffs.” The company stated also that the outcome flies against the 1985 Supreme Court decision in Phillips Petroleum Co. v. Shutts, which provided for the legal use of opt-out class actions. Glaxo said the opt-out class action would be rendered “categorically unconstitutional” by the Third Circuit’s decision.

As it turns out, Glaxo has company in making those arguments. The Washington Legal Foundation has filed an amicus brief, and said in an accompanying statement that Louisiana’s lawsuit was a copycat lawsuit, adding that the Eleventh Amendment applies only to lawsuits filed against a state rather than in response to a lawsuit filed by the state. The Pharmaceutical Research and Manufacturers of America also weighed in, stating that Louisiana “did not somehow become a defendant at any point,” and that a constitutionally sufficient notice of class action eliminates any form of immunity from a plaintiff-side position. The association further stated that absent any textual or historical indications to the contrary, “there is simply no warrant for this Court or the Third Circuit to simply make such rules up.”

Technical assistance or radical overhaul?

Despite its hiatus from the headlines, the question of FDA regulation of lab-developed tests never quite went away, and is now topical again thanks to a technical assistance document recently published by the agency. The proposal has its critics, but Congress might soon act on the question if some stakeholders have their say.

The Aug. 8 technical assistance refers to the notion of a pre-certification program akin to the digital health pre-cert program, but FDA commissioner Scott Gottlieb had already said the pre-cert concept could be applied to LDTs, so such a provision hardly comes across as any surprise. There is a provision in the FDA approach, however, for the use of for-cause inspections when adulteration or misbranding is suspected, and ultimately this document may prove significant if the Diagnostic Accuracy and Innovation Act of 2017 gathers sufficient momentum to reach the House floor in the remaining weeks of 2018.

Among the supporters of the FDA framework is the diagnostic arm of the Advanced Medical Technology Association, which said in an Aug. 8 statement that the FDA document “is an important and necessary next step” in providing a statutory framework for LDT regulation. Perhaps less expected is the support of the American Clinical Lab Association, which had previously expressed skepticism regarding FDA regulation of LDTs.

Not everyone is so optimistic, however. An entry at the FDA Law Blog by Hyman, Phelps and McNamara points out that the FDA document would jettison the existing lexicon for premarket review of LDTs, to be replaced by “a whole new vocabulary.” Jeffrey Gibbs of Hyman Phelps said the novel regulatory mechanism of a test group is not functionally similar to that of the predicate device of 510(k) lore. Gibbs said the document would also seem to offer outside parties the opportunity to challenge the approval obtained by a test maker, an outcome he said the FDA “would not want.”

FDA Suspends LDT Regulation, But Liability Still in Play

After two years and seemingly endless sturm und drang, the FDA’s device center has announced it will suspend its proposed framework for regulation of lab-developed tests. The agency made it clear this is not the end of its interest in the matter, but Congress has an eye on this issue as well, which makes the outcome of all this activity difficult to forecast. If there is anything resembling certainty in all this, it may be that lab-developed tests will soon be subject to more liability under state tort law.

PMA Preemption Likely to Hold

The FDA said in its Nov. 18 announcement that the agency is aware of the importance of working with “stakeholders, our new administration, and Congress” to forge the appropriate approach to regulation of lab-developed tests (LDTs). However, the statement includes the remark that the FDA will publish an outline of what the agency sees as an appropriate risk-based paradigm for LDT regulation “in the near future,” which could be used to “help guide continued discussions” on the subject. Clearly, the FDA intends to stay in the game as this controversy evolves in 2017, although it is interesting to ask whether the agency would have pulled back on the draft had the presidential election yielded a different result.

The House Energy and Commerce Committee had floated a discussion draft of a new framework for regulation of LDTs in 2015, which calls for the establishment of a new center at FDA that would regulate these tests, and which would report to the FDA commissioner “in the same manner as the other agency centers.” This passage would seem to put LDTs on the same regulatory footing as therapeutic devices, which in turn would suggest a similar legal status where preemption of tort law for PMA devices is concerned. The draft also cited preemption with the statement that the states would not be allowed to sustain any existing or establish any new requirements for LDTs that would be “different from, or in addition to” the mandates set out in the discussion draft, a seemingly familiar passage that presumably would not pertain to tests cleared under the 510(k) program.

Regardless of how the preemption question evolves, there are a number of parties who have expressed concern about the potential for an LDT-specific regulatory regime to increase legal exposure. The American Society for Human Genetics said in a Feb. 2, 2015, letter to the FDA that the agency’s proposed LDT regulation framework would subject tests for genomic purposes “to the states’ strict product liability tort regimes.” The American Clinical Laboratory Association raised a similar set of concerns in a June 2013 citizen’s petition to the FDA requesting the agency scupper the LDT regulation effort.

Lawsuits Already a Risk

There have already been several liability cases for LDTs, including the wrongful birth case in the state of Washington that cost LabCorp – and the hospital where the test was conducted – a total of $50 million. LabCorp was on the receiving end of another lawsuit, Khadim v. LabCorp, a case the company managed by having itself identified in legal terms as a provider, which in Virginia limits the damages available to plaintiffs. It does not seem a stretch to imagine that provider status under state law would suffer in a formal federal regulatory environment.

There are other ways the FDA can boost its enforcement activities in this area, such as the issuance of a safety alert, a move that would lead to increased media scrutiny and possibly media coverage-driven lawsuits. There is one inescapable fact to consider, however: Modern medicine’s reliance on LDTs will continue to increase and grow increasingly visible, particularly as gene sequencing technologies become less expensive and more commonly used to determine a course of treatment that may or may not achieve the desired result.

Obviously there are several moving parts to this predicament, but the net effect is unavoidably that the stakes for makers of these tests will grow, regardless of how Congress, the FDA and the White House answer the LDT regulation question.