Quality Requirements and Standards

May 6th 2024 will forever be etched into the history of regulation. It's the date that the FDA issued its Final Rule on Laboratory-Developed Tests (LDTs). This is the introduction to this momentous, some might say monstrous, occurrence.

It’s time to talk to your FDA about ED.

Enforcement Discretion and the new FDA rules on Laboratory-Developed Tests (LDTs)

May 2024
Sten Westgard, MS

Summer’s almost here and the worst beach read ever is upon us. It’s the 160-page Final Rule of the FDA on Laboratory-Developed Tests (LDTs), issued on May 6th, 2024. It promises an upheaval for laboratories across the country, as well as plenty of work for the lawyers and consultants who will help labs grapple with the new requirements.

While we plan to provide in-depth coverage of all the thrills and chills of these new regulations, we wanted to give a quick overview of the final rule.

Some phrases jump out in their use and frequency. “Enforcement discretion” appears 780 times throughout the document, while “general” (776) and “generally” (348) are also very popular.

 

[Sidenote: It’s too late to relitigate the issue. But let’s hold a quick wake anyway]

The reaction to the LDT regulations in the trade news and the journals has been all about bemoaning the passage of these new regulations, but the final rule was not a shock, as there was plenty of warning that this was going to happen. Particularly when CLIA vacated the field – stating it would not could not regulate LDTs – and the laboratory community long ago abdicated its responsibility by failing to set up any alternative self-governing system for LDTs, and the Congress failed to move forward any VALID act.

If the effective choice was between no additional regulation of LDTs or FDA regulation of LDTs, FDA was always going to choose the latter. If the current status quo allowed the likes of Theranos to commit fraud and endanger thousands of patients, there was really no other option but to bring new regulations to bear.
Will this impose new burdens and delays on the creation of new tests? Absolutely, the FDA does not deny this. The FDA believes, however, that more patients will be saved by providing new safeguards for LDTs, than harmed by the delay of those tests coming to market. In the history of automobiles, seat belts, airbags, antilock brakes, etc., have been opposed by the industry as being too expensive, too onerous, too impractical to implement. But in the end, we have come to believe that these safety features are a cost worth bearing. After we dry our tears, we will eventually come to accept that LDTs need the same level of scrutiny as other testing.

 

Congratulations, you’re a Manufacturer Now!

At the core of the regulatory argument lies the fact that diagnostic manufacturers were held to one standard, while laboratories were the benefit of “general enforcement discretion,” a polite term for a blind eye. If a manufacturer created an LDT, it had to submit to all the scrutiny of the FDA. A laboratory, up until 5/6/24, didn't have to expect any of that scrutiny.

The FDA has now declared that LDTs are being manufactured by laboratories and therefore they are subject to the same standards as diagnostic manufacturers.
Enforcement discretion is ending. The blind eye is no more.

 

There are Five Stages of Grief – and Five Stages of the ED Phase-Out

How will this end of ED play out? Let’s quote directly from the FDA rule here:

“Stage 1: beginning 1 year after the publication date of this final rule, FDA will expect compliance with MDR requirements, correction and removal reporting requirements, and QS requirements under § 820.198 (21 CFR 820.198) (complaint files);
"Stage 2: beginning 2 years after the publication date of this final rule, FDA will expect compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements;
"Stage 3: beginning 3 years after the publication date of this final rule, FDA will expect compliance with QS requirements under part 820 (21 CFR part 820) (other than requirements under § 820.198 (complaint files), which are already addressed in stage 1);
"Stage 4: beginning 3 1⁄2 years after the publication date of this final rule, FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review; and
"Stage 5: beginning 4 years after the publication date of this final rule, FDA will expect compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that require premarket submissions), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.”

This doesn’t quite clear things up, as each stage refers to a set of other regulatory rules and requirements, which we will have to cover in depth in future articles. But the gist is that the world isn’t ending today, but instead it will end over 4 years in 5 phases. Increasingly, laboratories will have to create documentation and policies and demonstrate performance, etc. culminating in a Premarket Review. At any point, however, the FDA reserves the right to crack down on an LDT that appears to be “violative” – a word I had not previously encountered. [violating or tending to violate or offend against. Offending or offensive] Basically, if you’ve got an LDT that’s getting a bad reputation, the FDA won’t wait 4 years to come down on you.

 

You’re not just a manufacturer, you might also be a Grandfather!

While the regulation itself only mentions “Grandfather” twice in the entire document, the FDA did carve out a significant safe zone for LDTs that were “on market” before May 6, 2024:

“FDA intends to exercise enforcement discretion and generally not enforce premarket review and QS requirements (except for requirements under part 820, subpart M (Records)) for currently marketed IVDs offered as LDTs that were first marketed prior to the date of issuance of this rule and that are not modified, or that are modified in certain limited ways…”

This doesn’t mean you’re going to be regulation-free, though. You’ll still have to developed the labelling, complaint monitoring, etc., and submit that to the FDA. And if you make any significant modifications to the LDT after 5/6/24, you’re back in the trenches. And don't even think about getting violative...

There are a few additional exceptions. Again, to be precise, we’ll quote directly:

“FDA generally does not intend to enforce requirements under the FD&C Act and FDA’s regulations for ‘‘1976-Type LDTs’’ (as described in section V.B.1); Human Leukocyte Antigen(HLA) tests that are designed, manufactured, and used within a single laboratory certified under CLIA that meets the requirements to perform high-complexity histocompatibility testing when used in connection with organ, stem cell, and tissue transplantation to perform HLA allele typing, for HLA antibody screening and monitoring, or for conducting real and ‘‘virtual’’ HLA crossmatch tests; and tests intended solely for forensic (law enforcement)purposes (88 FR 68006 at 68022).
"In addition, FDA considered comments received on the proposed phaseout policy and, based in part on those comments, made various changes to the phaseout policy, which include the addition of the following enforcement discretion policies:
"• FDA intends to exercise enforcement discretion and generally not enforce requirements for LDTs manufactured and performed within the Veterans Health Administration (VHA) or the Department of Defense (DoD);
"• FDA intends to exercise enforcement discretion and generally not enforce premarket review requirements for LDTs approved by NYS CLEP;
"• FDA intends to exercise enforcement discretion and generally not enforce premarket review requirements and QS requirements (except for requirements under part 820, subpart M (Records))16 17 for LDTs manufactured and performed by a laboratory integrated within a healthcare system to meet an unmet need of patients receiving care within the same healthcare system;
….
"• FDA intends to exercise enforcement discretion and generally not enforce premarket review and QS requirements (except for requirements under part 820, subpart M (Records)) for non-molecular antisera LDTs for rare red blood cell (RBC) antigens where such tests are manufactured and performed in blood establishments, including transfusion services and immunohematology laboratories and where there is no alternative available to meet the patient’s need for a compatible blood transfusion.”

Want to offer an LDT without falling under new FDA rules? Like Michael Buble, you need some patient needs, that “I just haven’t met you yet!”

One clear escape hatch from the new FDA regulation is the “unmet need” of a patient. If you can prove the LDT you’re offering is one that hasn’t been addressed by the greater diagnostic market, you have a relatively regulation-lite future.

“Specifically, FDA intends to exercise enforcement discretion and generally not enforce premarket review and QS requirements (except for requirements under part 820, subpart M (Records)) for LDTs manufactured and performed by a laboratory integrated within a healthcare system to meet an unmet need of patients receiving care within the same healthcare system. FDA intends to phase out the general enforcement discretion approach for these LDTs with respect to all other applicable requirements consistent with the stages described in section V.C.”

But the FDA has a pretty narrow definition of “unmet”:

“FDA considers an LDT to be for an unmet need where there is no available FDA-authorized IVD that meets the patient’s needs. This may be because: (1) there is no FDA-authorized IVD for the disease or condition (for example, because it is for a rare disease or condition); (2) there is an FDA-authorized IVD for the disease or condition but it is not indicated for use on the patient, or a unique attribute needs to be added to the LDT to meet the patient’s needs; or (3) there is an FDA-authorized IVD but it is not available to the patient. Examples of LDTs for unmet needs [include]
…."• An LDT to accommodate an alternative specimen type that is infrequently tested when the specimen type required for the FDA-authorized IVD is not and cannot be made available (variation from the indications for use of an FDA-authorized IVD);
"• An LDT for use on pediatric patients when FDA-authorized IVDs are indicated for use on adults only (variation from the indications for use of an FDA-authorized IVD);
"• An LDT that generates results in a significantly shorter period (e.g., hours versus days) than an FDA-authorized IVD with the same indication where, due to the circumstances of the patient, the shorter time period to get results is critical for the clinical decision being made (unique attribute needed to be added to an FDA-authorized IVD);
"• An LDT for the same indication as an FDA-authorized IVD that is offered only in another healthcare system that is not accessible to the patient and the developing laboratory will not make the IVD available outside its system (FDA-authorized IVD is not available); and
"• An LDT for an emerging pathogen for which there is no FDA-authorized IVD and for which FDA has not identified an emergent situation (no FDA-authorized IVD).
In contrast, FDA does not consider an LDT to be for an unmet need when there is an available FDA-authorized IVD that would sufficiently meet the needs of the patient. For example, potential improvements in performance or lower cost in comparison to an FDA-authorized IVD that meets the patient’s needs does not fall within this policy.
….Notably, this unmet needs LDT policy applies only to LDTs that are validated.”

So there is a loophole for unmet needs, but it’s neither as broad nor as deep as labs might have hoped for.

Comments and criticisms make up the remainder of the new rules. While the first 30 pages detail new regulations, the subsequent 130 pages discuss and dissect the various comments, objections, and lamentations offered by the laboratory community, which numbered in the thousands. As we said earlier, discussing why the rule should not have been put in place is no longer a productive argument. We have the rules now, it’s best to focus on how to deal with them.

Stay tuned, for more discussion, and the prospect of more ups and downs if a viable pathway to overturning these new rules emerges. Lawsuits are expected. The Congress may suddenly decide to act. Stranger things have happened.

A footnote

If it’s not obvious, we here at Westgard are pro-Quality, which in some circumstances means we are pro-regulation. We would have made the same choice that the FDA just made. That doesn’t mean we aren’t relentlessly critical of poor regulation (recall our criticism of the CLIA “eqc options” and the current “IQCP” ridiculousness). We have excoriated CLIA and CMS whenever they make mistakes. We intend to hold the FDA to the same standard.