When Congress reconvenes in January, the lengthy docket of action items is expected to include proposed solutions to the years-long conundrum over how to regulate laboratory developed tests (LDTs).

The FDA touched off the issue in 2014 when it proposed regulating “high-risk” LDTs along the lines of Class III medical devices, through draft guidances friendlier to for-profit diagnostic developers than they were to nonprofit academic medical centers. Within a year, both sides responded with regulatory counterproposals, and by 2016 the agency ended its rulemaking attempt.

This year, a pair of bills addressing LDTs emerged in the U.S. Senate and House of Representatives. A bipartisan quartet of lawmakers in March proposed bringing LDTs and test kits under FDA oversight under a new category of “in vitro clinical tests” (IVCTs) through the Verifying Accurate and Leading-edge IVCT Development (VALID) Act. Sens. Michael Bennet (D-CO) and Richard Burr (R-NC) introduced the VALID Act in the Senate (S. 3404), while Reps. Larry Bucshon (R-IN) and Diana DeGette (D-CO) introduced the House version (H.R. 6102).

Bucshon and DeGette first drafted VALID in 2018, as a revision of a discussion draft bill— the Diagnostic Accuracy and Innovation Act (DAIA)—they co-wrote a year earlier with industry and stakeholder input.

“The VALID Act establishes a risk based regulatory framework that allows for leading edge development and innovation to thrive, while assuring doctors and patients that their test results are analytically and clinically valid,” Bucshon stated in March. “This will ensure that patients receive the most appropriate medical advice or treatment.”

Two weeks after VALID was introduced, Sen. Rand Paul, M.D. (R-KY) introduced a different measure—the Verified Innovative Testing in American Laboratories (VITAL) Act of 2020. The measure (S. 3512) would keep LDT oversight outside of the FDA by directing that “no aspects of lab-developed testing procedures shall be regulated under the Federal Food, Drug, and Cosmetic Act, including during a public health emergency.”

Instead, the VITAL Act would update federal lab standards under the Clinical Laboratory Improvement Amendments (CLIA), overseen by the U.S. Department of Health and Human Services (HHS)—through which LDTs would also be regulated under the Public Health Services Act, which gives HHS authority to respond to public health emergencies.

Most early SARS-CoV-2 tests flawed

In keeping LDTs from FDA oversight, the VITAL Act cited the agency’s initially slow response to expanding access to SARS-CoV-2 tests. HHS Secretary Alex M. Azar II declared COVID-19 a public health emergency on February 4, the same day the FDA issued the Centers for Disease Control and Prevention (CDC) an Emergency Use Authorization (EUA) for a three-reagent SARS-CoV-2 test kit later found to be defective due to a faulty reagent that produced a positive result with the negative control. The test design was modified for use with the other two reagents, the change authorized by the FDA, and the tests shipped out.

The FDA authorized only public health labs and Department of Defense labs to use the CDC test. The problems with CDC’s test became apparent shortly thereafter and touched off a delay of several weeks while numerous others labs scrambled to secure EUAs for their owns tests. The FDA on February 29 required that every test marketed to screen for or diagnose the disease, including LDTs, must first receive an EUA from the agency.

“As witnessed with the 2020 COVID-19 pandemic, undue regulation of laboratory-developed testing procedures may hamper the medical management and public health response to infectious disease outbreaks and pandemics, leading to delays in access to testing and the ability to meet needed capacity to stem community spread,” the VITAL Act bill states.

By March however, the FDA began allowing labs to bring a test to market immediately, as long as they applied for an EUA within 15 days.

“We thus put labs developing their own COVID-19 tests on the honor system and prioritized early access over independent confirmation of accuracy,” Jeffrey E. Shuren, M.D., J.D., and Timothy Stenzel, M.D., Ph.D., wrote in a commentary published September 9 in The New England Journal of Medicine. Shuren is director of the FDA’s Center for Devices and Radiological Health (CDRH), while Stenzel is director of the FDA’s Office of In Vitro Diagnostics and Radiological Health within CDRH.

“Although this approach resulted in earlier test availability, the EUA’s less-rigorous evidence standard, coupled with delayed FDA review, allowed the use of several LDTs that ultimately proved to have performance problems or to be poorly validated.”

Shuren and Stenzel analyzed 125 EUA requests from laboratories, identifying 82 with design or validation problems: “In the majority of cases, the FDA worked with the laboratories to correct the issues and permit continued testing.”

As of October 15, the FDA had approved 281 COVID-19 tests under EUAs—including 219 molecular tests, 56 antibody tests, and six antigen tests.

HHS weighs In

Five months later in August, HHS weighed in by directing the FDA to further limit its role in LDT regulation. The HHS directive said that the FDA could no longer require premarket review of LDTs except through notice-and-comment rulemaking, rather than less formal guidance documents or other sub-regulatory communications tools.

Test developers pursuing an EUA approval, or clearance for an LDT may still voluntarily submit EUA requests, premarket approval applications, or premarket notifications for review and decision by the FDA. However, users of LDTs bypassing premarket review or authorization would remain subject to regulation through CLIA and would not be covered under the Public Readiness and Emergency Preparedness Act (PREP) Act, which provides immunity from liability (except for non-willful misconduct) for claims of loss tied to manufacturing, distributing, administering, or using the tests.

HHS aligned its directive with White House efforts to fight COVID-19 “and to keeping duplicative regulations and unnecessary policies from interfering with those efforts.”

The focus by President Donald Trump’s administration on streamlining regulation explains why HHS weighed in: “HHS didn’t realize that FDA was going to interpret the declaration of a public health emergency as a directive to start regulating laboratory-developed tests,” says Roger D. Klein, M.D., J.D., chief medical officer of OmniSeq, a molecular diagnostic laboratory in Buffalo, NY, that spun out of Roswell Park Comprehensive Cancer Center.

“Nobody has demonstrated that there’s a need for this additional regulation,” adds Klein, the principal of an eponymous consultancy serving the clinical lab industry and other industries.

While FDA maintains that a laboratory that creates a test for its own patients is manufacturing a product that should be subject to regulation, Klein says, the laboratories have countered that their tests amount to services rather than products, and that no data has suggested a problem with laboratory testing generally, or with LDTs specifically.

“FDA regulation would impair patient access to tests, and basically freeze advancement in the field, because knowledge is changing so fast, particularly in molecular genetics and molecular diagnostics, that FDA can’t possibly keep up with it,” says Klein, who is also the former chair of the Solid Tumors Division of the Association for Molecular Pathology (AMP). “It would drive smaller labs, academic labs out of the field, because this is not an area that is a profit center for hospital labs. And the notion that they could afford to comply with the same sort of regulatory framework, even aside from the fact that there’s no evidence they should, is not feasible. I would call it quixotic.”

Challenging the FDA

However, Scott Gottlieb, M.D., who served as FDA Commissioner under President Donald Trump from May 2017 to April 2019, criticized the HHS directive in an August 22 Twitter thread as posing a potentially wider threat to the agency’s ability to carry out its mission.

“FDA’s ability to protect public health could be challenged,” Gottlieb tweeted. “FDA might not be able to provide critical advice to test developers or take needed enforcement actions against bad tests. After all, how can FDA take action over something HHS says it doesn’t regulate?

Test developers, Klein asserts, have long and steadily advocated for FDA regulation of lab-developed tests “in order to force laboratories to purchase their products, and in order to gain more sales, so that there’s a commercial interest by a powerful lobbying group of companies to eliminate what they perceive to be competition.”

An industry group representing test developers countered that its advocacy of legislation would benefit multiple stakeholders beyond test developers by eliminating uncertainty and clearing up the FDA’s role in test regulation, says Susan Van Meter, executive director of AdvaMedDx, the diagnostics manufacturers’ division of the Advanced Medical Technology Association (AdvaMed).

“From talking with a lot of the high complexity laboratories, with our members, and a lot of patient organizations, it just further reinforces how we need to have a legislative solution here and we need to provide that clarity on the authority, the FDA’s extended authority,” Van Meter says. “And, frankly, we’ve got to modernize the framework that has been developed.”

Modernizing the framework should include ensuring that IVD and LDT developers are subject to the same standard of test validation during the pandemic and beyond to protect patients and public health, AdvaMed president and CEO Scott Whitaker said in an August 20 statement.

‘Need for legislative reform’

The HHS directive, added to the need for new COVID-19 tests. The scramble by diagnostics developers and academic labs to develop tests, “from our perspective really underscores the need for legislative reform,” Liz Richardson, project director, Health Care Products, The Pew Charitable Trusts, tells Clinical OMICs.

Richardson says HHS’ directive not only complicated the fragmented system of regulating LDTs but could also lead to inaccurate COVID-19 tests entering the market.

“One risk is that more COVID tests that have not been properly designed or validated come to market now,” Richardson says. “FDA review did provide a valuable check on the quality of tests that were being marketed for that disease.”

It’s reasonable, Richardson says, for test developers and labs to raise the issue of regulatory red tape—a question she asserts the VALID Act can help resolve by ensuring flexibility and opportunity for innovation by developers, yet offering baseline assurance that the benefits of a given test outweigh its risks.

“The VALID Act is an important step forward in that conversation. There are still a lot of things to negotiate, but having that legislative reform would resolve these questions of FDA authority,” Richardson says.

In September, Pew recommended several changes to the VALID Act in a letter to its House and Senate sponsors. Among its recommendations:

• Narrow the categories of tests exempted from FDA premarket review, applying exemptions only where costs outweigh benefits to public health. As VALID is written, all tests now on the market would be exempt, and only about 5-10% of tests would be required to undergo premarket review.
• Phase in the measure’s new regulatory pathway allowing IVCT developers to certify multiple tests using a single technology without undergoing FDA review for each test, so long as the agency deems them within the same scope of approval. The FDA has estimated 40% of tests on the market would be eligible for tech certification.
• Strengthen FDA postmarket surveillance authority, and revise the Special Rule along the lines of past drafts, which allowed the agency to take action on tests deemed to potentially pose a risk to public health.
• Provide “adequate” resources for the FDA to effectively oversee LDTs, including Congressional appropriations beyond what the agency now receives, and user fees. The bill gives the FDA no additional funding, and requires it to issue guidances before collecting user fees.

“There’s no authorization of appropriations in the current draft the of VALID Act, and that raises real concerns about the agency’s ability to carry out all of the mandates they would have to carry out under the VALID act,” Richardson says.

European Approach

Klein says a better approach to regulating LDTs would be along the lines of the European Commission’s Article 59, in which the EC identifies and authorizes medical devices and PPE that may be sold without CE Marking during the public health emergency wrought by the pandemic. Market access is granted individually by each member state.

“In our country, we have created a very expensive, lengthy, and sometimes, in my view, overly rigorous—particularly on the clinical end—type of process, and it’s created an even greater need for laboratory developed tests because of the dearth of high-quality in vitro diagnostic test kits that have gone through approval,” Klein notes.

He says “smarter” regulation of those tests would do much to solve the problem.

“Lowering the bar to make it more like the EUA process is now for in vitro diagnostic test kits would be more helpful,” Klein adds. “If the FDA would focus particularly on known biomarkers, known genes, for example—if they would focus on reviewing the technical aspects of the test and make sure that the tests technically do what the manufacturer say they do—we can handle the rest. We don’t need the FDA to practice medicine for us.”

Klein, Richardson, and Van Meter agree that action was unlikely this year on any legislation concerning LDTs given the U.S. presidential election and other issues Congress faces— including the adoption of a budget for the current fiscal year.

Next year appears more likely to see action on some form of LDT legislation, they concur, though the shape it takes will hinge on who wins the White House and which parties control both houses of Congress.

“We’ve seen during COVID-19 that we need to understand what tests are out there, how they’ve been validated, and how they perform,” Van Meter of AdvaMedDx says. “You want to know, if you’re feeling unwell, that the molecular test you’re getting in a lab, that there’s been validation, that you can rely on it, and there’s information available about that test performance. You want to know that as a patient. And public health officials are trying to tamp down the spread of the virus; they really need to be able to rely on them too.”

That principle also holds, she said, for cancer and other diseases.

“I feel confident that we are going to secure comprehensive legislative reform. We really just think that this is a matter of time,” Van Meter adds. “There are too many public health issues that need to be addressed.”

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