On April 29, 2024, the Food and Drug Administration (FDA) released its highly anticipated final rule, Medical Devices; Laboratory Developed Tests. This rule is scheduled to be published in the Federal Register on May 6, 2024, and its policies will take effect on July 5, 2024.

This rule redefines in vitro diagnostic products (IVDs), including laboratory developed tests (LDTs), as medical devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act). This change will bring IVDs manufactured by laboratories under the same regulatory oversight as other medical devices, which includes compliance with requirements such as premarket review and quality system regulations.

Additionally, the FDA released two guidance documents to accompany the final rule. The first,  FDA: Laboratory Developed Tests, outlines the agency’s enforcement discretion policy for certain laboratories offering certain unauthorized IVDs for immediate response to emergent health situations, such as an infectious disease outbreak. The second, FDA: LDT Frequently Asked Questions, details the considerations that the FDA intends to evaluate when developing a policy regarding enforcement discretion for certain IVDs during a public health emergency declared under section 564 of the FD&C Act.

Specifically, the final rule:

• Updates FDA regulations to redefine IVDs, stating that IVDs are devices under the FD&C Act, including when they are produced by laboratories.
• Ends the FDA’s general enforcement discretion policy for LDTs and implements targeted enforcement discretion policies for specific types of IVDs manufactured by laboratories under certain conditions.
• Finalizes a modified phaseout structured into five stages over a four-year period, with increasing compliance expectations.
• Specifies that the scope of phaseout applies broadly to IVDs within laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) for high complexity testing and excludes tests for blood and tissue screening, emergency situations, and direct-to-consumer tests.
• Outlines specific enforcement discretion policies outlined for various categories of tests based on risk and other factors.
• Projects health and economic impacts from regulation of LDTs and evaluates benefits to patients, reduced spending, and decreased litigation costs resulting from regulation.
• Estimates annualized benefits ranging from $0.99 billion to $13.62 billion over a 20-year period, with annualized costs ranging from $566 million to $3.79 billion.

FDA AMENDS REGULATION TO DEFINE IVDS AS MEDICAL DEVICES UNDER THE FD&C ACT

The FDA is updating its regulations to clearly define that IVDs are considered devices under the FD&C Act, regardless of whether they are manufactured by a laboratory. This revision clarifies that the definition of a device does not vary based on the manufacturing entity, ensuring consistency and transparency for all stakeholders affected by changes to the FDA’s enforcement discretion approach for LDTs.

Additionally, the FDA is updating the statutory citation for the device definition in § 809.3 to align with recent legislative changes brought by the Safeguarding Therapeutics Act. This Act adjusted the formal definition of a “device” and introduced a new category for “counterfeit devices.” Despite public feedback on the Notice of Proposed Rulemaking (NPRM), the FDA has decided not to make further changes to these amendments.

FDA ENDS ENFORCEMENT DISCRETION FOR LDTS

Despite opposition, the FDA is ending its general enforcement discretion for LDTs. Critics argue that LDTs, due to their unique manufacturing processes, should not be subjected to the same regulatory framework as other IVDs. However, FDA assessments indicate that LDTs share similar materials, technologies, and purposes with other IVDs, challenging the notion of their inherent superiority.

According to the FDA, evidence, including reviews by the FDA and data from the New York State Department of Health, highlight significant issues with some LDTs, such as design flaws and inadequate validation, which question their reliability. The FDA’s move to phase out enforcement discretion is part of an effort to unify regulatory standards for all IVDs, aiming to ensure consistent safety and effectiveness across the board.

FDA MAKES ADJUSTMENTS TO PHASE OUT POLICIES IN RESPONSE TO PUBLIC FEEDBACK

In response to public feedback, the FDA is adjusting its proposed phase out policies to introduce more stringent compliance requirements for many IVDs while retaining flexibility through targeted enforcement discretion for specific, sensitive testing scenarios. This approach is designed to balance the need for regulatory oversight with the practical realities of test development and use in various healthcare and emergency contexts.

FDA Outlines 5-stage Phaseout Policy Across 4-year Period

The phaseout is structured into five stages over a four-year period, each focusing on different compliance expectations:

Stage 1 (Year 1): Compliance with Medical Device Reporting (MDR) requirements, correction and removal reporting requirements, and Quality System (QS) requirements concerning complaint files.

Stage 2 (Year 2): Compliance with registration and listing requirements, labeling requirements, and investigational use requirements.

Stage 3 (Year 3): Compliance with broader QS requirements.

Stage 4 (Year 3.5): Compliance with premarket review requirements for high-risk IVDs, with ongoing discretion during the review of pending submissions.

Stage 5 (Year 4): Compliance with premarket review requirements for moderate-risk and low-risk IVDs, again with ongoing discretion during the review of pending submissions.

SCOPE AND SPECIFIC ENFORCEMENT DISCRETION POLICIES

Recognizing the impact of its previous policies on the LDT market and their importance in healthcare, the FDA is introducing specific enforcement discretion policies. These are designed to preserve access to essential tests and accommodate the development of LDTs for unmet medical needs.

The FDA intends for LDTs to meet the required standards post-phaseout, with specific enforcement discretion policies still applicable under certain circumstances. These policies are not exhaustive, and additional discretion may apply based on the situation.

IVDs within the Phaseout Scope

The phaseout applies broadly to IVDs manufactured and used within laboratories certified under CLIA for high complexity testing, even if these do not fit the traditional definition of an LDT. This broad application is intended to ensure uniform compliance across all relevant IVDs, addressing past misunderstandings about the limited nature of FDA’s enforcement discretion.

IVDs outside the Phaseout Scope

• The phaseout does not include IVDs used for blood donor screening or human cells, tissues, and cellular and tissue-based products (HCT/P) donor screening, which are critical for preventing infectious diseases and incompatible transfusions. These tests must use FDA-authorized IVDs and are subject to stringent FDA oversight.
• Tests related to emergency or material threats declared under section 564 of the FD&C Act are also excluded. These situations pose significant risks, and the FDA expects compliance with applicable regulations due to the potential consequences of inaccurate test results.
• Direct-to-consumer tests are excluded due to the higher risks they present when used without professional healthcare oversight. The FDA emphasizes the need for strict regulation to ensure patient safety when tests are directly accessed by consumers.

Additional Considerations

• Tests intended for public health surveillance are distinct and not intended for clinical decision-making. Such tests are used for population-level health data analysis and are not impacted by the phaseout policy.
• The FDA has issued and will continue to issue guidance for certain tests in response to public health emergencies, such as COVID-19 and Mpox, and for immediate responses to chemical, biological, radiological, or nuclear threats.

Specific Enforcement Discretion Policies

The FDA plans to apply a policy of enforcement discretion concerning premarket review and many quality system requirements for specific types of IVDs. This includes:

• IVDs currently sold as LDTs that were available on the market before the publication of the final rule. The aim of this policy is to mitigate the potential for significant compliance costs leading to a reduction in the availability of essential IVDs, which many patients depend on.
• LDTs produced and used within a single healthcare system to address specific patient needs when no FDA-approved test exists. This policy is designed to ensure that patients continue to have access to crucial LDTs. It includes risk mitigation measures that can help labs detect issues with their tests and guide their proper use and interpretation.

Other specific enforcement discretion policies are outlined in the table below.

Category	Description	Justification for Enforcement Discretion
1976-Type LDTs	Characterized by manual techniques, use of legally marketed components, and confined operations within a single CLIA-certified laboratory.	Low-risk nature and reliance on skilled laboratory personnel justify ongoing enforcement discretion.
HLA Tests for Transplantation	Designed and used within a single laboratory for transplant-related purposes, subject to rapid modifications.	Urgent medical needs and robust oversight by programs like the OPTN justify continued discretion.
Forensic Tests	Used solely within law enforcement, benefiting from judicial safeguards that mitigate risk.	Judicial safeguards warrant ongoing discretion.
Department of Defense (DoD) and Veterans Health Administration (VHA) Tests	Cater to specific population needs within the DoD and VHA, underpinned by internal regulatory frameworks.	Internal regulatory frameworks reduce the necessity for additional FDA oversight.
NYS CLEP-Approved LDTs	For LDTs that have received either full or conditional approval from the New York State Clinical Laboratory Evaluation Program (NYS CLEP).	Rigorous evaluation by NYS CLEP means the FDA will not generally enforce premarket review requirements.

FDA ANALYSIS PROJECTS HEALTH AND ECONOMIC IMPACTS FROM REGULATION OF LDTS

The FDA evaluates the potential benefits to patients from preventing health issues linked to defective IVDs designated as LDTs. This analysis primarily targets major disease categories that are frequently associated with diagnostic inaccuracies in the United States. The FDA highlights additional advantages of the regulation, including reduced spending on these problematic IVDs and a likely decrease in litigation costs. Moreover, the FDA has assessed the financial impact on laboratories that must meet legal and regulatory standards, as well as the costs to the FDA itself.

Over a 20-year period, using a 7 percent discount rate, the FDA estimates that the annualized benefits could range from $0.99 billion to $11.1 billion, with an average estimate of $3.51 billion. Using a 3 percent discount rate, the benefits are estimated to range from $1.24 billion to $13.62 billion, with an average estimate of $4.34 billion. Projected annualized costs are expected to vary from $566 million to $3.56 billion at a 7 percent discount rate, with an average estimate of $1.29 billion, and from $603 million to $3.79 billion at a 3 percent discount rate, with an average estimate of $1.37 billion.

UPCOMING WEBINARS AND OPPORTUNITY TO SUBMIT QUESTIONS

On May 14, 2024, the FDA will host a webinar to provide an overview of the rule and the phaseout policy. Stakeholders may submit questions to be considered for discussion in the upcoming webinar regarding the final rule by emailing them to CDRHWebinars@fda.hhs.gov by May 7, 2024.

Additionally, the FDA plans to schedule further webinars to discuss detailed aspects of the phaseout policy and the targeted enforcement discretion policies in the future.

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This Applied Policy® Summary was prepared by Meghan Basler with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact Meghan Basler at mbasler@appliedpolicy.com.