Summary of LDT Rule: An In-depth Look at the Final Rule Regarding Laboratory-Developed Tests

The U.S. Food and Drug Administration (FDA or the Agency) issued a Final Rule on May 6, 2024 (89 FR 37286), that will, over the next four years, radically alter the landscape for laboratory-developed tests (LDTs) and "correct the imbalance" between in vitro diagnostics (IVDs) marketed outside a laboratory and those IVDs manufactured by a laboratory. This action follows FDA's Proposed Rule issued on October 3, 2023 (88 FR 68006, Oct. 3, 2023).

Below, we recap the Final Rule and the "phase-out" plan of FDA's enforcement discretion approach with several key dates that traditional IVD and clinical laboratories offering LDTs should monitor closely. We also identify those areas outside the rule and described in FDA's continued discretion and the enforcement discretion policy "targeted" at certain types of LDTs. We offer further key insights for clinical laboratories and IVD manufacturers on how to navigate the complexity of FDA's approach and the changes (and likely challenges) on the horizon here.

As always, it is important to define our terms. In general, LDTs—or as the Final Rule calls them, "IVDs offered as LDTs"—are in vitro diagnostics (IVDs) that are intended for clinical use and are designed, manufactured, and used within laboratories that are certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and meet the regulatory requirements under CLIA to perform high-complexity testing (even if outside FDA's traditional understanding of an LDT because they are not designed, manufactured and used within a single laboratory).^[1] FDA has long considered LDTs to be IVDs under 21 CFR §809.3(a) and, as such, "devices" under §201(h) of the FD&C Act. The Final Rule amends the definition of IVDs at 21 CFR §809.3(a) to make explicit that IVDs, including IVDs manufactured by laboratories, are devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act). This amendment reflects that the device definition in the FD&C Act and its IVD regulations do not differentiate between entities manufacturing the device. Accordingly, IVDs offered as LDTs are subject to FDA regulation as medical devices.

LDT Regulation—How Soon Is Now?

The Medical Device Amendments of 1976 (the MDA) amended the FD&C Act to create a comprehensive system for the regulation of devices intended for human use. However, in implementing the MDA, FDA has generally taken an enforcement discretion approach (not enforced applicable regulatory requirements) toward most LDTs, as discussed later in this document. This is because MDA-era LDTs were mostly manufactured in small volumes by laboratories that served their local communities. They were typically intended for use in diagnosing rare diseases or for other uses to meet the needs of a local patient population. These early LDTs also tended to employ manual techniques (and did not use automation) performed by laboratory personnel with specialized expertise. They were to be used and interpreted by physicians or pathologists in a single institution responsible for the patient (and who were actively involved in patient care) and were manufactured using components legally marketed for clinical use, such as general-purpose reagents or immunohistochemical stains marketed in compliance with FDA requirements.

In addition, the laboratories developing LDTs were also regulated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) that were administered by the Centers for Medicare & Medicaid Services (CMS) to "ensure accurate and reliable test results when laboratories perform testing on patient specimens."^[2] CMS and FDA agree on their complimentary jurisdictions: CMS's jurisdiction over the analytical validity of a test developed for use in a specified laboratory under set conditions, and FDA's authority to regulate IVDs for their clinical validity—that is, the safety and efficacy of the test to identify, measure, or predict the presence or absence of a clinical condition for a patient. Accordingly, FDA's enforcement discretion approach was sufficient to protect the public health until the LDT landscape radically changed.

A lot has changed since 1976! Now, almost 50 years since MDA, many LDTs rely on high-tech or complex instrumentation and software to generate results and clinical interpretations. They are often used in laboratories outside of the patient's healthcare setting and are often manufactured in high volume for large and diverse populations. Many LDTs are manufactured by laboratory corporations that market the tests nationwide, as they accept specimens from patients across the country and run their LDTs in very large volumes in a single laboratory. Today's LDTs are also more commonly manufactured with instruments or other components not legally marketed for clinical use and are more often used to inform or direct critical treatment decisions, to widely screen for common diseases, to predict personal risk of developing certain diseases, and to diagnose serious medical conditions like cancer and heart disease. FDA has found that the associated risks with most modern LDTs are much greater today than they were at the time FDA began implementing the MDA, and most LDTs today are similar to other IVDs that have undergone rigorous review under the FD&C Act's device regulatory scheme. Given these changes in the LDT landscape, FDA considers its enforcement discretion approach insufficient to meet the public health need. In short, FDA sees the Final Rule as "correcting the imbalance in its oversight between non-laboratory and laboratory IVD manufacturers—an imbalance that harms American patients."^[3]

The "Phase-out" of Enforcement Discretion is a "Phase-in" Regulatory Requirements

Under the Final Rule, FDA is phasing out its general enforcement discretion approach to LDTs. During a four-year phase-out period, FDA will "phase in" regulatory compliance expectations for certain types of IVDs offered as LDTs in five stages. Each stage adds additional layers of compliance expectations over time, with which clinical laboratories using LDTs will need to comply. These requirements are not new; they are regulatory tools already applied in enforcement against traditional IVD manufacturers: adverse event reporting, establishment registration and device listing, labeling standards, investigational use requirements, and, as new IVDs enter the market or are significantly modified, CGMPs and premarket review. The Final Rule applies these requirements in a five-stage "ramp up" approach over the next four years as follows:

• Stage 1: Within 1 year (by May 6, 2025), FDA expects compliance with medical device reporting (MDR) and Quality System Regulation (QSR) compliance under 21 CFR §820.198 (complaint files).
• Stage 2: Within 2 years (by May 6, 2026), FDA expects compliance with registration and listing requirements, including labeling, and compliance with investigational use requirements.
• Stage 3: Within 3 years (by May 6, 2027), FDA expects compliance with full QSR at 21 CFR Part 820.
• Stage 4: Beginning at 3.5 years (by November 6, 2027) after publication, FDA will require compliance with premarket review for high-risk IVDs offered as LDTs. Enforcement discretion will continue for any application for Class III PMA or 351(a) PHSA BLA for/including an IVD received before the 3.5-year mark.
• Stage 5: Beginning 4 years after publication (by May 6, 2028), FDA will require premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs requiring pre-market submission. Enforcement discretion will continue for any submission received by FDA before the 4-year mark.

"Targeted" Enforcement Discretion Continues

The Final Rule "phase-out" policy also includes targeted enforcement discretion policies—"carve outs"—for certain categories of IVDs offered by LDTs by a laboratory. FDA intends to exercise enforcement discretion and generally not enforce all applicable regulatory requirements for specified categories of LDTs, including:

• Perhaps most significantly, "grandfathered" LDTs that were first marketed before FDA issued the LDT final rule, as long as they are not modified in a manner that (1) changes the indications for use of the IVD; (2) alters the operating principle of the IVD; (3) includes significantly different technology in the IVD; or (4) adversely changes the performance or safety specifications of the IVD;
• "1976-Type LDTs," which include tests that (1) use manual techniques (without automation) performed by laboratory personnel with specialized expertise; (2) use components legally marketed for clinical use; and (3) are designed, manufactured, and used within a single CLIA-certified laboratory that meets the requirements under CLIA for high-complexity testing;
• Human Leukocyte Antigen (HLA) tests that are designed, manufactured, and used within a single laboratory certified under CLIA that meet 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;
• Tests intended solely for forensic law enforcement purposes;
• LDTs manufactured and performed within the Department of Defense or the Veterans Health Administration;
• LDTs approved by the New York State Department of Health's Clinical Laboratory Evaluation Program (NYS CLEP) with respect to premarket review and certain QSR^[4];
• 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. An LDT would satisfy the "unmet need" criteria when "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"; and
• Non-molecular antisera LDTs for rare red blood cell (RBC) antigens when such tests are manufactured and performed by blood establishments, including transfusion services and immunohematology laboratories and when there is no alternative test available to meet a patient's need for a compatible blood transfusion. However, this policy does not apply to molecular tests used for genotyping RBCs.

The following table summarizes these exemption categories, along with a summary of the applicable regulatory requirements for each category:

* Because these tests are LDTs, FDA generally will not expect compliance with 21 CFR Part 820 requirements other than design controls, purchasing controls, acceptance activities, CAPA, and records requirements.

** Compliance with 21 CFR 820.180-820.186 generally expected beginning May 6, 2027; compliance generally not expected with other QS requirements (except for complaint files).

What Is Outside the Scope of the Final Rule?

Importantly, some types of tests are not impacted by the "phase-out" of FDA's enforcement discretion. In other words, FDA expects that the following class of devices will continue to comply with the comprehensive medical device regulatory system:

• Blood Donor Screening tests intended for blood donor screening or human cells, tissues, and cellular and tissue-based product (HCT/P) donor screening required for infectious disease testing
• Tests intended for emergencies declared under §564 of the FD&C Act. Alongside the Final Rule, FDA published a draft guidance on factors to consider in adopting enforcement discretion policies relating to uses of unauthorized tests in future public health emergencies. FDA also issued a second draft guidance regarding enforcement policy for certain tests intended for use for immediate public health response in the absence of a declaration under the emergency use authorization provisions at §564 of the FD&C Act. The Final Rule explained the significant concerns raised by ineffective tests used during the COVID-19 pandemic as key reasons to continue its regulatory oversight of these tests;
• Direct-to-consumer tests. As discussed in the preamble to the LDT final rule, FDA's general enforcement discretion approach has not been applied to tests intended for consumer use that did not include "meaningful involvement by a licensed healthcare professional," given the greater risks to patients presented by such tests; and
• LDTs described in FDA's ongoing voluntary pilot program for certain oncology drug products

And About Those Comments …

Much of the remainder of the Final Rule is devoted to responding to the 6,500+ comments that FDA received in response to the Proposed Rule. Many of the key questions are reflected in the revised text of the Final Rule, but there are nuances sprinkled throughout the Q&A discussion. FDA has already announced a series of webinars to be held between May and August 2024 on various topics within the Final Rule (the first one occurred on May 14th and is available online), and we expect to see further clarification about how FDA intends to interpret the new LDT policies. Along with these Agency-level communications, it will also be important to monitor congressional activity and likely litigation challenging the Final Rule.

For more information on these anticipated developments in litigation and legislation, see our client alert here for further discussion of these topics. Venable's Food & Drug Law Team is ready to help you understand and implement the Final Rule requirements and help you monitor the horizon for key developments.

[1] "LDT Final Rule," 88 Federal Register 37286 (May 6, 2024) at note 1.

[2] See CMS Fact Sheet regarding CMS and FDA complimentary jurisdiction, published October 12, 2013, as cited in FDA and CMS: Americans Deserve Accurate and Reliable Diagnostic Tests, Wherever They are Made (Jan. 19, 2024).

[3] LDT Final Rule at 89 Federal Register 37290 (May 6, 2024).

[4] FDA recently issued comprehensive amendments to harmonize the Quality System Regulation at 21 CFR Part 820 with International Standard Organization (ISO) 13485.2016 (ISO 13485). The QSR is now the Quality Management System Regulation (QMSR). See 89 FR 7496, February 2, 2024.