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HSS Rescinds FDA's "Informal" Ability to Require Premarket Review pf LDTS Without Formal Rulemaking

On August 19, 2020, the US Department of Health and Human Services (HHS) announced that the Food and Drug Administration (FDA) will not require premarket review of laboratory-developed tests (LDTs) without first outlining its plans for such review following formal notice-and-comment rulemaking. Further, the title of the announcement—“Rescission of Guidances and Other Informal Issuances Concerning Premarket Review of Laboratory Developed Tests”—indicates that FDA will be expected to rescind various guidance documents, compliance manuals, website statements and other informal issuances addressing premarket review requirements for LDTs.

The notice clarifies that clinical laboratories that develop and offer LDTs may voluntarily seek approval, clearance, or an Emergency Use Authorization (EUA) from FDA, but that such laboratories are not required to do so. However, laboratories that chose to run LDTs for SARS-CoV-2 (COVID-19) without FDA premarket review or authorization will not be eligible for liability protections under the Public Readiness and Emergency Preparedness Act (PREP Act).

The notice also clarifies that clinical laboratories remain subject to regulation under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), regardless of whether they elect to seek premarket review of their LDTs. State laboratory licensure requirements are also unaffected by the notice.

BACKGROUND

The FDA has long contended that it has the authority to regulate LDTs as medical devices. However, the FDA has historically exercised enforcement discretion with respect to most LDTs, which FDA defines as a test designed, manufactured and used within a single laboratory. However, with LDTs becoming increasingly complex, the FDA announced its intent to revisit its policy of enforcement discretion and in July 2014 released draft guidance outlining its intent to regulate most LDTs as medical devices. In January 2017, the FDA announced that it would not finalize the 2014 guidance, and instead published a “discussion paper” that outlined a substantially revised approach to agency oversight of LDTs. Since that time, the agency has primarily focused on responding to legislative efforts—e.g., the VALID Act—as a mechanism to clarify its authority over LDTs.

Since the outset of the COVID-19 public health emergency, the FDA has required CLIA clinical laboratories that run molecular LDTs for COVID-19 to apply for an EUA for such tests. However, under an enforcement policy most recently outlined in a May 2020 guidance document, FDA allowed high-complexity CLIA laboratories to offer such LDTs prior to receiving an EUA provided the test had been validated, the laboratory notified FDA of its intent to offer the test prior to receiving an EUA, and the laboratory made certain information and disclaimers regarding the LDT available to end users. In contrast, laboratories offering validated serology tests for COVID-19 have been permitted to offer such tests without seeking an EUA.

IMPACT OF THIS POLICY ON COVID-19 LDTS

Since the outset of the public health emergency, public health experts have repeatedly emphasized that the ability to control the pandemic and resume “normal” life will depend, in substantial part, on widespread access to testing. While HHS positions this announcement as one that is intended to reduce regulatory barriers, it is unclear that the FDA’s approach to the oversight of COVID-19 LDTs posed a meaningful barrier to the availability of testing, as many LDTs could already be offered before they receive an EUA provided they submitted a notification to the FDA. Indeed, a survey by the Association of Molecular Pathologists performed earlier in 2020 suggests that laboratories were quickly able to begin offering tests, including LDTs for COVID-19, after the start of the epidemic. However, the capacity of labs to offer tests was limited by reagent constraints (e.g., extraction and buffers) as well as the availability of testing platforms and kits. Other supply limitations, such as transport media and swabs for specimen collection, also impacted patient access. If the availability of raw materials and associated testing supplies remains limited, test capacity is unlikely to increase regardless of reduced regulatory constraints.

At the time of publication, the FDA has not updated its guidance on COVID-19 testing, nor has it updated its COVID-19 FAQ page, for consistency with the HHS announcement. The FDA’s timeline for updating these documents is unclear at this time.

IMPACT OF THIS POLICY ON LDTS MORE GENERALLY

Although the announcement is primarily positioned as one related to pandemic testing efforts, HHS’s language regarding the requirement for notice and comment rulemaking is noticeably not limited to COVID-19 tests. As a result, it would appear that HHS intends for this announcement to apply to all tests offered as LDTs—not just tests for COVID-19. If HHS intends for the policy to be read this broadly, it would potentially open the door for many types of LDTs that currently are not eligible for enforcement discretion—e.g., direct to consumer tests and companion diagnostics, among others—to be offered without FDA clearance, approval or authorization.

That being said, clinical laboratories would be prudent to consider the context in which this announcement was made before making wholesale changes to business plans. Notably, notwithstanding the HHS announcement, at the time of this writing the FDA’s LDT website remains unchanged and the FDA website continues to link to previous guidance documents and informal statements, suggesting the FDA may wish to limit the impact to COVID-19-related LDTs.

We also note that the durability of this policy likely depends on the results of the November elections. If President Trump wins the election, the policy articulated herein could well extend through the next four years. However, if Vice President Biden wins the election, the new administration may rescind this policy and take a position that makes it easier for FDA to exercise oversight of LDTs.

Moreover, any decisions by the executive branch concerning FDA regulation of LDTs may be short lived if Congress passes a bill to reform the regulation of laboratory tests. If enacted, the VALID Act would subject all diagnostic tests—including LDTs—to a novel risk-based oversight framework. In contrast, the VITAL Act would prohibit the FDA from regulating LDTs and confirm a CLIA-centric framework for FDA oversight.

CONCLUSIONS

While the HHS announcement is a notable development, the impact of the announcement on access to COVID-19 LDTs and LDTs more generally is unclear at this time. Interested stakeholders should carefully monitor future statements from HHS and the FDA for clarifications on the applicability of this policy and consult with their trusted advisors to determine whether to pursue premarket review and, if already submitted or in process, whether to withdraw such applications or stop such efforts pending formal rulemaking by the FDA on regulation of LDTs. More generally, stakeholders should consider the impact of the November election and congressional appetite to enact a new regulatory framework for diagnostics as they evaluate the impact of this announcement on their business plans and operations.

© 2021 McDermott Will & EmeryNational Law Review, Volume X, Number 237
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Paul Gerrard, M.D.  physician and healthcare executive McDermottPlus Consulting
McDermottPlus Consulting

Paul is a highly regarded physician and healthcare executive with deep experience in both the academic and patient care spaces. He offers clients critical insights across a wide range of clinical areas and healthcare technologies, and provides guidance on Medicare policy and regulatory requirements.  Paul also has significant experience in health outcomes research and scientific computing.

Before joining McDermottPlus, Paul served as chief medical officer and MolDX director of clinical science at a commercial provider and Medicare Administrative Contracting company. MolDX has a...

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Brian Malkin counsels pharmaceutical and biologic clients on Food and Drug Administration (FDA) regulatory matters and intellectual property (IP) law, with an emphasis on patent litigation. His practice at the intersection of FDA- regulated products and patent law makes him a valuable partner to drug manufacturers, biotechnology clients, medical device companies and cannabis companies as they develop new products and protect their innovations though life cycle management, bring their products to market and pursue transactional opportunities.

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Michael Ryan Attorney specializing in Pharma law McDermott Law Firm
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Michael W. Ryan is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office.

Michael focuses his practice on the legal, regulatory and reimbursement issues that manufacturers and investors encounter in the development and commercialization of pharmaceuticals, medical devices, biotechnology products and laboratory services.  Michael counsels entities as they seek to obtain authorization to market their products from the U.S. Food and Drug Administration, maintain compliance with applicable laws and regulations (including the...

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