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Following Republican Election Gain, Detractors of FDA Lab Test Regulation Seize Chance for Support

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Originally published Nov. 11.

NEW YORK (GenomeWeb) – Just as power in both houses of the US Congress tilted in favor of Republicans after the midterm elections last week, a group representing pathologists has kicked off a major lobbying push against the US Food and Drug Administration's attempt to regulate laboratory-developed tests (LDTs).

On Wednesday, more than 70 members of the Association for Molecular Pathology are planning to descend upon Capitol Hill and educate legislators and their staff on the regulatory and reimbursement issues impacting tests developed by and performed at labs.

"The primary goal this week is for our members to educate their members in Congress about the field of molecular pathology, about LDTs, and how important these tests are to patient care," Roger Klein, chair of AMP's Professional Relations Committee, told PGx Reporter. "And the other objective is really to make them understand how critical molecular pathology professionals are."

The House Energy and Commerce Committee's subcommittee on health held a hearing on LDT regulation in September, after the FDA provided notice to Congress in July of its intention to break with 40 years of "enforcement discretion," during which time LDTs were largely regulated under the Centers for Medicare & Medicaid Services' Clinical Laboratory Improvement Amendments. After giving Congress 60 days to look over its regulatory proposal, the agency at the end of September officially released for public comment two draft guidances outlining a risk-based oversight framework that the agency will phase in over a decade.

As former FDA senior reviewer Lakshman Ramamurthy noted when the FDA provided Congress notice of its plans, the timing of the agency's actions – right before legislators were about to go on summer recess – was politically calibrated so that it could publicly release the guidances before the November elections and avoid a more hostile climate toward its proposals.

"The events of the past week explain why the agency was keen to get the LDT guidance out when it did," Lakshman Ramamurthy, an FDA regulation and policy expert at the healthcare advisory firm Avalere Health, told PGx Reporter this week. "In some sense they were vindicated in their approach. On the other hand, any progress on getting the guidance implemented will face some challenges."

Following the congressional elections last week, which put up for vote all 435 seats in the House of Representatives, the Republicans have taken the majority claiming 244 seats (with a few seats yet to be decided). In the Senate, where 36 seats were up for vote, seven Democrats were replaced by Republicans, giving the latter a 52 to 46 majority (with two Independents and one seat still to be decided).

It's too early to gauge whether the more conservative tenor in Congress will bode well for those opposing increased oversight of LDTs from the FDA, Alan Mertz, president of the American Clinical Laboratory Association, told PGx Reporter. "We certainly saw at the [September] hearing … that a lot of Republicans had concerns about the resource issues for the FDA, [and] we heard a number of Republicans and Democrats raising the issue as to whether [regulations] should be put forth through guidance as opposed to rulemaking."

ACLA will continue to oppose FDA regulation of lab tests, focusing on the key arguments that the agency lacks statutory authority to oversee such tests, that it should promulgate regulations through notice-and-comment rulemaking instead of guidelines, and that LDTs are not devices, but services. ACLA is currently furnishing these and other objections that it will submit as public comments in response to FDA's draft guidelines.

"We'll be talking to the new leadership of the Senate health committee to see whether there is any interest in taking a harder look at the FDA getting into this area," Mertz added. Sen. Lamar Alexander (R-Tenn.) will be the new chair of the Health, Education, Labor, and Pensions committee, and is expected to lead efforts to revise or repeal parts of the Affordable Care Act (ACA). Although Republican legislators have talked about repealing the ACA, they don't have the necessary votes to break a filibuster by the Democrats or override a presidential veto.

Ultimately, the Republicans' focus on repealing the ACA may detract from the push to undo FDA's LDT regulations, even though ACLA and AMP have a likeminded legislator in Rep. Michael Burgess (R-Tex.). While both of these groups acknowledge there is room to improve LDT regulations, they would do so by expanding CMS's capabilities under CLIA, which they say are better suited to address the needs of labs than the FDA is. Burgess previously introduced a bill that sought to keep LDT oversight under CMS by granting the agency the funds and resources to establish whether marketed LDTs are "clinically valid." Although CLIA regulations currently include measures to ensure an LDT is analytically valid, there aren't procedures in place to establish its clinical validity.

While the chances of such a bill may be improved in the current Republican-controlled Congress, it is not immediately clear if Burgess is considering reintroducing this legislation. Burgess' office didn't respond to questions prior to publication of this article.

However, one industry insider knowledgeable of the process predicted it was unlikely that Burgess will take the lead on LDT regulatory reform. The source noted that there was interest on both sides of the aisle to get meaningful guidelines on the books for LDTs, as well as significant pharma backing for consistent FDA oversight of companion diagnostics. As an advisor to top players in the life sciences field, the source asked to remain anonymous due to political sensitivities of clients.

"While Democrats are very strong supporters of FDA, the pro-FDA regulation folks, such as AdvaMed members and College of American Pathologists, have strong ties on the Republican side, too," the source said. "So, I do not see a huge shift in the balance on this issue based on the election."

Avalere's Ramamurthy similarly pointed out that despite the fact that Rep. Joe Pitts (R-Penn.) chaired the September hearing on LDT regulation, Pitts seemed to appreciate the need for greater oversight of advanced molecular diagnostics that are more widely marketed.

"It wasn't like the House Energy and Commerce Committee['s health subcommittee] wasn't already led by the Republicans," Ramamurthy noted. "[Pitts] certainly seemed to identify that there needs to be some prudent and thoughtful validation of diagnostics that are rolled out to the larger population. So, I don't see him as someone completely opposed to LDT regulation [and] the FDA may still have a chance at putting out its LDT regulation [plan]."

Meanwhile, there is already talk on Capitol Hill that medical device industry supporter Sen. Orrin Hatch (R-UT) will lead bipartisan efforts to repeal the Medical Device Excise Tax, which was a provision meant to help raise funds for the ACA. The device tax issue is only tangentially related to LDTs, but nonetheless could play a part in policy debates.

"We pay for the tax whether LDTs regulated as devices are taxed or whether the tax is assessed on device companies and is passed on in some cases to their customers, which would be the labs," ACLA's Mertz said. "So, we would pay one way or the other."

For ACLA, repealing the device tax isn't a priority. Still, it "goes to the basic question of why are these being considered devices?" Mertz posited. "LDTs aren't products that are sold like an article or device with a price on it. If tax is 2.3 percent, then it's 2.3 percent of what? You haven't sold a product."

In its LDT regulatory framework, the FDA has said that a lab will have to register and list an LDT with the agency only if the test is subject to premarket clearance or approval. Labs would trigger the device tax by listing and registering these higher-risk tests. The FDA explained to Congress during the September hearing that for low-risk tests or LDTs for rare diseases – over which the agency would continue to practice enforcement discretion under the oversight plan – labs could simply notify the FDA about a test and not register and list it, thereby avoiding the tax.

In Ramamurthy's view, a repeal of the device tax would help advance FDA's LDT regulatory plans, rather than detract from it. "Calling all LDTs devices automatically confers a device tax on them," he noted. "If you call the high-risk LDTs a device, you have to call all LDTs a device."

The FDA has maintained that LDTs fall under the definition of a device, which the agency regulates under the Medical Devices Amendments of the Federal Food, Drug, & Cosmetic Act. AMP and ACLA have vigorously opposed FDA's position in this regard, and central to their opposition of FDA oversight is their belief that LDTs are fundamentally not devices.

In support of this view, AMP has been using a new term – laboratory developed procedures or LDPs – in lieu of LDTs, in its public communications on the topic. During their visits with legislators this Wednesday, AMP members' top talking points will include key differences between devices and lab testing services.

"In the end … it will be very difficult to treat our members like medical device manufacturers," AMP's Klein said. "For example, a [test] kit is distributed to many users with varying levels of expertise, who don't have the same knowledge about the workings of a particular test as the ones that our members have put together as services.

"When they set up a test, [our members] watch it very closely every time it's run," he continued. "The tests are provided under substantial supervision and oversight by the professionals who understand the workings of the test because they designed it. And the nature of what's done is really a service."

Of course the FDA would disagree and has repeatedly pointed out that its oversight of LDTs is necessitated by the fact that tests marketed as LDTs are often not developed at a single lab and are marketed broadly to many providers the same way diagnostic kits are.

Amid this debate over the definition of an LDT, the device tax has created a crisis of terminology for the FDA. On the one hand the agency has said that all LDTs are devices. On the other hand, the FDA is willing to waive a tax on devices for some LDTs, but not others. This lapse in logic enables detractors of FDA's regulatory proposals to question the agency's authority to regulate LDTs and assert that such tests are indeed not devices, Ramamurthy suggested.

"Earlier, the FDA was sympathetic that calling all tests devices automatically confers a device tax on them … [and] that small labs may have to pay the tax," Ramamurthy said. "If the device tax is repealed, the FDA can continue to talk about a world where the high-risk tests will have to register with them and for the low-risk tests the agency can continue to use enforcement discretion."

The last quote from Lakshman Ramamurthy has been updated after publication to more accurately reflect FDA's regulatory plan.

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