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Industry to Seek Details from FDA on Risk Classification, Implementation of LDT Regulatory Framework

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NEW YORK (GenomeWeb) – Before the US Food and Drug Administration's draft guidance on laboratory-developed tests (LDTs) can be finalized, the agency will need to iron out with industry players several areas of regulation that remain unclear and confront old issues around the agency's authority over labs.

In its "anticipated" LDT draft guidance released to the US Congress last week, the FDA first and foremost lays out what isn't an LDT, and this is where detractors of the agency's oversight might launch their objections. In the same vein, given the nature of LDTs, the FDA will also need to work out kinks in manufacturing and labeling requirements that may work well for test kits or systems, but don't fit an LDT service-oriented model.

According to the guidance, the FDA's requirements for reporting, registration, 510(k) clearance, and premarket review of LDTs increase depending on the risk classification of a particular LDT – Class I (lowest risk); Class II (moderate risk), Class III (highest risk). As such, industry players will likely seek more clarity on how the agency will determine which class a test falls in. The FDA said it intends to issue additional guidance on the risk classification of LDTs within two years of finalizing the LDT guidance.

The FDA in a footnote in the draft guidance carves out direct-to-consumer genomic testing firms as being outside the scope of the LDT guidance. This is sure to raise some questions and objections from those concerned about the agency restricting consumers' ability to access genomic analyses without a physician's prescription.

Under the proposed LDT oversight framework, for Class I devices, as well as for LDTs for rare diseases and for unmet medical needs, the FDA will continue to practice enforcement discretion, leaving oversight responsibilities in the hands of the Centers for Medicare & Medicaid Services under CLIA. For these types of tests, the agency will not require premarket or quality systems review, but labs will have to register and list these tests. Additionally, the agency will extend enforcement discretion for LDTs used in forensics and tests for transplantation performed in CLIA-certified, high complexity histocompatibility labs.

For Class II and Class III LDTs, or moderate-to-high risk tests, FDA will phase in registration, listing, adverse events reporting, as well as 510(k) and premarket review requirements over a nine-year period. At the earliest, a year after the LDT guidance is finalized, labs developing the highest risk tests – tests with the same indication as FDA-approved companion diagnostics, as well as screening tools meant to be used in asymptomatic patients and high-risk diagnostics for infectious diseases – will have to submit documents for premarket review. Then, the agency will turn its oversight attention toward LDTs with the same intended use as FDA-approved Class III devices and finally to blood products. The FDA is hoping to wrap up oversight of high-risk LDTs five years after finalizing the LDT guidance, and then focus on moderate risk devices for the next four years.

"The agency makes clear with this pre-draft guidance … that there is no room for non-FDA reviewed LDT companion diagnostics when FDA approved alternatives exist," Lakshman Ramamurthy, an FDA regulation and policy expert at the healthcare advisory firm Avalere Health, told PGx Reporter. "That is certainly a shot in the arm for the diagnostics manufacturers, which have recently been contending with the dual issues of lowered reimbursement rates and having to share a market with me-too LDTs that haven’t had to take on the cost of FDA review so far."

The FDA has repeatedly cited the evolution of LDTs – from tests developed at small labs for rare conditions to multi-analyte tests using complex technologies that are marketed broadly – as the reason why it has chosen to lift its nearly 40 years of "enforcement discretion" over this subset of tests. While the agency was practicing enforcement discretion, and the majority of LDTs were under CMS' purview, drug firms and makers of companion diagnostics complained that the dual regulatory pathway created a disincentive to test kit manufacturers to take their products through the more rigorous FDA regulatory pathway. The same day the FDA issued notice to Congress about the draft LDT guidance, the agency also finalized the draft companion diagnostics guidelines, in which it reinforced that tests for predicting response to a drug need to be FDA approved or cleared (see related story).

In scrutinizing the document, Amy Miller, executive VP at the Personalized Medicine Coalition, is convinced that the agency listened not only to the concerns of drugmakers and kit manufacturers, but also to those of the lab industry. "The FDA listened to and addressed many of the community's concerns. For example, there is a rather long transition phase (nine years), which will allow the lab community time to adjust," Miller said over email. "FDA responded to the bandwidth arguments by again focusing on high-risk tests and reiterating enforcement discretion for the vast majority of LDTs."

Ramamurthy observed similarly that the FDA's guidance limits the regulatory requirements for LDTs for unmet medical need. This will ensure that patients will have uninterrupted access to tests for rare, genetic diseases and not tie up researchers exploring the molecular underpinnings of diseases affecting small subsets of patients. "Academic university-based labs should use this to focus efforts in these areas where they can transition important early findings into clinical tools," he said.

Finally, in hashing out the details of the guidance, some in the lab industry and legislators will likely raise questions about the agency's authority to regulate LDTs. The FDA has maintained it has the authority to regulate medical devices under the Food, Drug, and Cosmetic Act and that LDTs are devices.

How much of a roadblock this debate will pose to finalizing the guidance is difficult to gauge. "In the past, some labs and lab groups have asserted that FDA does not have the legal jurisdiction to regulate laboratories or lab-developed tests," Miller said. "But there are quite a few in the community that disagree."

What is not an LDT?

As far as the agency is concerned, an LDT and all its constituent parts must be developed at a single lab and then performed at that same lab to provide clinical diagnostic results. Companies that operate a network of laboratories cannot, according to the draft guidance, develop a device at one lab, transfer the test to all its network labs, and still call it an LDT. Similarly, manufacturing and licensing deals to manufacture or perform certain components of a device takes it out of the LDT category.

However, such collaborative and licensing practices are commonplace in the lab industry, and the draft guidance accommodates this reality. "FDA recognizes that some laboratories may currently be offering devices as LDTs, even though they do not meet FDA's definition of an LDT," the agency states in the draft document. "In the interest of ensuring continuity in the testing market and avoiding disruption of access to these tests, FDA intends to apply the same risk-based framework … to any IVD that is offered as an LDT by a CLIA-certified laboratory."

In an email to PGx Reporter FDA spokesperson Stephanie Yao elaborated further on this portion of the guidance: "Due to the potentially large number of tests now being marketed as LDTs that do not meet the definition of an LDT, this portion of the draft guidance explains that FDA intends to also apply the same risk-based, phase-in enforcement approach to this group of tests as well." According to Yao, so-called in vitro diagnostic multivariate index assays and other types of lab tests could potentially fall under this scenario of being marketed as LDTs when in fact they don't meet FDA's definition. "Even in these cases, the guidance states that FDA will apply the same risk-based, phased-in enforcement approach as that described in the guidance."

With regard to IVDMIAs – tests that gauge multiple analytes using a proprietary algorithm – the agency said it will prioritize these tests based on their intended use and their risk to patients' health. The FDA will use an external advisory panel and review the information labs provide to the agency on LDTs through notification. "The panel will provide recommendations to the agency on classification and prioritization of enforcement of applicable requirements on certain categories of LDTs, based upon risk," Yao said.

Ramamurthy elaborated that according to the draft LDT regulatory framework, just by the fact that a test is an IVDMIA wouldn't push it into a high risk category, and similarly an IVDMIA that is entirely developed and performed at a single lab would fit the definition of an LDT. "FDA regulates by intended use and the risk associated with it," he said. "Even if it’s a single mutation-detecting diagnostic, it has the potential of being deemed high risk if it is intended to guide therapy or surgical intervention or implantation … and that's regardless of whether the test is an IVDMIA or not."

Meanwhile, in its consistent stance against FDA oversight of its industry, the American Clinical Laboratory Association has challenged FDA's definition of LDTs, and the group's objections to the draft guidance may start from this central point. "LDTs are not 'devices' as defined in [the Federal Food, Drug, and Cosmetic Act]," ACLA stated in a citizen petition issued last year. "As the text and legislative history of the 'device' definition show, this term encompasses only articles. LDTs are proprietary procedures for performing a diagnostic test using reagents and laboratory equipment. They are essentially know-how, not articles."

The FDA, of course, believes LDTs are devices, and as such the agency has oversight authority as granted by the 1976 Medical Device Amendments. "The definition of a devices applies equally to [in vitro diagnostics] manufactured by conventional device manufacturers and those manufactured by laboratories," the agency states in the draft guidance. "An IVD, therefore, meets the device definition irrespective of where and by whom it is manufactured."

However, this difference of understanding regarding what constitutes an LDT is at the root of why some in the life sciences sector believe that LDTs can fit within an overarching framework regulating all clinical diagnostics, while others are convinced that LDTs warrant a unique regulatory approach. "ACLA is still in the process of analyzing the guidance, but it seems that there are still any number of provisions which are vague and open to broad interpretation," ACLA President Alan Mertz told PGx Reporter.

Mertz suggested that the lab industry will seek more clarity from the FDA about how it intends to determine the risk classifications for LDTs. "While the agency has stated that it will be using a risk-based framework, and included a non-exhaustive list of potential factors that will be taken into account in making a determination about the relative level of risk involved with a particular LDT, how the agency crafts those risk classifications will have an enormous impact on the lab industry," he said. "Further, the mere incursion of the FDA into this territory may trigger substantial downstream consequences for the labs."

Specifically, ACLA members are expected to push for further discussion with the FDA around how the agency will determine whether a high-risk LDT has the "same indication" as a companion test. By focusing initially on this category of LDTs, the agency says it intends to incentivize development of well validated, safe and effective companion diagnostics, but Mertz fears that interpreted too broadly this may chill innovation at labs. "What’s the incentive now for a laboratorian to fine tune a test and improve it if he risks enforcement actions from the FDA?" he posited.

FDA's Yao noted that the additional guidance on the risk classification of tests the agency plans to release 24 months after finalization of the LDT guidance "would also help manufacturers to determine whether they are likely to have an LDT that is low risk and that would generally remain under enforcement discretion with respect to premarket review requirements."

Similarly, the American Association for Clinical Chemistry, an organization representing medical professionals working in laboratory medicine and clinical lab sciences, is also seeing input from its members on how the FDA's new policy affects patient access to testing; if the guidelines improve patient safety and care; if the guidance will hinder the development and introduction of new technologies; and whether the regulatory and cost requirements of meeting the guidelines will hinder labs from providing tests.

It also remains to be seen how FDA will address labeling issues and manufacturing rules that the agency enforces for kit manufacturers, which don't translate well in the context of LDTs. "For example, when you're manufacturing something that you distribute, that you mail to labs, you're physically sending something out of the building, so labeling makes sense," PMC's Miller observed. "But when you're performing a lab-developed test [at a single site], how does labeling make sense there?"

Discussions between the FDA and industry stakeholders will undoubtedly return, as it always does, to whether the agency's oversight is ultimately necessary. In a statement, the Association of Molecular Pathology asserted again that the current regulatory mechanisms in place under CLIA are "sufficient" for the majority of laboratory developed "procedures" or LDPs.

To this, Ramamurthy countered that CLIA isn't an agency, it's an act. "It doesn't make sense in any world to set aside the mandate that an agency already has and add new bells and whistles on to an act."

The DTC exception

Despite the fact that there are significant implementation issues that still need to be worked out, the life sciences industry at least appears pleased to get a peek at the storied LDT guidance that has been held up for years by the Obama Administration due to the unfavorable political climate in Washington (see related story). "I think that most people are relieved to finally get a glimpse of the direction that the FDA is trying to take this," said Jen Wagner, a lawyer focused on the legal environment impacting the field of genomic medicine and molecular diagnostics, and a contributing editor to the blog Genomics Law Report. "It is a long road from now until final guidance though."

Wagner was particularly struck by a footnote in the FDA's draft guidance, in which the agency states that it "generally does not exercise enforcement discretion for direct-to-consumer tests regardless of whether they meet the definition of an LDT provided in this guidance. Therefore, the enforcement policies in this guidance do not apply to DTC tests, and FDA's usual enforcement policies apply to DTC tests."

FDA's Yao elaborated that it is precisely the DTC marketing of genomic data analysis that places such tests out of the scope of the LDT guidance. "The FDA generally does not exercise enforcement discretion for direct-to-consumer tests, regardless of whether they meet the definition of an LDT, given that marketing tests directly to consumers may significantly increase the risk of that test because consumers may make decisions based on the results that can adversely affect their health, such as stopping or changing the dose of a medication without the intervention of a clinical intermediary," she said.

Mountain View, Calif.-based 23andMe was the last remaining company in the dwindling DTC genomics testing industry. However, it stopped selling its lab-developed genetic tests directly to new consumers last November after the FDA sent a letter asking the firm to garner approval or clearance of its tests before selling them.

23andMe said in June that the agency accepted its 510(k) application for a health report on Bloom syndrome, but company officials acknowledged that this was just the start of their regulatory interactions with the agency. 23andMe markets genetic test reports for over a hundred conditions.

Prior to the FDA's action against 23andMe, there were a number of other genomic testing firms that marketed LDTs directly to customers, such as Navigenics and Decode Genetics through its DecodeMe service. But after the FDA sent these companies warning letters, they changed their business models and tried selling tests to doctors and healthcare providers. Subsequently, after being acquired by larger companies, these other companies stopped providing genetic testing services entirely.

The agency has said that by regulating DTC genomics firms it doesn't intend to restrict consumer access to raw genomic data, but rather ensure accurate interpretation of genomic findings in the context of people's health. In Wagner's view, the FDA's footnote in the LDT guidance about DTC genomic testing firms raises questions about whether the agency has oversight authority over interpretation of genomic data.

"Given the FDA claims that these rules do not apply to the DTC context, we're … still left wondering how the FDA is distinguishing various types of genetic analysis," Wagner told PGx Reporter in an email. "When it approved the MiSeq platform late last year, the FDA suggested that it was not against individuals gaining access to raw genomic data but, rather, that it was the health-related interpretations that mattered."

"This is quite problematic … because information and interpretive services are not really 'articles' to which the statutory definition of 'medical device' from 201(h) of the FD&C Act can be stretched," said Wagner. "We're all left waiting for more information on what the FDA is going to do with the DTC context."

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