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Legislators Question FDA, Stakeholders on How LDT Oversight Impacts Industry, Patients, Innovation


Originally published Sept. 9.

NEW YORK (GenomeWeb) – Members of the US Congress today grilled a US Food and Drug Administration official regarding the agency's legal authority to regulate lab-developed tests (LDTs), asking whether new requirements would trigger additional costs and taxes upon laboratories, and whether the FDA itself had the necessary resources to take on this enormous task.

The congressional hearing held by the House Energy and Commerce Committee's subcommittee on health follows the FDA's notice to legislators at the end of July of its intent to issue draft guidance after 60 days outlining regulatory requirements that developers of LDTs will have to meet to ensure they are marketing accurate and reliable devices. The "anticipated" guidelines, as described by FDA, would bring LDTs under the agency's oversight in a risk-based way over the next decade.

According to the proposed draft document, the FDA's requirements – for registering tests, reporting adverse events, garnering 510(k) clearance, and premarket review of LDTs – increase depending on the risk classification of a particular test. Class I tests confer the lowest risk, Class II devices have moderate risk, and Class III tests have the highest risk. 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. Labs performing these types of tests will not be required to submit evidence for premarket or quality systems review.

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 the next nine years. A year after the LDT guidance is finalized, FDA will require labs that make the highest risk tests – LDTs 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 – to submit documents for premarket review. Subsequently, the agency will turn its attention toward LDTs with the same intended use as FDA-approved Class III devices and then enforce the premarket review requirements for labs marketing Class II LDTs. The agency plans to issue a separate guidance in the next year and a half, clarifying the criteria for determining the risk classification for an LDT.

Jeff Shuren, director of the FDA's Center for Devices and Radiological Health, told legislators during the webcasted hearing that this draft guidance has been a long time coming. The agency began discussing regulating LDTs in the 1990s and since then, many other agencies have urged FDA to bring LDTs under its oversight. The FDA has held meetings and tried to regulate certain types of LDTs through earlier guidance that it has since abandoned in favor of a more overarching policy.

During 40 years of "enforcement discretion," while LDT oversight was in the hands of CMS under CLIA, diagnostic technologies have gotten more complex, Shuren said, and the risk that patients might receive inaccurate test results has increased. Moreover, he pointed out that traditional diagnostic kit manufacturers have long complained that the dual regulatory pathway – one for LDTs through CMS and another more costly and stringent one for kits via FDA – creates disincentives for kit makers making complex, innovative tests.

"The issue is not do we regulate, but how we regulate," Shuren said. "This is no sudden change. This has taken years," he said of the agency's move to issue guidance on LDT regulation. "The question shouldn't be 'Where did this come from?' The question should be, 'FDA, what the heck took you so long?'"

More than FDA can chew?

Members of the subcommittee from both sides of the aisle expressed concern during the hearing about the scope of FDA's LDT oversight plan and whether the agency had the bandwidth to carry it out in a fashion that wouldn't hinder innovation and patients' access to necessary tests. The FDA estimates that there are 6,000 labs with the ability to develop LDTs, many of which will be low-risk tests or diagnostics for rare diseases that the agency will continue to exercise "enforcement discretion" over.

Alan Mertz, president of the industry group American Clinical Laboratory Association, meanwhile asserted to members of Congress that the FDA has probably bitten off more than it can chew with its LDT oversight plan. The number of highly complex labs performing LDTs is closer to 11,000, according to Mertz's survey of the field. "The potential workload for the FDA is staggering," he said during the hearing, noting that the FDA may be dealing with as many as 100,000 LDTs that will now fall under the agency's regulatory framework.

"Last year, the FDA approved only 23 premarket applications for diagnostic tests," he noted. "We had heard some reports that [FDA] might look at 100 of the highest risk tests in the first year or so. That would be a five-fold increase in the number of [premarket reviews] FDA would be doing in the first year."

Paying for it

The FDA depends on congressional appropriations and industry user fees to fund its activities. "The phase-in [regulatory plan] was an attempt to try to fold this in with the current resources that we already have," Shuren said. "If it turns out there is additional need on resources, that's the kind of conversation we have as a part of the user fee [discussion]."

Upon questioning from representative Renee Ellmers (R-NC) about whether FDA intends to collect user fees from labs to support its oversight framework, Shuren explained that for labs that have to take LDTs through premarket review during the three fiscal years covered by the current Medical Device User Fee Amendments 2012 (MDUFA III), the agency will waive user fees. "For MDUFA IV, we would like to have labs at the table to have that discussion" to gauge if additional user fees are necessary, Shuren said. MDUFA III authorizes $595 million in user fees for fiscal years 2013 through 2017.

But if the agency waives user fees from labs under the MDUFA III process, then "FDA would have no additional money" to do these 100 or so additional reviews for high-risk LDTs, Mertz pointed out. In past years, Mertz and other lab industry stakeholders have supported legislation that would bolster CMS's authorities to regulate LDTs. One such bill, the "Modernizing Laboratory Test Standards for Patients Act," was introduced several years ago by subcommittee Vice Chairman Michael Burgess (R-Tex.). The bill would have kept LDT oversight under CMS, but would have also expanded the center's authority by granting it the ability to assess whether marketed LDTs are "clinically valid," not just analytically valid.

CLIA is funded entirely through industry user fees and Mertz indicated to that the lab community was willing to pay to keep LDT regulation under CLIA. The lab industry's willingness to pay may be tempered based on the cost of expanding CMS's authority under CLIA. During the hearing, Shuren noted that CMS had previously estimated a range of between $50 million and $100 million to put in place the necessary regulatory processes to oversee LDTs more rigorously.

Furthermore, Ellmers wondered whether FDA's regulation of LDTs will mean new taxes for labs. The Medical Device Excise Tax requires manufacturers to pay 2.3 percent of the sale price of a taxable medical device. Shuren acknowledged that some labs selling higher risk tests will indeed face this tax. "Registration and listing of that device triggers the tax," he said.

Labs that have to take their LDTs through the FDA premarket review process must register and list those devices, and therefore would be subject to that tax. Meanwhile, labs marketing LDTs that are low risk and for rare conditions can choose to notify FDA about an LDT, not register the test, and can avoid the device tax. "For a lot of these tests, if we're not going to subsequently regulate them, they were going to be under enforcement discretion, [and so] we weren't going to trigger all the other things that go with that," he added. "We were trying to give labs a break."

Need for economic analysis

Noting that oversight of LDTs represents a significant shift in its policies, some legislators pressed FDA about whether it should issue a rule, instead of a guidance, to implement its regulatory plan. In contrast to guidance, in issuing a rule the FDA would need to provide more justification for its policy changes, for example, showing what the economic impact of the proposed regulatory plans would be.

"I firmly believe the FDA lacks statutory authority to regulate medical practice," said Burgess, who is also a physician. "Laboratory developed tests are a service, not commercialized devices."

Burgess questioned five experts testifying before the subcommittee on whether FDA can achieve its LDT oversight aims through guidance versus rulemaking. ACLA's Mertz said the agency should undergo the rulemaking process; Kathleen Wilsey, cofounder of the Coalition for 21st Century Medicine, said both pathways would achieve similar outcomes; and Charles Sawyers, past president of the American Association for Cancer Research, noted that guidance was a good way to start regulating LDTs, followed by a rule down the road. Andrew Fish, executive director of AdvaMed Diagnostics, representing kit manufactures, and Christopher Newton-Cheh, a cardiologist who testified on behalf of the American Heart Association, supported the guidance pathway.

Burgess hinted several times during the hearing that the FDA was issuing guidance in order to avoid an economic impact survey by the Office of Management and Budget. "Are we going with guidance, because [rule-making] actually triggers a response from the OMB as to the financial impact" of the policy changes, Burgess posited. "If the onus is so severe, then why not go through a more … established pathway and let's do the economic analysis."

The extent of harm

Throughout the hearing, members of the subcommittee continued to return to whether FDA had the legal authority to regulate LDTs. Shuren maintained that the agency has always had the authority to regulate LDTs, which are in vitro diagnostics, and therefore fall under the 1976 Medical Device Amendments.

Although the agency has for four decades practiced "enforcement discretion" over LDTs, leaving oversight responsibilities to CMS, the FDA has said that it has long wanted to lift this practice, having noticed that labs that traditionally developed tests for rare conditions were increasingly marketing LDTs for common illnesses to a broader population of patients.

In Newton-Cheh's view, regardless of whether or not the FDA has the authority to regulate LDTs, the agency needs to step in now in order to protect public health. "The American public by and large has supported FDA's regulation of pharmaceuticals. They would not support rolling back to a 19th century Wild West, where snake oil is indistinguishable from safe and effective therapies," said Newton-Cheh, who in addition to representing the AHA is also an assistant professor at Harvard Medical School. "By the same token, they would not accept continuing unregulated LDTs in the 21st century."

The agency has repeatedly cited public health concerns for its decision to regulate LDTs. Leaving LDTs to be overseen under less stringent CLIA regulations has resulted in patients getting erroneous results or unnecessary testing, FDA Commissioner Margaret Hamburg said back in July when the agency initially gave Congress notice of its plans.

At the hearing, Shuren cited more concrete examples of patient harm. "Tests for breast cancer had high false negatives," he said. "So, people were being told that [they weren't candidates for] the treatment that's available… when in fact they would have been a candidate."

Another instance of patients receiving unproven LDTs highlighted by Shuren was of a test that gauged a genetic marker that initial studies suggested was associated with increased risk of cardiovascular events and response to statins. But subsequent investigations failed to conclusively link the marker to the disease.

Shuren was likely referring to genetic testing for the KIF6719Arg variant. Testing firm Celera received a "not approvable" letter in 2011 from the FDA for its KIF6 Genotyping Assay. As part of its premarket approval submission for the KIF6 test, the company conducted a retrospective analysis of several large, prospective studies showing KIF6's association with cardiac events and statin benefit. However, the FDA informed the company that it needed to conduct a prospective, randomized trial proving that the test is clinically useful to doctors in identifying which patients at risk for coronary heart disease would benefit from taking statins.

"We wound up seeing the data on this [test], and there was a subsequent study that showed that the markers didn't actually predict" risk of heart disease, Shuren recounted. While Celera was seeking FDA approval for its KIF6 diagnostic kit, the company was selling an LDT gauging the same marker through its Berkeley HeartLab subsidiary. The company had said at the time that it had tested nearly 200,000 people for the KIF6 marker with the LDT. Shuren estimated that the costs associated with the marketing of this unproven LDT could be as much as $2 billion.

Many in the lab industry don't buy FDA's public health concerns as a justification for regulating LDTs, and some have asserted that these fears are overblown. Congressman Henry Waxman (D-Calif.) pointed out that an HHS committee several years ago had found "there had been few documented cases where patients experienced harm because of errors in a CLIA regulated genetic test." To this Shuren replied that the extent of the harm patients may have experienced as a result of erroneous or unproven LDTs cannot be fully gauged because there is no adverse event reporting system in place under CLIA.

FDA's LDT framework would enable adverse events tracking for LDTs."CLIA's purpose is not to assure that tests are safe and effective," Shuren said, further noting that the same HHS advisory committee in the end actually backed FDA oversight of LDTs. "The absence of evidence" that LDTs are a threat to public health "doesn't mean there is an absence of a problem," he said.