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FDA Releases Discussion Paper on LDT Regulation After Gathering Stakeholder Feedback

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NEW YORK (GenomeWeb) – Instead of a final guidance, the US Food and Drug Administration on Friday issued a white paper outlining a framework for regulating laboratory-developed tests based on more than 300 comments to a draft proposal released two years ago, a public workshop, and meetings with stakeholders.

The document, while not enforceable, attempts to strike a balance by addressing the lab industry's concerns about burdensome and duplicative regulations and the agency's growing worries that gaps in the existing oversight scheme under the Clinical Laboratory Improvement Amendments is putting public health at risk.

Two years ago the FDA released a controversial draft guidance outlining a nine-year, risk-based plan for regulating LDTs that it wanted to phase in over nine years. Following the US elections, however, the FDA said it would hold off on finalizing those guidelines

The move was lauded by the lab industry and pathologist groups, which had lobbied against FDA oversight and advanced alternative proposals that would improve existing federal regulatory standards under CLIA executed by the Centers for Medicare & Medicaid Services. One of these proposals, from the so-called Diagnostic Test Working Group, however, would have spread oversight responsibilities across FDA, CLIA, and the states.

Based on the DTWG's framework, the House Energy & Commerce Committee had advanced draft legislation and was gathering stakeholder feedback. However, the document didn't advance much beyond the draft stage, and according to sources knowledgeable of the process, it didn’t have the support of the Senate Committee on Health, Education, Labor & Pensions, where some members are against any expansion of FDA's authority over LDTs. 

In releasing the white paper last week, the agency was careful to present it as another "possible approach." The paper doesn't contain enforceable regulations, and it does not represent a final version of the LDT draft guidance documents, according to an FDA spokesperson. The FDA won't even acknowledge that the ideas in the paper reflect its formal position on LDT regulation. 

The paper, released at the request of stakeholders, "is intended to simply advance public discussion," the spokesperson said. "The FDA is committed to ongoing engagement with and outreach to laboratories, as well as providing educational resources for laboratories, to help develop a potential LDT oversight approach that balances patient protection with continued access and innovation."

The American Clinical Laboratory Association, which remains staunchly against FDA regulation of LDTs and maintains that the agency lacks the statutory authority to oversee such tests, said that it is still reviewing the white paper and will view any regulatory proposal based on key principles that are important to its membership. "Any new regulatory proposal must avoid duplication, it must encourage innovation, and it must protect patient access," said ACLA President Julie Khani.

Detractors of FDA oversight felt that many of the agency's requirements in the draft guidance would have overlapped with CLIA and other standards that labs already have to follow, which in turn would overburden labs and keep them from improving their offerings or releasing tests quickly in a public health crisis. Moreover, industry observers further doubted the agency's ability to handle expanded oversight responsibilities, since by some estimates there are more than 100,000 LDTs on the market. And this became another argument for why FDA regulation could ultimately delay or restrict patient access to critical tests. 

Addressing concerns

In the discussion paper, it's clear the agency has given some thought to the lab industry's concerns. To start, compared to the draft guidance, fewer LDTs would be subject to the most resource-intensive aspects of FDA premarket review.

For example, in the draft guidance, the agency said it would continue to exercise enforcement discretion over certain LDTs used in transplantation and those used for forensic purposes. However, low-risk LDTs, "traditional LDTs," and those for rare diseases and unmet needs would only be exempt from premarket review and quality system requirements, but labs would still have to register and list these tests and report adverse events. 

There was a degree of humility in this discussion document that was positive.

Under this conceptual plan, the agency has narrowed the scope of its oversight to new and "significantly modified" high- and moderate-risk LDTs. However, LDTs on the market before the plan is implemented would be largely grandfathered in and would not have to meet premarket review, quality systems, and registration and listing requirements. New or significantly modified tests that are low risk, for rare diseases, forensic use, transplantation and antibody screening, public health surveillance, and traditional LDTs would also be exempt from having to meet these requirements.

Since fewer LDTs would be subject to premarket requirements, the proposed implementation timeline is also abridged from nine years to four years. In the first year, all traditional LDTs, and those for public health surveillance, transplantation, and forensic use, would have to start reporting serious adverse events and malfunctions. The FDA would require premarket review for new or modified tests that are high risk and moderate risk in the second and third years, respectively, and turn its attention to all other tests in the fourth year. 

In an effort to promote innovation, the agency is also open to broadening the definition of an LDT for unmet need to include any test for which no FDA cleared or approved alternative exists. Labs would have 90 days after launching such an LDT on the market to submit for premarket review and could continue offering the test during the review.

The agency would utilize third-party reviewers, existing standards, and proficiency testing programs under CLIA to reduce the burden on labs. The FDA is also considering forming "clinical collaboratives" with healthcare providers, labs, and IVD manufacturing communities to come up with standards around analytical and clinical validity. Estimating that the New York State Department of Health has reviewed more than 11,000 new and modified LDTs over the last decade, the agency said it is exploring if it's possible to exempt tests approved by NY state regulators from having to come into the FDA. Alternatively, tests with FDA approval wouldn't need NYSDOH approval.

The FDA also met with accrediting organizations that inspect labs under CLIA, and found that they review some but not all aspects of LDT development that the agency's quality systems regulations would address. As such, the FDA envisions focusing its assessments on three aspects of test development that aren't covered by CLIA — design controls; mechanisms for ensuring tests meet certain requirements during the entire testing process; and procedures for correcting quality problems. These quality systems inspections would be carried out by FDA-accredited third parties.

"There was a degree of humility in this discussion document that was positive," said Gail Javitt, a lawyer for the firm DLA Piper who provides regulatory advice to medical device and drug firms. "There was a recognition that entities both in the government and outside have expertise to share here."

The FDA has been trying out collaborative approaches through PrecisionFDA, a cloud-based platform where providers of next-generation sequencing tests and others in the life sciences community can share datasets and bioinformatics tools. The hope is that this stakeholder community will organically produce benchmark standards for genomic analysis.

In a draft guidance issued last year, the agency similarly proposed to exempt moderate-risk germline NGS tests for 510(k) notification if they meet FDA-recognized standards advanced by the scientific community or a standards development body. 

The concepts in the discussion paper on LDT regulation provide a basis for further discussion on the oversight of NGS testing, many of which are LDTs and are being used to make high-risk decisions about what treatments cancer patients should receive, reflected Jeff Allen, president of advocacy organization Friends of Cancer Research. Further discussion of the risk-based framework could enable evaluation of tests that measure multiple genetic markers, he said, so that doctors and patients have a better understanding of the similarities and differences between them.

The devil is in the details.

Finally, the FDA also attempts in the paper to mollify the lab industry's fears that they'd have to garner the agency's go ahead for every little modification to an LDT. Since labs tweak and adjust lab test mechanisms daily, this could quickly become untenable. The FDA proposes in the paper that as part of premarket review labs would submit protocols for the changes they anticipate having to make, and as long as the modifications are made according to these protocols, they wouldn't need a new submission.

But the paper also raises some new questions and concerns. For example, the shorter, four-year time frame might mean some labs also have less time to meet the agency's requirements. Javitt flagged FDA's definition of "traditional LDTs"— tests that use components that are legally marketed for clinical use and are interpreted manually by a lab professional without automated instrumentation or software. Given the amount of "automation" in laboratory testing, this may be a "vanishingly small category," she reflected.

"The devil is in the details," said Girish Putcha, a regulatory and reimbursement policy expert, also reflecting on this part of the paper. Many LDTs may not meet the definition of traditional LDTs because, he pointed out, it's fairly common for labs to use components that are labeled for research use, which cannot be marketed for clinical use under current FDA guidelines.  

Maintaining authority

The agency generally takes a concilliatory tone in this white paper, but not so much when it discusses the impact of testing on public health. According to the paper, the agency would retain the right to impose premarket review and other requirements to any LDT that is unsupported by analytical or clinical validity data; when a lab has deceptively marketed an LDT; or when an LDT might seriously harm patients or cause their death.

The FDA also discusses the need for transparency around what an LDT can and cannot do. The agency would publish information about the analytical and clinical validity of the tests it reviews, but for exempt tests, it would be up to the labs to make such information public. In the future, the FDA said it might reduce post-market adverse event reporting requirements for certain LDTs, as real-world use data emerges.

"As is the case now, the FDA maintains its authority to take appropriate enforcement action if necessary to protect the public health," the agency spokesperson said. "LDTs remain under enforcement discretion, but they are still medical devices over which the FDA has regulatory authority."

Although the FDA is holding off issuing final guidance, the agency has maintained that it has legal authority to regulate LDTs. "They are keeping the option to regulate open, although they don't have a specific timetable they are articulating," Javitt observed. "They could have let the matter drop, but I think they are putting a marker down for future regulation, albeit in a more toned-down form." 

Counter to stakeholders that prefer regulatory improvements be made strictly through changes to CLIA, the agency argued in the paper for a "complementary approach" that takes advantage of FDA's experience in conducting premarket reviews and establishing clinical validity of LDTs, which currently isn't done under CLIA.

"Adapting CLIA to enable CMS to provide the kind of effective oversight of LDTs that is needed to ensure that they are accurate, reliable, and clinically valid would require a significant change in the nature of what the agency does, rather than minor modifications as some have suggested," the FDA stated in the paper. Maintaining the current dual pathway for diagnostics — LDTs overseen by CMS and in vitro diagnostic kits regulated by the FDA — would create regulatory inconsistencies, jurisdictional challenges, as well as costly federal redundancies, the agency wrote.

Moreover, maintaining a dual regulatory pathway obfuscates the "goal lines" tests have to meet in terms of regulation and reimbursement, Putcha observed, which makes it difficult for innovators and investors to formulate a reasonable expectation of a return on investment.

"Regulation can actually incentivize and reward real innovation by providing market barriers to substandard products," said Putcha, who is director of laboratory science for Medicare contractor Palmetto GBA but wasn't speaking in that capacity. "I would argue that the existing parallel universes of LDTs and IVDs actually hinder real innovation in this space by creating a double standard based on who or where the test is provided."

Regulation can actually incentivize and reward real innovation by providing market barriers to substandard products.

After reading the discussion paper, Javitt came away thinking that the story is not fully written with regard to the FDA and LDTs. The agency's recent recommendation against using ovarian cancer screening tests shows the FDA is still tracking LDTs and might be mulling the best way to exercise its authority.

"I wouldn't expect to see something big any time soon," she said. "But I think they're leaving their options open to enforce ad hoc, which is what they were doing before they started talking about a comprehensive framework." 

The agency has issued discussion papers before, for example, when it was mulling regulations around use of human tissues in the 1990s, and it took around a decade to go from discussion paper to complete final regulations. "They may be harkening back to that model," Javitt said. "While it did result in regulation of an industry that had not been previously regulated, … it was a much more sequential engagement."

Similarly, in 2005, the FDA shared its preliminary thoughts on how to co-develop a drug and diagnostic as a framework for advancing personalized medicines through a concept paper. The agency issued final guidance on this topic last year. 

The agency also issued a white paper in 2015 to communicate that it was considering a standards-based approach to assessing analytical validity of NGS tests and using public variant databases to ensure clinical validity of such tests. Based on the ideas in those papers and subsequent public workshops, the agency issued two draft guidances last year. 

It remains to be seen what will follow from the FDA's white paper on LDT regulations, if it will catalyze discussion as intended and whether the status quo will change. "The FDA doesn't really provide a pathway for how they're going to get from discussion paper to the next step," Javitt said, noting that while stakeholders can write in to FDA about the paper, the agency isn't inviting it.

ACLA, meanwhile, also hasn't backed off its position that the FDA lacks statutory authority to regulate LDTs, and continues to back a legislative solution for diagnostic regulatory reform, which Khani believes is possible in the current Congress. "We look forward to working with the FDA, with CMS, with Congress, and the broader stakeholder community on pro-patient, pro-innovation diagnostic [regulatory] reform."

Others see congressional action as a remote possibility given the anti-regulation bent of the incoming administration and Republican legislators. "New legislation directly addressing the regulatory morass that currently exists is probably ideal, but seems unlikely in the next four years," said Putcha.

Although Putcha believes the FDA's discussion paper could form the basis of future regulatory reforms, it is only possible if "all stakeholders engage in a good-faith way," he said, "and not merely be obstructionist, while claiming to have patient's health and safety at heart, in order to protect their own parochial interests."

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