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Q&A: ACLA President Alan Mertz on Option of Suing FDA to Stop LDT Regulation

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NEW YORK (GenomeWeb) – The American Clinical Laboratory Association has tried lots of different ways to stave off the US Food and Drug Administration from regulating the tests and services provided by its members.

Over the years, ACLA members have participated in public meetings, written letters, commented on proposed guidelines, testified before Congress, and supported legislation that would improve regulation of laboratory-developed tests (LDTs) by changing the existing framework under the Centers for Medicare & Medicaid Services. Last year, the association submitted a Citizen Petition laying out the community's arguments as to why LDTs aren't devices and are therefore outside of FDA's statutory oversight under the Medical Device Amendments.

Although lab industry players have often talked of suing the FDA to settle the question at the heart of the dispute – whether the agency has statutory authority to regulate lab tests – it hasn't amounted to much more than just talk until this week, when ACLA announced that it had retained Solicitor General Paul Clement, a partner at Bancroft PLLC, and Laurence Tribe, constitutional law professor at Harvard University, for legal advice on LDT regulatory matters.

While there's no lawsuit yet, ACLA may choose to pull that trigger depending on the direction FDA goes with the draft guidances it issued in October outlining its LDT oversight plans. Alan Mertz, ACLA president, talked to GenomeWeb about the association's decision to bring in legal counsel and the group's strategy to keep LDT regulation out of FDA's hands. Below is an edited transcript of the interview.


The debate around FDA's regulation of LDTs has been going on for more than a decade. During that time, ACLA members have talked about taking legal action against the agency. What pushed you to take concrete steps in this direction finally?

Once the FDA gave notification [to the US Congress] and put out the draft guidance, we started talking about wanting to have additional legal counsel. We knew we wanted to comment on the guidance, and of course we testified before the House Energy & Commerce Committee meeting. There were a number of things with which the seriousness of this increased. We wanted to have some of the best legal minds take a look at this and advise us as we go forward.

You haven't officially filed a lawsuit against the FDA, but what would need to happen for you to exercise that option?

The hiring of the lawyers does show that we do take what the FDA is proposing very seriously. We want to explore all the avenues of trying to stop this. It's too early to say what we're going to do. We want to keep our options open. We're going to comment on the draft guidance. We would hope that the FDA did not move ahead with the final guidance on this, but we'll wait and see what that looks like before we decide what our next steps should be.

So ACLA is still planning to engage with the FDA in this guidance development process?

Yes, we will comment on it. We plan to participate in the public meeting the FDA is going to have in January and we'll try to meet with FDA. So, yes, we'll definitely be engaging with the agency in the coming months.

If a lawsuit were to result, what judgment would ACLA seek from the court?

Again, we haven't made the decision to litigate. It is pretty clear through the Citizen Petition we put out in 2013, as well as our testimony in September to the House Energy & Commerce Committee, and other statements we've made that we have long maintained that the FDA doesn't have the statutory jurisdiction over LDTs to regulate them as devices. Even if they did have that jurisdiction, which we do not think they do, [these regulations] would have to be done through official rulemaking and not guidance.

In conjunction with this, the American Medical Association put out a letter with signatures from a number of organizations, including hospitals and many academic labs, taking the position that this cannot be done through guidance; it has to be done through rulemaking. We signed that letter, which states that the organizations that have signed the letter don't believe that FDA has the statutory authority to regulate LDTs.

It's interesting that you're willing to engage with the FDA through this guidance development process, but at the same time, you're not supportive of advancing regulations through guidance. So what would satisfy ACLA members as the FDA moves ahead with its draft guidelines? What is the outcome you want to see at the end of it?

The outcome we'd be asking FDA for is that they don't finalize the guidance.

As you said, the AMA has gotten a number of stakeholders to write the FDA and request that the agency pursue notice-and-comment rulemaking in promulgating LDT regulations. Could you explain why rulemaking would be better? How would the outcome be different or more favorable for the lab industry through the rulemaking process, than through guidance?

We don't even think FDA should pursue rulemaking to advance LDT regulations because we don't think they have the authority. If they did have the statutory authority and they had to go through rulemaking, the primary difference is they'd have to analyze the economic impact on the federal government, but more importantly the impact on the laboratory industry. Secondly, FDA would have to respond to all the comments one by one.

Doesn't FDA respond to comments on draft guidances?

It's their policy. FDA says that they would [respond to comments], but there's no statutory requirement to do so. And there is certainly no economic impact analysis that they have to do. That analysis is very important because it means that the FDA would have to define what a high-risk LDT is at the beginning. You can't really do an economic impact analysis on the government or on the industry without deciding how many tests are going to be required to submit to the FDA for clearance. Currently, we're going through this initial guidance process and some year or two later FDA is going to decide what high risk is.

And who would look at whether that economic impact was positive or negative on the government and industry?

That is definitely something that the Office of Information and Regulatory Affairs in the Office of Management and Budget does look at. They try to do that before a rule is even proposed, and certainly they can look at it before [a rule] goes final, as well. It would be very illustrative to Congress, as well as to OMB, as to what the economic impact is.

Then if the analysis yields a negative economic impact, then you think there might be a good chance that the rule may not be implemented?

Well it would provide Congress and OMB information that would certainly raise some fundamental questions about FDA getting into regulating LDTs … You first have to look at what the problem is they're trying to solve and how bad is the problem. The FDA really hasn't come up with solid examples of where LDTs have caused harm. On the other hand, if you did a careful analysis on what the impact is going to be on patients, labs, and innovation, and compared that to the problem they're trying to solve, it would be very illustrative. It would raise a lot of concern with Congress and with OMB.

ACLA supports improving regulations for LDTs through CLIA. How long would it take to get CMS up to speed to promulgate such a plan?

It certainly wouldn't take nine years, which is what the FDA is proposing.

It certainly wouldn't take nine years, which is what the FDA is proposing.

Do you think improving LDT regulations through CMS would be faster?

I do, and I'm serious about that. It's not going to take nearly as long because CLIA is 100 percent funded by lab user fees, and those fees could be increased to cover [regulatory] efforts. This is very different from the way FDA is funded. I've heard that between 20 percent and 30 percent of the cost of the device reviews is covered by user fees. So, there's a much better funding structure through CLIA that could be increased so [CMS] would have the resources to do it. The regulatory gaps that exist could be filled fairly quickly and the funds would be there to do it, because the industry is willing to pay a bit more in user fees.

But with the FDA, it would take the agency nine years [to fully implement the proposed plans] because they're really starting from scratch and they don't really regulate laboratories. If you line up everything labs have to do under CLIA, in terms of quality systems, lab inspections, and proficiency testing, with the FDA's [proposed] requirements for labs to register as device manufactures and for quality systems, it would be very duplicative and complicated. You'd just have to start all over again and it would add a whole new layer [of regulation], whereas just adding a few things to what CLIA already does would be much, much simpler.

I have maintained that you'd have many more LDTs that would go through a review process under a stepped up CLIA [pathway] than you would through FDA. [The agency] only did 23 premarket approvals last year. There are more than 10,000 LDTs [from high complexity labs] and the number of LDTs that the FDA would be able to review would start out very small.

Has ACLA garnered any support from CMS for such a CLIA-focused proposal? And where does the College of American Pathologists [which accredits labs] stand in all of this?

We have talked to CMS going all the way back to when FDA first proposed regulating LDTs. CMS has taken the position that they have their hands full with what they're doing right now. They have a lot of [CLIA]-waived tests they're concerned about. This is not unusual. Most agencies don't want to take on more work than they have to … But that's why you have Congress, and Congress can direct [CMS] to take on some additional work. But we're willing to give CMS the funding to do it and hire them some additional people to do it.

Where CAP is on this, you'd have to ask them. We have a lot of folks who are pathologists with our [lab] members [and] who are CAP inspectors … [and] while they don't speak for CAP, they don't understand the FDA starting this new regulatory process. They see the value of doing this through CLIA.

The FDA has repeatedly said that the current regulatory framework has resulted in faulty LDTs and, in some instances, patient harm. But ACLA says that FDA regulation would result in patient harm. So, if FDA's plan were to go through, what would be the harm?

At the [congressional] hearing in September [FDA's Center for Devices and Radiological Health Director] Jeff Shuren was asked by the committee to provide a list of the actual harms that resulted from LDTs. We still haven't seen that list. The examples that FDA has raised, there has yet to be one where something has gone wrong with an LDT and resulted in patient harm. There may be a case out there … but FDA has not provided an instance of documented harm as a result of an LDT. The cases they raised, the harms were not a result of the test.

Some of the examples [of harm] have to do with direct-to-consumer testing. That's a different kind of problem and we think that CLIA should address the DTC issue. We don't allow labs to join ACLA that are [selling tests] DTC and don't use a physician to order the test.

So, then, what's the harm in FDA regulating LDTs?

That's a different kind of harm. That's harm in terms of stifling innovation … because [for a test] to go through a full premarket review, the costs can be in the millions of dollars. It's rare that an LDT would have the kind of reimbursement that could justify that kind of an investment. We know that most LDTs could never afford to go through that kind of a process through FDA.

That's a different kind of harm. That's harm in terms of stifling innovation.

I've asked a number of labs that joined ACLA and had developed some of the breakthrough tests 10 years ago, "You're successful now, but if you had to go through an FDA review for a Class III or Class II [device], what would have happened?" And they've told me that they wouldn't have been able to develop the test. They've told me that over and over again. So, that's the harm that we see. And patients will be harmed because the tests will not exist.

Can you give some examples of breakthrough tests that you think wouldn't exist today if they had to go through FDA premarket review?

Most of the tests for infectious diseases wouldn't have been created. You can go all the way back to HIV genotyping tests back in the 1980s. If they had to go through an FDA process they wouldn't have been developed … Most of the cancer tests would have probably would have had a very difficult time.

You're saying you're not suing the FDA, and that you're keeping your options open. But at this point, ACLA has already exercised a number of those options, through public meetings, letters, legislation, and Citizen Petition, to try to convince the FDA that its regulation of LDTs would hurt the industry. It hasn't worked. Now ACLA has retained counsel. Is suing the FDA the nuclear option for ACLA?

It's one of the options that we'll have to consider if FDA goes ahead with finalizing its guidance. But we haven't made that decision yet. We have to see what happens. Congress could also get involved in this, and the FDA could decide to go in a different direction.

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