Written by Julie Bick, Ph.D.
Laboratory-derived tests (LDTs) play a crucial role in modern healthcare, offering diagnostic insights and personalized treatment options. These tests are developed, validated and performed within individual clinical laboratories, meaning that there are questions around the quality of LDT test performance between labs. However, LDTs have witnessed a surge in popularity due to their ability to cater to specific patient needs and fill a void in testing solutions that enables clinicians to make informed decisions. As the landscape of medical testing evolves, the regulatory framework governing LDTs becomes increasingly important. In the United States, the oversight of LDTs is a complex interplay of federal and state regulations, involving multiple agencies and evolving policies. This blog aims to provide a comprehensive overview of the regulatory landscape surrounding LDTs, exploring key agencies, historical context, recent developments, and the impact on the healthcare industry.
To understand the current regulatory environment around LDTs, it's essential to trace the historical progression of clinical testing oversight. Historically, LDTs were primarily developed and used within individual laboratories, often associated with academic institutions or hospitals. This decentralized approach allowed for flexibility and innovation but raised concerns about the accuracy and reliability of tests. There were also concerns rooted in the belief that laboratories would only develop tests for their own patients, ensuring a close connection between the test developers and the end-users. In addition, there was a rapid proliferation of highly complex and high-risk LDTs, that prompted regulatory bodies to reevaluate their approach.
In the early 1970s, the Clinical Laboratory Improvement Amendments (CLIA) were enacted to establish quality standards for all laboratory testing to ensure the accuracy, reliability, and timeliness of patient test results, regardless of where the test was performed. By 1988 Congress enacted CLIA of 1988 (Pub. L 100-578) to completely replace section 353 of the Public Health Services Act (PHSA). In order for clinical laboratories to provide testing services, they were required to obtain a CLIA certificate from Centers for Medicare and Medicaid Services (CMS), including payment of fees to cover general costs of administration, as well as inspection fees. While CLIA addressed general laboratory practices, it did not specifically regulate the analytical validity of individual tests, leaving a critical regulatory gap that lasted for several years.
The regulation of LDTs became a highlighted issue with the emergence of more advanced and complex tests, and in 2014, the Food and Drug Administration (FDA) released a draft guidance document proposing a risk-based framework for the oversight of LDTs. This document (link in reference 1) suggested that high-risk LDTs should undergo premarket review, similar to other in vitro diagnostic devices; such a review represented a significant investment in time and funds, which many clinical laboratories could not afford. This proposed shift from enforcement discretion to a more comprehensive supervision approach was met with a mix of support and with some resistance. Proponents argued that stricter regulation would ensure patient safety and improve the quality of tests, while critics expressed concerns about stifling innovation and impeding timely patient access to critically needed diagnostics. In response to the feedback received, the FDA released a discussion paper in 2016 that outlined a potential regulatory framework for LDTs (https://www.fda.gov/media/102367/download ). This paper emphasized the need for a risk-based approach, categorizing LDTs into different classes based on factors such as intended use, technology, and the significance of the results to patient management. There were also discussion drafts circulated by congressional offices that included discussions around LDTs- the Diagnostic Accuracy and Innovation Act (DAIA) in 2017 and the Verifying Accurate Leading-edge IVCT Development Act (VALID) in 2018. In both drafts the term in vitro clinical test was used to describe all diagnostics including LDTs. This created concern and panic for both clinical laboratories and the clinicians who relied on them, with many expressing concerns over access to critical diagnostic tests without which, would be detrimental to patient care. In an effort to gather diverse perspectives, the FDA held public workshops and solicited input from various stakeholders, including laboratory professionals, clinicians, patients, and industry representatives. This collaborative approach aimed to strike a balance between ensuring patient safety and fostering innovation (Gatter, 2017).
By 2019, the FDA had unveiled a proposal to establish a new framework for the regulation of LDTs. This proposed framework involved a phased approach, focusing initially on high-risk LDTs and gradually expanding to include moderate- and low-risk categories. The proposal also included provisions for grandfathering certain existing LDTs and providing a reasonable timeline for compliance. This marked a significant step toward a more structured regulatory framework for LDTs, aligning with the FDA's commitment to patient safety and test accuracy. However, the regulatory landscape continued to evolve, with ongoing discussions, revisions, and refinements to address the concerns of various stakeholders (Mohlman et. al. 2019; Clement et. al. 2019). All of this has had profound implications for clinical testing laboratories and the broader diagnostic industry. Laboratories that develop and offer LDTs have faced increased scrutiny and the potential need for additional resources to comply with new regulatory requirements, and for many laboratories the financial commitments needed to offer these LDTs could not be met. However, for some diagnostic companies, the evolving regulatory environment has created opportunities.
While some companies have adapted by investing in regulatory compliance and developing robust quality systems, others have faced barriers to innovation and market entry. The overall impact on the industry has been a topic of ongoing discussion, with stakeholders expressing diverse views on the balance between regulation and innovation. In addition, the industry has seen a growing emphasis on analytical and clinical validity, along with an increased focus on post-market surveillance to monitor ongoing test performance- all of this in an effort to alleviate the concerns surrounding LDTs and maintain access for patient testing.
In addition to federal oversight, laboratories offering LDTs must navigate state-specific regulations. States have the authority to regulate laboratories within their borders, and the regulatory requirements can vary significantly. This adds an additional layer of complexity for laboratories operating in multiple states, requiring careful navigation of state-specific requirements. Some states have adopted more rigorous regulations for LDTs, (for example New York, which is widely regarded as the most stringent) while others have aligned with federal standards. This patchwork of state regulations can pose challenges for laboratories seeking to ensure compliance across diverse geographic regions. Harmonizing state and federal requirements remains an ongoing challenge within the industry.
Professional organizations and collaborative efforts have played a crucial role in shaping the regulatory landscape of LDTs. Organizations such as the American Clinical Laboratory Association (ACLA) and the College of American Pathologists (CAP) have actively engaged with regulators to advocate for the interests of both clinical laboratories and patients. These organizations have contributed valuable insights, data, and perspectives to inform the development of policies that help to strike the right balance between regulation and flexibility. Furthermore, associations such as the American Hospital Association have published open letters to the FDA to request that LDT oversight remains under the discretion of the CMS and CLIA rather than be considered in vitro diagnostic products [reference 2].
Such open discussions and collaborations between regulatory agencies, professional organizations, and industry stakeholders have been instrumental in fostering a more inclusive and informed regulatory approach. Ongoing dialogue and collaboration will likely continue to be essential as the regulatory landscape evolves further.
The regulatory landscape of LDTs in the United States is a dynamic and evolving space. As technological advancements continue to drive innovation in diagnostic testing, regulators face the challenge of adapting to new testing paradigms while maintaining rigorous standards for patient safety and test accuracy. One ongoing challenge is the need to strike a balance between ensuring regulatory clarity and fostering innovation. The FDA and other regulatory bodies must remain agile in responding to emerging technologies, adapting regulatory frameworks to accommodate new testing modalities, and addressing the unique challenges posed by rapidly evolving fields such as genomics and artificial intelligence.
Another area of future focus is the need for international harmonization of regulatory standards. As diagnostic testing becomes increasingly global, aligning regulatory approaches across different jurisdictions is critical for facilitating market access, streamlining regulatory processes, and ensuring consistent standards for test performance and safety. This is a complex and multifaceted arena, shaped by historical developments, stakeholder input, and ongoing technological advancements. The changing guidelines for regulatory compliance reflect a delicate balance between the imperative to ensure patient safety and the desire to foster progress in the field of diagnostic testing.
On September 29, 2023, the Food and Drug Administration (FDA) issued a proposed rule to end the policy of enforcement discretion with respect to regulation of LDTs. In summary, the FDA is planning to modify the definition of “in vitro diagnostic products” in 21 CFR Part 809.3 to include LDTs, and in so doing, require a more in-depth premarket review. All of the current discretions around LDTs will be phased out in five stages over four years and premarket review requirements will start in the final two stages. Only forensic testing and human leukocyte antigen tests will be excluded from these new requirements. In addition, no grandfathering of any LDTs currently on the market will be considered, but the FDA has yet to consider public comments on this plan. Although many in the healthcare industry were not surprised by the FDA’s new proposal, almost all agree that it is unlikely to become effective without a fight, and it is highly expected that the FDA will face judicial challenges from multiple stakeholders.
As clinical laboratories, industry stakeholders, and regulators continue to develop best practices, collaboration and ongoing dialogue will be essential. The goal is to develop and refine a regulatory framework that accommodates technological advancements and ultimately enhances patient care. The journey toward achieving this balance is ongoing, with the potential to shape the future of diagnostic testing and precision medicine in the United States and globally.
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