The U.S. Food and Drug Administration released a final rule yesterday regarding the regulation of laboratory developed tests, also known as LDTs. This final rule follows a proposed rule that was released last fall. While the final rule closely follows the proposed rule released late last year, there are some additional considerations regarding enforcement discretion and specific details on the phaseout schedule.
In the proposed rule, the FDA suggested general principles for expanding oversight of LDTs, while in the final rule, the FDA provided additional detail, highlighting the need for regulatory standardization between LDTs and other in vitro diagnostic devices. The final rule notes that IVDs, when manufactured by laboratories, will be treated the same as other IVDs under the law, unless specific other regulatory considerations apply.
Secondly, while the initial proposed rule mentioned a phaseout schedule, the final rule specifically notes a four-year timeline with five stages, highlighting what regulatory requirements will be at each stage.
A deeper dive into the final rule
The first stage, beginning on May 6 next year, will require companies to comply with medical device reporting requirements, correction and removal reporting requirements, and quality system requirements regarding compliant files. The final stage, beginning May 6, 2028, expects full compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs.
One of the most anticipated sections of the final rule is clear examples of enforcement discretion provided by the FDA. For instance, the FDA provided examples of LDTs used within federal institutions such as the Veterans Health Administration, LDTs that address unmet medical needs, and most significantly LDTs that are currently marketed. Many organizations questioned the enforcement discretion during the comment period, so these examples look to address that feedback.
Furthermore, the final rule includes in-depth economic analysis, including an estimate of the benefits, costs and transfer of the final rule. According to the FDA, the rule will result in an initial annualized estimate of $3.5 million at a 7% discount rate of benefits stemming from the avoidance of harm to patients from the use of problematic IVDs offered as LDTs and avoidance of spending on such IVDs. The estimated annualized costs per the FDA are $1.3 million at a 7% discount rate. In addition, the FDA estimated $41 million in transfers from user fees for premarket submissions.
Finally, in the final rule the FDA detailed the expected public health benefits, including improved patient safety and health care outcomes, reduction in medical errors, and enhancement of diagnostic accuracy through stricter regulatory controls.
The takeaway
The impact of these regulations will not just be seen in laboratories that offer LDTs, but across the health care and life sciences ecosystems. Clinical trials frequently rely on LDTs, from initial diagnosis to screening and testing. Contract research organizations may face increased costs, adding to the extremely high costs associated with running clinical trials. But there are concerns that the FDA oversight may lead to more consolidation in the market, with smaller laboratories unable to dedicate the resources to regulatory compliance as well as limited financial resources.
One question is whether the FDA has the capacity to review these additional filings, especially as PMA First Approvals review timelines topped two years on average in 2023 and average 510(k) timelines have been sitting at over five months since 2021. But the FDA has announced that they are exploring the use of artificial intelligence technologies to facilitate their internal operations and regulatory processes, which may address these timeline concerns.
Overall, the hope is that these regulations lead to better patient outcomes, with the additional oversight aimed to ensure both safety and efficacy. With the challenges facing European companies ensuring compliance with new medical device and IVD regulations, we anticipate a long road to compliance, but ideally with better patient outcomes.
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