Texas judge strikes down FDA rule on lab-developed tests regulation

A federal judge in Texas ruled that the FDA overstepped its authority when it issued its Final Rule: Medical Devices; Laboratory Developed Tests in May of last year, which said laboratory-developed tests (LDTs) should be regulated as medical devices.

In a 450-page lawsuit filed by the American Clinical Laboratory Association (ACLA), molecular testing laboratory for infectious diseases HealthTrackRx Indiana and HealthTrackRx, and others, the plaintiffs claimed the FDA’s rule would dramatically increase research and development costs, hinder innovation and “hamper adaptation of existing tests to meet evolving patient needs.”

The plaintiffs claimed that the FDA’s rule contends that lab testing services are devices because they are similar to in vitro diagnostic (IVD) test kits, which the FDA regulates as medical devices. 

The parties argued that an IVD test kit is a device as it is “a packaged set of components manufactured and sold in interstate commerce as a single physical product, like an at-home COVID test.”

The plaintiffs said that such commercial test kits are different from laboratory-developed tests, which are “professional services performed by professional clinicians in a laboratory.”

Under the FDA’s rule, the plaintiffs said virtually all diagnostic laboratory tests could only be legally marketed after undergoing costly and time-consuming administrative review through the FDA’s regulatory process that was designed for medical devices, not professional testing services. 

The plaintiffs claimed the FDA does not have the authority to regulate professional lab-developed testing services, and the rule could have devastating and far-reaching consequences for U.S. laboratories as well as the entire healthcare system. 

On Monday, the Texas court ruled in favor of the plaintiffs, vacating and setting aside the FDA’s Final Rule and remanding the matter to the Secretary of Health and Human Services for further consideration. 

“The court’s ruling ensures that clinical laboratories can continue to focus on their primary mission – offering innovative and reliable diagnostics that save and improve the lives of millions of patients every day,” Susan Van Meter, ACLA president, said in a statement. “This is a victory that protects patient access to critically needed testing services and removes burdensome regulations that would have undermined the clinical laboratory system in this country.”

THE LARGER TREND

Traditionally, both the FDA and the Centers for Medicare and Medicaid Services (CMS) have overseen LDTs but in different capacities. 

The FDA has long held the power to regulate LDTs as medical devices but did not exercise that authority until releasing its Final Rule last year.

“Both CMS and the FDA believe that patients and their doctors need to know that LDTs are valid. The FDA and CMS both provide oversight to help assure the accuracy of test results; however, they have different roles,” CMS wrote in a press release early last year. 

CMS’ authority is under the Clinical Laboratory Improvement Amendments (CLIA) program, which aims to ensure quality laboratory testing and accurate results. 

“Some have suggested that concerns with LDTs should be addressed through expansion of CLIA. This is not the answer,” the CMS release said. 

“CMS does not have the expertise to assure that tests work; the FDA does. Moreover, establishing a duplicative system for the oversight of tests by expanding CLIA would create more government bureaucracy and inconsistencies. That makes no sense.” 

The FDA announced its plans to enforce regulation of LDTs months after CMS’ press release and just before the Agency released its Final Rule.

The Agency argued that LDTs were increasingly being used to make healthcare decisions while concerns existed around the safety and effectiveness of these tests.

“There is a growing body of evidence that demonstrates that some IVDs offered as LDTs raise public health concerns; for example, they do not provide accurate test results or do not perform as well as FDA-authorized tests, including from published studies in the scientific literature, the FDA’s own experience in reviewing IVDs offered as LDTs, news articles and class-action lawsuits,” the FDA wrote.

“The FDA is aware of numerous examples of potentially inaccurate, unsafe, ineffective or poor quality IVDs offered as LDTs that caused or may have caused patient harm, including tests used to select cancer treatment, aid in the diagnosis of COVID-19, aid in the management of patients with rare diseases and identify a patient’s risk of cancer.”

The Agency said that without greater oversight, patients may initiate, delay or forego treatment based on inaccurate test results or tests with misleading or false claims, which could result in harm, worsening illness or death as well as increased healthcare costs.

A federal judge in Texas ruled that the FDA overstepped its authority when it issued its Final Rule: Medical Devices; Laboratory Developed Tests in May of last year, which said laboratory-developed tests (LDTs) should be regulated as medical devices.

In a 450-page lawsuit filed by the American Clinical Laboratory Association (ACLA), molecular testing laboratory for infectious diseases HealthTrackRx Indiana and HealthTrackRx, and others, the plaintiffs claimed the FDA’s rule would dramatically increase research and development costs, hinder innovation and “hamper adaptation of existing tests to meet evolving patient needs.”

The plaintiffs claimed that the FDA’s rule contends that lab testing services are devices because they are similar to in vitro diagnostic (IVD) test kits, which the FDA regulates as medical devices. 

The parties argued that an IVD test kit is a device as it is “a packaged set of components manufactured and sold in interstate commerce as a single physical product, like an at-home COVID test.”

The plaintiffs said that such commercial test kits are different from laboratory-developed tests, which are “professional services performed by professional clinicians in a laboratory.”

Under the FDA’s rule, the plaintiffs said virtually all diagnostic laboratory tests could only be legally marketed after undergoing costly and time-consuming administrative review through the FDA’s regulatory process that was designed for medical devices, not professional testing services. 

The plaintiffs claimed the FDA does not have the authority to regulate professional lab-developed testing services, and the rule could have devastating and far-reaching consequences for U.S. laboratories as well as the entire healthcare system. 

On Monday, the Texas court ruled in favor of the plaintiffs, vacating and setting aside the FDA’s Final Rule and remanding the matter to the Secretary of Health and Human Services for further consideration. 

“The court’s ruling ensures that clinical laboratories can continue to focus on their primary mission – offering innovative and reliable diagnostics that save and improve the lives of millions of patients every day,” Susan Van Meter, ACLA president, said in a statement. “This is a victory that protects patient access to critically needed testing services and removes burdensome regulations that would have undermined the clinical laboratory system in this country.”

THE LARGER TREND

Traditionally, both the FDA and the Centers for Medicare and Medicaid Services (CMS) have overseen LDTs but in different capacities. 

The FDA has long held the power to regulate LDTs as medical devices but did not exercise that authority until releasing its Final Rule last year.

“Both CMS and the FDA believe that patients and their doctors need to know that LDTs are valid. The FDA and CMS both provide oversight to help assure the accuracy of test results; however, they have different roles,” CMS wrote in a press release early last year. 

CMS’ authority is under the Clinical Laboratory Improvement Amendments (CLIA) program, which aims to ensure quality laboratory testing and accurate results. 

“Some have suggested that concerns with LDTs should be addressed through expansion of CLIA. This is not the answer,” the CMS release said. 

“CMS does not have the expertise to assure that tests work; the FDA does. Moreover, establishing a duplicative system for the oversight of tests by expanding CLIA would create more government bureaucracy and inconsistencies. That makes no sense.” 

The FDA announced its plans to enforce regulation of LDTs months after CMS’ press release and just before the Agency released its Final Rule.

The Agency argued that LDTs were increasingly being used to make healthcare decisions while concerns existed around the safety and effectiveness of these tests.

“There is a growing body of evidence that demonstrates that some IVDs offered as LDTs raise public health concerns; for example, they do not provide accurate test results or do not perform as well as FDA-authorized tests, including from published studies in the scientific literature, the FDA’s own experience in reviewing IVDs offered as LDTs, news articles and class-action lawsuits,” the FDA wrote.

“The FDA is aware of numerous examples of potentially inaccurate, unsafe, ineffective or poor quality IVDs offered as LDTs that caused or may have caused patient harm, including tests used to select cancer treatment, aid in the diagnosis of COVID-19, aid in the management of patients with rare diseases and identify a patient’s risk of cancer.”

The Agency said that without greater oversight, patients may initiate, delay or forego treatment based on inaccurate test results or tests with misleading or false claims, which could result in harm, worsening illness or death as well as increased healthcare costs.