by Amy M. Miller, Ph.D., PMC Executive Vice President

More than 18 months after FDA first published a detailed proposal for regulating laboratory-developed tests (LDTs), many in the community are still advocating for different approaches to the issue. Pain points remain. But now might be the time to begin considering what the community may ask of FDA in the event that a final guidance is published anyway.

FDA and the Centers for Medicare & Medicaid (CMS) have been committed to the agency’s original proposal and its intent to finalize an updated version of it since the beginning, and that hasn’t changed.

In late November 2015, FDA Center for Devices and Radiological Health Director Jeffrey Shuren, M.D., J.D., took the stage with CMS Chief Medical Officer Patrick Conway, M.D., to discuss possible changes to the regulation of LDTs with the Energy and Commerce Committee in the U.S. House of Representatives.

The agencies were in lockstep as they outlined the strategy. Conway clearly stated that CMS lacked the staff, resources and inclination to regulate LDTs — echoing a statement made nearly a decade earlier under the previous administration, to the Secretary’s Advisory Committee for Genomics, Health and Society.

Shuren, on the other hand, told Congress that FDA is ready, able and willing to take on the mission outlined in the draft guidance. Shuren was also clear and confident that the finalized documents could be expected early in 2016. That confidence is logical, and corresponds with the argument that in order to comply with the Congressional Review Act’s language on regulation under a new administration, President Obama must finalize them 60 legislative days before the end of his presidency. Add 60 days for the Congressional notice provision of the Food and Drug Administration Safety and Innovation Act (FDASIA) and the finalized documents may come in mid-March.

For many years, various groups contemplated legislative alternatives to both the current device regulation process and FDA’s regulation of LDTs. Comparison and discussion of those ideas has recently turned toward areas of commonality, not differences. For example, they all take a tiered approach to regulation, with the high-risk tests getting the most attention from FDA, and in some cases, the only attention. Furthermore, most in the community recognize that FDA’s device regulations do not fit diagnostic tests. Finally, many in the community now agree that FDA should be more flexible in its management of modifications, to fit the now-recognized evolution of tests. (For more on the similarities and differences between the various proposals see GenomeWeb‘s white paper on the topic here.)

Why is so much attention paid to this issue?

First, LDT regulation would put a new burden on FDA. Rather than review currently marketed tests, many in the kit manufacturing industry would like FDA to focus on getting new and novel diagnostics to market, and there is concern that FDA’s focus on lab tests would distract the agency from that pursuit.

Second, regulation would put a financial burden on clinical laboratories. Clinical laboratories range greatly in size, and the financial burden of FDA regulation is more than simply user-fees. Labs must manage internal processes and staffing to conform to regulations. Furthermore, they will either need to hire personnel or contract with them to manage filings. These costs, in an ordinary market, would be passed on to the consumer. However, diagnostic coverage and payment policy in the U.S. has led to prices that are set so low many labs will not be able to make the investments in staff needed for FDA regulation. This could result in a substantial contraction of the industry.

Third are the effects on patient access. Significant contraction in the industry will unintentionally hinder access to tests. Furthermore, if the costs of regulation are added to the cost of tests but insurers do not adjust their payment rates, then those cost increases might be passed on to consumers. As a result, patients may avoid testing.

All of this clearly shows that the change will be drastic for clinical laboratories. That is why implementation requests to FDA are so important. How is the agency planning to integrate and assimilate LDTs into a new regulatory paradigm? FDA has long been clear that the proposal starts with high-risk tests, but is it possible to delay the start of that time clock until FDA publishes a priority list and labs come to better understand the definition of a high-risk test? Finally, clinical labs do not fully appreciate FDA’s quality systems requirements and how they conflict or conform to the Clinical Laboratory Improvement Amendments (CLIA) program. Might FDA and CMS provide more technical assistance on that issue?

Recent estimates indicate that there are more than 60,000 gene tests on the market. Of those, nearly 8,000 would probably be considered “high-risk” by FDA, depending on various assumptions. That is only a subset from about 300 labs. Even though the number does include actual FDA cleared and approved kits, it is still an underestimation of the entire world of high-risk tests.

It is important that FDA builds capacity before taking regulatory action. The agency has a responsibility to prepare labs for this change and provide adequate time for compliance.

FDA’s intent is to ensure that personalized medicine testing is safe and effective for patients. Now might be the time to suggest ways to navigate this regulatory shift.