FDA's New LDT Rule Unveiled: Key Insights and Lab Preparations

Prepare for compliance and explore alternatives to mitigate regulatory burdens amidst legislative and legal challenges.

The FDA released its final rule on LDTs on May 6, 2024. Following this, Quadax hosted a webinar featuring Christine Bump, the principal and founder of Penn Avenue Law and Policy. Christine, a regulatory attorney with nearly two decades of experience, specializes in FDA strategies for devices, diagnostics, and digital health platforms. The webinar covered the new rule's implications, its application to various test types, and recommended actions for labs. This is a recap of that webinar.

Labs must prepare for full enforcement of the rule and its phase-out policy while remaining vigilant for potential changes over the next four years.

The FDA published its final rule on May 6, 2024. This is the publication date and the date of issuance. These two items are important because the phase-out policy stages are tied to the publication date and the determination for when something was on the market is tied to the date of issuance. The FDA has clarified that both of those days are May 6th.

Historical Context:

• 1976 Revision: The Federal Food, Drug, and Cosmetic Act was revised to include devices, giving the FDA regulatory authority.
• Device Definition: A device includes in vitro reagents or articles for disease diagnosis, treatment, or prevention.

Diagnostic tests have always been considered devices under FDA regulation. However there has been a longstanding debate about whether all tests should be classified as devices, particularly differentiating In Vitro Diagnostics (IVDs) from Laboratory Developed Tests (LDTs).

IVDs (In Vitro Diagnostics)

Defined under FDA regulations (21 C.F.R. section 809.3), IVDs are test kits manufactured by labs or diagnostic companies. These kits contain all necessary components and instructions, allowing any lab to perform the test.

LDTs (Laboratory Developed Tests)

LDTs are developed and used within a single laboratory, not distributed elsewhere.

What the New Rule Does

The FDA redefined IVDs to include products made by laboratories, eliminating the distinction between IVDs and LDTs. Now, laboratories are considered manufacturers, and their tests are subject to FDA regulation.

Classification of Tests

If all LDTs are now devices, they are classified under the medical device amendments as Class I, II, or III devices.

• Class I devices are low risk.
• Class II devices are moderate risk.
• Class III devices are high risk.

Laboratories must understand that FDA risk classifications are separate from CLIA certification categories. A CLIA high-complexity lab might run low or moderate-risk tests according to the FDA, as CLIA certification doesn't correlate with FDA risk assessments.

Premarket Review

Class I (low risk) devices generally do not require premarket review. Class II and III devices do, involving the following processes:

• 510(k): For Class II devices, demonstrating safety and effectiveness compared to existing devices.
• De Novo: For new devices with no equivalent, reclassified as Class II.
• PMA (Pre-Market Approval): For Class III devices, often requiring clinical trials.

Regulatory Scheme

Beyond premarket submission, regulations governing investigational use, quality systems, labeling, recordkeeping, and reporting to the FDA are included in the phase-out of FDA enforcement discretion.

Exemptions from the Rule and Phase-Out Policy

Certain tests are not subject to the new rule or phase-out policy because they are already regulated by the FDA or not regulated at all:

• Human Cell and Tissue Products: Regulated as biologics.
• Tests Under Emergency Use Authorization (EUA): Used during a federal health emergency as declared by the Secretary of Health and Human Services.
• Direct-to-Consumer Tests: Already regulated as devices if they don't involve a licensed healthcare provider
• Public Health Surveillance Tests: Generally not regulated by the FDA, but screening tests are considered devices unless exempted otherwise.

Enforcement Discretion and Phase-Out Policy: The FDA has claimed authority over LDTs since 1992 but has exercised enforcement discretion, only enforcing regulations when necessary. The new phase-out policy will phase out this discretion over five stages in four years, requiring labs to comply with FDA requirements.

• No True Grandfathering: There are no perpetual exemptions from FDA compliance. Changes in enforcement discretion can subject any test to full FDA regulation.

Enforcement Policy and Phase-Out Stages

• Stages 1 through 3 will apply to all LDTs, though some tests only have to comply with the records requirements under Stage 3.
• Exemptions from enforcement discretion will primarily occur in Stages 4 and 5.

Timeline for Compliance

One to Four Years from Publication of the Final Rule:

• Labs will have to comply with certain FDA device regulations.
• FDA acknowledges the learning curve and believes the phase-out policy gives labs enough time to comply.

Stage 1 (By May 6, 2025): Labs must comply with these sections of FDA’s regulations:

• Medical device reports
• Corrections and removals
• Complaint files

Labs might think they already have complaint files or systems in place, but FDA regulations are different. Labs will need new systems, processes, ways of documenting, maintaining those documents, and ensuring timely and appropriate reporting to the FDA.

Stage 2 (By May 6, 2026): Labs must comply with FDA’s regulations for:

• Registration: Laboratories must register each of their locations with FDA.
• Listing Tests: Specify which tests are developed or manufactured at each location.
• Labeling Requirements: Comply with FDA’s broad labeling requirements, which include anything discussing or presenting the test (e.g., lab reports, conference posters).
• Investigational uses of devices

The FDA will provide guidance on labeling for LDTs, now classified as IVDs and specific regulations will apply to tests considered investigational, requiring compliance during phase two of the transition.

Stage 3 (By May 7, 2027): Compliance with FDA Quality System Requirements

Stage 3 requires compliance with FDA's quality system regulations within three years. These requirements are extensive and distinct from CLIA standards. Laboratories must implement additional systems and processes to meet these standalone FDA regulations, even if they already have robust quality systems for CLIA, CAP accreditation, or New York compliance.

Quality System Requirements for Stage 3 include design controls, purchasing controls, acceptance activities, CAPA, and extensive record-keeping. Labs also must implement and comply with these detailed and labor-intensive requirements.

Stages 4 and 5: Compliance Deadlines

• Stage 4 (Three and a Half Years): PMA applications due by November 6, 2027.
• Stage 5 (Four Years): 510(k) and De Novo applications due by May 6, 2028.

The device industry is working to comply with new regulations separate from the LDT rule. The FDA has harmonized its quality system requirements with ISO 13485, effective February 2, 2026. By this date, all device manufacturers and importers must comply with these requirements. This compliance deadline precedes Stage 3 of the LDT rule, so laboratories will need to meet ISO 13485 standards as part of FDA's quality system regulations.

Exemptions from the Phase-Out Policy: Certain tests are exempt from some or all stages of the FDA's phase-out policy. Here are the key points:

Completely Exempt Tests:

• Types of Exempt Tests: Four types are entirely exempt from stages one through five of the phase-out policy:
  • HLA Tests for Transplantation: Specific definition in the final rule.
  • Law Enforcement Tests: Intended solely for law enforcement purposes.
  • Department of Defense and Veterans Health Administration LDTs: Manufactured and performed within these agencies.
  • 1976-Type LDTs: Original LDTs with all manual processes, using only legally marketed clinical components, and used within a single high-complexity CLIA lab.
    
    
    • Conditions for 1976-Type LDT Exemption:
      • No automation in any process.
      • All components must be legally marketed for clinical use (no RUOs). 
      • Designed, manufactured, and used within a single high-complexity CLIA lab.

Implications:

• Enforcement Discretion: FDA will continue current enforcement discretion for these tests. They are exempt from Stages 1 through 5, but any change in criteria can revoke the exemption.
• Examples of Changes: Automation of any process or using tests beyond an original forensic purpose can end the exemption.

Partially Exempt Tests:

• Exempt from Pre-Market Review: These tests do not need to comply with Stages 4 or 5, but must comply with Stages 1, 2, and all of 3, including all quality system requirements.

In summary, exemptions are conditional, and any deviation can subject the test to full FDA regulation, hence the term "grandfathering" is not appropriate.

LDTs Approved by New York:

• Approval from New York does not exempt labs from FDA regulation entirely.
• Full compliance with stages 1 through 3 is still required.
• New York approval must be specific and applies only to the version of the test approved by New York.

Modified Tests:

• Certain modifications to cleared or authorized tests may be exempt from requiring additional clearance or authorization.
• The modifying lab must be high-complexity CLIA certified.
• Modifications must not significantly alter the test's intended use, safety, or effectiveness.
• Five specific modifications are listed in the final rule.

Important Note: This exemption for modified tests does not apply to modifications of PMA-approved tests. In essence, while these exemptions offer regulatory relief, labs must still meet specific requirements and adhere to FDA guidelines to ensure compliance.

Exemptions for Certain LDTs and Currently Marketed IVDs: Certain LDTs and currently marketed IVDs may be exempt from certain stages of the FDA's phase-out policy. Here are the key points:

Exemption from Pre-Market Review (Stages 4 and 5) and Partial Exemption from Quality System Requirements (Stage 3):

• Certain LDTs and currently marketed IVDs are exempt from pre-market review Stages 4 and 5. They are also exempt from most of stage three, except for records requirements.
• This exemption is the least burdensome among the exemption categories.

Tests in this Category:

1. Certain LDTs for Unmet Needs:
   • Tests addressing unmet needs, where no FDA-cleared, approved, or authorized versions exist.
   • Tests must be integrated within a healthcare system under the same corporate ownership as the ordering physicians.
2. Currently Marketed IVDs Offered as LDTs:
   • These tests must have been on the market on May 6th, the date of publication of the final rule.
   • Any changes to these tests may revoke the exemption, subjecting them to full FDA regulation.
   • Specific modifications, such as changes in indication for use or altering the operating principle, can trigger loss of exemption.

Important Considerations:

• FDA may collect data during stages one and two to identify currently marketed LDTs that may no longer qualify for exemption.
• Labs should not assume permanent exemption, as any changes to the tests may remove them from this category, leading to full FDA regulation.

In essence, while certain tests may currently qualify for exemption, labs must remain vigilant as changes to tests or regulatory requirements may alter their compliance status.

Implementation Expectations and Potential Challenges

The effective date of the FDA's LDT final rule is July 5th, 2024, the phase out began on May 6. However, several factors may influence its implementation and enforcement:

Congressional Review Act (CRA):

• A Joint Resolution has been introduced to nullify the rule due to perceived burdens on laboratories and innovation.
• However, President Biden's support for the rule makes nullification unlikely.

Potential Challenges and Alternatives:

• On May 29, 2024, the American Clinical Laboratory Association filed a lawsuit challenging FDA’s authority to regulate LDTs as devices. This lawsuit includes a request to stop FDA from enforcing the final rule.
• Labs should not rely solely on legal challenges and should prepare to comply with the rule's requirements.
• Compliance with the rule involves significant costs, including system development and hiring of personnel or consultants.
• FDA user fees for pre-market review may increase as enforcement progresses, further burdening labs financially.

Recommended Actions:

• Labs should identify tests subject to enforcement discretion and understand potential compliance requirements.
• Despite ongoing legislative and legal activity, labs should prepare for compliance with Stage 1 requirements by May 6th, 2025.
• Engaging with stakeholders to explore alternative regulatory frameworks, such as the VALID Act, may offer potential relief from burdensome regulations.

In summary, while legislative and legal challenges may impact the rule's implementation, labs should proactively prepare for compliance while exploring potential alternatives to mitigate regulatory burdens. Click here to read our full Q&A for more in-depth knowledge and insights following the webinar.