Diagnostic Reform Legislation, the VALID Act, Reintroduced

The Verifying Accurate Leading-Edge IVCT Development (VALID) Act of 2021, which would be a fundamental overhaul of diagnostic regulation if enacted, was reintroduced in Congress on Thursday, June 24, 2021. The bipartisan bill is sponsored in the House of Representatives by Reps. Diana DeGette (D-CO) and Larry Bucschon, M.D. (R-IN), and in the Senate by Sens. Michael Bennett (D-CO) and Richard Burr (R-NC).[1]

The VALID Act proposes to create an entirely new regulatory framework for “in vitro clinical tests” (IVCTs), which would encompass both in vitro diagnostic (IVD) test kits and laboratory developed tests (LDTs). While IVDs are currently regulated by FDA as medical devices, LDTs are diagnostic tests that are developed and offered by laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA). FDA’s authority to regulate LDTs as devices has been the subject of ongoing debate and shifting regulatory policies.[2] The VALID Act would harmonize the regulation of both types of tests by creating a single framework for the regulation of all IVCTs.

The reintroduction of VALID reflects a renewed focus on diagnostics legislative reform and follows multi-year discussions and efforts to develop a new legislative framework and resolve the longstanding debate over FDA’s authority to regulate LDTs. A different approach to diagnostic regulation was introduced earlier this year as the Verified Innovative Testing in American Laboratories (VITAL) Act of 2021. Versions of both the VALID Act and the VITAL Act had been introduced in the prior 2019-2020 Congress, but neither had progressed to committee. We expect that VALID will be the focus on significant attention in the next year, with the possibility that the bill could be enacted as part of the reauthorization of the Medical Device User Fee Act in 2022.

Broadly speaking, the structure and regulatory approach of the 2021 version of VALID is very similar to the 2020 version. That said, some important changes were made, including amended criteria for defining high- and low-risk IVCTs, changes to which tests can utilize the various premarket pathways, and several other differences. Below we summarize VALID, and highlight some of the key differences between the 2020 and 2021 versions of the bill.

Risk-Based Framework

The VALID Act proposes a complex framework for classifying IVCTs, principally driven by the risk posed by a particular type of test. The risk classification for an IVCT determines the premarket pathways and other regulatory controls that apply to the test.

Under the bill, some tests may be classified as “high-risk” and others as “low-risk,” according the criteria discussed below. The bill does not define a moderate risk category, but certain IVCTs would qualify as neither high- nor low-risk, and thus fall into an undefined moderate-risk category. In addition, tests also may qualify as a “first-of-a-kind” IVCTs (first test with a particular intended use), “cross-referenced” IVCTs (test labeling references a non-IVCT medical product, e.g., a companion diagnostic), or other defined categories, which can influence the risk-level of such tests.[3]

• High-Risk. High-risk tests include those tests for which an undetected inaccurate result presents unreasonable risk for serious or irreversible harm or death or serious harm to the public health, or is potentially likely to result in the absence, significant delay, or discontinuation of life-supporting or life-sustaining medical treatment. Such tests are required to undergo full premarket review­—similar to a device premarket approval application (PMA)—to demonstrate that they provide a reasonable assurance of analytical and clinical validity. Tests can be removed from the “high risk” category, however, if “mitigating measures,” such as labeling or confirmatory testing, are established to mitigate the risk of harm from an inaccurate result.[4]
• Low-Risk. Low-risk tests, on the other hand, include those tests for which an undetected inaccurate result would cause minimal or no harm, immediately reversible harm, or a remote risk of adverse patient impact or public health impact. A test also may be low-risk if an undetected inaccurate result would cause a serious adverse health consequence, harm that is reversible, a delay in necessary treatment that is not life-supporting or life-sustaining, or would lead to a serious risk of adverse patient experience or adverse public health impact, but mitigating measures “have the capacity” to ensure the test meets the low-risk standard in the previous sentence. Low-risk tests are exempt from premarket review.
• IVCTs that are neither high- nor low-risk. Tests that are neither high-risk nor low‑risk, nor otherwise eligible for exemption from premarket review (see below), also must undergo premarket review to demonstrate a reasonable assurance of analytical and clinical validity. However, streamlined pathways are available for such tests in the form of “special premarket review” for individual tests and “technology certification” for developers of eligible tests (both pathways discussed further below).
• Additional Categories & Exemptions. Some special categories of tests also are exempt from premarket review even if they are not low-risk. These categories include tests that would have been 510(k)-exempt under the device framework, custom or low‑volume tests, humanitarian tests for diseases or conditions affecting ≤ 10,000 people, manual tests, and “grandfathered LDTs,” which are discussed further below.
• Claw-Back. FDA may “claw back” and require premarket review of otherwise exempt tests (e.g., low-risk, grandfathered tests) if it determines the test is supported by insufficient valid scientific evidence, the test is offered with materially deceptive or fraudulent claims, or it is reasonably possible that the test will cause serious adverse health consequences. FDA also may “claw back” for premarket review specimen receptacles for which there is sufficient valid scientific evidence indicating that the receptacle will not perform as intended, will not support the analytical validity of tests with which it is used, or is not safe for use.

When a test is modified in certain ways, it becomes a new test that must be reassessed to determine whether a new premarket review is required. A modified test is a new test if the modification affects the analytical or clinical validity of the test, causes the test to no longer comply with applicable mitigating measures or restrictions, or affects the safety of a specimen receptacle. However, certain software modifications, modifications made pursuant to approved change protocols, labeling changes, and specimen-related modifications will not cause the test to be a new test.

Breakthrough Designation

A test may be designated as a “breakthrough IVCT” if it meets certain eligibility criteria relating to its ability to address an unmet need. The breakthrough designation enables FDA to take certain actions to expedite development and review of the test, but it does not change the applicable standard for approval (reasonable assurance of analytical and clinical validity) or the pathway by which such standard must be demonstrated (i.e., regular or special premarket review). The benefits of a breakthrough IVCT designation are the same as those under the agency’s current breakthrough program for devices.

Technology Certification

The VALID Act proposes to create a “technology certification” process under which test developers may receive a technology certification order that allows them to introduce non-high-risk tests without the individual tests undergoing premarket review.[5] The technology certification process is intended to be similar in concept to the agency’s proposed Pre-Certification program for medical device software. Key components of technology certification include:

• Technology certification orders may be based only on a single “technology,” meaning tests that do not significantly differ in control mechanisms, energy sources, or operating principles, and for which design, development, and manufacturing, are addressed in a similar manner. Developers are not prohibited from receiving technology certification orders for more than one technology, but such orders must be applied for separately.
• Technology certification orders expire after four years, at which point the developer must apply for renewal. However, any tests introduced pursuant to a then-valid technology certification order may continue to be offered by the developer even if a technology order is allowed to expire.
• Applications for technology certification order must include information describing the developer’s quality system, procedures for analytical and clinical validation, and information concerning one or more representative tests within the scope of the application. The representative test may be an IVCT the developer already offers, if such test was submitted for review and approved under the VALID premarket review framework.

Continued Availability of Tests Offered Prior to Enactment

The VALID Act proposes to ensure continued availability of tests offered prior to enactment through a combination of exemptions, deemed approvals, and grandfathering.

• Exemptions for 510(k)-Exempt Tests. Tests that would have been regulated as 510(k)-exempt devices also are exempt from premarket review under VALID. Thus, such tests may continue to be offered after enactment without premarket review, even if such test is not low-risk under the new framework.
• Deemed Approvals for Authorized Devices. Any test with a device marketing authorization, whether 510(k)-clearance, PMA-approval, de novo classification order, or BLA license, will be deemed an approved IVCT for purposes of the VALID Act. Thus, such tests also may continue to be offered without a new premarket review.
• Grandfathered LDTs. LDTs are exempt from premarket review if they were first offered prior to enactment. For purposes of this grandfathering provision, an LDT is an unapproved test developed in a laboratory certified to conduct high-complexity testing under CLIA, and that is performed in that same laboratory, in another high-complexity laboratory under common ownership and within the same corporate organization, or by a public health laboratory within a network coordinated or managed by CDC.

If any of these tests are modified after enactment, however, they may require premarket review under the new framework before they may continue to be offered. For example, an LDT that is modified after enactment may be a new test such that it was not “first offered” prior to enactment.

Emergency Use

The VALID Act also proposes to codify certain aspects of FDA’s COVID-19 testing policy[6] in the event of another public health emergency. Specifically, the VALID Act proposes that, in the event of an HHS determination of a public health emergency under section 319(a) of the Public Health Services Act (PHSA), or in the event of an HHS declaration justifying the emergency use of medical products under section 564(b) of the FDCA, an IVCT may be offered prior to receipt of an EUA under certain conditions, depending on the type of developer. If the developer is a CLIA-certified high-complexity laboratory, the tests may be offered after the test is validated and FDA is notified, as long as the developer submits an EUA within 15 calendar days. For all other developers, the test can be offered only after the test is validated, FDA is notified, and the EUA request has been submitted.

Additional Requirements

The VALID Act also proposes requirements related to registration and listing of IVCTs, test design and quality requirements, labeling requirements, adverse event reporting, corrections and removals, investigational use, and postmarket surveillance. These requirements generally apply regardless of the risk classification or marketing pathway for a test. The test design and quality requirements, as well as some labeling requirements, vary depending on whether the developer is a CLIA-certified, high-complexity laboratory, but other requirements are generally applicable, regardless of the developer.

Transition

The VALID Act proposes to go into effect four years after the date of enactment. Final regulations regarding premarket review, technology certification, adverse event reporting, corrections and removals, adulteration and misbranding must be promulgated within two years of enactment.[7]

Tests that are developed and performed in CLIA-certified, high-complexity laboratories and first introduced between enactment and the effective date may continue to be offered after the effective date if an application for premarket review is pending on the effective date. All other tests must comply with applicable device requirements between enactment and the effective date, and FDA may approve or clear a pending device marketing authorization if it is pending on the effective date.

In addition, beginning five years after enactment (one year after the effective date), new IVCTs must be based on instruments—hardware and software intended to generate a clinical test result—that comply with the requirements of VALID, including premarket approval of the instrument, if applicable.[8] Currently, many hardware and software products that may meet the VALID Act’s definition of “instrument” are marketed without active regulation by FDA (e.g., for research use only), and are used by laboratories to develop LDTs. Under this transition provision of VALID, however, such products—if not approved, cleared, or authorized by FDA prior to enactment—may no longer be used to develop and introduce new IVCTs beginning 5 years after enactment. Thus, manufacturers of such products must seek approval under VALID of already-marketed instruments, or else IVCT developers will have to procure new instruments that comply with VALID to support new IVCT development.

The VALID Act also proposes establishment of a new user fee program for IVCTs.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Food, Drugs, and Devices practice.