Unpacking FDA’s Final Rule to Regulate Laboratory Developed Testing Services as Medical Devices

Unpacking FDA’s Final Rule to Regulate Laboratory Developed Testing Services as Medical Devices

May 1, 2024, Covington Alert

On Monday, April 29, 2024, FDA announced the publication of its Final Rule to regulate laboratory developed testing services (LDTs) as medical devices under the Food, Drug & Cosmetic Act (FDCA), less than five months after the close of the public comment period on the proposed rule.[1] Like the proposed rule, the Final Rule amends the definition of “in vitro diagnostic product” at 21 CFR 809.3 to include “when the manufacturer of these products is a laboratory,” and announces a staged phaseout of enforcement discretion. Key takeaways and open questions regarding the phaseout policy as announced in the Final Rule are summarized below.

1. The Final Rule broadly regulates all “IVDs offered as LDTs,” with limited exceptions and targeted enforcement discretion for certain categories for tests.

As a baseline, the Final Rule applies to all “IVDs offered as LDTs,” with limited exceptions. Specifically, FDA states that it will continue to exercise general enforcement discretion from all requirements under the FDCA only for the following LDTs that are designed, manufactured, and used within a single laboratory certified under the Clinical Laboratory Improvement Amendments (CLIA) to perform high-complexity testing (CLIA-certified, high-complexity laboratory):

• “1976-Type LDTs” that use manual techniques (without automation), using components legally marketed for clinical use;
• Human leukocyte antigen (HLA) tests that are used in connection with organ, stem cell, and tissue transplantation; and
• Tests that are manufactured and used within the Department of Defense (DoD) or the Veterans Health Administration (VHA) for patients being tested and treated within those systems.

Additionally, FDA clarifies that tests intended solely for forensic (law enforcement) purposes and public health surveillance tests remain subject to enforcement discretion.

However, the Final Rule announces targeted enforcement discretion policies for certain categories of tests, such that those tests generally will not be expected to comply with premarket review and, in some cases, most quality requirements. The main categories include:

• Currently marketed LDTs;
• LDTs offered by a laboratory integrated within a healthcare system to meet an unmet need of patients receiving care within the same healthcare system;
• LDTs that are approved by New York State Department of Health Clinical Laboratory Evaluation Program (NYS CLEP); and
• Modifications by CLIA-certified, high-complexity laboratories to 510(k)-cleared or De Novo-authorized tests that would not require 510(k) clearance if made by the manufacturer.

These categories are discussed in greater depth below. Lastly, the Final Rule restates FDA’s position that certain categories of tests have never been subject to enforcement discretion, including direct-to-consumer (DTC) tests, tests intended for use in a declared emergency, and certain tests for blood donors and human cells, tissues, and cellular or tissue-based products (HCT/Ps) donors. The Agency also states in a footnote that the phase out policy does not apply to collection devices, which are expected to comply with FDA’s medical device requirements.

2. Enforcement discretion for LDTs will be phased out in five stages over four years.

The timeline and general structure of the phaseout policy is largely the same as that described in the proposed rule. It occurs over five stages in four years, timed according to the publication date of the phaseout policy, which will be May 6, 2024.

Stage 1. One year after publication of the Final Rule (May 6, 2025): medical device reporting (MDR), corrections and removals reporting, and complaint files.

The requirement to maintain complaint files was not described in the proposed rule. FDA explains that it has added this requirement to stage 1 given the connection between complaint files and MDR reporting requirements.

FDA also notes that the new quality management system regulation (QMSR)[2] will become effective during stage 1—on February 2, 2026—at which point laboratories will be expected to comply with the correlating QMSR requirements for complaint files, which will be Subclause 8.2.2 of ISO 13485 plus additional requirements under new 21 CFR § 820.35. 

Stage 2. Two years after publication of the Final Rule (May 6, 2026): registration and listing, labeling, and investigational device requirements.

Labeling requirements include both the general labeling requirements for devices, as well as the labeling requirements specific to IVDs. FDA also expressly notes that the general device labeling requirements include unique device identification (UDI) requirements. Additionally, as explained further below, certain categories of tests that are exempt from premarket review will be expected to submit labeling for their tests under FDA’s registration and listing authorities.

Stage 3. Three years after publication of the Final Rule (May 6, 2027): quality system requirements.

More limited quality requirements will apply to traditional LDTs (i.e., those designed, manufactured, and used in a single CLIA-certified, high-complexity laboratory), though as noted above, the QMSR will be in effect when this stage of the rule comes into effect, rather than the current quality system regulation (QSR). Accordingly, the limited quality requirements for traditional LDTs will include the following clauses and subclauses of ISO 13485:

• Clause 4. Quality Management System, Subclause 4.2.5
• Clause 6. Resource Management
• Clause 7. Product Realization, Subclause 7.1, Subclause 7.3, Subclause 7.4, and Subclause 7.4.3
• Clause 8. Measurement, Analysis, & Improvement, Subclause 8.2.2, Subclause 8.2.5, Subclause 8.2.6, and Subclause 8.3

However, FDA notes that approval of a premarket approval application (PMA) requires an applicant to demonstrate conformity to quality system requirements. Accordingly, if a test requires PMA approval, compliance with all quality systems requirements could be required, unless an exemption or variance is granted.

Stage 4. Three-and-a-half years after publication of the Final Rule (November 8, 2027)[3]: PMA submissions for high-risk (Class III) tests.

If an application is received by FDA by the beginning of this stage, a test may continue to be offered while FDA is reviewing that application.

In the Final Rule, FDA estimates that far fewer PMA submissions will be required. This is because the Final Rule includes targeted enforcement discretion policies for premarket review for certain categories of tests, including currently marketed LDTs and LDTs approved by NYS CLEP. Additionally, FDA states that it aims to complete its announced down-classification of most high-risk tests from Class III to Class II before the beginning of this stage 4.

Stage 5. Four years after publication of the Final Rule (May 8, 2028)[4]: 510(k) and De Novo submissions for moderate-risk (Class II) and low-risk (Class I) tests that require premarket submissions.

If a 510(k) or De Novo is received by FDA by the beginning of this stage, a test may continue to be offered while FDA is reviewing that submission.

3. FDA will exercise “targeted enforcement discretion” for certain categories of tests.

The Final Rule establishes targeted enforcement discretion policies for certain categories of tests as follows. Although none of these policies were included in the proposed rule, FDA had requested comment on several of these categories of tests.

Currently Marketed LDTs. FDA intends to exercise enforcement discretion and generally not enforce (1) premarket review and (2) most quality system requirements (except for records requirements under 21 CFR Part 820, subpart M) for currently marketed LDTs that were first marketed prior to the issuance of the rule. These tests remain subject to the other FDA requirements under the phaseout policy, however.

Notably, FDA intends to request submission of the labeling for these tests, including performance information and a summary of supporting validation, as applicable, under its registration and listing authorities. The Agency states that “[t]his information will help FDA more closely monitor currently marketed IVDs offered as LDTs and identify those that may lack analytical validity, clinical validity, or safety. As part of its review of labeling, FDA also intends to look closely at claims of superior performance and whether those claims are adequately substantiated.” Accordingly, FDA intends to leverage the submitted labeling information to inform its enforcement priorities, which may include enforcement against currently marketed LDTs, despite the announced targeted enforcement discretion policy.

Currently marketed LDTs remain subject to enforcement discretion from premarket review and most quality system requirements as long as they are not modified or are only modified in limited ways. Specifically, they may not be modified, individually or in the aggregate, to:

• Change the indications for use;
• Alter the operating principle of the test;
• Include significantly different technology in the test; or
• Adversely change the performance or safety specifications.

Finally, note that under the QMSR, the relevant records requirements that remain applicable to these tests will be found in Subclause 4.2 of ISO 13485.

LDTs for unmet needs within an integrated healthcare system. FDA intends to exercise enforcement discretion and generally not enforce (1) premarket review and (2) most quality system requirements (except for records requirements) for LDTs offered by a laboratory integrated within a healthcare system to meet an unmet need of patients receiving care within the same healthcare system. These LDTs remain subject to the other FDA requirements under the phaseout policy, however.

This targeted enforcement discretion policy only applies where there is an “unmet need,” which is defined as where there is no available FDA-authorized IVD that meets the patient’s needs because:

(1) there is no FDA-authorized IVD for the disease or condition (e.g., rare disease or emerging pathogen);

(2) there is an FDA-authorized IVD for the disease or condition, but it is not indicated for use on the patient (e.g., indicated for adults only when the patient is a child), or a unique attribute needs to be added to the LDT to meet the patient’s need (e.g., results need to be generated faster than they can be generated with authorized IVD); or

(3) there is an FDA-authorized IVD but it is not available to the patient (e.g., IVD only offered in another healthcare system that is not accessible to the patient).

These criteria are subject to considerable ambiguity, and it is an open question how FDA will interpret them. FDA may issue guidance in the future on the scope of these criteria.

As with currently-marketed LDTs, FDA intends to request submission of the labeling for these tests, including performance information and a summary of supporting validation, as applicable, under its registration and listing authorities. The Agency states that “[t]his labeling will facilitate FDA surveillance for potentially poor performing LDTs that should otherwise be addressed.”

LDTs approved by NYS CLEP. FDA intends to exercise enforcement discretion and generally not enforce premarket review, only, for LDTs that are approved by NYS CLEP. These tests remain subject to the other FDA requirements under the phaseout policy, however, including quality system requirements.

“LDTs approved by NYS CLEP” includes LDTs that are approved, conditionally approved, or within an approved exemption from full technical documentation. The Agency specifically confirms that this includes moderate-risk tests that receive conditional approval, as long as that approval is not withdrawn (e.g., because approval is denied after NYS CLEP completes the full technical review). Importantly, this targeted enforcement discretion policy applies only to traditional LDTs, i.e., those that are designed, manufactured, and used within a single CLIA-certified, high-complexity laboratory. However, also importantly, this targeted enforcement discretion applies regardless of whether the LDT was marketed prior to issuance of the Final Rule or is introduced at a later date.

Again, FDA intends to request submission of the labeling for these tests, including performance information and a summary of supporting validation, as applicable, under its registration and listing authorities. The Agency states that the labeling information “will help FDA identify LDTs that raise concerns, e.g., concerns regarding insufficient validation or inaccurate results.”

Modifications to 510(k)-cleared and De Novo classified tests. FDA intends to exercise enforcement discretion and generally not enforce premarket review, only, for certain modifications made to 510(k)-cleared and De Novo-authorized tests by CLIA-certified, high-complexity laboratories, even if that 510(k) clearance or De Novo authorization is held by a different manufacturer. Modifications subject to enforcement discretion include those for which the manufacturer would not be required to submit a new 510(k) if they made the modification for a distributed test, i.e., modifications that (1) could not significantly affect the safety or effectiveness of the test, and (2) do not constitute a major change or modification in intended use. The laboratory must follow design controls and other quality system requirements, as required under stage 3 of the phaseout policy, and the modified test must be performed only in the laboratory making the modification. This enforcement discretion policy does not apply to modifications to PMA-approved tests.

Non-molecular antisera LDTs for rare red blood cell (RBC) antigens. FDA also intends to exercise enforcement discretion and generally not enforce (1) premarket review, and (2) most quality system requirements (except for records requirements) for certain non-molecular antisera LDTs for rare RBC antigens when they are designed, manufactured, and used in a single CLIA-certified high-complexity laboratory. These LDTs remain subject to the other FDA requirements under the phaseout policy, however.

4. The phaseout policy continues to describe policies of “enforcement discretion,” from which FDA can deviate at its discretion, and which FDA can change using guidance documents.

FDA emphasizes that it views the phaseout policy, including the targeted enforcement discretion policies, to be “enforcement discretion” policies, which can be changed “consistent with FDA’s good guidance practices,” i.e., without additional rulemaking. Moreover, the Agency emphasizes that “these enforcement discretion policies do not confer lawful marketing status on any IVD being marketed as described in the policies. These policies do not in any way alter the fact that it is illegal to market an IVD that lacks required premarket authorization or is otherwise in violation of the FD&C Act, the [Public Health Service (PHS)] Act, or FDA regulations.” Moreover, “FDA intends to take action to enforce applicable requirements for IVDs (including IVDs described in these policies) as appropriate, taking into account any public health concerns as evaluated on a case-by-case basis.”

5. FDA defends its authority to regulate LDTs as devices.

FDA continues to assert that LDTs are and always have been medical devices, and that the Agency is simply phasing out its policy of enforcement discretion for LDTs. The Final Rule contains almost 100 pages of legal arguments from FDA justifying its authority to regulate LDTs as medical devices, and over 40 pages of legal arguments defending its action against comments related to other laws and legal principles, including the First Amendment, Takings Clause of the Fifth Amendment, and the Administrative Procedures Act, among others.

6. Several open questions remain regarding FDA’s implementation of the Final Rule.  

As only a few examples:

• What is the scope of “IVDs offered as LDTs”? FDA acknowledges that this is broader than its traditional definition of an LDT, and includes tests that are offered as LDTs by CLIA-certified, high-complexity laboratories, even if they are not designed, manufactured, and used within a single laboratory. However, the boundaries of this definition—versus what FDA considers to be a traditional LDT, and therefore subject to certain targeted enforcement discretion policies—are unclear.
• FDA intends to leverage its authority under 21 CFR § 807.26(e) to require labeling submissions from laboratories that will offer tests subject to targeted enforcement discretion from premarket review, but is this a proper exercise of FDA’s authority under this provision? It is not clear that this regulation anticipates FDA’s sweeping request for labeling submissions for categories of tests or developers.
• How will laboratories comply with labeling requirements for LDTs? The IVD labeling requirements under 21 CFR § 809.10 are incredibly detailed and nuanced, and do not translate well to tests that are not packaged and distributed. The Final Rule states only that FDA intends to provide more targeted guidance and/or additional resources regarding applicable labeling requirements prior to stage 2 of the phaseout period.

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