In the MedTech industry, it seems we are always preparing and delivering solutions for disruptive regulatory changes. We are still working on the EU MDR implementation and sterilization techniques. This year, another big concern is the long-anticipated FDA final rule for oversight of laboratory developed tests (LDTs) regulated under Clinical Laboratory Improvement Amendments (CLIA).
I was speaking with IPM Senior Consultant and LDT expert Linda Castle, who has been tracking the progress ups and downs and putting our perspective in place. Here’s what we’re seeing as we navigate the new challenges.
The FDA Move to Significantly Change LDT Oversight
Since May 2024, we have seen a whirlwind of developments for life science laboratory service companies offering LDTs. Although uncertainties remain, May 2025 is a significant deadline for labs expected to comply with Phase 1 requirements of the new FDA oversight rules.
- Enacted in 1988, CLIA has always been administered by a collaboration of the FDA, CMS, and CDC. While the FDA has been considered the authority on oversight, it has used a discretionary enforcement method that left administration in the states’ hands for decades. About 10 years ago, the FDA proposed rules on strengthening its oversight of in vitro diagnostics (IVDs) offered as LDTs in CLIA laboratories. But because of strong pushback from the industry and the American Clinical Laboratory Association (ACLA), the rules were never finalized and nothing changed.
- Some years later, there was a legislative attempt to strengthen the FDA’s authority to regulate the safety and efficacy of LDTs. The Verifying Accurate Leading-edge IVCT Development (VALID) Act and its updates were intended to amend the Federal Food, Drug, and Cosmetic Act to provide authority for the FDA to regulate LDTs as IVD medical devices. However, through two congressional sessions, the bill has languished and has not been brought up for a vote.
- In 2023, the FDA again proposed new rules for governing CLIA LDT tests. This time, in May 2024, the final rules were successfully published. They provide a four-year phased approach to end discretionary enforcement for LDTs in CLIA labs and provide regulation via the framework developed for IVDs as medical devices. As before, the CLIA industry and supporters argued against the new rules. Both the ACLA and the Association for Molecular Pathology (AMP) sued the FDA to stop implementation.
- The case against implementation gained steam in June 2024 with the Supreme Court’s ruling on Chevron v. Natural Resources Defense Council, which reduced the power of federal agencies to interpret laws they administer. This opened the door for lawsuits questioning the FDA’s authority to follow through on the newly published LDT rules. Shortly thereafter, the House Appropriations Committee recommended that the FDA suspend work on the final rule and instead partner with Congress to again attempt new legislation to modernize the regulation of LDTs.
Translating the Rules into a Business Plan
With the uncertainty around where oversight changes will come from and what they will look like, companies that are built around their CLIA LDTs are understandably concerned.
- The first phase of compliance is on the annual anniversary of the final rule publication, May 6, 2025. On that date, companies must have in place processes to comply with complaints and reportable events. This requires quality system tracking and FDA notifications.
- Likewise, on May 6, 2026, Phase 2 compliance includes registration and quality system processes for listing, labeling, and investigational use requirements.
- All labs must meet Phase 1 and 2 requirements. However, the rules do allow LDTs currently on the market, those approved by New York State CLIA requirements, and some healthcare and other tests to remain on the market without 510(k) or pre-market approval as long as they are not significantly modified.
- Ultimately, the FDA seeks to have all LDTs obtain 510(k) or pre-market approval.
For thousands of established and start-up CLIA LDT companies, the new requirements pose a disruptive challenge to add this new oversight structure. With the upcoming Phase 1 deadline in 2025, time for preparations to implement quality systems, or at least update them, and to gather the data needed for the first regulatory submission is closing in.
Despite the Uncertainty, it’s Time to Act
For labs with LDTs, staying up to date on FDA regulations, developing strategies for navigating potential requirement changes, and acquiring practical guidance on Phase 1 and 2 compliance to keep their tests market-ready with minimal business disruption is urgent. For companies with scarce internal resources, finding experts, consultants, and project managers to ensure readiness at the last minute will be expensive and risky. The time to start is now. Consider your long-range business plan and the changes needed to implement the rules for each phase, then map a path forward to build a strong, compliant, and successful quality system.
Even if the lawsuits and legislation eventually impact the final rule implementation, it is unlikely that oversight will revert to and stay at 2024 standards. Demands for patient safety and proof of test efficacy will continue to move toward greater transparency to the public and oversight to reduce misinformation and potential fraud.
At this time, the final rule is in effect as law and the Phase 1 compliance date is May 6, 2025. At that time, all LDT test manufacturers must have in place medical device reporting, reporting of corrections and removals, and quality system requirements regarding complaint files. Not acting puts you at risk for potentially serious business consequences.
Stay with us as we continue to chart the course and help you navigate the journey.
October 23, 2024
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