A New Chapter in FDA Regulation

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February 2014 Clinical Laboratory News: Volume 40, Number 2


A New Chapter in FDA Regulation
How Will the Final Research Use Only Guidance Affect Labs?


By Bill Malone


Clinical labs received one dose of practice-changing news at the end of 2013 from Medicare on the reimbursement front. The U.S. Food and Drug Administration (FDA) also delivered several major decisions late in 2013 that labs and in vitro diagnostics (IVD) companies are still absorbing.


In November, FDA finalized a guidance on how companies can market research use only (RUO) and investigational use only (IUO) diagnostic products. These tests do not require FDA review, but many clinical labs use them for lab-developed tests (LDTs), a practice FDA has long condemned. That same month, FDA also signaled that it’s ready to tackle new technology, with a first-ever clearance of a next-generation sequencing (NGS) instrument and universal reagents.


In the final RUO guidance, FDA does not threaten to punish companies merely for selling RUO products to clinical labs, as the agency had suggested in a 2011 draft guidance. Nevertheless, FDA has drawn a line in the sand, stating clearly it believes RUO tests are not appropriate for clinical labs and opening the way for enforcement in this area when the agency feels a company crosses the line.


Now, 2014 will be critical as the IVD industry watches closely to see how FDA will leverage the final guidance and potentially step up enforcement, according to Mya Thomae, chief executive officer of the IVD consulting firm Myraqa. “FDA has been trying to put out a guidance document on RUO for nearly 20 years, so this is a significant step for them,” she said. “But we don’t yet know how FDA will enforce this. Right now, we’re helping our clients examine their risk profiles. If they’re selling RUO products that labs are using for LDTs, it can make them a target for enforcement, and they have to consider if they can accept that risk.”


It’s Not What You Sell, But How You Sell It


According to legal and regulatory experts, the final guidance from FDA will not lead to a shutdown of RUO sales to clinical labs. The emphasis of the guidance is not so much about if manufacturers sell RUO tests or instruments to clinical labs, but how: any claims, education, marketing, or hands-on help related to clinical use is out of bounds. This sets the stage not only for a case-by-case look by FDA at how a manufacturer behaves, but also perhaps more limited interactions with clinical labs (See Box, p. 7).


The guidance notes that if a manufacturer “were to assist in the validation or verification of the performance of a test for clinical diagnostic use that uses its RUO or IUO labeled IVD, that assistance would be considered to be evidence of a non-research or non-investigational intended use.”


Companies will be safe if they continue to promote RUO products for research purposes. But they’ll have to be careful about with whom they communicate and how, according to Allyson Mullen, a former in-house counsel at an IVD company and currently an attorney with the law firm Hyman, Phelps, and McNamara. “If a company with RUO products visits a lab that only does clinical diagnostic work and the company doesn’t have an FDA-cleared product to promote, FDA is going to view that company as not having a legitimate purpose for being there, and that is going to be problematic,” Mullen said.


When it comes to communication with clinical labs, FDA’s director of personalized medicine, Elizabeth Mansfield, PhD, urged caution. “FDA is not defining what is and is not allowed, but reminding manufacturers that their words and actions should be consistent with RUO use.”

The kind of customer support RUO manufacturers offer clinical labs is another trouble spot. Although FDA wrote in the guidance that a company can provide generic maintenance for an RUO product in a clinical lab, it can be difficult to define how far this should go in practice, Mullen said. “Often an RUO product is a complex instrument that the companies are more expert in than the labs themselves, so the lab needs company personnel in there,” she explained. “But it’s so hard to draw that line between the instrument and the clinical assay that’s being run on that instrument. I think that is going to be a fine line for companies to walk.”

If a company helps a lab validate an RUO test for clinical testing—or even suggests this is possible—they could run into trouble, warned Jeffrey Gibbs, a colleague of Mullen’s at Hyman, Phelps, and McNamara. “This part of the guidance will most likely require some change in behavior,” Gibbs said. “You get into some pretty sticky issues when it comes to validation, and I think companies will have to look at their policies and procedures and fine-tune them.” Gibbs, who has represented healthcare companies on FDA matters since 1984, previously served in the agency’s Office of the Chief Counsel, where he was an associate chief counsel for enforcement.


Of course in practice, many companies sell a mix of RUO and FDA-cleared products. Likewise, many labs perform both research and clinical testing, especially at academic medical centers. This is one of the gray areas that, until FDA takes enforcement action, experts say will be difficult to predict.


“We do get visits from representatives of companies that sell RUO products, but often we purchase a variety of reagents from them,” noted Elaine Lyon, PhD, medical director of molecular genetics at ARUP Laboratories and an associate professor of clinical pathology at the University of Utah in Salt Lake City. “It’s hard to split hairs here and say they are marketing a specific RUO reagent to us, when it may be only one of a number of reagents we buy from them.” Lyon is also president of the Association for Molecular Pathology.


Lyon emphasized while companies offer support on RUO products, it is the lab that validates the test. “These companies don’t provide a procedure for their reagents or instruments. Our laboratory is a high-complexity laboratory with a lot of molecular experience, so we develop the procedures ourselves, and validate reagents/instruments as a laboratory-developed procedure,” Lyon said. “Laboratories without molecular expertise may need more help.”


Many companies saw the writing on the wall when FDA circulated a draft RUO guidance in 2011. Since then, those less tolerant of risk have already begun to adjust their behavior with clinical labs, according to Thomae. “Some companies are very, very careful and they do things like train their sales people about what exactly to say and not to say,” she said. “But I think smaller companies tend to be a little scrappier and take more risks, and sometimes their sales people get out ahead of their skis a little bit as far as what they’re willing to say to labs to get their business. They may need to step up their training and procedures.”

Is Direct-to-Consumer Genetic Testing Dead?
FDA Shuts Down Last Company Standing


After just a few years of high hopes and fanfare, the direct-to-consumer (DTC) genetics revolution is stalling. A warning letter from FDA on November 22, 2013 effectively shuttered the health-related testing business of the DTC firm 23andMe. The company had been the last in the DTC genomics business, selling over-the-web collection kits and test results for carrier status, health risks, and drug response. It will now only sell kits for information on ancestry or for raw genomic data.


DTC genetic testing originally got caught up in FDA’s controversial foray into regulating lab-developed tests (LDTs) in 2010. At the same time FDA announced it would regulate LDTs, it also sent out warning letters to more than a dozen DTC genetic testing firms. The other DTC companies on the market stopped selling kits to consumers the same year, including Knome, Pathway, Navigenics, and deCODE.


By 2011, FDA had convened a skeptical advisory committee meeting on the topic, after which Alberto Gutierrez, PhD, director of FDA’s Office of In Vitro Diagnostics and Radiological Health told CLN that the agency would be working with companies on a case-by-case basis.


According to his recent, lengthy warning letter to 23andMe, Gutierrez was true to his word. “Since July of 2009, we have been diligently working to help you comply with regulatory requirements regarding safety and effectiveness and obtain marketing authorization for your PGS [personal genome service] device,” Gutierrez wrote. This included “more than 14 face-to-face and teleconference meetings, hundreds of email exchanges, and dozens of written communications.”


23andMe declined an interview with CLN but offered a statement via a spokesperson. “Our goal is to work cooperatively with the FDA to provide consumers with access to their genetic data in a way that clearly demonstrates the benefit of having that information and the science that underlies the test,” she wrote. “We have responded to the FDA warning letter and agreed to discontinue new consumer access to the health-related genetic tests while we complete the submission process for FDA marketing authorization. We will continue to offer our Personal Genome Service, including ancestry information and access to raw data without interpretation.”


According to John Conley, the William Rand Kenan, Jr. professor of law at the University of North Carolina at Chapel Hill, FDA did not kill the DTC genetic testing market. “If it’s dead, I think it’s dead as a market failure,” he said. “I just don’t see a lot of demand for this kind of service. If you think about it, who as a consumer is going to buy this genetic testing? It’s not reputed to be terribly accurate. On the one hand, you have to know enough about genetics to be willing to spend money, but on the other, you have to be so ignorant that you’ll actually do something on the basis of low-reliability tests.” Conley is also an attorney with Robinson, Bradshaw & Hinson, and editor of the Genomics Law Report.


One possibility is that 23andMe, rather than bungling their chance with FDA, actually intends to take an aggressive posture, Conley said. “There has always been a question about how far FDA’s authority should stand in this area,” he said. “It’s possible that 23andMe’s strategy is actually to try and get this underlying question before a court.”


RUO Versus FDA-Cleared


Some insight into FDA’s thinking about the final guidance came in the form of testimony from Jeffrey Shuren, MD, director of FDA’s Center for Devices and Radiological Health. During a November 15 hearing of the U.S. House of Representatives Energy and Commerce Committee, Shuren told committee members that FDA is most concerned about clinical labs using RUOs when an FDA-cleared test already exists.

But experts aren’t sure how much stock to put in Shuren’s statements on this matter. “That will be something to watch for, when there is already a corresponding cleared test,” said Mullen. “But it’s still not clear exactly what actions will result in enforcement.”


In many cases, labs use RUO products because no FDA-cleared test exists. And when they choose not to use an FDA-cleared test, it’s for good reason. “There are a few instances where an FDA-cleared test may be available, but we have chosen to perform a laboratory-developed procedure instead,” Lyon said. “The test may not be reimbursed adequately to use the more expensive FDA reagents. But more importantly, we choose what we consider to be the best test for our patients. Simply because a test is cleared by the FDA does not mean it’s a better test than a laboratory-developed procedure.”


For example, an FDA-cleared molecular genetic test may include a limited set of mutations, but in the time since the test was cleared, more research may have shown that several other mutations are also significant. In that case, the lab would want to include these additional mutations in order to improve sensitivity and detection, Lyon explained.


“The FDA-cleared test may not fit exactly the spectrum of analytes we want to detect, or it doesn’t fit our work flow or an instrument that we have,” Lyon said. “Even if we use an FDA-cleared product, but want it to perform differently than what it was cleared for—such as a different sample type—that test becomes a laboratory-developed procedure. However, if the FDA-cleared test is a good test, fits with our workflow, and is priced appropriately, then we use it.”


At the end of the day, quality is the lab’s responsibility, regardless of how a test is labeled, Lyon emphasized. “The clinical labs are responsible for the quality of their testing, whether it is an FDA-cleared test or a laboratory-developed procedure,” she said.


The FDA’s hard line on RUOs may also drive more labs to seek custom materials when no FDA-cleared test exists, noted Thomae. Custom materials avoid the RUO labeling issue entirely and make it clear that the reagent is merely a test ingredient ordered by the clinical lab. “A lot of players have made it their mission to get rid of as much RUO as possible, particularly on the reagent side,” she said.


With custom materials, the manufacturer creates a reagent to the lab’s exact specifications, and the terms and conditions of the contract acknowledge that the lab bears responsibility for final quality control, Thomae explained. “The specifications might be awfully similar to what’s being sold RUO, but it can be a nice thing for the lab, because they can order exactly what they want and know what they’re getting lot-to-lot, instead of trying to work with whatever the company happens to be selling as RUO,” she said.


Custom materials, however, are not always the answer. They are expensive, and can easily make the cost of performing a test greater than its reimbursement.

Staying Out of Trouble
FDA Asks Companies to Renounce Support of Clinical Testing for RUOs


In the final guidance on research use only (RUO) and investigational use only (IUO) products, FDA made clear it expects manufacturers to toe the line and not help labs use their products for clinical diagnostics. “Because these products are exempt from most regulatory controls, it is important that they are not distributed for clinical diagnostic uses,” FDA wrote. “Mere placement of an RUO or IUO label on an IVD product does not render the device exempt from otherwise applicable clearance, approval, or other requirements.”


FDA says it intends to look at “the totality of circumstances” surrounding a manufacturer’s distribution of RUO products. Overt statements about diagnostic use in a product’s labeling or advertising will clearly get a company in trouble, but FDA will be looking at other evidence as well, including:

  • Statements in any labeling, advertising, promotion, or presentations by or on behalf of the manufacturer, including any performance claims, instructions for clinical interpretation, clinical information, product names, or descriptors that claim or suggest that the IVD product may be used for any clinical diagnostic use.
  • Statements that suggest that clinical laboratories can validate the test through their own procedures and subsequently offer it for clinical use as a lab-developed test.
  • Solicitation of business from clinical labs.
  • Providing specialized technical support outside of generic maintenance or software upgrades, such as assisting clinical labs in validating or verifying a test that incorporates RUO products.


Setting a Precedent on Next-Generation Sequencing


The IVD industry took another double-take when FDA announced late in 2013 its first-ever clearance of an NGS instrument and universal reagent kit. In addition to two cystic fibrosis assays that run on the instrument, FDA granted de novo petitions for the Illumina MiSeqDx instrument platform and the Illumina Universal Kit reagents. These make up the first FDA-regulated test system that allows labs to develop and validate sequencing of any part of a patient’s genome.


Notably, FDA announced this landmark clearance just 3 days before warning direct-to-consumer (DTC) genetic testing company 23andMe that it should stop selling health-related tests, and 6 days before issuing its final RUO guidance (See Box, p. 6).


“With the MiSeqDx clearance, I think FDA is sending a message to companies that FDA can clear complex, novel technology that companies have shied away from submitting in the past. It also sends a message that FDA has a strong preference for cleared products versus RUO products,” Gibbs said. “When you put that into the context of how they went after 23andMe at the same time, it’s a very interesting period for the IVD industry.”


The MiSeqDx clearance could be significant to the future of how FDA regulates RUOs. In 2010, when FDA began cracking down on DTC genetic testing companies, Illumina received a warning letter from FDA, calling out the company’s sale of RUO instruments that DTC companies were using for health-related genetic test reports.


Now, with an FDA-cleared next-generation instrument, and a firm stance from the agency on RUO, the question becomes, what will it expect from others? Thomae hopes this clearance signals a new era for FDA, in which individual instruments or tests can be cleared on their own merits outside of a complete test system. This could lead to more companies moving their RUO products through the FDA process, she predicted.


“The FDA has said for a long time that it would like the industry to move away from these RUO materials, and my response has always been that companies would love to, but the FDA policy of requiring full systems to get clearance makes it a problem,” Thomae said. “The only way to get through FDA clearance in the past has been to have the instruments, reagents, and software all together in order for them to review it. But most of us in the IVD industry don’t grow up as system companies—we have companies working just on sequencers or who are absolutely dedicated to the next best HIV assay. We don’t tend to be all together in one company. And maybe FDA has finally heard that and is going to help us bring everyone along.”

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