More than 2 years after the Food and Drug Administration (FDA) issued proposed guidance on oversight of lab-developed tests (LDTs), clinical laboratories now face a new kind of uncertainty. The November 8 election left Republicans in control of both the executive and legislative branches of government, and within 10 days FDA informed congressional offices that it would put its final LDT guidance on hold. FDA released a statement that it would outline “a risk-based approach in the near future.”

Although it is difficult to predict how FDA might plot its next steps, experts believe that a Trump administration will direct regulators to back off from many areas that the Obama administration made a priority. At the same time, Congress will be energized to tackle the new administration’s agenda on taxes and an alternative to the Affordable Care Act. These seem likely to take precedence over the legislative proposals some advocacy groups floated in response to FDA’s LDT proposal.

“In light of the congressional election results and the new administration’s goal of reducing regulation, I believe it very unlikely that Congress would adopt legislation that would substantially increase the regulation of laboratories,” said Jeff Gibbs, an attorney with Hyman, Phelps and McNamara, PC in Washington, D.C. and a contributor to the FDA Law Blog. “I believe it more likely that Congress will retain the status quo, particularly since it will have to address many other higher priority issues, and the regulation of labs remains a very contentious subject.”

However, even with the final guidance on LDTs on hold, FDA still has tools with which it can regulate labs, Gibbs noted. These include “sending out public notices challenging specific tests—as it did in September 2016 for ovarian cancer screening—or asserting that a particular test is not an LDT, or that a test is a direct-to-consumer test and therefore not subject to enforcement discretion,” he said. “It would not be surprising if FDA shifted from trying to adopt sweeping guidelines, to challenging the actions of specific labs.”

Lessons From Pre-Trump Preparations

Before the election, some laboratories already were taking steps to prepare for the possibility that they would need to seek FDA approval for their LDTs. FDA in October 2014 issued draft guidance outlining a framework for phasing in oversight of LDTs, with the highest-risk tests required to get premarket approval, a process through which a laboratory would need to establish safety and effectiveness of the test. Agency officials said repeatedly in 2016 that they intend to issue final guidance before the end of this year.

Until FDA’s postelection announcement, the agency had seemed poised to issue final guidance, said David Grenache, PhD, professor of pathology at the University of Utah and section chief and medical director of the chemistry division at ARUP Laboratories in Salt Lake City. In anticipation of FDA oversight, ARUP overhauled its test development and implementation processes to get them more in line with FDA’s quality system regulation (QSR), which in vitro diagnostic (IVD) manufacturers must follow.

Even with the final guidance on hold, Grenache believes the efforts preparing for LDT regulation were not wasted. “The changes we have made to our processes are beneficial and will continue even if final guidance is not released,” Grenache said. “We improved the overall quality of our assay development and validation processes, documentation, and accountability.”

Ready for Whatever Comes Next

ARUP and other laboratories that invested time in preparing for LDT regulation faced a challenge in undertaking FDA’s QSR system. Because the QSR applies to so many different types of devices, it does not prescribe in detail how a manufacturer must produce a specific device or test kit. Rather, the regulation provides the framework that all manufacturers must follow by requiring that they develop and adhere to procedures. Manufacturers also have to fill in the details that are appropriate to a given device according to current state-of-the-art manufacturing for that specific device.

ARUP’s strategy was to standardize its test development and manufacturing processes, dividing the steps into five distinct phases: feasibility, development, validation, documentation, and implementation. For each phase, standardized templates serve as guides. For example, in the feasibility phase, the lab considers intended use, financial assessments, intellectual property restrictions, reagents and instrumentation requirements, and research and development protocols.

“We also defined what the performance characteristics have to be before we go into validations,” Grenache explained. “All of the performance measures have to be predefined, reviewed, and signed off on by the responsible parties. If, during the validation, those performance measures are not met, we go back to the development phase and start over.” ARUP applied this process to all tests developed after July 1, 2016. Grenache found it could double the amount of time required to develop and implement a new test.

The cost of seeking FDA approval for LDTs would have been significant, with estimates ranging from $50,000 to $250,000 for each 510(k) submission and from $2.5 million to $5 million for each premarket approval application. In 2015, the former president and CEO of ARUP Laboratories, Edward Ashwood, MD, estimated that based on the number of Class II and Class III LDTs on ARUP’s menu, the cost of seeking premarket approval alone could cost ARUP $316 million.

Grenache estimated that about 4% of ARUP’s LDTs are Class III (highest risk), 48% Class II (moderate risk), and 48% Class I (low risk). Because it was never clear whether FDA would allow grandfathering of existing LDTs, Grenache expected that ARUP would have to perform a thorough analysis of the cost associated with bringing an LDT onto the test menu.

Two Different Systems

Dan O’Leary, president of Ombu Enterprises in Swanzey, New Hampshire, a consulting company that works with manufacturers on developing effective processes, explained that FDA’s proposal would have driven labs to develop separate quality systems for designing/manufacturing LDTs and for running the tests in the lab.

Complying with QSR would require a creating a clear line or two different systems between designing and manufacturing, and running tests and reporting results, he said.

“The difficulty is in making sure the system is clear in differentiating between activities,” he said. “Organizationally they may already by separated, but they may not be split in terms of the quality management system.”

While the QSR is not particularly prescriptive, this can be a double-edged sword, O’Leary explained. “The good news in QSR is that there is a tremendous amount of flexibility,” he said. “And the bad news is that there is a tremendous amount of flexibility.”

This double-edged sword is something IVD companies know very well. For those laboratories exploring a QSR path, O’Leary recommended building relationships with IVD companies that could teach them how to develop and implement quality systems for their tests. Labs also could learn from these companies how to set up post-market reporting systems to alert FDA of serious adverse events associated with the use of their LDTs. Under the proposed guidance, FDA wanted labs to begin reporting these events within 6 months of the guidance being finalized.

Robust Development Processes in Place

Laboratories that did not explicitly prepare for FDA regulation of LDTs nevertheless expressed confidence, grounded in the processes they already had developed. At Mayo Medical Laboratories (MML) in Rochester, Minnesota, a robust LDT development process has been in place for some time, according to Curtis Hanson, MD, chief medical officer of MML. “We already have to meet standards under CLIA, the College of American Pathologists (CAP), and New York State. We have a systemized approach that we call our test life cycle process.”

Similarly, leadership at NorthShore University Health System in Evanston, Illinois, was taking a wait and see approach toward potential FDA oversight before news broke of the guidance being put on hold. “We haven’t made any significant changes to our processes,” said Karen Kaul, MD, PhD, chair of the department of pathology and laboratory medicine. NorthShore already uses a validation template and defines test performance goals in advance of validation, and before launching a test, gathers large quantities of data on such things as accuracy, sensitivity and specificity, reportable range, and reproducibility—then performs ongoing assessment to ensure the test performs as it should, as required by CLIA. That data is available for review by inspectors from CAP, she noted.

Like many in laboratory medicine, Kaul believes that it would be better to strengthen CLIA’s oversight of LDTs rather than divide oversight between CLIA and FDA. This is a view taken by AACC in a position statement released in February 2016, in which the association recommended that CLIA remain the primary mechanism of regulating LDTs and that CLIA be updated to require laboratories to demonstrate that LDTs are clinically valid for use in medical decisions. In a statement after FDA announced it would delay acting on LDTs, AACC said it “will continue to work with Congress, the federal agencies, and other stakeholders to ensure that patients continue to have access to high-quality, innovative tests.” 

Kimberly Scott is a freelance writer who lives in Lewes, Delaware. +Email: kmscott2@verizon.net