On October 3, 2014, the Food and Drug Administration (FDA) issued its anticipated draft guidance for the regulation of laboratory-developed tests. This article will review the history of medical testing regulation and the implications of this new policy for laboratory- and manufacturer-developed diagnostic tests.
Not-so-ancient history: how we got here
The Federal Food, Drug, and Cosmetic Act of 1938 defined device as an “instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article… intended for use in the diagnosis of disease or other conditions….”1 The definition of device applied equally to a manufacturer-developed test (MDT) and to a laboratory-developed test (LDT). However, with the application of the 1976 Medical Device Amendments (MDA) and the 1988 Clinical Laboratory Improvement Amendments (CLIA),2 the regulation of these two testing categories differed substantially. While MDTs fell under the FDA’s jurisdiction, LDTs remained under the jurisdiction of CLIA.
The FDA’s decision to withhold regulation of LDTs centered on the fact that LDTs were at the time a small number of tests created to serve rare disease populations. However, in the 38 years the MDAs have been in effect, medical and technological advancements have led to an explosion of LDTs in medical practice. The National Institutes of Health’s (NIH) voluntary genetic testing registry alone contains more than 16,000 laboratory-developed procedures. These and countless other LDTs form the backbone of healthcare lab services in this country and have a key role in the process of detecting, managing, and curing disease.
For years, various committees within the NIH and the Centers for Disease Control and Prevention (CDC) have called for a review of laboratory regulatory practices.2 In 2008 the NIH Secretary’s Advisory Committee on Genetics, Health, and Society Archives (SACGHS) released a well-received report documenting the changing environment in the LDT industry. This report enumerated areas of concern and contained corresponding recommendations (Those relevant to LDTs are summarized in Table 1.)
|Table 1. 2008 SACGHS genetic testing oversight report recommendations|
In 2011 the SACGHS recommendation of increased transparency was addressed in the MolDx program, a pilot program conceptualized and administered by the Centers for Medicare & Medicaid Services (CMS) contractor Palmetto GBA through collaboration with McKesson. The program created a new code set to delineate every molecular diagnostic test for which labs seek coverage and payment. The increased transparency brought to the area of molecular diagnostic testing was furthered with the American Medical Association’s (AMA) 2012 finalization of 127 new Current Procedural Terminology (CPT) codes for molecular pathology. SACGHS had also made recommendations regarding clinical validity. These have been addressed in the MolDx program in their plans to evaluate both the clinical validity and the clinical utility of proposed molecular diagnostics tests.
In July 2010, the FDA announced its intent to halt the status quo of its 40-year “enforcement discretion” and held a public meeting to discuss the oversight of laboratory tests. A congressional letter to the Office of Management and Budget (OMB) in April 2014 requested release of LDT draft guidance,4 and on October 3, 2014, the FDA released the document for 120-day public comment period.5
The proposed FDA LDT guideline staggers the timeline for regulation of LDTs in a risk-based approach. Highest-risk (Class III) LDTs will be subject to pre-market approval (PMA) submission to the FDA within one year of final guidance publication, whereas tests with lowest risk will have up to nine years to become compliant with the new regulations. Highest-risk LDTs are defined as either those with the same intended use as an FDA-cleared or approved class III medical device; or certain LDTs used to determine the safety or efficacy of blood products. Lowest-risk (Class I) LDTs and LDTs servicing rare diseases will continue to experience enforcement discretion, in order to preserve both the quality of patient care and the lab industry’s marked tradition of innovation.
Pros and cons
FDA oversight and regulation of LDTs remains a subject of active debate during the current 120-day comment period. Those that challenge the regulation of LDTs argue that laboratories have the skills and experience by training and the oversight of CLIA to ensure test validity. Further, they argue that additional regulations will hamper medical progress, as LDTs can be quickly developed and updated following important clinical research and technological advances. Additionally these proponents express concern that laboratories do not have the resources, experience, or clear direction from the FDA regarding classification and submission. The community expects further clarification from the FDA during this comment period. Of great concern is that the proposed process will significantly impact current and future LDT offerings and thus the care of patients in the United States.Those supporting the FDA’s proposed LDT oversight claim that regulation will level the playing field for all manufacturers, whether the device is an MDT or LDT. This process will ensure all tests used to diagnose patients demonstrate both analytic and clinical validity as well as clinical utility. There are certain areas within molecular diagnostics where FDA regulation could be more widely accepted; the area of companion diagnostics is one such developing field. A 2013 Quintiles report on Future Best Practices in Oncology accurately depicts the value of companion diagnostics in stating that “Companion diagnostics are enabling the identification of patients best suited to receive, or not to receive, specific drugs.”6 The FDA mandates that approved drug labeling include information on the accompanying biomarker companion diagnostic. Therefore, all tests which stratify patients for therapeutics must have a homogenous regulatory path forward ensuring that all patients are appropriately triaged for the best possible outcomes of their subsequent drug therapies.
How will labs and manufacturers be impacted?
The extent to which implementation of these LDT guidelines will impact laboratories and manufacturers will be determined by the language of the final FDA guidance. A simplified view of the impact to the laboratories can be described as a function of two metrics; the first is based on the lab’s LDT risk mix and second on the lab’s premarket approval (PMA) proportion. A lab’s LDT risk mix is defined as number of high-, intermediate-, and low-risk LDTs currently offered, and is measured by the resources needed to fulfill final FDA requirements. The second metric defines the proportion of LDTs the lab chooses to submit for FDA clearance/approval. LDT manufacturers will wrestle with the same questions as MDT manufacturers: what is the cost-to-benefit ratio of submitting each diagnostic to the FDA as opposed to allowing others to provide this service to their patients? There will undoubtedly be a substantial learning curve for laboratories seeking FDA compliance for the first time, and many are calling for the FDA to provide a mechanism for both process and financial assistance. The complexity of high-risk test approval is highlighted by the fact that despite well-documented clinical utility of HER2 testing in breast cancer, there are only five approved PMA tests in the U.S.
MDT manufacturers have indicated that the proposed regulation will introduce symmetry into the oversight of MDTs and LDTs. A 2013 report by McKinsey & Company cited “…85 CDx on market and more than 500 clinically-relevant biomarkers,”7 which illustrates the hesitancy of manufacturers to invest in a space with an uneven playing field. That view is shared by the American Association for Cancer Research (AACR), which addressed the dualistic LDT/MDT oversight while advocating for FDA involvement.8 “Having a single approval standard for all tests regardless of origin would also create a more predictable regulatory and investment climate for both the diagnostics and the pharmaceutical industries,” says Laura van ’t Veer, PhD.
The 1976 MDAs required MDT manufacturers to invest in good manufacturing practice (GMP), quality systems, and FDA submissions. MDT pricing has therefore offset this added investment in regulation, which also formalizes the tests’ analytic and clinical validity. That FDA process differentiates an MDT from an LDT in the eyes of clinicians, payers, and the patient. With the proposed guidelines, any test provider who gains approval can provide the marketplace with the same level of confidence in their test result, which will enhance competition and advancement of diagnostic testing.
The FDA describes the goal of its LDT draft guidance as crafting a regulatory approach to achieve the desired public health goal of assuring that the diagnostic tests used in the provision of healthcare, regardless of the manufacturer, provide reasonable assurance of safety and effectiveness.9 This regulatory approach, new to many laboratories, has created concern due to uncertainty in the implementation of the draft guidance. The outcome from the public comment period will shape how these regulations are ultimately put into effect in the coming years.
- Federal Food, Drug & Cosmetic Act, 1938, SEC. 201. [21 U.S.C. 321] CHAPTER II—Definitions1:http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/FDCActChaptersIandIIShortTitleandDefinitions/ucm086297.htm. Accessed November 11, 2014.
- Federal Register; The Daily Journal of the United States Government; Clinical Laboratory Improvement Amendments (CLIA) 1988. https://www.federalregister.gov/clinical-laboratory-improvement-program. Accessed November 11, 2014.
- U.S. System of Oversight of Genetic Testing: A response to the charge of the Secretary of Health and Human Services. Report of the Secretary’s Advisory Committee on Genetics, Health, and Society. April 2008. http://osp.od.nih.gov/sites/default/files/SACGHS_oversight_report.pdf. Accessed November 11, 2014.
- Markey E, Warren E, Blumenthal R, Brown S, Durbin R. United States Senate: Letter to the Office of Management and Budget, Executive Office of the President. July 2, 2014. http://www.hpm.com/pdf/blog/2014-07-02_Deese_LDTs.pdf. Accessed November 11, 2014.
- Draft guidance for Industry, Food and Drug Administration Staff, and Clinical Laboratories. Framework for Regulatory Oversight of Laboratory Developed Tests (LDT’s). October 3, 2014. http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM416685.pdf. Accessed November 11, 2014.
- Smith B, Ransom J, Spinner D, Faulkner E. Future Best Practices in Oncology Development: Critical aspects of co-developing and launching an oncology drug and companion diagnostic (CDx). Quintiles. 2013;14(15)19:112013. http://www.quintiles.com/~/media/library/white%20papers/future-best-practices-in-oncology.pdf. Accessed November 11, 2014.
- Kulkarni S, Ma P. Personalized medicine: the path forward. McKinsey & Company. 2013;(3):1-48.
- AACR issues policy statement to urge FDA to provide oversight of high risk laboratory developed tests to protect patient safety and product innovation. American Association for Cancer Research Journal. September 9, 2014. http://www.aacr.org/Newsroom/Pages/News-Release-Detail.aspx?ItemID=589#.VEVvd7dOXrc. Accessed November 11, 2014.
- Department of Health and Human Services. Letter to chairman. http://www.fda.gov/downloads/MedicalDevices/ProductsandMedicalProcedures/InVitroDiagnostics/UCM407409.pdf. Accessed November 11, 2014.