FDA Proposes Regulation of Laboratory Developed Tests and Sets Up Collision Course with Major Questions Doctrine

Today, the U.S. Food and Drug Administration (FDA) released the text of a widely anticipated proposed rule to regulate laboratory developed tests (LDTs) as medical devices.¹  FDA asserts that it historically has exercised “enforcement discretion” for LDTs and “has generally not enforced applicable provisions under the [FDCA] and FDA regulations with respect to LDTs.”² Through the addition of one sentence to the regulatory definition of in vitro diagnostic products (IVDs) at 21 CFR § 809.3(a)—stating that these products are devices “including when the manufacturer ... is a laboratory”—FDA would effectively end that policy.

The practical impacts of this change would build over time, as a result of a phased enforcement policy. The announcement states that FDA would “gradually phase out its current general enforcement discretion approach so that most IVDs offered as LDTs would generally fall under the same enforcement approach as other IVDs.”³

FDA’s new enforcement policy would be implemented in five stages:

1. First, FDA proposes to end its general enforcement discretion related to medical device reporting (MDR) requirements and correction and removal reporting requirements. FDA would effect this change “1 year after FDA publishes a final phaseout policy, which FDA intends to issue in the preamble of the final rule.”⁴
2. Second, FDA would begin enforcing registration and listing requirements, labeling requirements, and investigational use (IDE) requirements 2 years after the final phaseout policy is published.⁵
3. At the 3-year mark, FDA would roll back its enforcement discretion related to device Current good manufacturing practice (CGMP) requirements of the Quality System Regulation (QSR).⁶  For certain labs certified under the Clinical Laboratories Improvement Act (CLIA) as high-complexity clinical laboratories, however, FDA’s approach would complement current CLIA requirements. FDA asserts that, “for IVDs for which all manufacturing activities occur within a single CLIA-certified laboratory that meets the regulatory requirements to perform high complexity testing and for which distribution of the IVD does not occur outside that single laboratory,” FDA would expect compliance with certain QSR requirements “for which CLIA regulations do not provide the assurances that FDA requirements would provide.”⁷
4. Fourth, FDA proposes to enforce “premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be eligible for classification into Class III)” 3.5 years after the publication of the FDA’s final phaseout policy.⁸ FDA clarifies that LDTs undergoing Premarket Approval (PMA) review could stay on the market during FDA’s consideration of the application.⁹
5. Fifth and finally, FDA would impose premarket review requirements for lower-risk IVDs 4 years following the publication of the final phaseout policy.¹⁰ At that time, premarketing review requirements would apply to “moderate risk IVDs offered as LDTs (IVDs that may be eligible for classification into class II) and low risk IVDs offered as LDTs (IVDs that may be eligible for classification into class I) that require a premarket submission.”¹¹ FDA explains that these premarket submissions would include 510(k) submissions and de novo requests.¹²

FDA’s assertion of jurisdiction over LDTs has been vigorously contested for decades. Since at least 2006, Congress has considered but not enacted numerous bill to give FDA explicit statutory authority over LDTs (most recently the VALID Act of 2023).¹³ The proposed rule places the Agency on a collision course with the “major questions” doctrine, recently endorsed by the U.S. Supreme Court in West Virginia v. EPA.¹⁴ According to the Court, that doctrine requires that administrative agencies point to “clear congressional authorization” when they claim the power to make decisions of vast economic and political significance. This proposed rule presents large stakes for stakeholders, some of whom may seek to challenge FDA’s action, pointing to a lack of a clear statutory directive for FDA to regulate LDTs and the scope of such regulation, and others who may support FDA’s proposed rule under its existing authority.

For its part, FDA already has previewed some potential arguments regarding its jurisdiction, knowing that it will have another chance to flesh them out in response to comments. Comments on the proposed rule—which, depending on how (if at all) the Agency addresses them, may impact the viability of any future litigation challenge to the final rule—are due by December 4, 2023, unless extended by further FDA action.

¹Proposed Rule, “Medical Devices: Laboratory Developed Tests” (filed Sept. 29, 2023, scheduled publication date Oct. 3, 2023) (“LDT Proposed Rule”), available at https://www.federalregister.gov/public-inspection/2023-21662/medical-devices-laboratory-developed-tests?utm_medium=email&utm_source=govdelivery.

²See, e.g., FDA, Draft Guidance for Industry, FDA Staff, and Clinical Laboratories: Framework for Regulatory Oversight of Laboratory Developed Tests, 5-6 (Oct. 2014).

³LDT Proposed Rule at 58.

⁴Id.

⁵Id. at 61.

⁶Id. at 62.

⁷Id. at 63-64. FDA specifically cites design controls under 21 C.F.R. § 820.30, purchasing controls and supplier controls under 21 C.F.R. § 820.50, acceptance activities under 21 C.F.R. § 820.80 and § 820.86, corrective and preventative actions (CAPA) under 21 C.F.R. § 820.100, and Part 820’s record requirements.

⁸Id. at 64.

⁹Id. at 65.

¹⁰Id. at 66.

¹¹Id. at 67.

¹²Id.

¹³See VALID Act of 2023, H.R. 2369 (118th Cong. 2023).

¹⁴142 S. Ct. 2587 (2022); see also Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427, 2444 (2014) (courts express great skepticism “[w]hen an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy’”); Vullo v. Office of the Comptroller of Currency, 378 F Supp.3d 271, 295 (S.D.N.Y. 2019) (“[T]he plausibility of an agency interpretation of statutory text that would confer new power upon that agency bears inverse relation to the size of that putative power and the belatedness of the putative discovery.”).