Laboratory-developed tests: FDA moves to close loophole

The Centers for Disease Control and Prevention estimates that 70 percent of modern medical decisions depend on laboratory test results, a staggering statistic that underscores the importance of the accuracy and reliability of today's laboratory tests for public health. However, recent events undermine our confidence in many of these tests. 

The proliferation of laboratory-developed tests

Major news outlets have extensively covered scandals such as Elizabeth Holmes’s Theranos, in which she was able to market fraudulent lab tests through a long-standing loophole in FDA regulation. The loophole applied to tests developed by and used within a single lab, called laboratory-developed tests (LDTs). These tests, sometimes called “send-out” tests, are ones in which samples are sent to another location for processing instead of being conducted on the spot.

LDTs have proliferated in volume and complexity in recent decades and touch nearly all aspects of modern health care. In 2022, The New York Times spotlighted the potential harms of inaccurate non-invasive prenatal tests, a type of LDT commonly used in pregnant people to screen for fetal genetic abnormalities. These tests have some clinical merit; the American College of Obstetricians and Gynecologists recommends offering this type of screening test for more common genetic conditions (e.g., Down’s Syndrome) but recommends against using them for other, rarer conditions because it is not clear if these tests are reliable in those cases. Other common examples of LDTs include those used for infectious diseases (including COVID-19), cancer, and genetic testing.

Why laboratory-developed tests are still not properly regulated

In 1976, the Medical Device Amendments to the Federal Food, Drug, and Cosmetic Act gave the FDA the authority to regulate medical devices, including in vitro diagnostic tests (IVDs), of which LDTs are a subset. However, LDTs of the 1970s were far simpler and less common than they are today. The FDA chose to exercise “enforcement discretion” over LDTs, meaning they decided not to regulate them at the time, despite their authority to do so. This regulatory vacuum has facilitated the growth of the large LDT market that exists today.

Of course, both the FDA and industry are aware of this regulatory loophole, and the FDA has been trying to close it for decades. In addition to efforts to exercise its authority over LDTs in the 1990s and early 2000s, the FDA released a draft guidance for the oversight of LDTs in 2014, a proposal that was ultimately withdrawn due to industry and Congressional pressure. The FDA has continued to highlight its concerns about these tests in the intervening years, as evident in a 2015 report outlining 20 problematic LDTs and a 2017 discussion paper in response to the resistance to its previously proposed guidance. Beginning in 2020, the FDA worked with Congress and other stakeholders to craft the VALID Act, a law that would have created a new framework for FDA oversight of all IVDs, including LDTs. Despite CSPI’s calls for action, this bill has failed to pass in Congress. 

A new era for LDTs?  

On May 6, 2024, the FDA responded to these failed attempts by releasing a rule that would phase out its “enforcement discretion” approach over the next four years. The final rule directs labs offering LDTs to comply with current FDA requirements for all medical devices, including but not limited to maintaining quality assurance systems, reporting adverse events, and, in some cases, submitting test information to the FDA for approval before use. The rule includes major exemptions to many of these requirements, however, to ensure continued access to certain LDTs. Exemptions include LDTs already in use, those developed by health system labs for unmet clinical needs of patients cared for in their health systems, and LDTs used in the Veterans Health Administration and Department of Defense. FDA will also honor LDTs approved by a similar program in New York State.

Even before the rule was finalized, opponents began to mobilize. The House Energy and Commerce Committee’s Subcommittee on Health convened a hearing in March of 2024, highlighting what it saw as the overreach of the proposed rule. In May, 11 days after the final rule was released, Representatives Brad Finstad (R-MN) and Dan Crenshaw (R-TX) and Senator Rand Paul (R-KY) introduced resolutions in the House and Senate that would repeal the rule. The House of Representatives further registered their disapproval by pressuring the FDA to stop implementation of the rule and instead work with Congress on a legislative framework. Though these efforts are not expected to succeed in blocking the rule, they highlight the resistance it faces amongst some members of Congress. And opposition was not confined to the Congress. The American Clinical Laboratories Association filed a lawsuit against the FDA, challenging its statutory authority to regulate LDTs and even asserting that LDTs aren’t medical devices at all.

Howls of protest from industry aside, we are where we are because, as in so many other areas, Congress has failed to do its job. Faced with a growing category of unregulated products, some demonstrably harmful, the FDA did what was needed to fulfill its mandate to protect public health. As CSPI president Peter Lurie, MD, MPH, put it in our latest issue of Nutrition Action, “Stay tuned as we continue to push lawmakers and the feds to protect you and millions of others from unreliable lab tests.”