ACLA lawsuit challenging FDA final rule on LDTs signals integrated healthcare system impact

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Barely one month into the U.S. Food and Drug Administration's (FDA) new regulations for laboratory developed tests (LDTs), at least one organization joined by the company HealthTrackRx has filed a lawsuit challenging the FDA's new stance.

The American Clinical Laboratory Association (ACLA)'s lawsuit is one of the first to formally demand that a court decide the rule should be set aside and vacated, according to the filing in the U.S. District Court's Eastern District of Texas, which is available on the ACLA website and includes several hundred pages of supporting documentation.

“FDA’s Final Rule is the wrong approach, both as a matter of law and public policy, and represents regulatory overreach,” said ACLA President Susan Van Meter in a statement May 29 via the ACLA website. “The medical device framework is inappropriate and ill-suited for regulating laboratory-developed tests, which are services provided by trained professionals rather than manufactured products. These professional services incorporate the latest scientific advances to offer innovative testing solutions to physicians and the patients they serve.

"The Rule will disrupt this paradigm, creating negative consequences for the entire health care system, including millions of vulnerable patients who depend on the essential clinical testing services that only laboratory professionals can provide,” Van Meter added.

Directed at the FDA, the Department of Health and Human Services (HHS), Secretary of Health and Human Services Xavier Becerra, and FDA Commissioner Dr. Robert Califf, the ACLA lawsuit points out that the FDA was silent for decades when it comes to claiming any authority to regulate laboratory testing services as “devices,” or the FDA otherwise favored not enforcing and not exercising jurisdiction over laboratory testing services.

"In asserting authority to transform the regulatory framework that has applied for decades, FDA cannot point to any new statutory authority granted by Congress," the lawsuit also stated, adding "FDA’s final rule means that, in order to be legally marketed, virtually all diagnostic laboratory tests will have to undergo costly and time-consuming administrative review through a regulatory process that was designed for evaluating manufactured medical devices, not professional testing services."

Details compiled by the ACLA and HealthTrackRx that were incorporated into the filing estimated that the number of affected currently marketed IVDs offered as LDTs ranges from 39,557 to 79,114, and thousands are used in high-complexity clinical laboratories that are located within integrated healthcare systems.

Other points the ACLA lawsuit raises:

  1. Certain types of tests affected do not generate sufficient revenues to justify going through the very expensive FDA clearance or approval process.
  2. It may no longer be cost-effective to offer low-volume tests to diagnose or monitor rare diseases.
  3. By subjecting laboratories to regulation as device manufacturers, FDA’s final rule will significantly undermine the relationship between laboratory professionals and the care teams that rely on the diagnostic services of clinical laboratories.
  4. It is unclear how FDA intends to apply its new rule to modifications that are made to existing tests, which are critical to improving LDTs and ensuring that they reflect the latest scientific advances.

As part of the lawsuit, Dr. Jay Reddy, senior vice president of laboratory and clinical strategy at HealthTrackRx, pointed out that even though the final rule offered numerous carveouts for enforcement discretion, those exceptions to the rule will create "intolerable regulatory uncertainty," as FDA’s rule states that the agency could change its mind at any time. HealthTrackRx specializes in polymerase chain reaction (PCR)-based infectious disease testing and provides lab testing services nationwide.

"The various aspects of the phase-out policy apply in full only to LDTs that are not subject to any carveouts or continuing enforcement discretion," attorneys Joyce Gresko and Benjamin Wolf of the firm Alston and Bird wrote following the FDA final rule's release May 6.

"It will take time to establish the systems required to comply with these and other regulatory provisions," according to Gresko and Wolf. Laboratories should consider starting to review their operations and establishing FDA-compliant systems as soon as possible to ensure they are compliant as the existing enforcement discretion is phased out.

The first phase of the enforcement discretion phase out begins in May 2025.

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