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The FDA’s Proposed Ruling on Lab Tests Could Have Unintended Consequences

February 06, 2024
by Isabella Backman

New regulations may hinder access to testing for rare diseases and the ability to respond to pandemics quickly

Yale experts are raising concerns about a rule proposed by the U.S. Food and Drug Administration (FDA) to enforce the agency’s regulatory control over laboratory-developed tests, or LDTs. The tests play a critical role in filling gaps in commercial testing, such as diagnostic tests for rare diseases deemed unprofitable by manufacturers. LDTs also allowed laboratories at Yale and beyond to rapidly offer testing during pandemics including H1N1, COVID-19, and mpox.

There are two main categories of laboratory testing. One involves tests marketed by commercial manufacturers to laboratories, and these tests are regulated by the FDA. LDTs, on the other hand, are tests developed by a specific laboratory for use within that laboratory. These are currently exempt from FDA oversight. But on September 29, the FDA announced its new proposal, citing evidence pointing to growing safety and efficacy concerns.

We’ve actually seen more problems with the FDA-cleared commercial tests than we have with our laboratory-developed tests.

Marie-Louise Landry, MD

The agency intends for these regulations to protect patients. However, some scientists fear that they will ultimately cause more harm than good. The new ruling, Yale researchers say, will introduce significant burdens that will hinder access to available LDTs. The time-consuming and costly FDA-approval process, for instance, may make it more difficult for patients with rare diseases to access appropriate testing or for a laboratory to rapidly respond to a future pandemic or national emergency.

“The new rules could be significantly detrimental to the patient care that we provide, especially at large academic institutions like Yale New Haven Hospital,” says Alexa Siddon, MD, associate professor of laboratory medicine and of pathology at Yale School of Medicine (YSM).

The history behind LDT regulation

In 1979, Congress passed the Medical Device Amendments to the Federal Food, Drug, and Cosmetic Act (FD&C Act). These amendments gave FDA explicit authority to regulate medical devices. These included tests developed by manufacturers sold for commercial purposes to laboratories around the country. However, the amendments didn’t specifically include tests developed by laboratories for their own use.

Then, in 1988, Congress passed the Clinical Laboratory Improvement Amendments (CLIA). These gave clinical laboratories the ability to develop and perform their own tests to fill gaps in available testing and provided the framework for LDT regulation. Today, all laboratories must have appropriate CLIA accreditation, overseen by the Centers for Medicare and Medicaid Services (CMS), to run LDTs. The regulatory agency oversees around 320,000 entities. “Under CLIA, if the laboratory developed the test, it did not need to go through the FDA,” says Joe El-Khoury, PhD, associate professor of laboratory medicine.

Beyond CLIA, laboratories are inspected by additional accrediting organizations. Clinical laboratories at Yale New Haven Hospital (YNHH), for example, are also regularly inspected by teams assembled by the College of American Pathologists (CAP). Furthermore, the hospital clinical laboratories conduct blinded proficiency tests from CAP multiple times a year and keep documentation of test performance and any errors, including for LDTs.

“With of all these safety measures, we’ve actually seen more problems with the FDA-cleared commercial tests than we have with our laboratory-developed tests,” says Marie-Louise Landry, MD, professor of laboratory medicine and of medicine (infectious diseases), who was one of nearly 7,000 to submit their concerns during the FDA’s 60-day comment period. "In addition, if there is a problem identified with an LDT, we have the ability to correct it promptly, whereas it can take years for a manufacturer to take corrective action and to obtain FDA approval."

In 2021, the Verifying Accurate Leading-edge IVCT Development (VALID) Act was proposed in Congress. The law would have enforced FDA oversight over LDTs. However, Congress did not pass this legislation. “After that, everyone was sure that the FDA would start to move on this new ruling,” says Henry Rinder, MD, professor of laboratory medicine and of medicine (hematology). “And they moved very rapidly [in announcing their proposal].”

New FDA ruling stems from concerns regarding patient safety

In 2015, the FDA published 20 case studies in which LDTs negatively impacted patients. Inaccurate testing, including false positive or negative results, may lead to inappropriate or delayed treatment, the agency stated.

One notable example in the report was the downfall of the multi-billion-dollar medical diagnostics company Theranos, founded by Elizabeth Holmes. The company claimed that its unprecedented blood test, classified as an LDT, could diagnose a multitude of diseases with just a single drop of blood.

But in 2015, a Wall Street Journal investigative journalist broke the story that the technology failed to perform as the company claimed. The story sparked an investigation by CMS in January 2016, which ended in a 150-page inspection report finding that Theranos failed to meet numerous clinical standards. CMS then issued a 45-page warning letter that stated the startup was facing severe sanctions including hefty fines, the loss of its CLIA certification, and a two-year ban on Holmes operating any laboratory.

Following an additional surprise inspection, CMS officially revoked Theranos’s CLIA certification on July 7, 2016. Theranos dissolved in 2018, and Holmes began her 11-year prison sentence for defrauding investors last year. Many supporters of the proposed ruling believe the faulty blood test’s status as an LDT and exemption from FDA review helped it to fly under the radar for as long as it did.

The FDA has also cited evidence that LDTs have caused harm to patients seeking diagnosis and treatment for heart disease, cancer, autism, and Alzheimer’s disease. “The FDA is concerned patients could initiate unnecessary treatment, or delay or forego proper treatment altogether, based on inaccurate test results, which could result in harm, including worsening illness or death,” the agency stated in its September 2023 news release.

However, other researchers are skeptical that enforcing FDA regulation over LDTs will reduce patient harm. “Multiple studies show that the majority of laboratory errors take place in the pre-analytic phase—before the patient sample arrives in the laboratory,” says Siddon. “I believe that the FDA is overestimating how much patient safety would increase through its ruling.”

In the infamous case of Theranos, El-Khoury doubts that FDA regulation would have prevented the fraud. “The FDA claims that if it regulated LDTs, Theranos wouldn’t have happened—but that’s not true. The agency approved one of its blood tests [for herpes simplex 1], and it’s even still listed under the approved category,” he explains. “What brought down Theranos was [revocation of] CLIA [certification] and investigative journalism.”

Proposed ruling poses barriers to rare disease testing

Clinicians often turn to LDTs when needed testing is not available commercially. The extensive process manufacturers must go through to produce these commercial tests contributes to the gaps in available testing, says Landry. “Because it’s so time-consuming and expensive to obtain FDA clearance, manufacturers will only go through the FDA process for tests and sample types that they believe they’re going to recoup the money on,” she explains. “For tests that won’t be as high-volume, it doesn’t make financial sense. We try to fill that gap with LDTs.”

In the late 1990s, polymerase chain reaction (PCR)—the test that would become known as the gold standard for detecting the virus responsible for COVID-19—was emerging as the predominant test for diagnosing viruses after biochemist Kary Mullis received the 1993 Nobel Prize in chemistry for its invention. The FDA approved the first PCR test for human immunodeficiency virus-1 (HIV-1) in 1996. But for over a decade, says Landry, this was the only FDA-approved PCR test for viruses. “So for us to offer virology testing for our patients, we had to implement laboratory-developed tests,” she says.

Academic medical centers often care for complex patients with esoteric diseases or infections, and to address their diverse needs, LDTs are essential. To this end, Yale’s virology laboratory alone has developed more than 30 LDTs for detecting different viruses. Under the new ruling, all of these tests would need to undergo a costly, extensive approval process. “Lab-developed tests provide a very important service for these patients,” Landry says. “With these high costs, we will not be able to provide these services and will lose the expertise and infrastructure to run them.”

Beyond virology, the ruling would pose barriers to a wide range of patients suffering many kinds of rare conditions, including genetic diseases. “Putting LDT implementation under the FDA regulation will particularly impact the availability of innovations benefiting smaller patient populations that wouldn’t readily attract commercial interest,” says Hui Zhang, MD, PhD, associate professor of genetics and co-director of YSM’s DNA Diagnostic Lab. “FDA regulation of LDTs will adversely impact the care of patients with rare genetic conditions.”

“Drug companies tend to go after big diseases like diabetes,” says El-Khoury. “But how many drug companies do you have going after niche diseases? Not a lot—it’s extremely costly.”

Delaying the response to potential pandemics

LDTs also allow laboratories to respond rapidly to pandemics. During the 2009 swine flu pandemic, Yale New Haven Hospital was the only hospital in the state that was able to offer testing for the pandemic virus. Similarly, it was the only hospital in Connecticut that could provide testing during the early weeks of the COVID-19 pandemic. “We set up a test and made it available 24/7 for our patients,” says Landry. “We wouldn’t have been able to do that if we had to wait for a commercial test to become available.”

Shortly after the onset of COVID-19, the world experienced another global outbreak—mpox. Because there was no commercial testing, the Biden administration contacted the Association of American Medical Colleges about having academic laboratories set up LDTs. Once again, Landry’s laboratory was among those that were able to rapidly respond to the outbreak.

LDTs also allow scientists to respond to other crises. In April 2023, the White House declared xylazine, a powerful animal tranquilizer used in veterinary settings, as an emerging threat as its presence in street drugs grows in the United States. Clinicians and researchers have found it increasingly mixed with fentanyl and linked to a rise in opioid overdose deaths. “Labs need to be able to quickly develop tests for xylazine and launch them. It takes commercial manufacturers five to 10 years to do this,” says El-Khoury. “Under CLIA guidance, we can develop, validate, and offer tests the next day.”

If the proposed ruling is finalized, experts fear that patients, especially those with rare diseases, will be hindered in access to the tests they need, and that obtaining necessary results—especially in the context of national emergencies—will be significantly delayed. “Some of the LDTs we do are absolutely critical, life-saving even, in terms of patient care,” says Rinder. “The enforcement by the FDA could put us into a situation where we just have to stop LDTs. Suddenly, clinicians will realize they can’t get an important test anymore or have to wait weeks for results.”

Looking to the future of LDT testing

Medicine has evolved dramatically since the establishment of CLIA in 1988. One alternative to the new ruling, proposes El-Khoury, is to update the amendment. “We need to modernize the current regulatory structure, not create a whole new structure,” he says. “A lot of testing that we now do was not available in 1988. All of these examples of LDTs being harmful could have been dealt with under a more modernized CLIA.”

For example, CLIA could be updated to require all laboratories to also be College of American Pathologists (CAP) accredited. “CAP has an additional layer of regulatory requirements that has over 5,000 items and checklists that are updated by experts and inspected on every two years,” says El-Khoury. “Laboratories that use these frequently updated checklists do not have these harm issues that have been mentioned by the FDA.”

The FDA plans to finalize its ruling in April 2024. The administration then plans to initiate a phased implementation process in which it will require laboratories to register their LDTs and begin the pre-market review process over the next four years.

“Every patient who comes into the hospital gets laboratory tests,” says Siddon. “If finalized, this could have such a big impact on hospitals all over the country, and I’m not sure we even recognize the implications of what could happen.”

Submitted by Robert Forman on February 06, 2024