ADLM Webinar on FDA LDT - Sept 25 2024

ADLM held an excellent 1 hour webinar on the FDA LDT compliance issues that labs are racing.  ADLM will post a link to the webinar in a few days.

Here is an AI summary.

FDA's New Lab Industry Requirements: Navigating the Regulatory Landscape

In May 2024, the FDA issued a sweeping final rule that significantly impacts laboratories developing Laboratory Developed Tests (LDTs). This new regulation is poised to shift how clinical labs operate, imposing FDA oversight traditionally reserved for commercial test manufacturers. While the rule promises to standardize safety and quality, it places laboratories in uncharted territory, with new compliance requirements and hefty penalties for non-compliance.

The Association for Diagnostics and Laboratory Medicine (ADLM) recently held a webinar to help laboratories decode the FDA’s regulatory roadmap. Here’s what labs need to know to prepare for these transformative changes.

The Five-Stage Regulatory Framework

The FDA's LDT rule is rolled out in five stages, gradually introducing more complex requirements. Stage 1, which takes effect in May 2025, is quickly approaching and primarily focuses on adverse event reporting, product corrections, and complaint files. Stages 2 and 3 will follow in 2026 and 2027, respectively, requiring formal registration, device labeling, and compliance with FDA’s Quality System Regulations (QSRs). Stages 4 and 5, beginning in 2027 and 2028, will introduce even stricter oversight, including pre-market approval for high-risk LDTs and FDA clearance for moderate-risk tests.

Stage 1: Immediate Requirements

Medical Device Reporting (MDR): Starting in May 2025, labs must report serious adverse events (e.g., deaths or injuries) and device malfunctions to the FDA within 30 days. In cases of urgent remedial actions to prevent harm, reports must be submitted within 5 days. Labs will need to establish formal procedures for MDR compliance, including using FDA’s MedWatch Form 3500A and assigning an FDA Establishment Identifier (FEI) number. Notably, the FDA now views labs as "manufacturers," a designation that brings new regulatory burdens.

Corrections and Removals: If a laboratory identifies a flaw in its LDT (e.g., a contaminated reagent or faulty device), it must notify the FDA and follow specific correction or removal protocols. A simple buffer replacement could trigger these rules, making labs susceptible to public recalls under the FDA’s expansive recall system.

Complaint Files: Labs must create a system to document, review, and respond to complaints about their LDTs. Any complaint, including those received orally, must be documented, and labs must assess whether complaints trigger MDR obligations. This system must be set up by May 2025 and will be subject to future FDA inspections.

Stage 2: Registration, Labeling, and Investigational Devices

Registration and Listing: By May 2026, laboratories must register with the FDA as manufacturers, a process that includes paying user fees (currently set at $9,280 per year). Labs will also need to list all of their LDTs with the FDA, breaking down the assays they use and specifying whether each is modified from an FDA-approved test or a pure LDT. Compilation of these lists will require substantial internal audits.

Device Labeling: The FDA expects each LDT to be fully documented with comprehensive device labeling—akin to a package insert for commercially marketed diagnostic tests. This includes not only assay performance data but also detailed patient and provider instructions. Labs should begin familiarizing themselves with FDA labeling requirements, as the process is complex and cannot be completed at the last minute.

Investigational Device Exemptions (IDE): For labs conducting clinical trials with LDTs, IDE regulations will come into play. Labs using LDTs as part of clinical trials must ensure their tests comply with investigational device rules unless exempt.

Stage 3: Quality System Regulations (QSR) Compliance

In May 2027, the FDA’s QSRs will take effect, marking a seismic shift for labs. Traditionally designed for device manufacturers, QSRs include stringent design controls, purchasing controls, and corrective and preventive actions (CAPA). Labs developing new LDTs or modifying existing tests will need to document these processes meticulously. Labs that fail to follow QSR requirements may face regulatory action, even for LDTs that have been safely used for years.

One of the most significant changes in Stage 3 is the requirement for design controls, which mandates that all test validations follow a stepwise, FDA-approved process. Labs that develop or modify LDTs will need to maintain detailed design history files for each test. This means that any LDT development done without following these protocols will need to be revalidated under the new system, adding an enormous administrative burden.

Stages 4 and 5: Premarket Approvals and FDA Submissions

By November 2027, labs developing high-risk LDTs will need to submit them for pre-market approval, mirroring the approval process for traditional medical devices. Low- and moderate-risk LDTs must be submitted through FDA's 510(k) or de novo pathways by May 2028.

The FDA estimates that bringing an LDT through this process could cost between $250,000 and $4.5 million per assay, a prohibitive price for many smaller laboratories. Labs will need to weigh these costs against their clinical utility and volume of use.

Challenges and Considerations for Labs

While some aspects of the rule are clear, the FDA has left many questions unanswered, leading to considerable uncertainty within the lab community. Key challenges include:

• Enforcement Scope: The FDA must inspect thousands of clinical labs to ensure compliance, but the agency's capacity to handle such oversight is questionable. Labs are also grappling with how dual regulation under CLIA and FDA will play out, particularly when standards between the two overlap.
• Resources and Costs: Complying with the new rules will be resource-intensive, and labs need to start budgeting now. User fees, staff training, and the potential costs of revalidating LDTs under FDA standards will weigh heavily on smaller labs.
• Turnaround Time: Labs may apply for enforcement discretion under the "unmet need" category if LDTs provide critical, time-sensitive results that FDA-approved tests cannot match. However, these labs will not be able to serve external customers under this category, limiting their reach.

Looking Ahead: Lawsuits and Legislative Uncertainty

The FDA’s final rule is being challenged in court by the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP). These lawsuits, currently being heard in Texas, could alter the scope of FDA authority over LDTs. Additionally, the recent Supreme Court ruling striking down the Chevron deference doctrine may reduce the FDA’s leeway in interpreting the rule, making future legislative action a critical battleground for the lab community.

While Congress has shown interest in intervening, the specifics of any legislative proposal could either alleviate or exacerbate the regulatory burden. For now, labs must proceed under the assumption that the FDA’s rule will stand, making compliance preparation urgent.

Conclusion

The FDA’s final rule on LDTs represents a sea change for laboratories, bringing them under stricter scrutiny and imposing costly compliance measures. While the aim is to ensure safety and effectiveness, the practical realities of implementing these changes will place a heavy burden on the industry. Laboratories must start preparing now, even as they await potential relief from lawsuits or legislative action.

As the deadlines loom, the lab community will need to navigate these new regulations carefully, ensuring both compliance and continued access to critical diagnostic tests.

##

Focus on the Q&A sessions.

##

Summary of Q&A from the Webinar on FDA’s New Lab Industry Requirements

The Q&A session during the webinar covered various clarifications regarding the FDA’s new rules for Laboratory Developed Tests (LDTs). Below is a summary of each key question addressed:

1. Minor vs. Significant Modifications of Currently Marketed Tests

   • Question: What constitutes a minor modification versus a significant modification to a currently marketed test?
   • Answer: Significant modifications, as defined by the FDA, include changes to a test’s operating principle, technology (e.g., from AI to machine learning), or indications for use (e.g., a new specimen type). Minor modifications are less defined but might involve adjustments like slight protocol changes. Significant modifications trigger the full FDA approval process.

2. Revalidating an Out-of-Service LDT

   • Question: If an assay was developed but has been out of service before the final rule, can it be revalidated and considered an existing LDT?
   • Answer: This depends on how much modification has been done. If the assay remains unchanged and is simply being revalidated, it may qualify as an existing LDT. However, if modifications were made, the FDA might consider it a new test, subject to the new rules.

3. FEI Number for Multiple Labs in a Health System

   • Question: Does each lab need a separate FDA Establishment Identifier (FEI) number, or can a health system use one for all labs?
   • Answer: It is unclear whether a single FEI number can cover multiple labs within a health system. Labs may need to apply individually, though there might be synergies for reporting certain types of events.

4. Turnaround Time as a Justification for Unmet Need

   • Question: Does turnaround time justify the unmet need category?
   • Answer: Yes, if the turnaround time impacts clinical care, it can justify using the unmet need category. For example, rapid testing for metabolic crises would qualify. However, cost and convenience alone do not meet the unmet need criteria.

5. FDA’s Capacity to Enforce the New Rules

   • Question: Can the FDA realistically inspect and enforce the rules for all laboratories?
   • Answer: The FDA faces challenges in scaling its oversight. The agency is relying on user fees to increase resources but may also prioritize high-risk LDTs and focus on listing and labeling to identify where enforcement is most needed.

6. Fees per Assay, Lab, or Healthcare System

   • Question: Are the FDA fees per assay, lab, or health system?
   • Answer: Fees are levied in multiple ways. Establishment registration fees apply per lab (based on the lab’s address), while submission fees for 510(k) or premarket approval are per assay.

7. Impact on Laboratory Director’s Discretion

   • Question: How will FDA oversight impact laboratory directors’ discretion in operations?
   • Answer: While laboratory directors will still have clinical discretion under CLIA, FDA oversight adds a regulatory layer that limits flexibility. Directors will need to balance medical judgment with compliance risks, especially for tests placed on the lab’s official menu.

8. Responsibility for Reporting Errors with FDA-Approved Tests

   • Question: Who is responsible for reporting issues when a lab modifies an FDA-approved test but an error occurs with the unmodified test?
   • Answer: If the error occurs with the FDA-approved test (e.g., the approved specimen type), the vendor would be responsible for reporting. However, if the error involves the modified LDT (e.g., a new specimen type), the lab assumes reporting responsibility.

9. Requirement to Switch to FDA-Approved Tests

   • Question: If an FDA-approved test becomes available, do labs have to stop using their currently marketed LDT?
   • Answer: No. If the LDT was in use before May 6, 2024, it can continue under existing LDT enforcement discretion, even if an FDA-approved test becomes available later. However, new LDTs developed after that date may not qualify for unmet need exemptions if an FDA-approved alternative exists.

10. Manufacturer's Role in LDT Modifications

    • Question: Can labs put pressure on manufacturers to address regulatory burdens for LDT modifications, like new specimen types?
    • Answer: Labs can advocate for manufacturers to address these needs, especially for modifications like specimen types, to avoid hundreds of labs independently seeking FDA approval. However, manufacturers have limited bandwidth, and their priorities may not always align with individual labs' needs.

11. Line Between Lab and Vendor Responsibility

    • Question: Where is the line drawn between a lab and a vendor's responsibility for reporting issues with FDA-approved tests?
    • Answer: For FDA-approved specimen types, the vendor remains responsible for reporting. For modifications developed by the lab (e.g., different specimen types), the lab assumes responsibility. There’s some gray area that will need clarification.

These Q&A responses underscore the complexity of FDA’s new regulations and the myriad challenges labs will face in complying with the evolving landscape.

##

What might a compliance officer report to the lab owner or board of directors, as his biggest concerns?

##

Here are the top six most concerning or alarming aspects of the FDA changes, based on the webinar, that you may want to report to your lab director, owner, and board of directors:

1. Redefining Labs as “Manufacturers”:
   The FDA’s classification of laboratories performing LDTs as “manufacturers” places labs under the same regulatory scrutiny as medical device companies. This means labs must comply with extensive requirements, including adverse event reporting and medical device corrections/removals, which significantly alters how labs have operated under CLIA. Labs will be subject to FDA inspections and are now obligated to manage compliance with federal regulations meant for device manufacturers.

2. Medical Device Reporting (MDR) Requirements:
   Starting in May 2025, laboratories will be required to report adverse events, including serious injuries and device malfunctions, to the FDA within 30 days (or within 5 days for urgent public health risks). The expansive scope of what constitutes a “device malfunction” could create a heavy administrative burden, requiring constant monitoring and quick responses. This also means labs need to implement formal MDR policies and designate personnel to manage this responsibility.

3. Extensive Complaint File Documentation:
   The FDA mandates that labs maintain a formal complaint handling system, requiring detailed documentation and investigation of all complaints, including oral complaints. Complaint management must follow formal procedures and involve a designated team or individual. The records must be available for future FDA inspections, creating another level of operational and record-keeping responsibility that could overwhelm labs without sufficient resources.

4. Cost and Resource Implications of Compliance:
   Compliance with the FDA rule will require significant financial and human resources. For example, labs must budget for user fees (currently $9,280 per year per lab) as part of the registration process, and compliance with pre-market approval and device labeling requirements could cost millions per assay. Many labs will need to hire regulatory personnel, train staff, and develop new internal procedures to handle the administrative burden, which could strain operational budgets and delay testing services.

5. Labeling and Device Registration Requirements by May 2026:
   Labs will need to submit detailed labeling for all LDTs, including assay performance data, instructions for use, and detailed specimen collection procedures. This is not just a simple process but involves a package insert-like document with comprehensive information. The time and resources required to prepare accurate, FDA-compliant labeling are substantial, and errors could result in non-compliance. Furthermore, labs must register all LDTs with the FDA, which introduces new overhead in tracking and managing tests.

6. Quality System Regulation (QSR) Compliance:
   By May 2027, labs will need to comply with FDA’s Quality System Regulations (QSRs), which impose stringent controls on test design, purchasing, and quality control processes. The design control requirements, in particular, will force labs to change how they develop and validate LDTs, requiring extensive documentation of every stage of test development. For labs that do not already operate under a QSR framework, this will require a complete overhaul of their current processes, adding significant operational complexity and cost.

These six concerns are critical to understanding the profound impact these regulatory changes will have on the lab’s operations, compliance, and financial health. They will require immediate attention and strategic planning to ensure smooth transitions and avoid penalties