Pure Chat GPT. offered FYI only.
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Here are some of the questions among NGS policy nerds, since the Texas court "loss" for the FDA LDT rule on March 31.
(1) What happens to updates of lab-based FDA tests? Foundation Medicine's PMA (P170019) has had 53 updates, such adding extra gene ABC as now approved for drug XYZ. Does FDA have authority to issue such updates, if lab services as tests, are outside FDA's scope?
(2) ADLT status. CMS has given special pricing to about a half-dozen sole source and FDA approved genomic tests (the Tempus FDA test is an ADLT). Have those horses left the barnyard, arrived in the ADLT barnyard, and the gate is now closed?
(3) What about labs that are midstream in their review as breakthrough devices as lab-based tests on the FDA pathway? Does the judge's ruling on the scope of FDA authority impact these?
(4) CMS NCD 90.2 provides automatic coverage for NGS cancer tests that are "CDx" with FDA approval. Will new tests that qualify have to be FDA kits (like Illumina TSO Comprehensive) rather than lab services (like FMI F1?)
### CHAT GPT 4o WRITES....
Great questions—these are exactly the kinds of “live-wire policy uncertainties” that make genomics investing both exciting and treacherous. You’ve framed them beautifully on LinkedIn, and they're absolutely relevant to Coatue and anyone tracking test valuation trajectories. Here's a synthesis of your insights with a few layers of policy commentary and speculative forecasting for each point.
🧩 Background Context:
On March 31, 2025, a Texas federal court ruled that FDA's attempt to regulate lab-developed tests (LDTs) exceeded its statutory authority. The judge leaned heavily on the argument that LDTs are not “articles” shipped across state lines, and therefore not “devices” within the scope of FDA regulation under the Food Drug & Cosmetic Act (FDCA). This undercuts FDA’s Final Rule on LDTs issued earlier in 2024.
🔍 Implications for Your Four Policy Questions:
(1) FDA Updates to Lab-Based CDx Tests (like Foundation's PMA P170019)
Issue: If a CDx test is approved under a PMA as an LDT, and not a physical kit, is FDA still empowered to issue label expansions and gene additions?
Policy Commentary:
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This is a gray zone. The PMA is a binding legal agreement between the FDA and the manufacturer (e.g., Foundation Medicine).
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Even if FDA can’t newly regulate LDTs, existing PMAs are probably still enforceable contracts. Think of them as “voluntarily entered” devices.
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But the authority to update or modify them now sits on shakier ground if the product is no longer in FDA jurisdiction.
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Result: Policy paralysis. FDA may stall or pause future label updates unless Congress clarifies.
(2) ADLT Status for FDA-Approved Sole-Source Tests
Issue: Will CMS continue granting ADLT status based on FDA approval, if that FDA approval no longer applies to LDTs?
Policy Commentary:
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Existing ADLTs (e.g., Tempus XT-CDx, Guardant360 CDx) are already on the CMS books—they won’t be revoked.
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Future ADLTs may need to show FDA clearance as a kit, not a lab service.
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If CMS becomes unsure whether a “CDx LDT” is truly “FDA approved,” the gate may effectively close—new LDT-based ADLTs may stall.
Takeaway: This may tilt future ADLT eligibility toward kit-based tests, disadvantaging new LDTs unless the FDA/DOJ appeals or Congress steps in.
(3) LDTs Midstream in Breakthrough Device Designation (BDD) or PMA Reviews
Issue: What happens to labs with LDTs halfway through an FDA submission under BDD or PMA?
Policy Commentary:
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These labs are in regulatory limbo.
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FDA may pause, withdraw, or offer conversion to 510(k) or kit-based pathways.
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CMS and payers often tie reimbursement to “FDA Breakthrough” status, so disrupted reviews may jeopardize near-term value propositions.
Practical effect: These companies may pivot to kit development or de-risk with hybrid strategies (LDT now, kit later). But timelines get longer and costlier.
(4) CMS NCD 90.2 – Future Eligibility for Auto-Coverage of CDx
Issue: Will CDx tests need to be kits to qualify for automatic Medicare coverage under NCD 90.2?
Policy Commentary:
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The NCD says: coverage applies to FDA-approved CDx using NGS for advanced cancer.
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If FDA can't regulate an LDT, it arguably can't “approve” one either.
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Therefore, future coverage under 90.2 may be limited to kit-based CDx (like Illumina’s TruSight Comprehensive), not LDTs (like FoundationOne CDx).
Bottom line: New entrants seeking NCD 90.2 coverage may have to shift to kit-based pathways, despite higher cost and complexity.
🔮 Final Thoughts
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Short-term uncertainty: CMS may freeze new ADLT or NCD90.2 approvals while waiting for HHS or DOJ appeal guidance.
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Medium-term outcome: This may accelerate the kit-ification of genomics—even by companies that prefer the LDT model.
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Strategic view for investors: FDA's setback introduces valuation bifurcation between:
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Tests already “in the system” (grandfathered)
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Newer or pending entrants, especially LDTs banking on FDA-enhanced pricing or coverage
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Would you like a slide or talking point in your deck summarizing this “FDA Rule Struck Down – Investment Implications”? I can mock that up in your style.
