FDA, industry scrambling to clarify or design new regs covering lab-developed tests

Science is rapidly shaping the landscape of the diagnostics industry, from the research into genetics and new materials like graphene, to the regulatory science practiced at the FDA.

After a decade-plus fight, the agency last year released a draft guidance on regulation of the lab-developed test (LDT) industry, signaling it had won permission to expand its oversight authority from higher-ups in the White House Office of Management and Budget.

Makers of diagnostic testing equipment were pleased that the large centralized laboratories that carry out the tests themselves will also be subject to FDA's stringent oversight. But the laboratories were predictably disappointed, and the American Clinical Laboratory Association has hired lawyers who are threatening to sue the FDA.

Regardless, all industry players face uncertainty and are anxious to see the final guidance, which the FDA has promised to deploy this year. That would mark the official beginning of the implementation phase of the planned regulatory reform.

Many wonder what role the federal Centers for Medicare & Medicaid Services (CMS) will play under the new system, for FDA is set to replace it as the top dog when it comes to regulating laboratory-developed tests.

"We have heard stakeholder confusion about the roles of the two agencies in ensuring quality and concerns about potentially duplicative efforts," conceded the head of FDA's device arm (CDRH), Dr. Jeffrey Shuren, in a post on the agency's blog.

To that end, he announced the formation of a joint task FDA-CMS task force. The agencies will "work together to clarify responsibilities for laboratories that fall under the purview of both agencies," he wrote.

Under the FDA's proposed framework, CMS will still have authority under what's known as the "CLIA rules" to ensure labs are run properly and have qualified personnel, while the FDA will regulate the design and manufacture of the test themselves, Shuren explained, though that hasn't satisfied most industry stakeholders, who are still trying to figure out how that will work in practice.

In fact, industry representatives from diagnostic manufacturers and clinical laboratories released a regulatory master plan of their own, as an alternative to FDA's proposed framework. It addresses concerns about duplicate regulations, as well as other worries like the lengthy time to market for some diagnostics.

The FDA Law Blog says the "intriguing" proposal could "could form the basis of legislation that may be released in the near future." For, adding to the uncertainty is the congressional Republicans' 21st Century Cures initiative, which promises to overhaul regulation of the entire life sciences industry if passed.

AdvaMed supports the FDA's initiative and said at a press conference it is confident that the agency's LDT regulations will survive the 21st Century Cures initiative. But many Republicans, such as Rep. Michael C. Burgess (R-TX), oppose expanding FDA oversight. Will the plan's support among lots of big companies convince the Republicans to make an exception to their less regulation stance?

Indeed, the FDA's plan to regulate LDTs reveals not just political but financial fault lines. AdvaMed member companies, like Roche ($RHHBY) and other manufacturers who sell diagnostic kits to third parties, will benefit from the increased regulation of competing diagnostic tests that are developed and conducted at centralized laboratories.

Meanwhile, the role of CMS remains unclear, at least beyond paper. The agency's core reimbursement function will remain unchanged. It recently proposed adding HPV screening to Medicare as additional an preventive service for beneficiaries aged 30 to 65.

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