Modernizing The Regulation of Laboratory Developed Tests (LDTs): Senator Rand Paul Identifies A Better Way Forward

June 14, 2021By Jeffrey K. Shapiro

In our last post on Laboratory Developed Tests (LDTs), we suggested that Congress, not FDA, should lead in directing modernization of LDT regulation.  Any change should be made by enacting new law, and not by Food and Drug Administration (FDA) administrative fiat.

Coincidentally, on the same day the post went up, Senator Rand Paul introduced the “Verified Innovative Testing in American Laboratories Act of 2021” or the “VITAL Act of 2021,” a bill clarifying that the Centers for Medicare and Medicaid Services (CMS), not FDA, is to regulate LDTs.  It would require also that CMS hold a public meeting to solicit recommendations on updating existing Clinical Laboratories Improvement Amendment (CLIA) regulations related to clinical testing laboratories.  This step would help propel forward a public conversation (which CMS has already started) about how to update these regulations in light of technological advances.

FDA argues that technological advances in LDTs necessitate FDA’s regulatory oversight pursuant to the Food, Drug, and Cosmetic Act (FDCA).  Senator Paul’s bill would likewise facilitate regulatory reform to meet technological advances, but it would place the responsibility on CMS and use the vehicle of updating the CLIA regulations.  This approach makes more sense, because the CLIA regulations have always been the main vehicle for regulating clinical laboratory testing.

Indeed, the effort these past few years to apply the FDCA and its implementing regulations to clinical laboratory testing has been a failure.  The outcome was not a surprise, because the FDCA was designed for regulatory oversight of medical device manufacturing and distribution, not clinical laboratory testing.  Applying the FDCA to clinical laboratory testing is akin to putting a square peg in a round hole; it will work for a portion, but there are sharp corners that just do not fit.

The background to this discussion is as follows:  In 1976, Congress amended the FDCA to add a basic regulatory framework for medical devices.  A little more than a decade later, in 1988, Congress amended Public Health Service Act (PHSA) to add the CLIA, which provided a basic regulatory framework for clinical laboratory testing.  The Centers for Medicare & Medicaid Services (CMS) implements CLIA, largely based upon regulations issued in 1992.

Shortly after CLIA was enacted, FDA asserted authority to regulate LDTs under the FDCA.  This conclusion was strange, since CLIA is obviously intended for clinical laboratory testing while the FDCA is obviously intended for medical devices.

Nonetheless, FDA implemented the claimed authority by adopting “enforcement discretion” for all LDTs unless the public health supposedly demanded intervention.  That is, FDA claimed the authority to regulate LDTs while for the most part declining to do so.  Think of a lion watching a gigantic herd of wildebeests thundering past.  Every so often, FDA would charge and pounce, picking off a test here and there for active regulation, while it left the rest alone.

The agency choice of which tests to regulate was not based on factors set forth in a statute or even a regulation.  It was all decided by administrative fiat.  This abuse of enforcement discretion was arbitrary, capricious and likely unconstitutional.  Fortunately, The Department of Health and Human Services (HHS) finally put a stop to it last summer.

With this background, we return to Senator Paul’s bill.  It would require CMS to initiate a public conversation about how best to update the regulations for modern diagnostic technologies.  If there is good follow through, CMS would ultimately issue new regulations reflecting appropriate changes.  In this discussion, we would suggest that CMS also should seek to identify amendments to its statutory authority under CLIA, if any, that are necessary to complete the job of reform.

We predict that the discussion to be initiated by Senator Paul’s bill, focusing on CMS and CLIA, will be much more fruitful than FDA’s attempt (and recent legislative efforts) to apply the FDCA broadly to LDTs.  It is time to recognize that an FDA‑centric approach is not desirable.  That said, because some still argue for FDA oversight of LDTs, at least in part, we will consider in a future blog post whether there exists an appropriate (if limited) role for FDA in oversight of LDTs, even if CMS should take the lead through CLIA, as it has done for three decades or more.