A VALID Argument: Proposed Legislation Would Reshape Regulation of Diagnostics

For many years, one of the most controversial topics in device regulation has been the dual-track oversight of in vitro diagnostics (IVDs) and laboratory developed tests (LDTs).  Distributed IVD products are regulated by FDA, while laboratories that perform LDTs are regulated by the Centers for Medicare & Medicaid Services (CMS).  At various points and in various ways, FDA has sought – mostly unsuccessfully – to regulate LDTs (see here).  Most recently, the Department of Health and Human Services (HHS) under the previous administration said FDA could not regulate LDTs in the absence of notice-and-comment rulemaking (see our prior post here).  Given how hard rulemaking is, that decision – if left standing by HHS – could significantly deter FDA from regulating most LDTs.

Enter Congress, and the introduction on June 24 of newest incarnation of the Verifying Accurate, Leading-edge IVCT Development (VALID) Act.  If enacted, the VALID Act would completely reshape the regulation of all diagnostic products in the United States.  Running 245 pages, the Act would create a new framework that would encompass both distributed IVD products and LDTs.  This approach stands in sharp contrast to the Verified Innovative Testing in American Laboratories Act of 2021 (VITAL Act), introduced on May 18, 2021.  In 7 short pages, this bill would give CMS exclusive jurisdiction over LDTs.  The VITAL Act would largely preserve the dual-track regulatory approach; the VALID Act would upend it.

Both approaches have their proponents and detractors.  Critics of the current system assert, for example, that it makes no sense for a diagnostic test for Condition X to be subject to FDA’s comprehensive regulatory framework if distributed and another test for the same condition to be subject to a different, and (some would argue) lower level of regulation as an LDT.  They argue that, from the patient’s perspective, the requirements for, and quality of, a test should not vary depending on whether it relies on a distributed IVD or is developed in a laboratory.  Proponents of the current dual-track approach assert that laboratories that develop and perform LDTs are in fact highly regulated – just not by FDA – and that LDTs have an excellent track record and are essential to the current health care system.

The COVID-19 pandemic has only highlighted and deepened the split.  LDT advocates assert that FDA’s blocking of LDTs at the start of the pandemic hindered the country’s response to the pandemic by delaying test availability.  FDA, however, claims that nearly two-thirds of COVID LDT EUAs submitted to the agency for review had design or validation issues.  Critics also note FDA’s struggle to cope with the large influx of EUA submissions for COVID tests (both IVDs and LDTs), and question FDA’s capacity to regulate a large influx of LDTs.  According to Concert Genetics there are currently an estimated 160,000 genetic tests – which is only one type of LDT.  The number of LDTs is certain to grow in the upcoming years.

Thus, both sides view the COVID pandemic as confirming their pre-pandemic positions; the need for greater FDA oversight of LDTs to ensure test quality, on the one hand, versus the detrimental impact of FDA regulation to the timely availability of LDTs, especially in response to new public health threats, on the other.

VALID comes down squarely on the side of the need for greater FDA regulation.  The bill creates a new category, called In Vitro Clinical Tests (IVCTs), which encompasses both distributed IVD products and laboratory tests.  Once the legislation is fully in effect, the distinction between LDTs and distributed products would largely vanish.

While completely revamping diagnostic regulation, VALID was not crafted in a vacuum.  Some elements, such as technology certifications, are new.  Many other concepts in the legislation are familiar, such as premarket review by FDA, breakthrough designations, pre-submissions, and risk classifications (albeit only in two categories).  Thus, many provisions will feel familiar, even if not identical.

And yet, the devil will lie in the details.  For instance, under VALID, IVCTs that are “low risk” and IVCTs that are “high risk” will be subject to very different requirements.  The former will enter the market without FDA review, while the latter will need FDA approval.  Thus, drawing the line is critically important.  A low risk IVCT is one that:

(A) would cause minimal or no harm, or minimal or no disability, or immediately reversible harm, or would lead to only a remote risk of adverse patient impact or adverse public health impact, taking into account the degree to which the technology for the intended use of an in vitro clinical test or category of tests is well characterized and the criteria for performance of the test or category of tests are well-established for the intended use, the clinical circumstances under which the in vitro clinical test or category of tests is used, and the availability of other tests (such as confirmatory or adjunctive tests); or (B) would cause a serious adverse health consequence, harm that is reversible, a delay in necessary treatment that is not life-supporting or life-sustaining, or would lead to a serious risk of adverse patient experience or adverse public health impact, but applied mitigating measures have the capacity to ensure the test meets the standard described in subparagraph (A).

These criteria are by and large different from the ones found in the language of the Federal Food, Drug, and Cosmetic Act for determining device classification.  The concepts here are ones that are often used by FDA, but the aggregation of concepts – risk + well-characterized + well-established performance criteria + clinical circumstances + confirmatory tests – represent a new statutory equation.  And because of the imprecision of many of the terms and how they are weighed, it will give FDA very wide latitude in classifying IVCTs.

This is just one example.  As one dissects VALID, there are numerous other instances where it is predictable that confusion and debate will ensue as to exactly what the law means.  FDA will have a gargantuan task in creating the guidance documents trying to provide greater clarity as to how the law would be implemented.  And, notwithstanding the drafters’ goal of developing new criteria for IVCTs, FDA may largely apply these concepts along the lines of its existing device framework.  Or, perhaps not.  How the law will be implemented is a large unknown.

FDA has, of course, dealt with similar challenges of assessing multiple factors in reviewing a submission.  For example, the agency has issued multiple guidance documents relating to device review which direct a multi-factorial analysis.  Those documents, though, represent FDA’s perspectives informed by years of evaluating devices under a fairly static framework.  At a minimum, these new statutory terms and concepts will lead to a protracted transitional period of great uncertainty.  Under section 5 of VALID, most provisions would not take effect for four years.  Given the scope and complexity of the law, FDA and stakeholders would need all of that time – and probably more – to prepare for implementation of the legislation.  Even then, it will take time to see how these terms are actually implemented in practice.

Ultimately, the most important provisions of any LDT legislation, if enacted, may not be what the legislative drafters expected.  That happened with the 1976 Medical Device Amendments.  The sponsor of the legislation wrote a detailed, lengthy section creating a pathway to market called “Product Development Protocols,” which was clunky, complex, and cumbersome, and quickly became irrelevant. Conversely, an obscure provision, added to create parity with pre-Amendment products – section 510(k) – became one of the most important provisions of all.

Whether VALID will be enacted is unknown.  Prior legislation to address IVCTs has died.  Perhaps this bill will have a different fate.  Gamblers can place their bets on the likelihood of passage.

One sure bet, though, is that despite the herculean efforts to craft this legislation, if VALID is enacted, an even more powerful law will kick in: the law of unintended consequences.  In transforming the field of diagnostic regulation in the United States, VALID will have impacts that will not be foreseen or contemplated.