Advocacy - Comment Letter
Dear Director Young, Administrator Revesz, & Associate Director for Health Spiro:
The Association for Diagnostics & Laboratory Medicine (ADLM) appreciates the Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA) taking the time to meet with us to discuss the Food and Drug Administration’s (FDA’s) final rule to regulate laboratory developed tests (LDTs). While this final rule has not yet been released, this issue has been discussed within the healthcare community for more than a decade. ADLM thinks it is premature for OMB to release this rule, given:
There are legitimate questions about whether the agency has the legal authority to regulate LDTs. In 2015, distinguished jurists Paul D. Clement and Lawrence H. Tribe published a white paper arguing that the FDA was seeking to “saddle a dynamic and innovative industry with sweeping new regulatory burdens without statutory basis.”[1]
Clement and Tribe further stated:
Similarly, the Department of Health and Human Services (HHS) General Counsel echoed these concerns in its 2020 analysis of the FDA’s legal authority to regulate LDTs. The counsel stated:
ADLM suggests that OMB direct FDA withdraw this rule until a neutral arbiter can determine whether the agency has the authority to regulate these tests.
The FDA further claims throughout the document that Congress gave the agency authority to regulate medical devices dating back “to at least 1938”[9] and that test systems developed and sold by medical device manufacturers are the same as testing services provided by clinical laboratories; therefore, hospitals and commercial laboratories conducting such testing are manufacturers as well. While Congress has passed legislation giving the FDA authority over the development and sale of test kits, the legislative authority to regulate testing services has been with CMS and its predecessors.
FDA involvement in regulating testing performed in clinical laboratories has been at the periphery, at best. The legislative and regulatory history of laboratory testing supports CMS as the primary overseer of testing, not the FDA.
The Administrative Procedures Act (APA) sets forth the criteria that federal agencies must employ when developing a rule. In its most basic format, the agency is required to develop a proposed rule, seek public comment on the proposal, review each comment, and then craft and promulgate a final rule that incorporates public feedback. The agency is directed to respond within that final rule to the public comments received.
For example, in February 2019, the Centers for Medicare and Medicaid Services published a proposed rule that would make modifications to its proficiency testing (PT) program under CLIA. It received 107 comments, which the agency responded in its July 2022 final rule. The estimated costs for implementing this final rule in 2022 ranged from $26 million to $94 million. CMS stated in the document that “generally, a final rule must be issued within 3 years of publishing a proposed rule, except under exceptional circumstances.”[10]
ADLM is concerned that the FDA is not adequately following the process for developing a rule. It is unclear to us how the agency could finalize an extremely complicated, costly, and impactful proposed rule in less than three months, when it took CMS more than three years on a much less complex document with far fewer comments. The economic impact of the LDT rule, according to the FDA, could be as high as $86 billion (see below). That figure alone, if accurate, makes it extremely important that any regulatory action be comprehensive and precise, rather than fast.
The FDA’s cost-benefit analysis of the proposed rule illustrates the need for gathering and evaluating additional data before any rule is advanced or action taken. As the FDA acknowledges, there are significant limitations in the data it used to conduct its regulatory analysis. Much of the information referenced by the agency is anecdotal or based on articles published in the popular press, not scientifically based evidence-driven studies. The result is a cost-benefit analysis that is so wide-ranging that it provides little meaningful insight into the impact of the proposed regulatory change. We are also concerned that the FDA is incorporating many flawed assumptions into its estimates.
According to the FDA, the annualized economic benefits from the proposal range from $2.67 billion to $86.01 billion over 20 years at a seven percent discount rate, whereas the annualized costs range from $2.52 billion to $19.45 billion over a similar period. The costs to the agency range from $265 million to $1.06 billion with a portion of this offset by user fees. These broad estimates reflect the agency’s lack of information.
We are concerned that the agency is vastly overstating the benefits of greater oversight, while understating the direct and indirect costs to healthcare providers and patients, including the expenses associated with patients failing to have access to timely lifesaving diagnostic tests. One industry analyst suggests the proposed rule will result in “a staggering $50 billion”[11] in costs to the laboratory industry over the first five years, while the suggested benefits are based on “highly speculative conjectures”[12] over 20 years.
ADLM believes that any analysis of LDTs must clearly delineate how many clinical laboratories will be affected and the number of LDTs that will be subjected to additional oversight. Further, the report must, at a minimum, address:
These issues are not adequately addressed in the FDA economic analysis associated with the proposed rule. We urge you to review the comments submitted by ARUP Laboratories, which highlighted many mischaracterizations and inaccuracies in the FDA document. The regional laboratory, which is associated with the University of Utah stated that “the FDA has made, at a minimum, an approximately 250-fold overestimate in its assessment of financial benefit.”[13]
As another commenter observed, the “FDA’s economic analysis systematically and repeatedly either understates the costs that will be imposed or ignores them altogether. Time and again, FDA simply does not mention entire categories of regulatory requirements that will apply to clinical laboratories. In order to meet its legal obligations, FDA must redo its cost analysis.”[14]
ADLM concurs with this assessment.
ADLM agrees that the increased number and complexity of LDTs may necessitate a review of the regulations governing these critically important clinical testing services. We believe, however, that the process for this review already exists within the CLIA regulations.
Administered by the CMS, CLIA provides a robust framework within which the agency oversees laboratory testing. CMS, with public input, created stringent federal standards that regulate laboratory testing, including LDTs. These standards include rigorous personnel, quality assurance, quality control, and proficiency testing requirements; regular inspections; and required corrective actions, when necessary.
In addition, many of the testing facilities that perform LDTs actively participate in the New York State, Joint Commission, College of American Pathologists (CAP), or other oversight programs, where they must meet requirements even more stringent than CLIA. ADLM is concerned that expanding oversight to include the FDA will divert limited laboratory resources from the provision of care to new, duplicative administrative requirements.
It is important to understand the differences in the roles of medical device manufacturers and clinical laboratories in providing testing services. Manufacturers develop the in vitro diagnostic (IVD) instruments and test kits sold to and used by a laboratory; medical laboratory professionals create LDTs to help physicians diagnose and treat patients when no comprehensive IVD product is available for a particular condition or purpose.
ADLM believes that any refinements to the regulation of LDTs should be discussed and acted upon within the Clinical Laboratory Improvement Advisory Committee (CLIAC), which is the federal advisory body that guides CMS, FDA, and the CDC on changes to the CLIA policy. Changes beyond the scope of the panel should be addressed by Congress as part of a larger CLIA modernization effort. Separate, duplicative FDA regulation is unnecessary and may harm patient care.
ADLM is concerned that the final rule will adversely affect the care provided to a wide spectrum of patient groups, particularly those in medically underserved populations, who will have less access, or delayed access, to these vital tests. LDTs are developed to fill a void—either a test kit is not available, the test kit on the market does not provide the information needed by the clinician, or the FDA-approved or cleared test is of limited diagnostic value. Listed below are just a few patient care areas that may be harmed if the proposed rule is finalized and promulgated:
Pediatric Testing
Our pediatric population is one of our most vulnerable populations as they cannot advocate for themselves and often cannot communicate their clinical symptoms. Additionally, children are reliant on parents/guardians to coordinate their care, which is often complicated by work schedules, finances, and transportation challenges. Specialty care for children is also primarily available in large metropolitan areas, increasing the need to travel long distances for parents/guardians who care for children with complex health needs. An important example of this is newborn screening (NBS) testing and follow-up.
NBS tests for inborn errors of metabolism (IEM) provide vital information for diagnosing and treating children with rare, often life-threatening, medical conditions. Although each individual disorder is rare, collectively it is estimated that one in roughly 2,000 newborns will have some sort of IEM. Phenylketonuria (PKU) is an example of a common inborn error of metabolism in which Children are unable to convert the amino acid phenylalanine to tyrosine due to a defective enzyme (phenylalanine hydroxylase).
If left untreated, the dangerous buildup of phenylalanine in the baby will result in devastating neurological symptoms, brain damage, and possibly death. However, children can lead normal, healthy lives with simple dietary modifications. Unfortunately, there are no FDA-approved tests to screen for or diagnose children with PKU or most other IEM. Screening tests like NBS are very sensitive so no infant with the disorder will be missed. That sensitivity, however, results in a relatively high false positive rate. Thus, a positive NBS test must be confirmed by a second definitive test for the condition. These confirmatory tests are all LDTs.
Although the initial sample for NBS is collected while mother and baby are still in the hospital, confirmatory and follow-up testing are done as outpatients unless the infant is critically ill. Children’s hospitals often have NBS follow-up testing in-house, allowing them to coordinate patient management in real-time with physicians and families who have traveled hours to have this testing performed. Any problems with specimen collection, results, and interpretations can be clarified and resolved on-site, preventing delay in treatment and diagnosis, numerous multi-hour trips or overnight stays which are a significant hardship to our patients, particularly those who live in rural settings and lack resources for travel and alternative local accommodations.
If these low-volume LDTs, which are well established and save many lives annually, were to require FDA submission – few hospitals would be able to continue to perform these tests. This would necessitate these in-house tests being sent to one or two central testing centers, requiring multiple days between specimen collection, and obtaining the results. Proposed FDA changes, if adopted, may severely limit access to these life-saving tests for these children.
Molecular oncology
Another key area that could be adversely affected by the FDA proposed rule is the treatment of patients that have cancer. Broad molecular profiling of patient tumors by next-generation sequencing tests is standard of care in the diagnosis, prognosis, and therapy selection for patients that have cancer. Molecular testing in the realm of oncology encapsulates several methods that are commonly used to help pathologists reach a diagnosis, assist care teams to anticipate disease progression, and allow the physician and patient to select the therapeutic plan that minimizes toxicity. Few of these methods are in a pre-packaged, FDA-approved “kit” format, thus forcing clinical laboratories to develop these diagnostic tools locally. Furthermore, several drugs approved by the FDA over the last decade have no biomarkers of efficacy available beyond LDTs, including immune checkpoint inhibitor therapies such as pembrolizumab.
A key benefit of molecular profiling is the ability to simultaneously analyze hundreds of genes, decreasing the cost of testing and increasing patient safety because less tissue from invasive biopsies is required for NGS testing. Accelerating the pace of discovery in cancer research has been a national objective for decades, including the “Cancer Moonshot” initiative that emphasizes the need for advances in technology innovation, scientific discoveries, and therapeutic options. ADLM is concerned the duplicative FDA oversight of these tests will further limit the ability of healthcare providers to offer these tests. We are not averse to exploring additional ways to improve oversight of LDTs. However, any changes should take place through the congressionally mandated CLIA standards, of which the FDA is a partner with CMS and CDC.
The FDA states in the proposed rule that “increased oversight may help to advance health equity,” through ensuring greater representation of marginalized populations in the clinical studies utilized in developing the test. The agency asserts this will increase the accuracy and usefulness of these tests.
ADLM is concerned that the agency is making policy based on speculative statements without providing scientific evidence to support these claims. Further, we share some of the concerns raised within the agency’s cost-benefit analysis of the proposal regarding the potential impact of the proposed rule on underrepresented populations. The FDA analysis states:
“Nonetheless, while the proposed rule may help to advance health equity, we have no specific data showing that increased FDA oversight of IVDs offered as LDTs will necessarily reduce health disparities.”[15]
“If laboratories pass-through the cost of compliance to the costs of IVDs offered as LDTs, testing frequency may decrease for areas that rely on IVDs offered as LDTs because of easy, rapid access.”[16]
” If laboratories or healthcare facilities respond to increased compliance costs by increasing the price of IVDs offered as LDTs or reducing the availability of IVDs offered as LDTs, there may be an increase in health inequity.”[17]
” Vulnerable populations that rely on IVDs offered as LDTs for diagnostic testing may have less access to diagnostic tests in general after the implementation of the rule.”[18]
The agency should not be seeking to rush through a proposed rule that could have a deleterious effect on patient access to testing, particularly in economically and racially marginalized communities.
The FDA, by its own admission, is having problems hiring staff to meet its current responsibilities. Increasing this burden would add to the agency’s problems, while potentially affecting patient care. The FDA’s lack of resources to execute its existing mission was evident during the COVID pandemic when the agency had to limit the review of COVID Emergency
Use Authorization tests to those with a volume greater than 500,000 per week. The inability of the FDA to review new COVID-19 tests raised legitimate concerns about whether the agency has the bandwidth to oversee LDTs, which could conservatively involve the review of tens of thousands of submissions.
For comparison, the Office of In Vitro Diagnostics, which would have oversight of LDTs, received a total of 112 510(k) submissions for the first recent quarter of this fiscal year and 10 PMAs.[19] It is clear the FDA does not have the staff nor resources to review many thousands of additional LDTs.
While ADLM believes that the FDA does a good job in evaluating new medical devices that enter the healthcare arena, its process is not perfect and, in fact, needs reform. There are many instances where test kits or drugs have been approved or cleared by the agency only to be later recalled. For example:
The FDA should focus its attention on improving its existing review process, rather than seeking to add another area of responsibility that may hinder the agency’s ability to meet its current workload.
ADLM is a global scientific and medical professional organization dedicated to clinical laboratory science and its application to healthcare. ADLM brings together more than 50,000 clinical laboratory professionals, physicians, research scientists, and business leaders from around the world focused on clinical chemistry, molecular diagnostics, mass spectrometry, translational medicine, lab management, and other areas of laboratory science to advance healthcare collaboration, knowledge, expertise, and innovation.
On behalf of ADLM, I would like to thank you for the opportunity to engage OMB on this rule. If you have any questions, please email Vince Stine, PhD, ADLM’s Senior Director of Government and Global Affairs, at [email protected].
Sincerely,
Octavia M. Peck Palmer, PhD, FADLM
President, ADLM
[1] Paul D. Clement and Lawrence H. Tribe, Laboratory Testing Services, As the Practice of Medicine, Cannot Be Regulated As Medical Devices, January 2015.
[2] Ibid, page 15.
[3] Ibid, page 15.
[4] Ibid, page 15.
[5] Department of Health and Human Services Memo to FDA on the agency’s legal authority to regulate LDTs, June 2022, page 2.
[6] Ibid, page 2.
[7] Ibid, page 2.
[8] Ibid, page 2.
[9] FDA Medical Devices; Laboratory Developed Tests proposed rule, October 3, 2023 Federal Register, page 68019.
[10] Centers for Medicare and Medicaid Services, CLIA Proficiency Testing Regulations, July 11, 2022, page 41194.
[11] Bruce Quinn, “FDA Regulation of LDT’s: The Hidden Facts You Need to Know,” October 10, 2023, page 3.
[12] Ibid, page 16.
[13] ARUP Laboratories, November 28, 2023 comment to the FDA on FDA-2023-N-2177-0001, page 8.
[14] Hyman, Phelps & McNamara, PC, December 4, 2023 comments to the FDA on FDA-2023-N-2177-0001, page 26.
[15] FDA, Preliminary Regulatory Impact Analysis, Initial Regulatory Flexibility Analysis, Unfunded Mandats Reform Act Analysis, Docket No. FDA-2023-N-2177, https://www.fda.gov/media/172557/download?attachment, page 105.
[16] Ibid, pages 105-106.
[17] Ibid, page 106.
[18] Ibid, page 106.
[19] FDA Quarterly Update on Medical Device Performance Goals, MDUFA V CDRH Performance Data, Actions through 31 March 2023, 2nd Quarter FY 2023 MDUFA V Performance Report (fda.gov).