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Proposed Rule2023-21662

Medical Devices; Laboratory Developed Tests

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Published

October 3, 2023

Issuing agencies

Health and Human Services DepartmentFood and Drug Administration

Abstract

The Food and Drug Administration (FDA, the Agency, or we) is proposing to amend its regulations to make explicit that in vitro diagnostic products (IVDs) are devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act) including when the manufacturer of the IVD is a laboratory. In conjunction with this amendment, FDA is proposing a policy under which FDA intends to phase out its general enforcement discretion approach for laboratory developed tests (LDTs) so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs. FDA is proposing this phaseout to better protect the public health by helping to assure the safety and effectiveness of LDTs. If finalized, this phaseout may also foster the manufacturing of innovative IVDs for which FDA has determined there is a reasonable assurance of safety and effectiveness.

Full Text

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<title>Federal Register, Volume 88 Issue 190 (Tuesday, October 3, 2023)</title>
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[Federal Register Volume 88, Number 190 (Tuesday, October 3, 2023)]
[Proposed Rules]
[Pages 68006-68031]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-21662]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 809

[Docket No. FDA-2023-N-2177]
RIN 0910-AI85

Medical Devices; Laboratory Developed Tests

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA, the Agency, or we) is
proposing to amend its regulations to make explicit that in vitro
diagnostic products (IVDs) are devices under the Federal Food, Drug,
and Cosmetic Act (FD&C Act) including when the manufacturer of the IVD
is a laboratory. In conjunction with this amendment, FDA is proposing a
policy under which FDA intends to phase out its general enforcement
discretion approach for laboratory developed tests

[[Page 68007]]

(LDTs) so that IVDs manufactured by a laboratory would generally fall
under the same enforcement approach as other IVDs. FDA is proposing
this phaseout to better protect the public health by helping to assure
the safety and effectiveness of LDTs. If finalized, this phaseout may
also foster the manufacturing of innovative IVDs for which FDA has
determined there is a reasonable assurance of safety and effectiveness.

DATES: Either electronic or written comments on the proposed rule must
be submitted by December 4, 2023.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. The <a href="https://www.regulations.gov">https://www.regulations.gov</a> electronic filing system will accept comments until
11:59 p.m. Eastern Time at the end of December 4, 2023. Comments
received by mail/hand delivery/courier (for written/paper submissions)
will be considered timely if they are received on or before that date.

Electronic Submissions

Submit electronic comments in the following way:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to <a href="https://www.regulations.gov">https://www.regulations.gov</a>
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
<bullet> If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

Submit written/paper submissions as follows:
<bullet> Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
<bullet> For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
Instructions: All submissions received must include the Docket No.
FDA-2023-N-2177 for ``Medical Devices; Laboratory Developed Tests.''
Received comments, those filed in a timely manner (see ADDRESSES), will
be placed in the docket and, except for those submitted as
``Confidential Submissions,'' publicly viewable at <a href="https://www.regulations.gov">https://www.regulations.gov</a> or at the Dockets Management Staff between 9 a.m.
and 4 p.m., Monday through Friday, 240-402-7500.
<bullet> Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: <a href="https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf">https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf</a>.
Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852, 240-402-7500.

FOR FURTHER INFORMATION CONTACT: Toby Lowe, Center for Devices and
Radiological Health, Food and Drug Administration, 10903 New Hampshire
Ave., Silver Spring, MD 20993, 301-796-6512,
<a href="/cdn-cgi/l/email-protection#1c5058484c6e736c736f79784e6970795c7a787d3274746f327b736a"><span class="__cf_email__" data-cfemail="2e626a7a7e5c415e415d4b4a7c5b424b6e484a4f0046465d00494158">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
A. Purpose of the Proposed Rule
B. Summary of the Major Provisions of the Proposed Rule
C. Legal Authority
D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
A. Introduction
B. Need for the Rule
C. FDA's Current Regulatory Framework
D. History of the Rulemaking
IV. Legal Authority
V. Description of the Proposed Amendment to the Definition of In
Vitro Diagnostic Products
A. Proposed Amendment
B. Legal Basis for the Proposed Amendment
VI. Description of the Proposed Enforcement Policy
A. Scope
B. Stages
VII. Proposed Effective Date
VIII. Preliminary Economic Analysis of Impacts
IX. Analysis of Environmental Impact
X. Paperwork Reduction Act of 1995
XI. Federalism
XII. Consultation and Coordination With Indian Tribal Governments
XIII. Other Issues for Consideration
XIV. References

I. Executive Summary

A. Purpose of the Proposed Rule

FDA is proposing to amend its regulations to make explicit that
IVDs are devices under the FD&C Act including when the manufacturer of
the IVD is a laboratory. This amendment would reflect that the device
definition in the FD&C Act does not differentiate between entities
manufacturing the device, and would provide further clarity, including
for stakeholders affected by the accompanying changes to FDA's general
enforcement discretion approach for LDTs. In connection with amending
the regulation, FDA intends to phase out its general enforcement
discretion approach for LDTs so that IVDs manufactured by a laboratory
would generally fall under the same enforcement approach as other IVDs.
For purposes of this document, we use ``manufacture'' and related terms
as a shorthand for the various activities that constitute manufacturing
as described in FDA regulations (e.g., design,

[[Page 68008]]

preparation, propagation, assembly, and processing).
In 1976, the Medical Device Amendments of 1976 (the MDA) amended
the FD&C Act to create a comprehensive system for the regulation of
devices intended for human use. In implementing the MDA, FDA has
generally exercised enforcement discretion such that it generally has
not enforced applicable requirements with respect to most LDTs.
Enforcement discretion for LDTs developed as a matter of general
practice. However, the risks associated with LDTs are much greater
today than they were at the time of enactment of the MDA. As discussed
more fully in section III.B, today's LDTs are generally, among other
things, used more widely, by a more diverse population, with an
increasing reliance on high-tech instrumentation and software, and more
frequently for the purpose of guiding critical healthcare decisions. In
this regard, today's LDTs are similar to other IVDs that have not been
under this general enforcement discretion approach. Given these
changes, and for the additional reasons discussed in section III.B,
phasing out the general enforcement discretion approach for LDTs is
important to protect the public health. The phaseout of FDA's general
enforcement discretion approach for LDTs is intended to help assure the
safety and effectiveness of LDTs, and may also foster the manufacturing
of innovative IVDs for which FDA has determined there is a reasonable
assurance of safety and effectiveness.

B. Summary of the Major Provisions of the Proposed Rule

This rulemaking would amend the definition of ``in vitro diagnostic
products'' in FDA regulations to state that IVDs are devices under the
FD&C Act ``including when the manufacturer of these products is a
laboratory.'' In conjunction with this amendment, FDA is also proposing
a policy under which FDA intends to phase out its general enforcement
discretion approach for LDTs so that IVDs manufactured by a laboratory
would generally fall under the same enforcement approach as other IVDs.
Additional details regarding the proposed phaseout policy are discussed
further in section VI.

C. Legal Authority

D. Costs and Benefits

We quantify benefits to patients from averted health losses due to
problematic IVDs offered as LDTs.\1\ Due to limitations in the data, we
quantify health benefits only with respect to IVDs for certain diseases
and conditions; however, we would expect additional health benefits
associated with averted health losses for other diseases and
conditions. We estimate that the annualized benefits over 20 years
would range from $2.67 billion to $86.01 billion at a 7 percent
discount rate, with a primary estimate of $31.41 billion, and from
$1.81 billion to $61.41 billion at a 3 percent discount rate, with a
primary estimate of $22.33 billion. Additional benefits would include
averted non-health losses from the quantified reduction in costs of
problematic IVDs offered as LDTs and unquantified reduction in costs
from lawsuits and costs to healthcare systems. We quantify costs to
affected laboratories for complying with applicable statutory and
regulatory requirements. Additional costs would include some costs to
FDA, which we include in our estimates. The annualized costs would
range from $2.52 billion to $19.45 billion at a 7 percent discount
rate, with a primary estimate of $5.87 billion, and from $2.39 billion
to $18.55 billion at a 3 percent discount rate, with a primary estimate
of $5.60 billion. The annualized transfers \2\ would range from $100
million to $452 million at a 7 percent discount rate, with a primary
estimate of $226 million, and from $121 million to $538 million at a 3
percent discount rate, with a primary estimate of $269 million. The
annualized costs to FDA would range from $265 million to $1.06 billion
at a 7 percent discount rate, with a primary estimate of $530 million,
and from $251 million to $1.00 billion at a 3 percent discount rate,
with a primary estimate of $501 million. These estimates do not include
anticipated offsets from user fees. Factoring in offsets from user fees
at current levels, estimated costs to FDA are reduced to $165 million
to $607 million at a 7 percent discount rate, with a primary estimate
of $304 million, and to $103 million to $465 million at a 7 percent
discount rate, with a primary estimate of $233 million, covering
approximately half of the estimated costs to FDA.
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\1\ See discussion of ``IVDs offered as LDTs'' in section VI.A
below.
\2\ This proposed rule would result in compliance costs for
laboratories that are ensuring their IVDs offered as LDTs are
compliant with applicable statutory and regulatory requirements.
These costs overlap somewhat with effects associated with this rule
in the form of user fees including annual registration fees, fees
for premarket submissions, and annual fees for periodic PMA
reporting, which are paid from laboratories to FDA. These fees are
paid by laboratories but are considered revenue for FDA. The
approach to estimating fee effects is distinct from the approaches
for either benefits or costs, so they will be presented as
transfers.
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II. Table of Abbreviations/Commonly Used Acronyms in This Document

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Abbreviation/acronym What it means
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510(k)....................... Premarket Notification.
AMC.......................... Academic Medical Center.
ASR.......................... Analyte Specific Reagent.
CFR.......................... Code of Federal Regulations.
CGMP......................... Current Good Manufacturing Practice.
CLIA......................... Clinical Laboratory Improvement
Amendments of 1988.
CMS.......................... Centers for Medicare & Medicaid Services.
EUA.......................... Emergency Use Authorization.
FDA.......................... Food and Drug Administration.
FD&C Act..................... Federal Food, Drug, and Cosmetic Act.
HCT/Ps....................... Human Cells, Tissues, and Cellular and
Tissue-Based Products.
HLA.......................... Human Leukocyte Antigen.
IDE.......................... Investigational Device Exemption.
IVD.......................... In Vitro Diagnostic Product.
IVDMIA....................... In Vitro Diagnostic Multivariate Index
Assay.
LDT.......................... Laboratory Developed Test.

[[Page 68009]]

MDA.......................... Medical Device Amendments of 1976.
MDR.......................... Medical Device Report.
MDUFA........................ Medical Device User Fee Amendments.
NIPS......................... Non-Invasive Prenatal Screening.
PMA.......................... Premarket Approval Application.
QS........................... Quality System.
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III. Background

A. Introduction

FDA's regulations define IVDs as reagents, instruments, and systems
intended for use in the diagnosis of disease or other conditions,
including a determination of the state of health, in order to cure,
mitigate, treat, or prevent disease or its sequelae, and intended for
use in the collection, preparation, and examination of specimens taken
from the human body. IVDs include test systems (also referred to in
this preamble as ``tests'') that are performed on samples taken from
the human body, such as blood or tissue, for the purpose of detecting
diseases or other conditions, monitoring a person's overall health,
identifying patients who are likely to benefit from specific therapies,
or otherwise helping to diagnose, cure, mitigate, treat, or prevent
disease or its sequelae. Some IVDs are manufactured by conventional
manufacturers for use by other entities such as laboratories,
healthcare providers, or, in some cases, patients. Such IVDs may
include ``test kits,'' containing packaged sets of components that are
part of or comprise a test system. Other IVDs are manufactured by
laboratories for use by the same or other laboratories. Such IVDs
include LDTs. FDA has generally considered an LDT to be an IVD that is
intended for clinical use and that is designed, manufactured, and used
within a single laboratory that is certified under the Clinical
Laboratory Improvement Amendments of 1988 (CLIA) and meets the
regulatory requirements under CLIA to perform high complexity testing.
Section V.B sets forth the legal reasoning for FDA's position that IVDs
manufactured by laboratories, including LDTs, are devices.
However, in implementing the MDA, FDA generally has exercised
enforcement discretion such that it generally has not enforced
applicable requirements with respect to most LDTs. At the time of
passage of the MDA, LDTs were mostly manufactured in small volumes by
laboratories that served their local communities. They were typically
intended for use in diagnosing rare diseases or for other uses to meet
the needs of a local patient population, or were generally similar to
well-characterized, standard tests. They also tended to employ manual
techniques (and did not use automation) performed by laboratory
personnel with specialized expertise; to be used and interpreted by
physicians or pathologists in a single institution responsible for the
patient (and who were actively involved in patient care); and to be
manufactured using components legally marketed for clinical use, such
as general purpose reagents or immunohistochemical stains marketed in
compliance with FDA regulatory requirements. Due to these and other
factors, FDA generally exercised enforcement discretion such that it
generally has not enforced applicable requirements for most LDTs.\3\
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\3\ Although FDA's general enforcement discretion approach
continues today, it does not apply to LDTs in all contexts; for
example, it does not apply to, among other LDTs, those used for
declared emergencies/potential emergencies/material threats under
section 564 of the FD&C Act (21 U.S.C. 360bbb-3).
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However, the LDT landscape has evolved significantly since 1976.
Today, many LDTs rely on high-tech or complex instrumentation and
software to generate results and clinical interpretations. They are
often used in laboratories outside of the patient's healthcare setting
and are often manufactured in high volume for large and diverse
populations. Many LDTs are manufactured by laboratory corporations that
market the tests nationwide, as they accept specimens from patients
across the country and run their LDTs in very large volumes in a single
laboratory. Today's LDTs are also more commonly manufactured with
instruments or other components not legally marketed for clinical use
and are more often used to inform or direct critical treatment
decisions, to widely screen for common diseases, to predict personal
risk of developing certain diseases, and to diagnose serious medical
conditions such as cancer and heart disease.\4\ The risks associated
with most modern LDTs are therefore much greater today than they were
at the time FDA began implementing the MDA, and most LDTs today are
similar to other IVDs that have not been under FDA's general
enforcement discretion approach. In addition, FDA is concerned that
firms are offering IVDs as ``LDTs'' even when they are not LDTs,
because they are not actually designed, manufactured, and used within a
single laboratory (see, e.g., Refs. 4 and 5).
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\4\ See, e.g., Refs. 1 to 3. These observations are also
informed by FDA's own experience, including the review of
submissions and site visits, and staff with prior experience in the
laboratory industry developing and running LDTs.
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As a result of this evolution in the testing landscape, FDA has
long recognized the need for a change in the Agency's general
enforcement discretion approach for LDTs. The history of FDA's efforts
with respect to LDTs is set forth in the ``History of the Rulemaking''
section below (section III.D). Over the past few years, FDA has
accumulated even more information supporting the need for a change, as
discussed below. In light of these developments, FDA is proposing to
amend FDA's regulations to make explicit that IVDs are devices under
the FD&C Act including when the manufacturer is a laboratory.\5\ FDA is
also proposing a policy under which FDA intends to phase out FDA's
general enforcement discretion approach for LDTs so that IVDs
manufactured by a laboratory would generally fall under the same
enforcement approach as other IVDs.
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\5\ As discussed further in section V, FDA is also proposing to
amend the statutory citation for the device definition included in
Sec. 809.3 (21 CFR 809.3) to reflect that it is now codified at
section 201(h)(1) of the FD&C Act (21 U.S.C. 321(h)(1)).
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B. Need for the Rule

FDA is proposing a policy under which FDA intends to phase out the
general enforcement discretion approach for LDTs because that approach
has led to an oversight scheme that does not best serve the public
health. LDTs that are under the general enforcement discretion approach
are treated differently from other IVDs. However, there is no longer a
sound basis for this distinction. In FDA's experience, including with
COVID-19 tests and IVDs that are offered as LDTs after FDA's approval
of a comparable companion diagnostic, many test systems made by
laboratories today are functionally the same as those made by other
manufacturers of IVDs. They

[[Page 68010]]

involve the same materials and technologies, are intended for the same
or similar purposes, are developed by and for individuals with similar
expertise, and are marketed to the same patients, sometimes on a
national scale. For these reasons, tests made by laboratories are often
used interchangeably by healthcare providers and patients with tests
made by other manufacturers. In fact, today, the testing industry has
come to view FDA's general enforcement discretion approach as an
alternative pathway to market for test systems, such that test systems
are often ``launched as LDTs'' with no assurance that they meet
requirements under the FD&C Act and its implementing regulations (see,
e.g., Refs. 6 and 7).\6\ These tests lack the characteristics and
institutional safeguards that originally justified FDA's general
enforcement discretion approach, as discussed above, and may directly
compete with FDA-authorized kit-based test systems. FDA views this
bifurcated system of oversight as untenable and inconsistent with FDA's
public health mission.
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\6\ The references cited are examples of the described practice.
Their inclusion does not represent FDA support for or approval of
the activities described.
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The proposed phaseout of FDA's general enforcement discretion
approach is designed to redress the imbalance in oversight and protect
the public health. Diagnostic testing is a cornerstone of modern
medicine; CDC estimates that 70 percent of medical decisions are based
on laboratory test results (Ref. 8). IVDs offered as LDTs are a growing
sector of that market (Ref. 1). Moreover, these tests are proliferating
in some of the most complicated and sensitive areas of medical
practice, where the presence of a valid test can be most important.
As the testing landscape has evolved, information about these tests
in the scientific literature, news articles, and anecdotal reports
submitted to the Agency, among other sources, has exposed evidence of
problems associated with these tests. This evidence is discussed in
more detail below. Particularly over the last few years, this evidence
has been growing and likely does not reflect the full scale of the
problems. (Until FDA systematically collects information on these
tests, such as adverse event reports, it will not be able to assess
more fully the extent of the risks to patients in the manner it does
for other devices.) Based on current safety signals, FDA is proposing
to phase out the general enforcement discretion approach to help assure
that patients are receiving accurate and reliable diagnostic test
results regardless of where the tests are made.
1. IVDs Offered as LDTs Have a Significant Impact on Modern Medical
Care
Today, IVDs offered as LDTs are ubiquitous, and are intended to
diagnose a broad range of diseases and conditions (see Ref. 2). In many
cases, these IVDs are meant for use in complex areas of medicine
involving life-threatening diseases, such as cancer, neurological
diseases, cardiovascular illness, infectious diseases, and rare
diseases. They can proliferate in areas where diagnosis is difficult,
and the healthcare community has few points of reference for
determining test validity. Sometimes, they use complex algorithms to
calculate ``scores'' for diagnosis with little transparency to the user
about the basis for these algorithms. Increasingly, these IVDs are
intended to inform drug treatment, directing physicians to choose
certain drugs based on a patient's genetic or other information. FDA
has witnessed an explosion in the volume, complexity, and scope of IVDs
offered as LDTs for use in determining cancer treatments,\7\ and as
discussed below, news coverage, including as recently as this year, has
drawn attention to the use of IVDs offered as LDTs for non-invasive
prenatal screening (NIPS), which evaluate fetal DNA circulating in a
pregnant individual's blood. In general, IVDs offered as LDTs are
occupying a growing share of the testing market and are used in some of
the most complex areas of medicine (see, e.g., Refs. 1 and 2).
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\7\ FDA has initiated a pilot program for certain oncology
diagnostics as one step that may be helpful in reducing the risks
associated with using certain LDTs to identify cancer biomarkers
(see 88 FR 40273 (June 21, 2023)).
---------------------------------------------------------------------------

Given the role these IVDs play in modern medical care, their
validity has a significant impact on the public health. False positive
test results, which erroneously indicate that a patient has a certain
disease or condition, can delay diagnosis and treatment of the true
disease or condition, lead to unwarranted interventions, and cause
needless distress. Interventions may involve medication with serious
side effects or risky medical procedures. False negative results can
lead to progression of disease, in some cases without the opportunity
for life-saving treatment, and the spread of infectious disease. The
harms to patients from false positive and negative results can be
significant. For example, the application of an ineffective oncology
treatment due to a false positive for a patient already weakened from
disease, or the failure to receive a life-saving medication due to a
false negative, can be fatal. These false results can stem from an
analytical error or from a lack of clinical validity where a measured
result is incorrectly associated with a particular clinical state.
Flaws in a test's algorithm can mean the difference in whether a
patient with cancer receives a beneficial immunotherapy. Pregnant
people may use screening tests to make decisions without obtaining
appropriate confirmatory testing. In 2016, FDA learned of a false
positive result from a genetic test for long QT syndrome (a heart
signaling disorder) that led to the erroneous implantation of a
defibrillator in a healthy individual. In addition to the risks
associated with the implantation procedure, the defibrillator delivered
inappropriate shocks to the patient, which posed the risk of sudden
cardiac death (Refs. 9 and 10). These are just a few examples of how
diagnostic tests can and do have significant long-term consequences for
patients.
2. Current Information Raises Serious Questions About Whether Patients
Can Rely on IVDs Offered as LDTs
FDA has highlighted the risks associated with IVDs offered as LDTs
for decades, and our concerns have grown in recent years. As described
in the ``History of the Rulemaking'' section, we first took steps to
address the issue in the late 1990s, followed by a series of different
proposed strategies for increasing oversight. In 2015, the Agency
published a report of 20 case studies involving inaccurate, unsafe,
ineffective, or poor quality LDTs that caused or may have caused
patient harm (``2015 Report'') (Ref. 11). More recent evidence suggests
that the situation is getting worse. This evidence cuts across test
types and laboratories and is from a variety of sources, including
published studies in the scientific literature, allegations of
problematic tests reported to FDA, FDA's own experience in reviewing
IVDs offered as LDTs, news articles, and class-action lawsuits.
Overall, the evidence points to fundamental uncertainty in the
marketplace about whether IVDs offered as LDTs provide accurate and
reliable results.
Scientific literature is one source of evidence. Over time, FDA has
become aware of various publications that describe problems with IVDs
offered as LDTs. In the past 3 years, four different studies have
documented high variability in performance among these IVDs (Refs. 12
to 15). In one study, the

[[Page 68011]]

same samples were sent to 19 laboratories for testing using their own
manufactured test and only 7 of those laboratories correctly reported
all results (Ref. 12). For almost half of the tests studied, analytical
accuracy was significantly lower than that of the parallel test
approved by FDA. In another study, researchers sent identical samples
to two different laboratories to detect tumor mutations and found over
70 percent discordance in the results from their tests (Ref. 13). A
study by Friends of Cancer Research found substantial variability among
tumor mutational burden (TMB) tests manufactured by laboratories and
used to identify patients with cancer most likely to benefit from
immunotherapy (Ref. 14). A fourth study highlighted validity concerns
specific to early cancer detection tests, including one IVD offered as
an LDT that delivered nine false positive results for every true cancer
diagnosis (Ref. 15). An article published earlier this year detailed an
oncologist's experience with false results from an unapproved blood-
based multi-cancer early detection IVD offered as an LDT and intended
to screen for more than 50 types of cancer (Ref. 16). A 2016 study
published in the New England Journal of Medicine reported false
positive results from genetic IVDs offered as LDTs for hypertrophic
cardiomyopathy in multiple patients of African American descent (Ref.
17). These studies do not mean that every laboratory is manufacturing
bad tests or that no patient can rely on IVDs offered as LDTs. Instead,
they reflect a level of variability, including the potential for
inaccurate or incomplete results, that highlights the need for changes
to the basic oversight scheme.
FDA's own experience has reinforced concerns regarding IVDs offered
as LDTs. FDA has gathered information about IVDs offered as LDTs
through its review of submissions. Although the Agency generally has
not enforced requirements for LDTs, it has received premarket
submissions from some laboratories seeking authorization for their
tests. We have received numerous submissions for such tests, including
premarket review submissions,\8\ Q-submissions,\9\ and investigational
use submissions for IVDs offered as LDTs, as well as many emergency use
authorization (EUA) requests from laboratories (which are discussed
further below). FDA's review of these submissions has provided insight
into laboratory test development and, in some cases, revealed
significant concerns. For example, FDA has observed that many
laboratories fail to perform appropriate or adequate validation
studies, have data demonstrating their test does not work as intended
but offer the test anyway, or use instruments and other components that
are not adequately controlled for clinical use. The tests described in
these submissions have been intended for a range of diseases or
conditions, some of which are very serious. FDA has received
submissions for IVDs offered as LDTs to diagnose Alzheimer's disease,
predict heart disease risk, diagnose Fabry disease (a rare neurological
disorder), and inform treatment considerations for a rare blood cancer,
all of which lacked adequate validation to support authorization.
---------------------------------------------------------------------------

\8\ These submissions have been for a wide variety of
indications, including tests intended to detect nucleic acids from
viruses associated with head and neck cancers; to identify patients
with obesity due to rare genetic conditions to inform treatment
eligibility; to aid in the management of therapy for patients taking
certain anticoagulants; and tests for breast cancer prognosis, tumor
profiling, and treatment selection, for patients with cancer.
\9\ For discussion of FDA's Q-submission program, see FDA's
guidance document issued on June 2, 2023, entitled ``Requests for
Feedback and Meetings for Medical Device Submissions: The Q-
Submissions Program,'' available at <a href="https://www.fda.gov/media/114034/download">https://www.fda.gov/media/114034/download</a>.
---------------------------------------------------------------------------

In addition, given that FDA's general enforcement discretion
approach for LDTs has not applied to IVDs for emergency use (though FDA
has issued enforcement policies for such IVDs during specific
emergencies, as explained elsewhere in this preamble), FDA has received
EUA requests for tests from laboratories, including many for COVID-19
diagnostics. Of the first 125 EUA requests for COVID-19 molecular
diagnostic tests submitted from laboratories, 82 showed test design or
validation problems (Ref. 18). In one case, the approach to validation
was so poor that when redone correctly, there was a 400-fold difference
in performance, leading the laboratory to take the test off the market.
In another example, an academic medical center (AMC) laboratory
purported to validate its test with only 12 positive samples, showing
perfect performance. FDA requested evaluation of additional specimens
to confirm. When an additional 12 samples were evaluated, the
cumulative performance revealed an unacceptably high false negative
rate, where the test identified only 71 percent of known positive
specimens as positive and falsely identified 29 percent of known
positive samples as negative, and the EUA request was withdrawn. In
addition, multiple laboratories that offered their tests as described
in FDA's COVID-19 test guidance (see discussion in Ref. 19) did not
provide any analytical and/or clinical validation data in the EUA
requests that they submitted after the tests were in use. This
experience provided a window into the approach that many laboratories
may take to test validation, and not only confirmed but increased FDA's
concerns about the validation of IVDs offered as LDTs. The experience
also showed that even tests involving relatively well-understood
techniques (here, the polymerase chain reaction, or PCR, technique) may
not perform well. In all, test performance seen in this subset of
submissions from laboratories was far worse than we expected. To the
extent that this sample represents larger trends in the performance of
IVDs offered as LDTs, it underscores the need for greater FDA
oversight.
FDA has also received multiple complaints, adverse event reports,
and other allegations identifying problems with IVDs offered as
LDTs.\10\ One complaint alleged that an IVD offered as an LDT to
diagnose autism had insufficient clinical validation to support this
use. In another complaint, an informant alleged that a laboratory was
forging results when its liquid biopsy test did not work. Additionally,
FDA has received multiple voluntary medical device reports (primarily
from patients) of inaccurate NIPS test results, as well as inaccurate
results from an oncology IVD offered as an LDT that predicts risk of
breast cancer recurrence and informs the decision to pursue
chemotherapy, both of which can pose serious, irreversible harm to
patients. Another report described a false negative result from a BRCA
test marketed to predict one's risk of breast cancer. The patient was
later diagnosed with breast cancer and found to be BRCA1 positive by
another test. A separate report from a healthcare provider described a
different patient that received discrepant results from testing with
this BRCA test and with another IVD offered as an LDT for hereditary
cancer risk prediction. In yet another report, a patient described a
false positive breast cancer result from an oncology blood IVD offered
as an LDT and that led to invasive followup procedures, emotional
anguish, and unnecessary monetary expenses. FDA also received a report
regarding a blood-based test for lung cancer that underestimated cancer
in about 40 percent of patients. Additionally, FDA has received medical
device reports

[[Page 68012]]

regarding infectious disease genetic IVDs offered as LDTs without
validation, from which inaccurate results could lead to limb loss or
women's health issues, and regarding inaccurate results from an IVD
offered as an LDT to assess medication adherence. As noted above,
collectively, this information, though anecdotal, points to potential
problems among IVDs offered as LDTs, the scope and scale of which FDA
cannot fully assess or address without phasing out the general
enforcement discretion approach for applicable requirements (such as
adverse event reporting).
---------------------------------------------------------------------------

\10\ FDA has not confirmed the veracity of the allegations or
facts in every complaint, report, and allegation. Nevertheless,
collectively this information points to potential problems among
IVDs offered as LDTs.
---------------------------------------------------------------------------

Aside from the scientific community and FDA, the general public is
coming to recognize concerns with the current scheme, in which most
LDTs are generally not overseen by FDA. General news sources and other
outlets have reported on such concerns (see, e.g., Refs. 20 to 26). For
example, the New York Times recently conducted an indepth investigation
into NIPS tests and found that positive results from the tests are
incorrect about 85 percent of the time (Ref. 22). NIPS tests are
screening tests, so they should be followed up with confirmatory
diagnostic testing, but the New York Times article reported that
patients and healthcare providers are making healthcare decisions based
on results from these screening tests alone due to manufacturers'
marketing claims. A device whose labeling is false or misleading in any
particular manner is misbranded under the FD&C Act; however, under the
general enforcement discretion approach, FDA generally has not enforced
this proscription for IVDs offered as LDTs. As another example,
ProPublica reported on a COVID-19 test offered by a laboratory under
contract with a university without EUA authorization from FDA, which,
according to the report, missed 96 percent of the positive cases from
the university campus, and routinely sent people infected with COVID-19
back into the community (Ref. 26). In addition, consumers,
shareholders, and investors are filing lawsuits against laboratory
manufacturers for false and misleading statements about test efficacy,
including lawsuits related to pharmacogenetic tests (genetic tests
intended to inform drug selection) and NIPS (see, e.g., Complaint, In
re Myriad Genetics, Inc. Sec. Litig., No. 2:19-cv-00707-PMW (D. Utah
2019); Complaint, Hickok v. Capone, No. 2021-0686 (Del. Ch. 2021);
Complaint, Davis v. Natera, Inc., No. 3:22-cv-00985 (N.D. Cal. 2022);
Complaint, Carroll v. Myriad Genetics Inc., No. 4:22-CV-00739 (N.D.
Cal. 2022); Biesterfeld v. Ariosa Diagnostics, Inc., No. 1:21-CV-03085,
2022 WL 972281 (N.D. Ill. 2022); and Complaint, Kogus v. Capone, No.
2022-0047-SG (Del. Ch. 2022)). The overall picture presented by this
evidence indicates that a change in oversight is needed to better
assure the safety and effectiveness of IVDs offered as LDTs.
3. Greater FDA Oversight is Needed To Protect the Public Health
As described above, the evidence FDA has collected points to flaws
in laboratory manufacturing of tests that need to be addressed to
protect the public. Greater oversight by FDA would help address these
flaws.
In the past, FDA has communicated with the public when it is
particularly concerned about a type of IVD offered as an LDT. For
example, in addition to the 2015 Report, FDA has issued safety
communications about pharmacogenetic tests, NIPS tests, ovarian cancer
screening tests, nipple aspirate tests, and instruments used in the
design of many different LDTs (Refs. 27 to 31). FDA has also taken
compliance action in some circumstances, such as issuing a warning
letter to a laboratory manufacturing a pharmacogenetic test in April
2019 (Ref. 32). However, more structural change is needed. FDA's
general enforcement discretion approach emerged at a time when the
typical IVD offered as an LDT looked very different from how it looks
today. FDA has made a preliminary determination that this approach has
become outdated, and the proposed steps to end this approach in this
rulemaking would better protect the public health.
Increased oversight would help to ensure the safety and
effectiveness of IVDs offered as LDTs. More accurate diagnoses would
lead to better care, which would advance public health overall. Through
increased oversight, the public, including patients and healthcare
professionals, could have more confidence that the test results they
rely on are accurate. Greater FDA oversight of IVDs offered as LDTs has
become particularly important as more and more novel treatments require
use of a specialized test to identify patients likely to benefit from
them. This, in turn, has led to increased development of tests used as
the primary driver for therapeutic decisions. These include tests to
determine whether to administer a therapeutic, which therapeutic to
administer, and at what dose to administer the therapeutic. For
example, recent approvals of drug products to treat diseases in their
early stages, such as for early-stage Alzheimer's patients, make
accurate and early diagnosis of these diseases more critical today than
ever before. As another example, gene therapy is an emerging field with
incredible potential to treat many diseases or conditions. Testing is
required to identify patients with the defective gene targeted by the
treatment and, in some cases, to assess whether the patient has
antibodies to the vector delivering the treatment that would prevent it
from working. In these and other cases, accurate and reliable test
results are essential for safe and effective use of a therapeutic.
Increased oversight would also address business strategies that
take advantage of the current bifurcated system. For example, in a
number of cases, laboratories that have submitted premarket submissions
for their tests, but whose tests did not meet applicable requirements
for authorization, have still offered these IVDs as ``LDTs.'' Some of
these tests, such as a test intended to diagnose Alzheimer's disease,
had inadequate validation data to support authorization (see Ref. 33).
A genotyping test purported to predict heart disease risk, but FDA
found that there was no association between the genetic information the
test identified (KIF6) and heart disease. A third test, intended to
diagnose Fabry disease, showed a high level of false negatives. The
public health is not served by a scheme in which tests that have these
types of problems are still offered to patients simply because the
manufacturer is a laboratory. FDA is also aware that some industry
players have created business models that claim a connection to
laboratories and offer IVDs as LDTs. The increase in firms using these
business models, as well as their substantial magnitude of reach,
underscores the need for more oversight.
In addition, FDA anticipates that consistent oversight would bring
more stability to the testing market overall, which could help to
encourage the manufacture of IVDs for which there is a reasonable
assurance of safety and effectiveness. FDA is aware of arguments that
better assuring the safety and effectiveness of LDTs would foster test
innovation. FDA is also aware of arguments that IVD manufacturers that
are not laboratories may currently be discouraged from investing time
and resources into developing novel tests due to the concern that once
the manufacturer receives marketing authorization for its test,
laboratories will develop similar tests and market their tests without
complying with FDA requirements. We anticipate that applying the same
oversight approach to

[[Page 68013]]

laboratories and non-laboratories that manufacture IVDs would better
assure the safety and effectiveness of LDTs, and would remove a
disincentive for non-laboratory manufacturers to develop novel tests,
thereby spurring innovation and access to IVDs for which there is a
reasonable assurance of safety and effectiveness. As a result, we
anticipate that phasing out the general enforcement discretion approach
for LDTs would advance responsible innovation by both laboratory and
non-laboratory IVD manufacturers alike, rather than discouraging it.
FDA is aware of other arguments that ending the general enforcement
discretion approach for LDTs would interfere with test innovation and
patient access due to the potential need for premarket review of new
tests. However, under FDA's device authorities, FDA premarket review is
only required for certain tests (generally those classified into class
II or class III), and FDA estimates that approximately 50 percent of
IVDs offered as LDTs would not require premarket review (see section
II.F.4 of the Preliminary Economic Analysis of Impacts (Ref. 34)). In
addition, FDA review is only required for device modifications in
certain circumstances. For devices that are subject to PMA
requirements, a PMA supplement is required only for changes that affect
the safety or effectiveness of the device, and in some cases the change
may be made prior to FDA approval (see 21 CFR 814.39(d)); may be made
30 days after a supplement has been filed, unless FDA takes certain
action (see 21 CFR 814.39(e)); or may be made 30 days after FDA
receives a notice describing the change (in lieu of a supplement),
unless FDA takes certain action (see 21 CFR 814.39(f)). For devices
that are subject to 510(k) requirements, a new 510(k) is only required
for a significant change or modification in design, components, method
of manufacture, or intended use, where a significant change or
modification is one that could significantly affect the safety or
effectiveness of the device or that is a major change or modification
in the device's intended use (21 CFR 807.81(a)). FDA has published
several guidance documents to help stakeholders determine whether a
certain change or modification may require a PMA supplement, new
510(k), or other submission to FDA, and FDA has several mechanisms
available through which manufacturers may seek FDA assistance in making
this determination. In addition, under section 515C of the FD&C Act (21
U.S.C. 360e-4), a PMA supplement or new 510(k) is not required for a
change to a device that would otherwise require a supplement or new
510(k) if the change is consistent with a predetermined change control
plan previously approved or cleared by FDA. We also note that as
described in section VI.B, FDA is proposing to phase out the general
enforcement discretion approach for LDTs with respect to premarket
review requirements on a date that aligns with or follows the beginning
of a new user fee cycle, such that FDA's review timelines and goals
would be reflected in commitments newly negotiated with industry. For
all of these reasons, FDA does not anticipate that ending the general
enforcement discretion approach for LDTs would unduly impair test
innovation and patient access.
Furthermore, FDA's approach was never intended to selectively
foster laboratory innovation at a cost to public health. Rather, the
approach arose based on certain test characteristics and institutional
safeguards that at the time adequately protected patients. In general,
those characteristics and safeguards are no longer present, putting
public health at risk. Further, FDA is aware that this scheme is in
some cases fostering unfounded claims of innovation rather than
responsible innovation. These claims are concerning to FDA because they
can mislead the public, undermine legitimate competition, and
disincentivize responsible, science-based innovation.
Finally, increased oversight may help to advance health equity. FDA
is aware of concerns that IVDs offered as LDTs may exacerbate health
inequities due to higher rates of inaccurate results among
underrepresented patient populations, particularly racial and ethnic
minorities undergoing genetic testing (see, e.g., Refs. 17 and 35 to
38). Some IVDs offered as LDTs have not been validated for use in all
patient populations within a disease state, meaning that it is unknown
how well the test may perform across diverse patient populations
expected to use the test and the test may be less accurate in
underrepresented patient populations, potentially contributing to
health disparities (see, e.g., Ref. 39). Increased FDA oversight may
help to ensure that information is available pertaining to device
safety and effectiveness for specific demographic characteristics if
performance differs within the target population, through the
enforcement of applicable labeling requirements. In addition, when FDA
conducts premarket review of a device, FDA may ask that sponsors
provide data for different intended patient populations, and with new
authorities under the Food and Drug Omnibus Reform Act of 2022 (FDORA),
sponsors generally are required to submit diversity action plans to
FDA, including the sponsor's goals for enrollment in device clinical
studies. In contrast, with limited oversight over these tests, FDA does
not know whether diverse patient populations are being included in
validation studies for these IVDs. FDA has made a preliminary
determination that increased oversight for these IVDs would help ensure
adequate representation of the intended use population in validation
studies and transparency regarding potential differential performance,
helping to advance health equity. FDA also recognizes that IVDs offered
as LDTs may serve communities in rural, medically underserved areas
with disparities in access to diagnostic tests. However, the benefits
of test access directly depend on the ability of tests to work as
intended. Thus, to the extent that access to IVDs offered as LDTs may
benefit patients in rural, medically underserved communities, the harms
of unsafe or ineffective IVDs offered as LDTs may also be realized
among these underserved patient populations. By increasing its
oversight, FDA may better prevent and mitigate such harms, thereby
better protecting the health of these underserved populations.
We are aware of arguments that other mechanisms--such as the
medical expertise of laboratorians or requirements under CLIA--already
provide adequate oversight of IVDs offered as LDTs. However, our review
of the evidence indicates otherwise. Evidence suggests that under the
current scheme, the healthcare community lacks adequate assurances
about the safety and effectiveness of IVDs offered as LDTs. Although
laboratories that offer LDTs are also subject to CLIA, which is
primarily administered by the Centers for Medicare & Medicaid Services
(CMS), CLIA is not a substitute for FDA oversight. CLIA establishes
requirements for laboratories and laboratory personnel pertaining to
operations, inspections, and certification, with a focus on the
proficiency with which laboratories perform clinical testing (see 42
U.S.C. 263a and 42 CFR part 493). Among other requirements, clinical
laboratories generally must have a CLIA certificate that corresponds to
the complexity of tests performed prior to accepting human samples for
testing. However, under CLIA, CMS does not regulate critical aspects of
laboratory test

[[Page 68014]]

development; does not evaluate the performance of a test before it is
offered to patients and healthcare providers; does not assess clinical
validity (i.e., the accuracy with which a test identifies, measures, or
predicts the presence or absence of a clinical condition or
predisposition in a patient); does not regulate certain manufacturing
activities, such as design controls and acceptance activities; does not
provide human subject protections for patients who participate in test
clinical research trials; and does not require adverse event reporting.
As such, CMS has described the FDA and CMS ``regulatory schemes'' as
``different in focus, scope and purpose, but they are intended to be
complementary'' (Ref. 40). Where CLIA does play a role (as discussed
further below, compliance with CLIA may provide certain assurances
relating to quality system (QS) requirements), FDA has tailored its
proposed phaseout policy accordingly.\11\
---------------------------------------------------------------------------

\11\ When ``QS'' requirements are discussed throughout this
preamble, FDA is referring to the current good manufacturing
practice (CGMP) requirements set forth in part 820 (21 CFR part
820). Generally, the requirements are referred to as QS
requirements, but that terminology may change when amendments to
part 820 are finalized. See 87 FR 10119 (February 23, 2022) and
section VI.B.3 for a further discussion of FDA's proposed amendments
to part 820.
---------------------------------------------------------------------------

We are also aware of arguments that any additional oversight of
LDTs should be accomplished by granting new statutory authorities to
CMS. However, this would cause a problematic split in oversight, with
the same types of tests being reviewed by different Agencies depending
on where the test was made. For example, a cancer diagnostic test
developed by a conventional manufacturer would be reviewed by FDA while
a similar cancer diagnostic test (using the same sample type and
testing for the same analytes) developed by a laboratory would be
reviewed by another Agency. Further, with that divided oversight, an
IVD developed by a conventional manufacturer could even be reviewed and
cleared by FDA and subsequently reviewed by another Agency if a
laboratory made certain modifications to it. However, if those same
modifications were made by the original manufacturer, they would be
reviewed by FDA. This could lead to confusion and inconsistency.
FDA has both the authority and the expertise to perform the
necessary oversight of IVDs offered as LDTs and is the only Agency for
which that is the case. One of FDA's most basic and well-understood
responsibilities is helping to ensure the safety and effectiveness of
medical products. FDA employs staff across a wide range of disciplines,
including physicians, statisticians, engineers, biologists, chemists,
geneticists, and others, to evaluate the science behind medical
products before they reach the market. Understanding the complex
technical information in applications, such as clinical trial data,
bench testing results, and product manufacturing and design
characteristics--and putting that information in context to assess
whether a product can be marketed--is within the unique expertise of
FDA. This type of expertise is no less important for IVDs, which can
have a wide variety of public-health consequences, as described
elsewhere in this rule. During review of an application for an IVD, FDA
reviewers closely examine data relevant to analytical validity,
clinical validity, and safety, and draw on their expertise and
experience to understand both the product and the science supporting
the product.
Review of the underlying science behind an IVD is based on what the
IVD does and is in no way related to where the IVD is made. Thus, FDA's
experience and expertise with respect to oversight of other IVDs is
directly applicable to oversight of LDTs. In fact, FDA has already
applied its expertise to the review of some IVDs offered as LDTs--for
example, during public health emergencies. As stated above, FDA has
reviewed many EUA requests for tests from laboratories during the
public health response to COVID-19.
Entities outside FDA have also recognized that FDA should oversee
LDTs, and that greater oversight is needed. For example, the
Secretary's Advisory Committee on Genetics, Health, and Society, in its
April 2008 report entitled ``U.S. System of Oversight of Genetic
Testing,'' stated that ``FDA should address all laboratory tests,
regardless of how they are produced (i.e., as a commercial test kit or
laboratory-developed test), in a manner that takes advantage of its
current experience'' (Ref. 41). The American Cancer Society Cancer
Action Network has taken a similar position, noting in a November 2016
statement that ``[c]urrent oversight of LDTs falls short of ensuring
these tests produce accurate and meaningful results . . . [t]he FDA is
the most appropriate agency to evaluate the analytical and clinical
validity of diagnostic tests, along with their safety, to help ensure
that cancer patients and their doctors are able to make appropriate
treatment decisions based on accurate information'' (Ref. 42).
Likewise, the Advanced Medical Technology Association (AdvaMed) stated
in November 2021 that the association has ``long supported the idea
that all diagnostic test developers . . . should be subject to the same
FDA standards and processes'' (Ref. 43).
4. FDA Should Increase Oversight in a Manner That Recognizes the
Current State of the Testing Market
As discussed throughout this section, increased oversight of IVDs
offered as LDTs is needed. However, FDA has also made a preliminary
determination that our general enforcement discretion approach should
be phased out in a manner that accounts for the level of public health
concern and the importance of avoiding undue disruption to the testing
market, including undue disruption to the provision of care. Therefore,
we are proposing a gradual phaseout to occur in stages over a total
period of 4 years, as described in section VI.B. FDA anticipates that
this phaseout policy should ultimately enable IVDs offered as LDTs that
are supported by sound science to remain on the market. FDA also
recognizes that some IVDs may need to come off the market, because, for
example, the IVD cannot meet applicable requirements under the FD&C Act
and its implementing regulations, or the laboratory chooses not to
invest resources to meet those requirements. To the extent that
withdrawal from the market of these IVDs implicates any reliance
interests, FDA has made a preliminary determination that the public-
health benefits associated with the reasonable assurance of safety and
effectiveness of IVDs offered as LDTs outweigh any such interests. In
addition, in the long run, it is possible that any reduction in the
number of current IVDs offered as LDTs may be offset by the market
entry of IVDs from other manufacturers who will have benefitted from a
more consistent oversight approach and increased stability spurring
innovation.

C. FDA's Current Regulatory Framework

The FD&C Act, as amended by the MDA and subsequent statutes,
establishes a comprehensive system for the regulation of devices,
defined in section 201(h)(1) of the FD&C Act, that are intended for
human use. Section 513 of the FD&C Act (21 U.S.C. 360c) establishes
three categories (classes) of devices depending on the regulatory
controls needed to provide reasonable assurance of their safety and
effectiveness. The three categories of devices are class I (general
controls), class II (special controls), and class III (premarket
approval).
Class I devices are those devices for which the general controls of
the FD&C

[[Page 68015]]

Act (controls authorized by or under section 501, 502, 510, 516, 518,
519, or 520 (21 U.S.C. 351, 352, 360, 360f, 360h, 360i, or 360j) or any
combination of such sections) are sufficient to provide reasonable
assurance of safety and effectiveness of the device; or those devices
for which insufficient information exists to determine that general
controls are sufficient to provide reasonable assurance of safety and
effectiveness or to establish special controls to provide such
assurance, but because the devices are not purported or represented to
be for a use in supporting or sustaining human life or for a use which
is of substantial importance in preventing impairment of human health,
and do not present a potential unreasonable risk of illness or injury,
are to be regulated by general controls (section 513(a)(1)(A) of the
FD&C Act).
General controls include, but are not limited to, provisions that
relate to establishment registration and device listing; premarket
notification; prohibitions against adulteration and misbranding (e.g.,
labeling that fails to bear adequate directions for use); recordkeeping
and reporting, including adverse event reporting and reporting of
corrections and removals initiated to reduce a risk to health posed by
the device or to remedy a violation of the FD&C Act caused by the
device which may present a risk to health; and current good
manufacturing practice (CGMP) requirements. These controls apply to all
devices unless an exemption applies.
Class II devices are those devices for which general controls by
themselves are insufficient to provide reasonable assurance of safety
and effectiveness, but for which there is sufficient information to
establish special controls to provide such assurance, including the
promulgation of performance standards, post-market surveillance,
patient registries, development and dissemination of guidelines,
recommendations, and other appropriate actions the Agency deems
necessary to provide such assurance (section 513(a)(1)(B) of the FD&C
Act).
Class III devices are those devices for which insufficient
information exists to determine that general controls and special
controls would provide a reasonable assurance of safety and
effectiveness, and are purported or represented for a use in supporting
or sustaining human life or for a use which is of substantial
importance in preventing impairment of human health, or present a
potential unreasonable risk of illness or injury (section 513(a)(1)(C)
of the FD&C Act).
Under section 513(d)(1) of the FD&C Act, devices that were
introduced or delivered for introduction into interstate commerce for
commercial distribution before the enactment of the MDA on May 28, 1976
(generally referred to as ``preamendments devices'') are classified
after FDA: (1) receives a recommendation from a device classification
panel (an FDA advisory committee); (2) publishes the panel's
recommendation, along with a proposed regulation classifying the
device, and provides an opportunity for interested persons to submit
comments; and (3) publishes a final regulation classifying the device.
A preamendments device for which a classification regulation has not
been promulgated is known as an ``unclassified device.'' Until an
unclassified device type has been formally classified by regulation,
the marketing of new devices within the device type requires FDA
premarket review through a premarket notification (510(k)) under
section 510(k) of the FD&C Act.
Devices that were not introduced or delivered for introduction into
interstate commerce for commercial distribution before May 28, 1976
(generally referred to as ``postamendments devices'') are classified
automatically by section 513(f) of the FD&C Act into class III without
any FDA rulemaking process. Those devices remain in class III and
require approval of a premarket approval application (PMA), unless and
until: (1) FDA classifies or reclassifies the device into class I or II
under section 513(f)(2) or (3) of the FD&C Act, or (2) FDA issues an
order finding the device to be substantially equivalent, in accordance
with section 513(i) of the FD&C Act, to a predicate device that does
not require premarket approval. The Agency determines whether new
devices are substantially equivalent to predicate devices by means of
premarket notification procedures in section 510(k) of the FD&C Act and
part 807 of the regulations (21 CFR part 807).
In addition, under section 520(g) of the FD&C Act and part 812 of
FDA's regulations (21 CFR part 812), a clinical investigation to
determine the safety and effectiveness of certain devices must be the
subject of an approved investigational device exemption (IDE) before
such investigation may commence. If an IDE has been granted, a failure
to comply with a requirement under which the device was exempted for
investigational use renders the device adulterated (see section 501(i)
of the FD&C Act).
Failure to comply with applicable requirements of the FD&C Act and
FDA regulations may render the device adulterated and misbranded under
sections 501 and 502 of the FD&C Act and may constitute a prohibited
act under section 301 of the FD&C Act (21 U.S.C. 331).
IVDs, as defined in Sec. 809.3 (21 CFR 809.3), are devices
intended for human use and are subject to the FD&C Act. They include
class I, class II, and class III devices, as well as both preamendments
and postamendments devices. Like other devices, IVDs are subject to
general controls, including premarket notification, reporting
requirements regarding adverse events and corrections and removals, IDE
requirements (though most investigations of IVDs are exempt from most
provisions of the IDE regulation), and other applicable requirements
under the FD&C Act and FDA's regulations. IVDs are also subject to
specific labeling requirements in part 809 of the regulations (21 CFR
part 809).

D. History of the Rulemaking

1. FDA's Longstanding Recognition That IVDs Manufactured by
Laboratories Are Devices
FDA has made clear, on many occasions and over many years, that
LDTs are devices under the FD&C Act (for the legal reasoning for this
conclusion, see section V.B). Over 25 years ago, FDA explained that
clinical laboratories that develop tests are acting as manufacturers of
medical devices (62 FR 62243 at 62249 (November 21, 1997)). FDA
reiterated that position in a citizen petition response a year later
(Ref. 44), and in the preamble to a final rule 3 years after that (65
FR 18230 at 18231 (April 7, 2000)). In 2006, FDA again cited its prior
statement that clinical laboratories that develop tests are acting as
manufacturers of medical devices (Ref. 45 (quoting 62 FR 62243 at
62249)). In 2014, FDA expressly considered and rejected arguments that
LDTs are not devices under the FD&C Act, stating in a citizen petition
response that ``LDTs are devices within the plain language of the
[statutory] definition'' (Ref. 46). Five years later, FDA issued a
warning letter stating that ``FDA has not created a legal `carve-out'
for LDTs such that they are not required to comply with the
requirements under the Act that otherwise would apply. . . . Although
FDA has generally exercised enforcement discretion for LDTs, the Agency
always retains discretion to take action when appropriate, such as when
it is appropriate to address significant public health concerns'' (Ref.
47). A wide range of other FDA documents, including guidance documents,
safety communications, compliance letters, and other public statements,
have

[[Page 68016]]

indicated or otherwise taken as their premise that IVDs are devices
even when the manufacturer is a laboratory (see, e.g., Refs. 11, 18,
27, 28, and 48 to 56).
FDA has also taken regulatory actions consistent with these
statements and documents. Since 2017, the Agency has reviewed over 40
PMAs, 510(k)s, and De Novo classification requests for tests identified
by the manufacturer as LDTs, and has approved, cleared, or granted De
Novo classification for roughly half of those tests under authorities
in the FD&C Act specifically reserved for ``devices.'' FDA has also
received many EUA requests from laboratories and has authorized over
150 such tests for emergency use, an authority that is also limited to
``devices'' or other FDA-regulated medical products.
2. Past FDA Initiatives To Address LDTs
In light of FDA's recognition that LDTs are devices and our
increasing concerns about IVDs offered as LDTs (as detailed in the
``Need for the Rule'' section, section III.B of this document), over
the years the Agency has considered various ways to address IVDs
manufactured by laboratories that raise safety or effectiveness
concerns. In 1997, FDA sought to address these concerns by establishing
restrictions on the sale, distribution, and use of analyte specific
reagents (ASRs), which the Agency described as the ``primary
ingredients'' of most LDTs (62 FR 62243 at 62249). In 2006, FDA issued
a draft guidance outlining a different enforcement approach for a type
of LDT known as an in vitro diagnostic multivariate index assay
(IVDMIA),\12\ which raised particular safety and effectiveness concerns
(Ref. 45). FDA later determined that it should engage in a more
comprehensive effort to oversee LDTs, in part due to stakeholder
feedback.
---------------------------------------------------------------------------

\12\ As defined in the draft guidance document, IVDMIAs are
``test systems that employ data, derived in part from one or more in
vitro assays, and an algorithm that usually, but not necessarily,
runs on software to generate a result that diagnoses a disease or
condition or is used in the cure, mitigation, treatment, or
prevention of disease.'' The draft guidance document further
characterized IVDMIAs as having the following three features: they
use clinical data to empirically identify variables and derive
weights/coefficients used in an algorithm; they employ that
algorithm to calculate a patient-specific result, which cannot be
independently derived and confirmed by another laboratory (absent
access to proprietary information used in the development and
derivation of the test); and they report that result, which cannot
be interpreted by a well-trained healthcare practitioner using prior
knowledge of medicine in the absence of information from the test
developer regarding clinical performance and effectiveness.
---------------------------------------------------------------------------

Consistent with this determination, in 2010, FDA announced plans to
develop a broader approach to the oversight of LDTs. The Agency held a
2-day public meeting and opened a docket for public comment (75 FR
34463 (June 17, 2010)). Input received through those proceedings
informed two draft guidance documents issued by FDA on October 3, 2014,
entitled ``Framework for Regulatory Oversight of Laboratory Developed
Tests (LDTs)'' (79 FR 59776) and ``FDA Notification and Medical Device
Reporting for Laboratory Developed Tests (LDTs)'' (79 FR 59779) (Refs.
48 and 49). In those draft guidance documents, FDA proposed to
implement a risk-based oversight framework for IVDs offered as LDTs,
with a phased enforcement strategy. FDA solicited public feedback on
the draft guidance documents and held a public workshop on January 8
and 9, 2015 (79 FR 69860 (November 24, 2014)).
From October 2014 through 2016, FDA analyzed more than 300 sets of
comments on the draft guidance documents, as well as discussion from
the public workshop, and engaged extensively with stakeholders in
meetings and conferences. A number of interested parties provided
feedback, including laboratories, healthcare providers, patients,
conventional IVD manufacturers, government agencies, and Congress. The
feedback ranged generally from strong opposition to strong support for
FDA's proposed increased oversight of LDTs and addressed a wide range
of topics, including FDA's authority to regulate LDTs, the risks posed
by LDTs without increased FDA enforcement, the effect of a new
enforcement approach on test access and innovation, the potential
interplay between FDA regulation and CLIA, and the implications of
increased FDA oversight for competition in the IVD market.
On January 13, 2017, FDA issued a discussion paper (2017 Discussion
Paper) synthesizing the feedback that had been provided to the Agency,
following a choice by FDA not to finalize the draft guidance documents
to allow for further public discussion and to provide an opportunity
for Congress to develop legislation for a new regulatory framework
encompassing all IVDs that appropriately balances patient protection
with continued access and innovation (Ref. 50).
In August 2020, HHS posted a statement on its website entitled
``Rescission of Guidances and Other Informal Issuances,'' which stated,
among other things, that ``the department has determined that the Food
and Drug Administration (`FDA') will not require premarket review of
laboratory developed tests (`LDT') absent notice-and-comment
rulemaking'' (Ref. 57).\13\ This statement was informed by advice in a
legal memorandum from the HHS Office of General Counsel (see Ref. 59).
In November 2021, based on new advice from the HHS Office of General
Counsel, HHS leadership determined that the August 2020 statement no
longer represented the Department's policy or legal views (Ref. 59).
HHS Secretary Xavier Becerra publicly announced the withdrawal of the
statement on November 15, 2021 (Ref. 60). Various news outlets have
reported on these events (Refs. 61 to 64).
---------------------------------------------------------------------------

\13\ HHS also posted an accompanying document entitled ``FAQs on
Laboratory Developed Tests (LDTs)'' on its website (Ref. 58).
---------------------------------------------------------------------------

IV. Legal Authority

FDA is proposing to issue this rule under the Agency's general
rulemaking authorities and statutory authorities relating to devices.
These authorities include sections 201(h)(1), 301, 501, 502, 510, 513,
514, 515, 518, 519, 520, 701, 702, 704, and 801 (21 U.S.C. 321(h)(1),
331, 351, 352, 360, 360c, 360d, 360e, 360h, 360i, 360j, 371, 372, 374,
and 381). In particular:
<bullet> Under section 201(h)(1) of the FD&C Act, a device is
defined as ``an instrument, apparatus, implement, machine, contrivance,
implant, in vitro reagent, or other similar or related article,
including any component, part, or accessory, which is (A) recognized in
the official National Formulary, or the United States Pharmacopeia, or
any supplement to them, (B) intended for use in the diagnosis of
disease or other conditions, or in the cure, mitigation, treatment, or
prevention of disease, in man or other animals, or (C) intended to
affect the structure or any function of the body of man or other
animals, and which does not achieve its primary intended purposes
through chemical action within or on the body of man or other animals
and which is not dependent upon being metabolized for the achievement
of its primary intended purposes.''
<bullet> Section 701(a) of the FD&C Act authorizes FDA to issue
regulations for the efficient enforcement of the FD&C Act.
For additional descriptions of some of the authorities referenced
above, see ``FDA's Current Regulatory Framework'' section (section
III.C.). For additional discussion of how these legal authorities apply
to LDTs, see ``Legal Basis for the Proposed Amendment'' section
(section V.B.).

[[Page 68017]]

V. Description of the Proposed Amendment to the Definition of In Vitro
Diagnostic Products

A. Proposed Amendment

We are proposing to amend part 809, subpart A, specifically Sec.
809.3, by updating the definition of ``in vitro diagnostic products''
to make explicit that IVDs are devices under the FD&C Act including
when the manufacturer of the IVD is a laboratory. IVDs are defined as
``those reagents, instruments, and systems intended for use in the
diagnosis of disease or other conditions, including a determination of
the state of health, in order to cure, mitigate, treat, or prevent
disease or its sequelae. Such products are intended for use in the
collection, preparation, and examination of specimens taken from the
human body'' (Sec. 809.3). This amendment would reflect FDA's
longstanding view that LDTs are devices under the FD&C Act, and would
reflect the fact that the device definition in the FD&C Act does not
differentiate between entities manufacturing the device. In other
words, whether an IVD is a device does not depend on where or by whom
the IVD is manufactured.
FDA is also proposing to amend the statutory citation for the
device definition included in Sec. 809.3 to reflect amendments to
section 201(h) of the FD&C Act as a result of the enactment of the
Safeguarding Therapeutics Act (Pub. L. 116-304, 134 Stat. 4915). For
many years, the definition of ``device'' had been codified at section
201(h) of the FD&C Act. Upon enactment of the Safeguarding Therapeutics
Act, the definition of ``device'' was redesignated as paragraph (h)(1)
and a new definition of ``counterfeit device'' was codified at
paragraph (h)(2).

B. Legal Basis for the Proposed Amendment

If amended as proposed, Sec. 809.3 would express in plain terms
that IVDs, including test systems, fall within the definition of a
device in section 201(h)(1) of the FD&C Act when they have been
manufactured by laboratories. In this subsection, FDA sets forth the
legal reasoning for this position.
1. In Vitro Diagnostic Test Systems Are Devices
The FD&C Act defines a device as, in relevant part, ``an
instrument, apparatus, implement, machine, contrivance, implant, in
vitro reagent, or other similar or related article, including any
component, part, or accessory, which is . . . intended for use in the
diagnosis of disease or other conditions, or in the cure, mitigation,
treatment, or prevention of disease'' (see 21 U.S.C. 321(h)(1); see
also 21 U.S.C. 360j(o) (identifying circumstances under which software
is and is not within the device definition)). This definition includes
IVD test systems. Test systems are sets of IVDs--for example, reagents,
instruments, specimen collection devices, software, and other related
materials--that function together to produce a test result. See, e.g.,
Sec. 809.10(a)(9)(iii) (21 CFR 809.10(a)(9)(iii)) (discussing
``multiple unit products which require the use of included units
together as a system''); id. Sec. 809.10(b) (referring to reagents and
instruments within a system). According to a straightforward reading of
the statutory text, these systems are ``apparatus[es],''
``contrivance[s],'' and articles that are ``similar or related'' to
``instrument[s]'' and ``in vitro reagent[s],'' that are intended for
use in the diagnosis of disease or other conditions or in the cure,
mitigation, treatment, or prevention of disease. They consist of
individual parts that have their own regulatory identity, but, when
combined, constitute a new device.
The device definition expressly contemplates this scenario because
it provides that both an overall article and each of its ``components''
and ``parts'' are devices subject to regulation. (21 U.S.C. 321(h)(1);
cf. Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 768 (3d Cir. 2018)
(describing the distinct status of a ``system that is itself a `device'
but that is comprised of Class II [device] components in addition to
one or more Class III [device] components'').) The word ``apparatus,''
which is defined as ``a set of materials or equipment designed for a
particular use,'' encompasses test systems by its plain terms. (See
Apparatus, <a href="http://Merriam-Webster.com">Merriam-Webster.com</a> (last accessed June 28, 2023); see also
United States v. Bacto-Unidisk, 394 U.S. 784, 798 (1969) (``Congress
fully intended that the [FD&C] Act's coverage be as broad as its
literal language indicates'').) Consistent with this analysis, FDA's
definition of an ``in vitro diagnostic product,'' which was first
promulgated in 1973 and is still in effect today, identifies a
``system'' as a type of IVD and a device under the FD&C Act. (Section
809.3 (IVDs include ``reagents, instruments, and systems''); see 38 FR
7096 at 7098 (March 15, 1973).)
The regulation of test systems is important because test systems
are generally the IVDs that produce a result--a ``positive'' or
``negative'' (such as what patients receive in the context of COVID-19
diagnostic tests), a quantitative value (such as a concentration of
glucose), or perhaps a more detailed report of results. The quality of
test results is generally what defines both the risks and benefits of
IVDs: the risks stem from inaccurate, unreliable, incomplete, or
misleading test results, and the benefits stem from accurate, reliable,
and complete test results. For that reason, test systems and their
results are a key focus of FDA's regulation of IVDs. FDA has issued
over 350 regulations classifying different types of test systems (see
generally 21 CFR parts 862, 864, 866) and has evaluated the performance
and results of innumerable test systems over the course of decades.
Patients and healthcare professionals rely on FDA to help ensure the
validity of test systems, and conventional IVD manufacturers have built
their business around this premise.
The focus on test systems and their results is not new; it has been
a consistent theme throughout the history of FDA's regulation of IVDs.
Congress expressly granted FDA authority over diagnostic products in
1938. (Federal Food, Drug and Cosmetic Act (June 25, 1938), Pub. L. 75-
717, 52 Stat. 1040 (defining ``drug'' and ``device'' with reference to
an intended use in ``diagnosis,'' among other things).) Following the
1938 Act, FDA took action against diagnostic products, including
against a system intended to diagnose illness based on human blood
samples. (See Drown v. United States, 198 F.2d 999, 1001 (9th Cir.
1952).) And, in the early 1970s, FDA established a specific IVD
regulatory program in response to ``rapid growth in development of in
vitro diagnostic products combined with the increasing use and reliance
on the results by physicians, hospital personnel, and clinical
laboratories.'' (37 FR 819, January 19, 1972). This program addressed
the ``need [for] closer scrutiny because of the possibility that
inaccurate and unreliable results may be obtained.'' Id. FDA issued
final regulations establishing controls over IVDs, including
``systems,'' in 1973 (38 FR 7096 at 7098) (creating, among other
things, ``product class standards'' to set ``performance requirements
necessary to assure accuracy and reliability of results''). FDA's
increasing concerns about these products was evident from the fact
that--even before Congress expanded the Agency's device authorities in
1976--it applied the drug authorities to certain IVDs. The Supreme
Court upheld that application in Bacto-Unidisk, 394 U.S. at 800-01.
In 1976, Congress enacted the MDA, sweeping legislation meant to
broaden and strengthen FDA's authority over

[[Page 68018]]

devices. (See, e.g., H.R. Rep. 94-853 at 11 (February 29, 1976).) The
MDA included revisions to the definition of ``device'' to clarify that
IVDs should be regulated under the new, more robust device authorities.
(Medical Device Amendments of 1976, Pub. L. 94-295, 90 Stat. 539
(adding the term ``in vitro reagent'' to the definition of a device);
S. Rep. No. 93-670 at 16 (January 29, 1974) (``The Committee recognizes
that there is confusion at the present time about whether certain
articles are to be treated as devices or drugs under the Food, Drug and
Cosmetic Act. Therefore, the Committee reported bill has carefully
defined `device' so as to specifically include implants, in vitro
diagnostic products, and other similar or related articles.''). The
legislative history shows that Congress had serious concerns about test
systems and sought to empower FDA to address them. (See, e.g., S. Rep.
No. 93-670 at 3-4 (January 29, 1974) (describing with concern ``quack
devices'' such as a ``diagnostic service'' in which ``[p]ractitioners .
. . mailed in the blood spots taken from their patients,'' ``[t]he
blood-spotted paper was put into a slot of the electrical device called
the `Radioscope' while the operator stroked with a wand the abdomen of
a person holding metal plates connected to the device,'' and ``the
operator determined from this the identity, kind, location, and
significance of any disease present'').) Congress also contemplated
performance standards relevant to test systems, such as required
labeling with ``ranges of accuracy of diagnosis.'' (H.R. Rep. 94-853 at
27.) Thus, in the MDA, Congress endorsed FDA's focus on test systems
and their results.
2. Test Systems Manufactured by Laboratories Are Devices
The definition of ``device'' in the FD&C Act encompasses test
systems regardless of where or by whom they are manufactured. (See 21
U.S.C. 321(h)(1).) In particular, the definition contains no exception
or limitation for devices manufactured by laboratories. ``Congress
expresses its intentions through statutory text passed by both Houses
and signed by the President (or passed over a Presidential veto).''
(Oklahoma v. Castro-Huerta, 142 S. Ct. 2486, 2496 (2022).) If Congress
had intended such a limitation, it could have said so. Instead,
Congress made clear that the definition does not turn on the type of
entity manufacturing the device: for example, the statute expressly
recognizes that even ``practitioners licensed by law to prescribe or
administer . . . devices'' (the professionals most closely associated
with traditional medical practice) can ``manufacture . . . devices,''
though they may be exempt from certain requirements when they do so
``solely for use in the course of their professional practice.'' \14\
(See 21 U.S.C. 360(g)(2); see also 21 U.S.C. 360i(c)(1), 374(a)(2)(B).)
---------------------------------------------------------------------------

\14\ These exemptions apply when a practitioner (1) is licensed
by law to prescribe or administer a device such as an IVD, (2)
manufactures that device, and (3) does so ``solely for use in the
course of [his or her] professional practice.'' Thus, these
exemptions apply to practitioners, not entities such as corporate or
hospital laboratories that employ licensed practitioners. For
example, FDA has long held that hospitals that reprocess single-use
devices are subject to registration and other requirements under the
FD&C Act because they are the owners/operators, manufacturers, etc.
even though those hospitals employ licensed practitioners. See
Frequently-Asked-Questions about the Reprocessing and Reuse of
Single-Use Devices by Third-Party and Hospital Reprocessors; Final
Guidance for Industry and FDA Staff (July 2001), available at
<a href="https://www.fda.gov/media/71057/download">https://www.fda.gov/media/71057/download</a> (stating ``Third-party and
hospital reprocessors of single-use devices (SUDs) are subject to
all the regulatory requirements currently applicable to original
equipment manufacturers, including premarket submission
requirements'' and including a Q&A that provides instructions on how
to register and list for such entities).
---------------------------------------------------------------------------

Courts have repeatedly recognized that articles manufactured by
medical professionals fall within FDA's jurisdiction (e.g., United
States v. Regenerative Sciences, 741 F.3d 1314 (D.C. Cir. 2014)
(holding that doctors ``producing, as part of their medical practice,''
a ``drug'' under the FD&C Act violated the FD&C Act); Drown v. United
States, 198 F.2d 999, 1001 (9th Cir. 1952) (upholding FDA action
against chiropractor who ``manufacture[d] certain photographic,
therapeutic and diagnostic instruments of her own design which she
use[d] in her practice'')). As the D.C. Circuit in Regenerative
Sciences observed, an approach that rejects ``the [FD&C Act]'s
regulation of doctors'' would ``create an enormous gap in the [FD&C
Act]'s coverage.'' (741 F.3d at 1320.)
The inclusion of articles in the FD&C Act's definition of a device
without regard to the identity of their manufacturer makes particular
sense in the context of test systems. Today, in FDA's experience, there
is little distinction between the test systems manufactured by
laboratories and other manufacturers. These systems generally consist
of highly specialized components with complex functionality working in
combination; they rarely resemble the ``1976-type'' tests discussed in
this rule. For example, a modern-day next generation sequencing (NGS)
test system for genetic testing typically consists of (among other
things) a DNA extraction kit to extract nucleic acids from a human
sample; an NGS instrument that analyzes the nucleic-acid output and
(after days) generates gigabytes of sequencing raw data; and multiple
pieces of computer software that translate that raw data into a test
report. The systems look the same, and function the same way,
regardless of who manufactures them. And although not all systems look
exactly like an NGS system, they do typically involve sophisticated
instruments with advanced software that, when used in conjunction with
other test components, produce the system's results. Their manufacture
generally requires knowledge of bioinformatics, software development,
and an underlying specialty, such as medical genetics--knowledge that
is neither traditionally associated with nor unique to laboratories.
FDA understands that many test systems offered as LDTs are designed at
Fortune 500 companies (see Ref. 65) by a ``development team,'' similar
to how systems from conventional manufacturers are designed. And in
FDA's experience, the individuals on these development teams generally
have the same training and expertise regardless of whether they are
employed by a ``laboratory'' organization or a conventional
manufacturer. Even smaller laboratories use the same complex equipment
for their systems, although they may purchase and use components that
are labeled by other companies for ``research use only.'' In short,
there is nothing inherent in the nature or design of laboratory
developed test systems that would justify exclusion from FDA's
jurisdiction.
That is not to say that laboratories and conventional IVD
manufacturers are identical. Laboratories do occupy a distinct role in
diagnostic testing because they are the entities that generally perform
the tests. Like many devices, such as a magnetic resonance imaging unit
used by a trained technician, test systems are usually used by trained
professionals. Laboratories that are certified under CLIA and that meet
the regulatory requirements under CLIA to perform high complexity
testing employ trained laboratorians to ``run'' test systems, and CLIA
is the statutory scheme that governs that work, as discussed in more
detail in section III.B. However, a laboratory's role in performing
test systems does not change its obligations under the FD&C Act when it
is manufacturing test systems. As previously noted, the FD&C Act does
not exclude medical professionals who manufacture devices from its
scope, and the mere fact that a device is manufactured in connection
with a

[[Page 68019]]

medical service or procedure does not eliminate FDA's jurisdiction.
(See United States v. Regenerative Sciences, 741 F.3d at 1319
(``Notwithstanding appellants' attempt to characterize this case as an
effort by the FDA to `restrict[ ] the use of an autologous stem cell
procedure,' the focus of the FDA's regulation is on the Mixture [that
is, the product that is created in connection with the procedure].'').)
Although some commentators have argued that laboratory
manufacturing is immune from regulation because it is within the
``practice of medicine,'' that argument misconstrues the scope of the
FD&C Act's ``practice of medicine'' provision. Section 1006 of the FD&C
Act (21 U.S.C. 396) provides: ``Nothing in this [Act] shall be
construed to limit or interfere with the authority of a health care
practitioner to prescribe or administer any legally marketed device to
a patient for any condition or disease within a legitimate health care
practitioner-patient relationship.'' Section 1006 carves out a specific
zone of protected conduct that does not reach laboratory manufacturing
of test systems. The purpose of the provision is to ``ensure[ ] that
once the FDA permits a device to be marketed for one use, health care
practitioners have the flexibility to draw on their expertise to
prescribe or administer the device'' for other uses. (Judge Rotenberg
Educ. Ctr., Inc. v. United States, 3 F.4th at 395 (emphases added); see
also Conf. Rep. 105-399 at 97 (November 9, 1997) (provision intended to
cover ``off-label use of a medical device by a physician using his or
her best medical judgment in determining how and when to use the
medical product for the care of a particular patient'').) The statutory
provision applies only in the context of use of a ``legally marketed
device''--that is, a device that is already manufactured and lawfully
on the market--and only applies to ``prescrib[ing] or administer[ing] .
. . within a legitimate health care practitioner-patient
relationship.'' It does not apply to the manufacture of new test
systems. The manufacture of a new device falls squarely within FDA's
realm. Cf. United States v. Regenerative Sciences, 741 F.3d at 1320
(``[W]hile the [FD&C Act] was not intended to regulate the practice of
medicine, it was obviously intended to control the availability of
drugs for prescribing by physicians.'') (quoting United States v.
Evers, 643 F.2d 1043, 1048 (1981)). The fact that healthcare
practitioners may prescribe a device, such as a test system, in the
context of a healthcare practitioner-patient relationship does not mean
that entities manufacturing that device can escape regulation. If that
were the case, few devices would be regulated, because most are
intended for use by healthcare practitioners in the context of a
healthcare practitioner-patient relationship.
Furthermore, contrary to what some commentators have suggested,
CLIA did not repeal FDA's authority over IVDs manufactured by
laboratories, which dates back to at least 1938. CLIA does not
expressly repeal FDA's authority, nor was FDA's authority repealed by
implication. ``An implied repeal will only be found where provisions in
two statutes are in irreconcilable conflict, or where the latter Act
covers the whole subject of the earlier one and is clearly intended as
a substitute.'' (Branch v. Smith, 538 U.S. 254, 273 (2003) (cleaned
up).) Here, as CMS itself has explained, ``the regulatory schemes of
the two agencies are different in focus, scope and purpose'' and ``are
intended to be complementary'' (Ref. 40). As explained in section
III.B, CLIA puts a focus on the proficiency with which laboratories
perform clinical testing, and the FD&C Act puts a focus on the
manufacturing of test systems. CMS and FDA have different areas of
expertise, and CLIA does not address a wide range of activities
regulated under the FD&C Act, such as clinical validation and design
activities. Thus, ``CLIA does not preempt the FDA's authority to
regulate facilities like [Clinical Reference Laboratory]. When two
statutes are `capable of co-existence, it is the duty of the courts,
absent a clearly expressed congressional intent to the contrary, to
regard each as effective.' '' (Clinical Reference Lab. v. Sullivan, 791
F. Supp. 1499, 1509 (D. Kan. 1992) (quoting Ruckelshaus v. Monsanto
Co., 467 U.S. 986, 1018, (1984)), aff'd in part and rev'd in part on
other grounds sub nom., United States v. Undetermined No. of Unlabeled
Cases, 21 F.3d 1026 (10th Cir. 1994).)
In fact, Congress has affirmed that test systems manufactured by
laboratories are devices under the FD&C Act. In the Protecting Access
to Medicare Act of 2014 (PAMA) (Pub. L. 113-93), Congress listed 510(k)
clearance or premarket approval under the FD&C Act as one of several
bases for Medicare payment for an ``advanced diagnostic laboratory
test,'' which is defined in part as a clinical diagnostic laboratory
test ``that is offered and furnished only by a single laboratory and
not sold for use by a laboratory other than the original developing
laboratory (or a successor owner)'' (section 216(a) of PAMA). If such
laboratory tests were not devices, the 510(k) clearance and premarket
approval provisions would not apply to them and the inclusion of such
provisions would be pointless and ineffectual. In addition, Congress
indicated that clinical laboratory tests are devices in 2016 amendments
to the FD&C Act. (21 U.S.C. 360j(o)(1)(D) (repeatedly referring to
``clinical laboratory test or other device data'') (emphasis added).)
The FD&C Act confers jurisdiction on FDA to regulate test systems,
a point that has been codified in FDA's regulations for more than half
a century. And nothing in the text, history, or purpose of the statute
suggests that test systems manufactured by laboratories are excluded
from that jurisdiction. This interpretation is not only the most
straightforward reading of the statute, it is also the most reasonable:
any other interpretation would create a bifurcated scheme in which
systems that are functionally identical are treated differently under
the law.
3. FDA's Jurisdiction Over IVDs Manufactured by Laboratories Is Not
Altered by the FD&C Act's Provisions Related to Interstate Commerce and
Commercial Distribution
Modern Commerce Clause jurisprudence holds that Congress has
``authority to regulate even purely local activities that are part of
an economic `class of activities' that have a substantial effect on
interstate commerce.'' (United States v. Regenerative Sciences, 741
F.3d at 1320 (quoting Gonzales v. Raich, 545 U.S. 1, 17 (2005)).) Thus,
few have disputed that Congress possesses the power to grant FDA
authority to regulate even purely intrastate activities. However, some
commentators have asserted that language in the FD&C Act referencing
``interstate commerce'' and ``commercial distribution'' precludes FDA
from regulating IVDs that are designed, manufactured, and used in a
single laboratory. As discussed below, these assertions lack merit.
a. Interstate commerce. There is no overarching requirement in the
FD&C Act that FDA-regulated articles have a particular nexus with
interstate commerce. Interstate commerce is not a prerequisite to FDA
jurisdiction (beyond the constitutional minimum). Rather, under the
FD&C Act, a limited number of provisions include specific interstate
commerce ``elements,'' and thus require a particular connection with
interstate commerce in order for those provisions to apply. For
example, certain of the FD&C Act's ``prohibited acts'' contain an
interstate commerce element that must be satisfied before the
government can bring an enforcement action under those

[[Page 68020]]

provisions (e.g., 21 U.S.C. 331(a), (c), (d), and (k)). But relatively
few of the FD&C Act's device provisions include a specific interstate
commerce element, and most of the device-related prohibited acts do
not. (See, e.g., 21 U.S.C. 331(e) (prohibiting the failure to establish
or maintain any record, or make any report, required under the device
adverse-event reporting requirements without reference to interstate
commerce); id. 331(p) (prohibiting the failure to register a device
establishment without reference to interstate commerce); id. 331(q)(1)
(prohibiting the failure to comply with device investigational-use
requirements without reference to interstate commerce); id. 331(fff)(3)
(prohibiting the doing of any act which causes a device to be a
counterfeit device, or the sale or dispensing, or holding for sale or
dispensing, of a counterfeit device without reference to interstate
commerce); see generally United States v. Walsh, 331 U.S. 432, 434-36
(1947) (finding no interstate commerce element to 21 U.S.C. 331(h),
which prohibits false guaranties) (``[21 U.S.C. 331(a)] is directed to
illegal interstate shipments, while [21 U.S.C. 331(h)] is directed to
the giving of false guaranties'').) If an FD&C Act provision does not
contain an interstate commerce element, ``interstate commerce'' imposes
no limit on FDA's powers beyond the constitutional minimum. For
devices, the FD&C Act imposes obligations even where there is no
interstate commerce element and likewise gives FDA authority to take
action when there is a violation of those obligations. Thus, FDA does
not, for example, somehow lose jurisdiction if a particular device has
not been ``introduced'' into interstate commerce.
In fact, Congress intentionally revised a provision of the FD&C Act
to ensure that FDA could take action against devices without satisfying
any particular interstate commerce element. In the MDA, Congress
revised the seizure provisions in section 304 of the FD&C Act to
``permit seizure of devices without reference to interstate commerce''
because the previous interstate commerce requirement ``ha[d] been a
burden to the effective enforcement of existing authorities'' and
``whether or not a medical device actually crosses state lines has
nothing to do with the principal intent of this proposal: to assure the
safety and effectiveness of medical devices.'' (H.R. Rep. 94-853 at 15;
see 21 U.S.C. 334(a)(2).) In other words, Congress recognized that the
interstate commerce element in this provision did not advance the goals
of the MDA. Consistent with that view, the FD&C Act grants FDA wide-
ranging authority over devices, including IVDs, and that general
authority does not turn on a connection with interstate commerce above
the constitutional minimum.
In addition, one of the key prohibited acts on which FDA relies,
section 301(k) of the FD&C Act (21 U.S.C. 331(k)), contains an
interstate commerce element, but applies even when a problematic device
has not been introduced in interstate commerce. That provision
prohibits ``the doing of any . . . act with respect to[ ] a . . .
device . . . if such act is done while such article is held for sale
(whether or not the first sale) after shipment in interstate commerce
and results in such article being adulterated or misbranded.'' Courts
have held that even if a product is wholly manufactured and sold
intrastate, the interstate commerce element is satisfied if the
components used in manufacturing the product have traveled in
interstate commerce. (See United States v. Regenerative Sciences, 741
F.3d at 1320-21 (upholding FDA enforcement action under 331(k) because
a drug component had traveled in interstate commerce); Baker v. United
States, 932 F.2d 813, 815 (9th Cir. 1991); United States v. Dianovin
Pharm., Inc., 475 F.2d 100, 102 (1st Cir. 1973).) At least some
components of test systems, such as general purpose reagents, ASRs,
instruments, and collection devices, are usually shipped in interstate
commerce even if the system itself is designed, manufactured, and used
solely in the laboratory (i.e., intrastate). And section 709 of the
FD&C Act (21 U.S.C. 379a) establishes a presumption of interstate
commerce in enforcement actions, meaning that the burden is on
regulated parties to demonstrate, for example, that no component of a
system traveled across State lines. (``In any action to enforce the
requirements of this Act respecting a device . . . the connection with
interstate commerce . . . shall be presumed to exist.'').
Some commentators have cited the interstate commerce element in
section 510(k) of the FD&C Act to raise questions about FDA's authority
over LDTs. Section 510(k) provides that a person who is required to
register and ``proposes to begin the introduction or delivery for
introduction into interstate commerce'' of a device ``shall'' submit a
premarket notification. Under this line of argument, laboratories that
design, manufacture, and use an IVD in a single laboratory are not
proposing to introduce their IVD into interstate commerce, and
therefore section 510(k) does not apply to them. That argument,
however, does not lead to the conclusion that FDA lacks jurisdiction
over LDTs or that none of the FD&C Act requirements apply to LDTs. It
would mean only that section 510(k) does not apply. And if accepted,
the only practical consequence of that assertion would be that affected
laboratories are subject to more burdensome requirements under the FD&C
Act.
In particular, if section 510(k) is construed to mean that such
IVDs are not eligible for the premarket notification pathway, that
would only mean that those IVDs (unless they are 510(k)-exempt, in
which case section 510(k) would not apply anyway, or are for
investigational use) would be forced into the more rigorous review
pathways of premarket approval or authorization through the De Novo
pathway. That is because under section 513(f)(l) of the FD&C Act, a
postamendments device, i.e., a device that was ``not introduced or
delivered for introduction into interstate commerce for commercial
distribution before [May 28, 1976],'' is a class III device by
operation of law (21 U.S.C. 360c(f)(1)). If such a device cannot be
found to be substantially equivalent through the premarket notification
pathway, it must either have an approved PMA (21 U.S.C. 360e(a)), or be
reclassified and gain authorization through a pathway such as the De
Novo process (21 U.S.C. 360c(f)(2)(A)(ii)). Thus, under this theory,
laboratories would not escape FDA regulation--they would face heavier
regulation. However, because section 510(k) does not, in fact, preclude
regulated entities from submitting premarket notifications even
assuming their devices are not introduced into interstate commerce, and
because laboratories have every incentive to take the less burdensome
path to market of 510(k) notification, the 510(k) pathway should play
the same role in device reclassification (21 U.S.C. 360c(f)) for IVDs
offered as LDTs as for any other device. Regardless, the inclusion of
an interstate commerce element in section 510(k) in no way affects
FDA's overall authority to regulate IVDs manufactured by laboratories.
b. Commercial distribution. The phrase ``for commercial
distribution'' also appears in various device provisions of the FD&C
Act, and some commentators have asserted that this phrase, too, signals
that FDA lacks authority over LDTs. For example, they point to the
510(k) premarket notification requirement, which is triggered when a
person who is required to register ``proposes to begin the introduction
or delivery for introduction into interstate commerce for commercial
distribution of a device intended for

[[Page 68021]]

human use'' (21 U.S.C. 360(k)). As with ``interstate commerce,'' the
presence of this phrase in that provision and certain other specific
device provisions does not bear on the Agency's overall jurisdiction.
Furthermore, LDTs are for commercial distribution, so the presence of
the phrase does not change the operation of those provisions with
respect to these IVDs.
Under our longstanding, judicially endorsed interpretation,
``commercial distribution'' does not require the physical transfer of
an object, as some commentators have argued. Instead, the legislative
history, FDA's near-contemporaneous regulation, and at least one
judicial decision reflect that the phrase ``commercial distribution''
means ``on the market.'' A House Report issued 3 months before
enactment of the MDA contains an unusually clear statement of the
intended meaning of the phrase: ```Commercial distribution' is the
functional equivalent of the popular phrase `on the market.' '' (H.R.
Rep. No. 94-853 at 36) FDA's regulations implementing the registration,
listing, and 510(k) provisions, which were finalized in 1977 (soon
after enactment of the MDA), similarly define commercial distribution
as ``any distribution of a device intended for human use which is held
or offered for sale.'' (21 CFR 807.3(b)) In the preambles to the
proposed and final rule, FDA equated the term with the phrase ``on the
market'' (41 FR 37458 at 37459 (September 3, 1976); 42 FR 42520 at
42524 (August 23, 1977)). A court has also endorsed this interpretation
of the term (United States v. An Article of Device Consisting of 1,217
Cardboard Boxes, 607 F. Supp. 990, 994-95 (W.D. Mich. 1985) (giving
deference to FDA's reasonable interpretation of ``commercial
distribution'' to mean, ``in its popular sense, `on the market' '')).
These sources show that the term does not relate to physical movement,
and because IVDs manufactured by laboratories (including LDTs)
generally are ``on the market,'' they are for commercial distribution.

VI. Description of the Proposed Enforcement Policy

Based on the considerations set forth in this preamble, FDA is
proposing to end the general enforcement discretion approach for LDTs.
However, FDA also recognizes that many IVDs manufactured by
laboratories are currently being marketed as LDTs, and that a sudden
change could negatively affect the public, including patients and
industry. In particular, FDA understands that the healthcare community
and patients have been using these IVDs, and that coming into
compliance will take time for manufacturers. FDA also recognizes that
we should consider Agency resources. For additional information
regarding the estimated costs associated with this rulemaking, see the
Preliminary Economic Analysis of Impacts (Ref. 34).
To achieve greater oversight in a manner that accounts for the
various considerations, FDA is proposing to gradually end its general
enforcement discretion approach in stages, as described below
(hereinafter ``the phaseout policy''). FDA's intent is that, following
a 4-year phaseout period, IVDs offered as LDTs generally would be
expected to meet applicable requirements.
Although FDA is proposing to gradually end its current general
enforcement discretion approach over a period of years, the phaseout
policy does not in any way alter the fact that it is illegal to offer
IVDs without complying with applicable requirements. Regardless of the
phaseout timeline and continued enforcement discretion approach for
certain IVDs discussed below, FDA retains discretion to pursue
enforcement action at any time against violative IVDs when appropriate.
Moreover, FDA has adopted and intends to continue adopting
enforcement discretion policies for certain types of IVDs in certain
circumstances, as appropriate. For example, FDA issued guidance
documents with enforcement discretion policies for certain COVID-19 and
Mpox tests at the beginning of each declared emergency (as described
further below), and intends to issue a draft guidance with an
enforcement policy for IVDs for emerging outbreaks offered prior to FDA
review to address the immediate public health need. FDA will seek
public comment on such draft guidance in accordance with good guidance
practices (see 21 CFR 10.115).
With this notice of proposed rulemaking, FDA seeks public comment
on whether specific enforcement discretion policies would be
appropriate for IVDs offered as LDTs for other public health scenarios.
If so, please provide a description of those scenarios, an explanation
of why enforcement discretion policies with respect to those scenarios
would be appropriate, and any relevant evidence to support such
policies. FDA would also appreciate public comment on what, if any,
unintended consequences may result from the proposed phaseout policy to
certain patient populations (for example, Medicare beneficiaries, rural
populations, etc.) and what steps could be taken to mitigate those
consequences.
FDA's proposed phaseout policy, including the scope and phaseout
timeline, is set forth below.

A. Scope

While FDA's general enforcement discretion approach has been
focused on LDTs, FDA is proposing a broader scope for the phaseout
policy. Specifically, FDA is proposing to apply the phaseout policy to
IVDs that are manufactured and offered as LDTs by laboratories that are
certified under CLIA and that meet the regulatory requirements under
CLIA to perform high complexity testing,\15\ even if those IVDs do not
fall within FDA's traditional understanding of an LDT because they are
not designed, manufactured, and used within a single laboratory.\16\
Throughout this preamble, these IVDs are referred to as ``IVDs offered
as LDTs.'' FDA is proposing this scope because it recognizes that not
all laboratories have understood the limited nature of FDA's general
enforcement discretion approach and have been offering IVDs based on
the approach even when they do not fit what FDA generally considers to
be an LDT. As previously discussed, FDA has made a preliminary
determination to structure the phaseout in a way that avoids undue
disruption to the testing market. This is important even for certain
IVDs currently on the market that do not fall within the scope of FDA's
general enforcement discretion approach.
---------------------------------------------------------------------------

\15\ Other laboratories would be out of compliance with CLIA
regulations if they were developing and performing tests that are
not FDA authorized. Such tests have never fallen within FDA's
general enforcement discretion approach (see, e.g., Refs. 32, 40,
and 54).
\16\ As discussed elsewhere in this preamble, FDA has generally
considered the term ``laboratory developed test (LDT)'' to mean an
IVD that is intended for clinical use and that is designed,
manufactured, and used within a single CLIA-certified laboratory
that meets the regulatory requirements under CLIA to perform high
complexity testing.
---------------------------------------------------------------------------

Although FDA is proposing this broader scope for the phaseout
policy, it does not intend to sweep in certain tests that were excluded
from the general enforcement discretion approach, as reflected in
compliance patterns, multiple public FDA actions and communications, or
both. These tests are:
1. Tests that are intended as blood donor screening or human cells,
tissues, and cellular and tissue-based products (HCT/Ps) donor
screening tests required for infectious disease testing under 21 CFR
610.40 and 1271.80(c), respectively, or for determination of

[[Page 68022]]

blood group and Rh factors required under 21 CFR 640.5. Under the cited
regulations, a blood or HCT/P establishment must not use a test for the
purposes listed here unless the test is licensed, approved, or cleared
by FDA for such use. Blood and HCT/P establishments must register with
FDA and are subject to FDA inspection (see 21 CFR parts 207, 607, 807
and 1271). FDA's general enforcement discretion approach for LDTs has
never applied to these tests because these tests are a critical part of
the overall process of ensuring the safety of blood and blood
components and HCT/Ps by preventing infectious disease transmission and
incompatible blood transfusions which can have life-threatening
consequences. Based on FDA experience, establishments have been
generally complying with these requirements (see, e.g., Refs. 66 and
67).
2. Tests intended for emergencies, potential emergencies, or
material threats declared under section 564 of the FD&C Act. After all
previous declarations under section 564(b), FDA has generally expected
LDTs to comply with applicable requirements in the FD&C Act and FDA
regulations. FDA's general enforcement discretion approach has not
applied to these tests because of the significant risk posed by the
disease (as signified by the unusual step of issuing a declaration) and
because false results can have serious implications for disease
progression and public health decision-making, in addition to the
individual patient's care. As it has done in other areas, FDA has
adopted (and may continue to adopt) specific enforcement discretion
policies for such tests (see, e.g., Refs. 51 and 52). In addition,
consistent with the Government Accountability Office's 2022
recommendation that ``FDA should develop a policy for the use of
enforcement discretion regarding unauthorized tests in future public
health emergencies,'' FDA intends to issue guidance on factors to
consider in adopting such enforcement discretion policies (Ref. 68).
FDA has communicated its expectations regarding tests for emergency use
in guidance and elsewhere, including ``It has come to our attention''
letters posted on FDA's website and other public communications (see,
e.g., Refs. 51 to 54, 69, and 70).
3. Direct-to-consumer tests. FDA's general enforcement discretion
approach has not applied to tests intended for consumer use (without
meaningful involvement by a licensed healthcare professional), given
the greater risks to patients presented by these tests (see, e.g.,
Refs. 48, 55, and 71 to 75). FDA's enforcement discretion approach for
LDTs was originally premised, in part, on the participation of medical
professionals to help determine whether a particular test was
appropriate, counsel patients on the significance and limitations of a
test, assist in interpreting results, assess how the results fit in the
overall clinical picture, and consider next steps. When patients order
tests, receive results, and make decisions (such as a decision to stop
medication) without this expert intermediary, there is a heightened
need for FDA oversight.
For these categories of tests, FDA has generally expected
applicable requirements to be met, and we are not proposing to change
that approach.
FDA notes that the manufacturing of test components outside of a
laboratory--for example, when the same entity owns both the laboratory
and a manufacturing facility separate from the laboratory--does not
fall within FDA's general enforcement discretion approach. FDA's
approach has long been specific to laboratory development (e.g., 61 FR
10484 (``in-house developed tests have not been actively regulated by
the Agency'') (emphasis added); Ref. 48 (describing an LDT as an IVD
that is ``designed, manufactured, and used within a single
laboratory''). The proposed phaseout policy would not change FDA's
longstanding expectation that IVD manufacturing activities occurring
outside of a CLIA-certified laboratory comply with applicable device
requirements.
In addition, for certain categories of tests manufactured by
laboratories, FDA is proposing to continue to apply the current general
enforcement discretion approach going forward. One such category of
tests is referred to in this preamble as ``1976-Type LDTs.'' Such tests
have the following characteristics common among LDTs offered in 1976:
use of manual techniques (without automation) performed by laboratory
personnel with specialized expertise; use of components legally
marketed for clinical use; and design, manufacture, and use within a
single CLIA-certified laboratory that meets the requirements under CLIA
for high complexity testing. The characteristics associated with LDTs
offered in 1976 resulted in the emergence of FDA's general enforcement
discretion approach for LDTs, and the specific characteristics listed
above provide the greatest risk mitigation among the characteristics
that were commonly associated with LDTs offered in 1976 (discussed in
section III.A). Based on changes to the LDT landscape since 1976, the
risks associated with most modern LDTs are generally much greater today
than they were in 1976; however, for tests that share the
characteristics listed above, FDA has made a preliminary determination
that the risks are sufficiently mitigated such that FDA's general
enforcement discretion approach for LDTs should continue to apply.
These tests might include, for example, immunohistochemistry tests that
involve no automated preparation or interpretation, but would not
include, for example, lateral flow tests, as they do not generally rely
on laboratory personnel expertise.
FDA is also proposing to continue to apply the general enforcement
discretion approach to Human Leukocyte Antigen (HLA) tests that are
designed, manufactured, and used in a single laboratory certified under
CLIA that meets the requirements to perform high-complexity
histocompatibility testing when used in connection with organ, stem
cell, and tissue transplantation to perform HLA allele typing, for HLA
antibody screening and monitoring, or for conducting real and
``virtual'' HLA crossmatch tests. FDA has made a preliminary
determination that HLA LDTs for transplantation used in
histocompatibility laboratories that meet the regulatory requirements
under CLIA to perform high complexity testing, when used in connection
with organ, stem cell, and tissue transplantation for certain purposes
as described in this paragraph, are unique in that they are generally
developed, and the testing is generally performed, in urgent, life-
saving situations for the patient. Physicians must often make prompt
decisions about transplantation based on medical judgment regarding
their patient's condition and degree of mismatch between the donor and
patient should an organ, stem cells, or tissue become available.
Further, these tests are often individualized within each medical
facility, for example, they include reagents that reflect local HLA
polymorphisms and patient demographics. Note that the general
enforcement discretion approach does not apply to HLA tests used for
blood transfusion as such tests are highly standardized across
institutions; FDA intends to continue to enforce applicable
requirements for HLA tests used for blood transfusion.
FDA also intends to maintain its longstanding enforcement
discretion approach for tests intended solely for forensic (law
enforcement) purposes. This approach has been in place for over 20
years and applies to such tests regardless of whether they are offered
as an LDT. See, e.g., 65 FR 18230 (April 7, 2000). Tests used in the
law

[[Page 68023]]

enforcement setting are subject to protections and requirements
associated with the judicial process that mitigate risk related to test
accuracy and sample collection and that generally are not available in
the home, workplace, insurance, and sports settings. These protections
include the use of rules of evidence in judicial proceedings and legal
representation of the accused (i.e., the person being tested) through
the judicial process during which the accuracy of the test may be
raised during the adjudication. We seek comment on any implications of
continued enforcement discretion with regard to LDTs used for law
enforcement purposes and any factors that FDA should consider--
particularly as it relates to civil rights and equity--related to the
scientific validity and accuracy of these tests.
In addition, tests exclusively used for public health surveillance
are distinct from other tests where: (1) they are intended solely for
use on systematically collected samples for analysis and interpretation
of health data in connection with disease prevention and control, and
(2) test results are not reported to patients or their healthcare
providers. These tests would not be affected by the phaseout policy.
The results of these tests are generally used for trending on a
population basis. Public health authorities also have access to test
results from non-surveillance tests that are FDA approved, cleared, or
authorized and that are reported under State reporting laws for
infectious and other diseases. In addition, during a public health
emergency, if there was a 564 declaration (as there was for past public
health emergencies), FDA could require test result reporting to public
health authorities under emergency use authorizations, as appropriate.
In 2017, FDA indicated support for less oversight of other
categories of tests, such as low-risk tests (class I devices), tests
currently on the market, and tests for rare diseases. However, FDA has
accumulated information in the intervening years that suggests we
should treat these categories of tests similarly to other FDA-regulated
tests. For example, as discussed above in section III.B, FDA has gained
additional information showing that there is a high variability in the
performance of IVDs offered as LDTs that are currently on the market,
including in circumstances where the test technology is relatively
simple and well-understood, where the tests are for rare diseases, and
where the tests are low risk. Among other things, FDA's recent
experience with tests for COVID-19 suggests that many tests
manufactured by laboratories are not appropriately validated.
Compliance with premarket review requirements (when applicable), QS
requirements, and registration and listing requirements would help
assure that these IVDs work as intended, enable FDA to keep track of
IVDs offered as LDTs (and, for example, help FDA locate IVDs that are
raising concerns or independently evaluate the risk status of marketed
IVDs), assist with FDA's inspection and planning efforts, and make
information available to patients and healthcare providers that may
inform the selection of particular IVDs for use. Therefore, FDA is now
proposing to end the general enforcement discretion approach, via a
phaseout approach, with respect to premarket review requirements (as
applicable), QS requirements, and registration and listing requirements
for these tests, in addition to medical device reporting (MDR)
requirements (i.e., reporting of adverse events), correction and
removal reporting requirements, and other requirements applicable to
such tests. Based on the information available at this time, FDA has
made a preliminary determination that this proposal appropriately
balances the relevant considerations with respect to these tests,
including currently marketed IVDs offered as LDTs.
However, FDA expects that some stakeholders will suggest that FDA
continue to maintain the current general enforcement discretion
approach with respect to premarket review and some or all QS
requirements for currently marketed LDTs or a subset of currently
marketed LDTs (i.e., what some previously referred to as
``grandfathering''). To the extent commenters suggest such an approach
for FDA's consideration, FDA requests information to support such an
approach, including the following:
<bullet> Given the information in the ``Need for the Rule'' section
of this preamble in particular, what would be the public health
rationale for generally exercising enforcement discretion with respect
to premarket review and some or all QS requirements, for LDTs that are
being offered as of the date of issuance of this proposed rule and are
not changed with respect to indications for use or performance after
that date? Please provide data to support such an approach. Also, if
you think there are steps that might help support such an approach,
including ideas that might help to address the public health concerns
discussed in the ``Need for the Rule'' section, please describe them,
and include a rationale and any supporting evidence.
<bullet> If commenters suggest maintaining the general enforcement
discretion approach with respect to premarket review and QS
requirements for a subset of LDTs (e.g., low and moderate risk LDTs)
currently on the market that are being offered as of the date of
issuance of this proposed rule and are not changed with respect to
indications for use or performance after that date, what would be the
public health rationale to support such an approach? Please provide any
data supporting such an approach. Also, if you think there are steps
that might help support such an approach, including ideas that might
help to address the public health concerns discussed in the ``Need for
the Rule'' section, please describe them and include a rationale and
any supporting evidence.
FDA recognizes that the phaseout of the general enforcement
discretion approach described in this section may have a relatively
greater impact on small laboratories. Therefore, FDA seeks comment on
the following:
<bullet> Is there a public health rationale to have a longer
phaseout period for IVDs offered as LDTs by laboratories with annual
receipts below a certain threshold (e.g., $150,000) (see Table 43 in
the Preliminary Economic Analysis of Impacts (Ref. 34))? If so, please
provide relevant data and comment specifically on an alternative
recommended timeline.
In addition, FDA is aware that some AMCs have claimed that their
laboratories operate under unique circumstances (such as being
integrated into direct patient care) and therefore their tests should
be treated differently than tests manufactured by other laboratories.
Although FDA is not aware of an established definition of an AMC
laboratory, one possible description is: a laboratory for which a
certificate is in effect under CLIA and that meets the requirements
under CLIA to perform tests of high-complexity; that is part of an
accredited public or nonprofit private AMC that has a medical residency
training program or fellowship program related to test development,
application, and interpretation; and that is integrated into the direct
medical care for a patient, including specimen collection, testing,
interaction with the treating provider, and, as appropriate, patient
treatment based on the test, all at the same physical location. FDA
seeks comments on the following:
<bullet> What are the characteristics of AMC laboratories? Do the
characteristics included above accurately describe

[[Page 68024]]

AMC laboratories and in fact distinguish them from other laboratories?
<bullet> Should FDA continue the general enforcement discretion
approach with respect to any requirements, such as premarket review
requirements, for tests manufactured by AMC laboratories?
<bullet> If FDA should continue the general enforcement discretion
approach with respect to any requirements, such as premarket review
requirements, for tests manufactured by AMC laboratories, are there any
additional considerations that should be taken into account with
respect to this approach, for example, whether an FDA cleared or
approved test is available for the same intended use as the test
manufactured by an AMC laboratory? Please provide a rationale and other
information (e.g., data) to support any additional considerations.
<bullet> If FDA should have a different policy for AMC
laboratories, what would be the public health rationale to support such
a policy? For example, if integration of an AMC laboratory into direct
patient care is included as a basis for a different policy, please
include a public health rationale when explaining why and how such
integration supports the different policy, and how integration could
ensure that there is a reasonable assurance of IVD safety and
effectiveness.
<bullet> If FDA should have a different policy for AMC
laboratories, is there evidence to support such a policy?
FDA also is interested in and seeks comment on leveraging programs
such as the New York State Department of Health Clinical Laboratory
Evaluation Program (NYSDOH CLEP) or those within the Veterans Health
Administration (VHA), as appropriate. In particular, FDA requests
comment on whether it may be appropriate to continue the general
enforcement discretion approach, such that FDA generally would not
enforce any applicable device requirements, where outside programs can
be leveraged. If FDA should continue to exercise enforcement discretion
under these circumstances:
<bullet> What specific characteristics of and activities within
these programs justify such an approach?
<bullet> Should the scope of such a policy be more limited for each
program in question? For example, should FDA continue enforcement
discretion for premarket review requirements and intend to enforce
other requirements, such as reporting adverse events?
<bullet> Are there any additional considerations that should be
taken into account?
Please provide a rationale and other information (e.g., data) to
support any suggestions.

B. Stages

As previously discussed, FDA is proposing to gradually phase out
its current general enforcement discretion approach so that most IVDs
offered as LDTs would generally fall under the same enforcement
approach as other IVDs. In developing the proposed phaseout policy, FDA
has considered a number of factors, including the public health
importance of better assuring the safety and effectiveness of IVDs
offered as LDTs, the desire to avoid undue disruption to the testing
market, the time it may take for laboratories to come into compliance
with FDA requirements, the need for adequate resources to implement the
phaseout policy in a manner that does not undermine reasonable
expectations with regards to premarket review timing (per the Medical
Device User Fee Amendments (MDUFA) V agreement), and the benefits of a
relatively simple policy that can be easily understood and implemented.
Keeping these factors in mind, FDA has structured the phaseout policy
to contain five key stages:
<bullet> Stage 1: End the general enforcement discretion approach
with respect to MDR requirements and correction and removal reporting
requirements 1 year after FDA publishes a final phaseout policy, which
FDA intends to issue in the preamble of the final rule.
<bullet> Stage 2: End the general enforcement discretion approach
with respect to requirements other than MDR, correction and removal
reporting, QS, and premarket review requirements 2 years after FDA
publishes a final phaseout policy.
<bullet> Stage 3: End the general enforcement discretion approach
with respect to QS requirements 3 years after FDA publishes a final
phaseout policy.
<bullet> Stage 4: End the general enforcement discretion approach
with respect to premarket review requirements for high-risk IVDs 3\1/2\
years after FDA publishes a final phaseout policy, but not before
October 1, 2027.
<bullet> Stage 5: End the general enforcement discretion approach
with respect to premarket review requirements for moderate risk and low
risk IVDs (that require premarket submissions) 4 years after FDA
publishes a final phaseout policy, but not before April 1, 2028.
Each of these stages is discussed in further detail below. For each
stage, FDA is proposing a period of time for laboratories to come into
compliance before FDA intends to end the general enforcement discretion
approach. FDA encourages laboratory manufacturers to begin early and
work toward compliance with requirements sooner than the end of the
specified timeframes. FDA also intends to consider providing more
targeted guidance and/or making additional resources available on
specific topics, such as compliance with applicable labeling
requirements, over the course of the phaseout period.
1. Stage 1: End the general enforcement discretion approach with
respect to MDR requirements and correction and removal reporting
requirements 1 year after FDA publishes a final phaseout policy.
FDA has structured the phaseout policy to obtain information about
potentially harmful IVDs offered as LDTs as soon as feasible. As
detailed elsewhere in this preamble, FDA is concerned that some of the
IVDs offered as LDTs may be posing risks to patients. Therefore, FDA is
prioritizing the phaseout of the general enforcement discretion
approach for requirements that would help FDA identify and monitor
significant issues with IVDs offered as LDTs, consistent with other
considerations described in this proposed policy.
Enforcement of the MDR requirements under 21 U.S.C. 360i(a) through
(c) and 21 CFR part 803, in particular, would enable FDA to
systematically monitor significant adverse events to identify
problematic IVDs offered as LDTs, such as those with poor performance
or other safety issues. FDA has made a preliminary determination that
gathering this information is important for IVDs that do not have the
safeguards associated with compliance with other FDA requirements, such
as manufacturing under QS requirements or confirmation of analytical
and clinical validity through premarket review.
For similar reasons, FDA is prioritizing the collection of
information about when a manufacturer has initiated a correction or
removal of its IVD to reduce a risk to health or to remedy a violation
of the FD&C Act that may present a risk to health. Under 21 U.S.C.
360i(g) and part 806 (21 CFR part 806), manufacturers are required to
report such corrections or removals to FDA, and FDA intends to phase
out the general enforcement discretion approach for these requirements
at the same time it does so for MDR requirements. Because FDA intends
for the phaseout of the general enforcement discretion approach with
respect to

[[Page 68025]]

correction and removal reporting requirements to occur before phaseout
of the general enforcement discretion approach with respect to
registration and listing requirements, FDA intends to exercise
enforcement discretion, such that it generally does not intend to
enforce, the requirement to use the establishment registration number
on such reports (21 CFR 806.10) when laboratories use their CLIA
certificate number instead prior to registering.
FDA's proposal to phase out enforcement discretion for MDR
requirements within 1 year after finalization of the policy is informed
by comments FDA received in response to the draft guidance documents
that FDA issued in 2014 proposing to implement an oversight framework
for IVDs offered as LDTs. In 2014, FDA proposed a 6-month timeline for
laboratory compliance with MDR requirements (Ref. 48), and we received
comments suggesting that a longer period may be appropriate for the
establishment of a system to identify, review, and report adverse
events. Based in part on those comments, FDA is now proposing a 1-year
time period for laboratories to come into compliance with the MDR
requirements. In conjunction with the phaseout of the general
enforcement discretion approach with respect to the MDR requirements,
FDA is also proposing to end the general enforcement discretion
approach with respect to the requirements of part 806, concerning
reports of corrections and removals. Because MDRs frequently are a
basis for corrections and removals, FDA views these requirements as
working together to provide information to FDA about issues with device
performance or quality. We anticipate that this 1-year time period is
adequate, particularly given that laboratories should already have some
processes in place for detecting problems with their IVDs to comply
with CLIA regulations.
2. Stage 2: End the general enforcement discretion approach with
respect to requirements not covered during other stages of the phaseout
policy 2 years after FDA publishes a final phaseout policy.
FDA is proposing to end the general enforcement discretion approach
for requirements besides MDR, correction and removal reporting, QS, and
premarket review requirements 2 years after the final policy is
published. These other requirements include registration and listing
requirements under 21 U.S.C. 360 and part 807 (excluding subpart E);
labeling requirements under 21 U.S.C. 352 and parts 801 and 809,
subpart B; and investigational use requirements under 21 U.S.C. 360j(g)
and part 812. We have included compliance with investigational use
requirements at this stage, in recognition that there has been some
confusion about our enforcement approach in this area. Our
understanding is that laboratories often are not complying with
investigational use requirements currently, even though FDA has
generally expected compliance with these requirements.\17\ We are
therefore including these requirements in the phaseout policy.
---------------------------------------------------------------------------

\17\ For example, FDA stated in the ``Framework for Regulatory
Oversight of Laboratory Developed Tests (LDTs)'' draft guidance that
``FDA intends to continue to enforce investigational device
requirements under 21 CFR part 812 for all clinical investigations
of LDTs that are conducted under clinical protocols that require
institutional review board approval'' (Ref. 48).
---------------------------------------------------------------------------

FDA recognizes that this proposal is different from FDA's prior
statements in the 2017 Discussion Paper regarding oversight of IVDs
manufactured by laboratories with respect to certain requirements, for
which the timing of FDA's expectations for compliance generally
depended on the type of premarket review applicable to the device.
However, upon review, FDA anticipates that it would better serve the
public health and be simpler to phase out the general enforcement
discretion approach for these requirements at the 2-year mark. For
example, under this timeline, laboratories could work toward compliance
with the stage 2 requirements without necessarily determining the risk
category of their IVDs until later stages of the proposed phaseout
policy. Another advantage of this timeline is that FDA would obtain
registration and listing information before the enforcement discretion
phaseout date for premarket review requirements, which could give the
Agency an initial understanding of the universe of IVDs offered as LDTs
to facilitate premarket review of those IVDs. Based on its experience,
FDA anticipates that 2 years is adequate time to come into compliance
with the various requirements.
3. Stage 3: End the general enforcement discretion approach with
respect to QS requirements 3 years after FDA publishes a final phaseout
policy.
At the 3-year mark, FDA would expect compliance with the device
CGMP requirements of the QS requirements under 21 U.S.C. 360j(f) and
part 820 (21 CFR part 820). However, for IVDs for which all
manufacturing activities occur within a single CLIA-certified
laboratory that meets the regulatory requirements to perform high
complexity testing and for which distribution of the IVD does not occur
outside that single laboratory, FDA would expect compliance at the 3-
year mark with some, but not all, of the QS requirements. Although FDA
and CMS regulation are different and complementary, compliance with
CLIA requirements provides some quality assurances that may be relevant
to laboratories' manufacturing practices. In particular, laboratories
may in practice be able to apply concepts set forth under CLIA
requirements for laboratory operations to manufacturing activities
regulated by FDA. For FDA to effectively leverage the CLIA assurances,
this proposed approach would apply only when all manufacturing
activities occur within a single laboratory and the IVD is not
distributed outside that laboratory. However, even in the context of
this approach, there are certain QS requirements for which CLIA
regulations do not provide the assurances that FDA requirements would
provide. These requirements include design controls under 21 CFR
820.30; purchasing controls (including supplier controls) under 21 CFR
820.50; acceptance activities (receiving, in-process, and finished
device acceptance) under 21 CFR 820.80 and 21 CFR 820.86; corrective
and preventative actions (CAPA) under 21 CFR 820.100; and records
requirements under part 820, subpart M. Because CLIA does not provide
assurances relevant to these requirements, FDA is proposing to end the
general enforcement discretion approach for these specific requirements
for IVDs for which all manufacturing activities occur within a single
CLIA-certified laboratory that meets the regulatory requirements to
perform high complexity testing, and which are not distributed outside
that laboratory, 3 years after finalizing this policy. For all other
IVDs offered as LDTs and subject to this phaseout policy, FDA is
proposing to end the general enforcement discretion approach for all QS
requirements 3 years after finalizing this policy.
Based on its experience, FDA anticipates that 3 years is adequate
time for laboratories to come into compliance with QS requirements. In
addition, based on the discussion above regarding concerns with the
quality and validation of IVDs offered as LDTs, FDA has made a
preliminary determination that phasing out the general enforcement
discretion approach for QS requirements later than 3 years would not be
in the best interest of the public health. Compliance with QS
requirements is critical to the quality and validity of IVDs offered as
LDTs.

[[Page 68026]]

For example, under the design controls of the QS requirements,
laboratories would, among other things, generally have better
procedures for validating the design of their tests, which would help
to ensure that they are analytically and clinically valid (see Ref.
76).
FDA also notes that on February 23, 2022, FDA proposed to amend the
device QS regulation, part 820, to align more closely with
international consensus standards for devices (87 FR 10119). As stated
in that proposed rule, the requirements, if finalized, would be
substantially similar to the requirements of the current part 820,
providing a similar level of assurance in a firm's quality management
system, and FDA intends for this phaseout policy to apply with respect
to any regulations promulgated through that rulemaking.
FDA intends to finalize amendments to the QS regulation
expeditiously, such that the amended QS requirements would be in effect
before the proposed beginning of stage 3. Upon the start of stage 3, or
if the laboratory complies with QS requirements prior to the start of
stage 3, FDA would expect compliance with the QS requirements that are
in effect at that time. For further information on the QS requirements
that would be established pursuant to the amendments to the QS
regulation, if finalized as proposed, please refer to the proposed
codified at 87 FR 10119 at 10133 and 10134. Notably, the requirements
relating to design controls, purchasing controls, acceptance
activities, CAPA, and records requirements are set forth in the
following ISO 13485 clauses as modified by the proposed codified for
part 820: Clause 4. Quality Management System, Subclause 4.2.5; Clause
6. Resource Management; Clause 7. Product Realization, Subclause 7.1,
Subclause 7.3, Subclause 7.4, and Subclause 7.4.3; and Clause 8.
Measurement, Analysis, & Improvement, Subclause 8.2.5, Subclause 8.2.6,
and Subclause 8.3.
In addition, FDA notes that under section 515(d)(2) of the FD&C
Act, the Agency may not approve a PMA if the applicant fails to
demonstrate conformity with the QS requirements. Therefore, compliance
with the QS requirements is needed to support approval of a PMA. As
provided in section 520(f)(2) of the FD&C Act, any person subject to
the QS requirements may petition for an exemption or variance from any
QS requirement (see also 21 CFR 820.1).
4. Stage 4: End the general enforcement discretion approach with
respect to premarket review requirements for high-risk IVDs 3\1/2\
years after FDA publishes a final phaseout policy, but not before
October 1, 2027.
FDA proposes that the phaseout date for the general enforcement
discretion approach with respect to premarket review requirements for
high-risk IVDs offered as LDTs (IVDs that may be eligible for
classification into class III) should occur 3\1/2\ years from the time
that FDA issues a final phaseout policy. The premarket review
requirements are set forth in 21 U.S.C. 360e and 21 CFR part 814. FDA
is proposing this time period because it is mindful that phasing out
the general enforcement discretion approach on a timeline that is too
short could cause undue disruption in the testing market. Among other
things, we anticipate that 3\1/2\ years would provide sufficient notice
and opportunity for laboratories manufacturing IVDs to plan for and
prepare PMAs and would appropriately account for any reliance
interests. We note that 3\1/2\ years is a longer time period than was
discussed in either the 2014 draft guidance documents or the 2017
Discussion Paper for the phaseout of the general enforcement discretion
approach for premarket review requirements.
This timeline is also intended to align the phaseout date for the
general enforcement discretion approach for premarket review
requirements for high-risk IVDs offered as LDTs with the start of
fiscal year 2028, which coincides with the beginning of a new user fee
cycle. This alignment would provide an opportunity for industry
participation in negotiations regarding the next user fee cycle with
the knowledge that laboratory manufacturers would be expected to comply
with premarket review requirements. (Although a trade association
representing laboratories previously has participated in MDUFA
negotiations, the prior negotiations have not incorporated similar
expectations regarding laboratory compliance with premarket
requirements.) Thus, we propose that this amount of time is appropriate
to foster stability and consistency in the marketplace for the current
MDUFA cycle, and would take into account the need for adequate FDA
resources to implement the phaseout policy in a manner that does not
compromise the capacity to achieve MDUFA V performance expectations.
FDA anticipates that during this 3\1/2\-year period, laboratories would
work with FDA to determine whether PMAs should be submitted for their
IVDs.
Under FDA's proposed policy, FDA generally would not intend to
enforce against IVDs offered as LDTs after a PMA has been submitted
(within the 3\1/2\-year timeframe) until FDA completes its review of
the application. Given that such IVDs may already be on the market and
available to patients, FDA generally does not intend to interrupt
access at the point when a submission is made.
Finally, FDA recognizes that the 2017 Discussion Paper described a
possible premarket-review approach specific to LDTs for unmet needs.
FDA has not included such an approach in this proposed policy because
we anticipate that the 3\1/2\-year timeframe should be sufficient for
laboratories to meet premarket review requirements for each of their
marketed IVDs, as applicable, including IVDs for unmet needs. FDA also
anticipates that programs currently in place may facilitate the
development and premarket authorization of IVDs for unmet needs. These
programs include the Humanitarian Use Devices (HUD)/Humanitarian Device
Exemption (HDE) program,\18\ which, among other things, provides an
exemption from the requirement to establish a reasonable assurance of
effectiveness for devices intended for use in the treatment or
diagnosis of rare diseases or conditions (21 U.S.C. 360j(m); 21 CFR
part 814, subpart H), and the Breakthrough Devices program, which is
intended to help expedite the development and review of certain devices
that provide for more effective treatment or diagnosis of life-
threatening or irreversibly debilitating diseases or conditions (21
U.S.C. 360e-3).
---------------------------------------------------------------------------

\18\ Under the proposed phaseout policy, laboratories that
intend to submit an HDE application should do so within the same
3\1/2\-year timeframe provided for submission of PMAs. As in the
case of PMAs, under FDA's proposed policy, FDA generally would not
intend to enforce against IVDs after an HDE application has been
submitted (within the 3\1/2\-year timeframe) until FDA completes its
review of the application.

5. Stage 5: End the general enforcement discretion approach with
respect to premarket review requirements for moderate risk and low
risk IVDs (that require premarket submissions) 4 years after FDA
---------------------------------------------------------------------------
publishes a final phaseout policy, but not before April 1, 2028.

FDA is proposing to end the general enforcement discretion approach
with respect to premarket review requirements for moderate risk IVDs
offered as LDTs (IVDs that may be eligible for classification into
class II) and low risk IVDs offered as LDTs (IVDs that may be eligible
for classification into class I) that require a premarket submission 4
years after FDA publishes the final phaseout policy. These premarket
submissions include 510(k) submissions, the requirements for which are
set forth at 21 U.S.C. 360(k),

[[Page 68027]]

360c(i), and part 807, subpart E. These submissions also include De
Novo requests, which laboratories may submit for IVDs offered as LDTs
for which there is no legally marketed device upon which to base a
determination of substantial equivalence, and for which the laboratory
seeks classification into class I or class II. These requirements are
set forth at 21 U.S.C. 360c(f)(2) and 21 CFR part 860, subpart D.
FDA intends this stage to begin no earlier than April 1, 2028.
FDA's reasons for proposing this time period to phase out the general
enforcement discretion approach with respect to premarket review
requirements for moderate risk and low risk IVDs offered as LDTs are
similar to those for the ``stage 4'' time period, except that FDA has
lengthened the time period by 6 months in order to prioritize the
review of applications for high-risk IVDs offered as LDTs (subject to
premarket approval requirements), so that FDA can focus first on IVDs
for which the consequences of a false result are most significant. FDA
also recognizes that a greater number of IVDs are subject to the 510(k)
requirements, as compared with premarket approval requirements, so a
longer period of time for laboratories to come into compliance with
these requirements may be appropriate, particularly for laboratories
with large test menus.
FDA generally would not intend to enforce against IVDs offered as
LDTs after a 510(k) or De Novo request has been submitted (within the
4-year timeframe) until FDA completes its review of the submission.
FDA also anticipates that laboratories may seek to utilize FDA's
Third Party review program. FDA currently operates a Third Party review
program for medical devices, and multiple organizations are accredited
to conduct reviews of 510(k) submissions for certain IVDs (see Ref.
77). We anticipate interest in the Third Party review program among
test manufacturers, as well as potential new Third Party review
organizations. In particular, FDA is aware of certain CLIA
accreditation organizations that may be interested in potentially
becoming Third Party reviewers under FDA's program, and to the extent
laboratories are already familiar with these organizations,
laboratories may be inclined to use the Third Party review program. In
addition, under the MDUFA V agreement, FDA is currently working to
enhance the Third Party review program, which may make it more
attractive to manufacturers including laboratories.

VII. Proposed Effective Date

The Agency proposes that any final rule based on this proposed rule
will become effective 60 days after the date of publication of the
final rule in the Federal Register.

VIII. Preliminary Economic Analysis of Impacts

We have examined the impacts of the proposed rule under Executive
Order 12866, Executive Order 13563, Executive Order 14094, the
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866, 13563, and 14094 direct us to assess all
benefits, costs, and transfers of available regulatory alternatives and
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). Rules are
``significant'' under Executive Order 12866 Section 3(f)(1) (as amended
by Executive Order 14094) if they ``have an annual effect on the
economy of $200 million or more (adjusted every 3 years by the
Administrator of [the Office of Information and Regulatory Affairs
(OIRA)] for changes in gross domestic product); or adversely affect in
a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, territorial, or tribal governments or communities.'' OIRA has
determined that this proposed rule is a significant regulatory action
under Executive Order 12866 Section 3(f)(1).
The Regulatory Flexibility Act requires Agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. Because most facilities that will be affected by
this rule are defined as small businesses and the proposed rule is
likely to impose a substantial burden on the affected small entities,
we find that the proposed rule will have a significant economic impact
on a substantial number of small entities.
We prepared an analysis consistent with the Unfunded Mandates
Reform Act of 1995 (section 202(a)), which requires us to prepare a
written statement that includes estimates of anticipated impacts,
before proposing ``any rule that includes any Federal mandate that may
result in the expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100,000,000 or more
(adjusted annually for inflation) in any one year.'' The current
threshold after adjustment for inflation is $177 million, using the
most current (2022) Implicit Price Deflator for the Gross Domestic
Product. This proposed rule would result in an expenditure in at least
one year that meets or exceeds this amount.
This proposed rule, if finalized, would amend FDA's regulations to
make explicit that IVDs are devices under the FD&C Act including when
the manufacturer of the IVD is a laboratory. As discussed in section
VI, FDA intends to phase out its general enforcement discretion
approach for LDTs so that IVDs manufactured by a laboratory would
generally fall under the same enforcement approach as other IVDs.
We anticipate that the benefits of phasing out FDA's general
enforcement discretion approach for LDTs would include a reduction in
healthcare costs associated with unsafe or ineffective tests, including
tests promoted with false or misleading claims, and from therapeutic
decisions based on the results of those tests. Quantified benefits are
the annualized sum of both health and non-health benefits. Unquantified
benefits would include the reduction in costs from lawsuits and
reduction in costs to healthcare systems.
Table 1 summarizes the annualized benefits, costs, and transfers of
the proposed rule. At a 7 percent discount rate, 20-year annualized
benefits range from $2.67 billion to $86.01 billion, with a primary
estimate of $31.41 billion per year. At a 3 percent discount rate, 20-
year annualized benefits range from $1.81 billion to $61.41 billion,
with a primary estimate of $22.33 billion per year. At a 7 percent
discount rate, 20-year annualized costs range from about $2.52 billion
to $19.45 billion, with a primary estimate of $5.87 billion per year.
At a 3 percent discount rate, annualized costs range from about $2.39
billion to $18.55 billion, with a primary estimate of $5.60 billion per
year. At a 7 percent discount rate, 20-year annualized transfers range
from $100 million to $452 million, with a primary estimate of $226
million per year. At a 3 percent discount rate, 20-year annualized
transfers range from $121 million to $538 million, with a primary
estimate of $269 million per year.

[[Page 68028]]

Table 1--Summary of Benefits, Costs and Transfers of the Proposed Rule
[Millions of 2022 U.S. dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Units
------------------------------------
Category Primary Low High Period Notes
estimate estimate estimate Year Discount covered
dollars rate (%) (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
Annualized Monetized ($m/year)............ $31,408 $2,670 $86,013 2022 7 20
22,332 1,810 61,413 2022 3 20
Annualized Quantified..................... .......... .......... .......... .......... 7
3
---------------------------------------------------------------------------------------------------------
Qualitative...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
Annualized Monetized ($m/year)............ 5,874 2,522 19,452 2022 7 20 A portion of foreign costs could
5,598 2,394 18,549 2022 3 20 be passed on to domestic
consumers. We estimate that up
to $30.73 million in annualized
costs (7%, 20 years) to foreign
facilities could be passed on
to domestic consumers.
Annualized Quantified..................... .......... .......... .......... .......... 7
3
---------------------------------------------------------------------------------------------------------
Qualitative...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers:
Federal Annualized Monetized ($m/year).... 226 100 452 2022 7 20
269 121 538 2022 3 20
------------------------------------------------------------------------
From: Device Industry
To: FDA
---------------------------------------------------------------------------------------------------------
Other Annualized Monetized ($m/year)...... .......... .......... .......... .......... 7
3
------------------------------------------------------------------------
From:
To:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects:
State, Local, or Tribal Government:.................................................................................................................
Small Business: The proposed rule is likely to have a significant economic impact on a substantial number of small laboratories that manufacture
IVDs offered as LDTs..
Wages:..............................................................................................................................................
Growth:.............................................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

We have developed a comprehensive Preliminary Economic Analysis of
Impacts that assesses the impacts of the proposed rule. The full
preliminary analysis of economic impacts is available in the docket for
this proposed rule (Ref. 34) and at <a href="https://www.fda.gov/about-fda/economics-staff/regulatory-impact-analyses-ria">https://www.fda.gov/about-fda/economics-staff/regulatory-impact-analyses-ria</a>.

IX. Analysis of Environmental Impact

We have determined under 21 CFR 25.30(h) that this action is of a
type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.

X. Paperwork Reduction Act of 1995

FDA tentatively concludes that this proposed rule contains no new
collections of information. However, FDA does assume that there will
need to be corresponding adjustments to the burden estimates for
relevant approved collections of information before the relevant
phaseout stage begins and any such collection of information would not
be as a result of the implementation of the proposed rule. FDA
tentatively concludes that the following information collections will
need adjustment before the relevant phaseout stage begins: Office of
Management and Budget (OMB) control number 0910-0437, Medical Device
Reporting; OMB control number 0910-0359, Corrections and Removals; OMB
control number 0910-0625, Device Registration and Listing; OMB control
number 0910-0485, Labeling; OMB control number 0910-0078,
Investigational Device Exemption; OMB control number 0910-0073, Quality
Systems; OMB control number 0910-0231, Premarket Approval; OMB control
number 0910-0332, Humanitarian Device Exemption; OMB control number
0910-0756, Q-Submissions; OMB control number 0910-0120, Premarket
Notification; and OMB control number 0910-0844 De Novo. Such
adjustments will be submitted for review and clearance by OMB under the
Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521).

XI. Federalism

We have analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. We have determined that
this proposed rule does not contain policies that have substantial
direct effects on the States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Accordingly,
we conclude that the rule does not contain policies that have
federalism implications as defined in the Executive order and,
consequently, a federalism summary impact statement is not required.
Through publication of this proposed rule, we are providing notice and
an opportunity for State and local officials to comment on this
rulemaking.

XII. Consultation and Coordination With Indian Tribal Governments

We have analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13175. We have tentatively
determined that the rule does not contain policies that would have a
substantial direct effect on

[[Page 68029]]

one or more Indian Tribes, on the relationship between the Federal
Government and Indian Tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian Tribes. The
Agency solicits comments from tribal officials on any potential impact
on Indian Tribes from this proposed action.

XIII. Other Issues for Consideration

FDA anticipates that this proposed rule, if finalized, may require
conforming amendments to other FDA regulations, including provisions
regarding IVD labeling and ASRs in part 809. FDA intends to consider
and propose conforming amendments, where appropriate, at a future date.
In addition, we note that various bills have been introduced in
Congress that would change the legal status of IVDs as devices (under
these bills, IVDs would generally be regulated as ``in vitro clinical
tests'' and would be subject to new statutory authorities).\19\ We
recognize that the enactment of such legislation would directly impact
this rule, given that it is being proposed under the statutory device
authorities and other authorities under the FD&C Act.
---------------------------------------------------------------------------

\19\ See, e.g. H.R.4128--117th Congress (2021-2022): VALID Act
of 2021, H.R.4128, 117th Cong. (2021), <a href="https://www.congress.gov/bill/117th-congress/house-bill/4128/text">https://www.congress.gov/bill/117th-congress/house-bill/4128/text</a>; S.2209--117th Congress
(2021-2022): VALID Act of 2021, S.2209, 117th Cong. (2021), <a href="https://www.congress.gov/bill/117th-congress/senate-bill/2209">https://www.congress.gov/bill/117th-congress/senate-bill/2209</a>.
---------------------------------------------------------------------------

XIV. References

The following references marked with an asterisk (*) are on display
at the Dockets Management Staff (see ADDRESSES) and are available for
viewing by interested persons between 9 a.m. and 4 p.m., Monday through
Friday; they also are available electronically at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. References without asterisks are not on public
display at <a href="https://www.regulations.gov">https://www.regulations.gov</a> because they have copyright
restriction. Some may be available at the website address, if listed.
References without asterisks are available for viewing only at the
Dockets Management Staff. FDA has verified the website addresses, as of
the date this document publishes in the Federal Register, but websites
are subject to change over time.

1. Grand View Research, ``Laboratory Developed Tests Market
Size, Share & Trends Analysis Report By Technology (Immunoassay,
Molecular Diagnostics), By Application (Oncology, Nutritional &
Metabolic Disease), By Region, and Segment Forecasts, 2023-2030:
Report Summary,'' available at <a href="https://www.grandviewresearch.com/industry-analysis/laboratory-developed-tests-market-report">https://www.grandviewresearch.com/industry-analysis/laboratory-developed-tests-market-report</a> (last
accessed on April 28, 2023).
2. The Pew Charitable Trusts, ``The Role of Lab-Developed Tests
in the In Vitro Diagnostics Market,'' October 2021. Available at
<a href="https://www.pewtrusts.org/en/research-and-analysis/reports/2021/10/the-role-of-lab-developed-tests-in-the-in-vitro-diagnostics-market">https://www.pewtrusts.org/en/research-and-analysis/reports/2021/10/the-role-of-lab-developed-tests-in-the-in-vitro-diagnostics-market</a>.
* 3. Congressional Research Service, ``FDA Regulation of
Laboratory-Developed Tests (LDTs),'' December 7, 2022. Available at
<a href="https://crsreports.congress.gov/product/pdf/IF/IF11389">https://crsreports.congress.gov/product/pdf/IF/IF11389</a>.
* 4. Warning Letter to deCODE Genetics re: deCODEme Complete
Scan (June 10, 2010). Available at <a href="https://www.fda.gov/media/79216/download">https://www.fda.gov/media/79216/download</a>.
* 5. Warning Letter to 23andMe, Inc. re: 23andMe Personal Genome
Service (June 10, 2010). Available at <a href="http://web.archive.org/web/20191214010336/https:/www.fda.gov/media/79205/download">http://web.archive.org/web/20191214010336/https:/www.fda.gov/media/79205/download</a>.
6. ThermoFisher Scientific, ``Demystify Molecular Test
Development and Implementation: How Do Labs Implement Molecular
Tests To Meet Complex Clinical Needs?'' Available at <a href="https://www.thermofisher.com/us/en/home/clinical/clinical-genomics/molecular-diagnostics/molecular-diagnostic-education.html">https://www.thermofisher.com/us/en/home/clinical/clinical-genomics/molecular-diagnostics/molecular-diagnostic-education.html</a> (last
accessed on March 28, 2023).
7. Lighthouse Lab Services, ``Industry Insights: Paths To
Consider When Commercializing Your LDT,'' December 19, 2022;
available at <a href="https://www.lighthouselabservices.com/paths-to-consider-when-commercializing-your-ldt/">https://www.lighthouselabservices.com/paths-to-consider-when-commercializing-your-ldt/</a> (last accessed on March 31,
2023).
* 8. Centers for Disease Control and Prevention, Division of
Laboratory Systems (DLS), ``Strengthening Clinical Laboratories,''
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