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FDA finalizes rule to increase oversight of lab tests

Rule is hoped to push Congress to act to regulate lab tests

FDA Commissioner Robert Califf testifies before the House Oversight and Accountability Committee on April 11.
FDA Commissioner Robert Califf testifies before the House Oversight and Accountability Committee on April 11. (Bill Clark/CQ Roll Call)

The Food and Drug Administration on Monday finalized a rule to regulate most tests developed in a lab, in a move that observers expect will face legal challenges and prompt intervention from Congress. 

The rule effectively reclassifies tests developed and performed in a lab as medical devices for the purposes of FDA regulation. It’s a controversial strategy, but in the wake of the testing debacle during the COVID-19 pandemic, the FDA is clearly done waiting for Congress to act.

FDA Commissioner Robert Califf has repeatedly made comments to that effect, saying in February, “I wish Congress had, I don’t know how to say it, done its job, whatever.”

“Rulemaking is — I’m sure you know — is limited in what we can do,” he said. “But it’s a start.”

The rule aims to help verify the accuracy of various clinical tests that doctors develop and use in labs. Califf pointed to the variations he saw while helping relatives with cancer.

“It just really disturbs me that you can go to different cancer centers and get entirely different answers based on which version of the test they happened to use,” he said.

Under the rule, lab test developers would be required to apply for FDA approval, beginning with higher-risk tests and phasing in over four years.

Some types of tests would be exempt, and the agency opted to roll back the initial proposal in several ways. Tests currently on the market would be grandfathered in, for example, and tests used within an integrated health system, the Department of Veterans Affairs or the Department of Defense would also be exempt. The FDA would also exempt tests verified through New York’s validation program.

The agency noted that it could revisit the exemptions in the future.

Currently, lab procedures are mostly regulated by the Centers for Medicare and Medicaid Services, but CMS does not validate the accuracy of the tests themselves. The FDA typically regulates testing devices like those used at home for pregnancy or COVID-19.

The agency issued the final rule seven months after releasing the proposal in September. 

Industry observers expect the rule to spur Congress to finally act. Capital Alpha Partners managing director Rob Smith wrote in a client note that the FDA’s wager “isn’t a bad bet.” Key lawmakers, such as House Energy and Commerce Chair Cathy McMorris Rodgers, R-Wash., and Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy, R-La., indicated as much after the FDA made its proposal in September, releasing statements condemning the FDA’s move. 

But the congressional outlook is increasingly uncertain as lawmakers who championed a legislative solution continue to retire. Richard M. Burr of North Carolina, the former top Republican on the Senate HELP Committee, who led a Senate bill that would have created a tailored, risk-based regulatory framework, retired from the Senate at the end of 2022.

And Rep. Larry Bucshon, R-Ind., who leads the current House version, is retiring at the end of this year, along with Rodgers. 

The influx of tests is also certain to strain the FDA’s resources, though grandfathering in existing tests will help relieve that burden. The agency is receiving around $70 million less in appropriations for fiscal 2024 than fiscal 2023 amid record inflation. The agency initially expected to receive around 40,000 applications under the proposed rule, which some think is a low estimate.

Perhaps in preparation for the influx in applications, the FDA recently reclassified most tests previously considered to be high-risk, which would enable those developers to go through the 510(k) premarket notification pathway rather than the more stringent premarket approval pathway.

With all those changes, the FDA now expects to receive fewer than 3,000 test applications per year.

The FDA is also certain to face legal challenges from industry groups like the American Clinical Laboratory Association, which has been vocal in its belief that the agency lacks the authority to regulate them.

“FDA’s claim that it has authority to regulate laboratories in this way rests on an implausible assumption that the entire laboratory industry has been operating in violation of the FDCA [Federal Food, Drug and Cosmetic Act] for decades,” ACLA president Susan Van Meter said in written testimony to the Energy and Commerce Health Subcommittee in March, “and only now has FDA decided to act.”  

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