Originally Published IVDT November/December 2009
REGULATIONS & STANDARDS
The Case for Regulating Laboratory-Developed Tests
LDTs need regulation to prevent abuses and protect the public health.
Bradley Merrill Thompson and Leah R. Kendall
For years, the IVD industry, clinical laboratories, and patient groups have debated the appropriate regulatory scheme for laboratory-developed tests (LDTs). More recently, FDA has ventured into the debate. For example, in addition to taking some enforcement measures, FDA issued the in vitro diagnostic multivariate index assay (IVDMIA) draft guidance and the revised analyte specific reagent (ASR) guidance, both of which strive to help draw the dividing line between LDTs and IVDs. FDA’s fundamental policy, however, has not changed substantially—the agency continues to exercise its enforcement discretion and not regulate most LDTs in a comprehensive fashion.
This first of a two-part column will explain why FDA should regulate LDTs and how the agency has dealt with a prior, analogous regulatory issue. Part two of this article will examine often-cited arguments for not regulating LDTs and explain why each argument falls short of justifying the agency’s inaction.
Doing Nothing Means Harming Patients
A high percentage of diagnostic tests are lab-made and unregulated by FDA. Eight years ago, experts estimated that LDTs accounted for 30 percent of the nearly $5-billion market for life science reagents.1 More recently, in 2006, laboratory industry revenues were valued at approximately $48.5 billion, with predicted growth of $51.7 billion in 2007.2
Further, clinical labs do not limit their LDT offerings to rare diseases or conditions for which no FDA approved lab test is available. In fact, clinical labs make and use their own tests for common, high-volume testing. Moreover, even when FDA-approved lab tests are available, labs often continue to use their own tests. The Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) estimated that while tests for more than 1500 genetic diseases are offered in 1254 clinical laboratories, FDA has cleared or approved only “several dozen” genetic tests, obviously a far cry from the 1500 tests for genetic conditions on the market today.3
There are significant numbers of LDTs out there, and most genetic tests in use today are LDTs that have not been reviewed by FDA. The healthcare system relies on these tests for important diagnostic information. With up to 80% of all medical decisions relying on clinical laboratory tests, and up to ten billion lab tests performed in the United States each year,4 the potential risk posed by LDTs that are without FDA oversight cannot be overstated. Not only is their use widespread, but these LDTs are also being used to make critical decisions about patient care.
The following excerpt is from page 19 of “Laboratory Medicine: A National Status Report,” published in May 2008 by The Lewin Group for CDC and other agencies:
“Laboratory medicine is an essential element of the health care system. It is integral to many clinical decisions, providing physicians, nurses, and other healthcare providers with often pivotal information for prevention, diagnosis, treatment, and management of disease. Laboratory tests and services supply clinicians with information necessary to provide high quality, safe, effective, and appropriate care to patients. The key role of laboratory testing is reflected in evidence-based medicine and clinical practice guidelines. Healthcare providers, quality assurance organizations, and payers are incorporating selected laboratory tests into indicators to objectively assess quality of care for individual patients and populations and to support payment policies.”
Moreover, diagnostic technologies will continue to play an ever-increasing role in improving patients’ outcomes and reducing healthcare costs.
Because of this dynamic role, providing the right regulatory scheme for LDTs is critical. A number of points must be taken into consideration to determine what form of oversight works best.
LDTs have hurt patients. Because labs are not required to report adverse events, and because there is no systemic collection of safety data related to LDTs, quantifying the public health impact of LDTs is difficult. However, over the years, numerous reports-such as “Public Health at Risk: Failures in Oversight of Genetic Testing Laboratories” by Gail Javitt and Kathy Hudson-have accumulated, detailing many instances where LDTs have hurt patients.5
CLIA is not equivalent to FDA. FDA’s refusal to exercise its authority to regulate diagnostic tests manufactured and used by clinical laboratories also cannot be defended on the grounds that other regulation compensates for the omission. Although clinical laboratories are regulated under CLIA, the amendments lack the protective mechanisms of FDA regulations governing diagnostic tests. While CLIA provides adequate protection for customization services, it does not provide adequate public health protections for large-scale manufacturing like FDA regulation does. In particular:
• CLIA lacks mechanisms for external review or approval of LDTs.
• CLIA lacks quality systems requirements and current good manufacturing practices that would ensure the quality and consistency of test materials and LDTs. CLIA focuses only on standards of performance and laboratory processes, not on the quality of diagnostic tests made and used by the laboratories.
• CLIA contains no mechanism for postmarket vigilance and reporting parallel to that of the FDA regulations.Moreover, because FDA has not applied its regulations for postmarket vigilance and reporting to LDTs, currently there is no systematic oversight of the safety of such tests. Anecdotally, there have been recent wide-scale problems with the use of LDTs.6
• CLIA contains no mechanism for recalls of problematic LDTs or any required reporting of corrections and removals that FDA regulations contain.
Quite simply, CLIA regulation should not be considered a substitute for FDA regulation for large-scale diagnostic test manufacturing.
On the other hand, FDA regulation is depriving patients of needed IVDs. Assume for a moment that CLIA regulation is all that is necessary for diagnostics. In this scenario, if the public heath is indeed adequately protected from unsuitable diagnostics tests under CLIA, then FDA is obligated to exempt IVDs from the burdens of FDA regulation.
What makes the best regulatory system? The best regulatory system for diagnostic tests will offer patients timely access to new and clinically important tests, protect them against unsafe or ineffective new tests, and keep healthcare costs down. Is this CLIA or FDA?
FDA requirements delay access to new tests. Obtaining FDA approval or clearance can require significant data collection, and submissions that contain substantial clinical data have increased in number.7, 8 Additionally, because FDA’s requirements for the data needed to obtain product clearance are not clearly established, further delays may be encountered when an IVD manufacturer must seek FDA’s guidance.9 Because of this, many cutting-edge diagnostic technologies sit on a manufacturer’s shelf while such data are painstakingly collected.
Once data collection is finally complete, further time is required for FDA to review the data and clear the test for sale. These times create an additional delay on top of data collection to getting new tests into patients’ and physicians’ hands.
In addition, FDA regulation adds considerable costs that burden the healthcare system—costs that must be shouldered by IVD manufacturers, FDA, and ultimately, by patients. These costs are imposed by requirements such as FDA’s review process and by FDA’s complex quality system and medical device reporting requirements. Not only do these requirements consume limited government resources, they also require manufacturers to invest significant dollars to ensure compliance. This, in turn, raises the cost of healthcare for patients. Using CLIA to regulate diagnostic tests could eliminate many of these costs, which needlessly burden the healthcare system.
CLIA offers an alternative that does not burden new product development nearly as much as FDA does. Because CLIA is self-funded, resources should be assured. All costs of administering the program, including survey fees, are covered by regulated facilities.
CLIA does not require premarket clearance or approval, thus ensuring that patients and physicians have significantly increased access to innovative diagnostic technologies. Further, under CLIA, test development would not be burdened by design controls as a prerequisite for ensuring product quality.
CLIA would allow IVD manufacturers to invest resources into innovation, rather than into meeting unnecessary regulatory requirements. Regulating all diagnostic tests under CLIA would remove regulatory hurdles so that manufacturers could reallocate the resources they would have invested to meet these requirements to R&D work on cutting-edge diagnostic technologies. Using CLIA represents the best way to get the newest diagnostic tests into the hands of patients and their physicians.
Bottom line: If CLIA offered the same protections as FDA regulation, because CLIA permits faster access to improved care, it could be the exclusive regulatory scheme for all diagnostics tests, regardless of who manufacturers them. But both approaches cannot be right. It can’t make sense, on one hand, to put IVDs through rigorous FDA premarket review, quality system requirements, labeling restrictions, and postmarket reporting obligations, and, on the other hand, impose none of those requirements on LDTs.
FDA’s Policy of Not Regulating LDTs Has Become Archaic
Despite the potential public health ramifications, FDA has chosen not to regulate laboratories that make their own lab tests. Prior to 1992, FDA took an analogous position with respect to pharmacy compounding services, and like that position of non-regulation, the decision to refrain from regulating LDTs has become outdated.
Pharmacy compounding. Under traditional pharmacy practice, pharmacists worked with physicians to provide personalized treatments for individual patients. This had value for patients; for example, turning a tablet into a suspension solution for a patient too young to swallow the tablet. Although FDA has said all compounded products are subject to FDA regulation, the agency historically exercised considerable discretion to enable pharmacies to continue this traditional type of pharmacy practice.10 FDA took this position in part because state boards of pharmacy also oversee the practice of pharmacy. These boards do not have all of the regulatory tools of FDA, but they are suitable for regulating customization services. In addition, the agency historically has not had sufficient resources to regulate every customized drug provided by a pharmacy.
Subsequently, some pharmacies grossly abused FDA’s compounding policies and engaged in such large-scale “compounding” practices that they amounted to unregulated drug manufacturing facilities. Although there was no mandatory reporting of adverse events, anecdotal evidence revealed that significant public health problems—including deaths—occurred.11
Ultimately, FDA clamped down on the practice. In 1992, FDA issued a Compliance Policy Guide (CPG) that provided criteria for distinguishing when a pharmacy crossed the line from traditional pharmacy practice into drug manufacturing that is subject to FDA regulation, including premarket approval. After some wrangling with statutory language, FDA published a new guide in May 2002 and has supported that guidance with active enforcement.
LDTs. Similarly, under the traditional practice of clinical laboratory testing, labs sought to fill in the gaps in approved, commercially available tests. The value to patients is illustrated by the following examples:
• A lab responds to the need of local doctors to test for a new strain of Hepatitis C showing up in the area.
• A lab responds to a leading pediatrician who wants to test for a rare genetic disorder he is just beginning to find.
FDA historically has taken the position that it has the authority to regulate LDTs but is exercising enforcement discretion to permit these patient-centric practices to continue—as is the case with pharmacy compounding. As with compounding, the agency typically offers two reasons for this approach. First, CLIA and state laws address clinical laboratory testing. These laws lack many of the regulatory tools of FDA, but they are suitable for regulating customization services. Second, the agency has not had the resources to regulate every custom clinical laboratory test.
Similar to the pharmacy compounding situation, some clinical labs abuse FDA’s LDTs policies and engage in large-scale making of tests that amount to unregulated diagnostic test manufacturing. Making these tests is no longer confined to gap filling, and instead, many labs may make copies of commercially available tests.
In contrast to pharmacy compounding, FDA has taken limited direct action. The agency has issued the ASR regulation, which allows IVD manufacturers to produce individual reagents for labs to buy and use in making their own tests. FDA has also proposed the policy on IVDMIA and engaged in some limited enforcement. However, labs continue to make their own tests on a large scale. Because FDA has chosen not to regulate these products, there is no mandatory reporting of adverse events, and no one tracks the public health consequences of these operations.
Among other factors in determining whether the pharmacy compounding activities cross the threshold into drug manufacturing, FDA considers the following factors:
• Compounding of drugs in anticipation of receiving prescriptions, except in very limited quantities in relation to the amounts of drugs compounded after receiving valid prescriptions.
• Compounding finished drugs from bulk active ingredients that are not components of FDA-approved drugs without an FDA-sanctioned investigational new drug application (IND).
• Using commercial-scale manufacturing or testing equipment for compounding drug products.
• Compounding drugs for third parties that resell to individual patients, or offering compounded drug products wholesale to commercial entities for resale.
• Compounding drug products that are commercially available in the marketplace or that are essentially copies of commercially available FDA-approved drug products. In certain circumstances, it may be appropriate for a pharmacist to compound a small quantity of a drug that is only slightly different than an FDA-approved drug that is commercially available. In these circumstances, FDA will consider whether there is documentation of the medical need for the particular variation of the compound for the particular patient.
These factors apply similarly to the manufacture of many types of LDTs—manufacture in advance of receiving physician orders for the test, using commercial-scale production equipment, a manufacturer using reagents or other components that are not cleared by FDA, and the like.
In all, LDTs operate in the same type of regulatory vacuum as pharmacy compounders and are prone to the same types of abuse. For this reason, policies that may make sense for individual customized LDTs do not make sense for laboratories making and selling their own tests in volume. Such bulk production of lab tests—like bulk compounding—necessitates FDA regulation.
Regulation of LDTs is critical to ensuring test safety and efficacy and protecting the public health. The second part of this column will present the reasons often advanced for not regulating LDTs, and the arguments against those reasons.
References
1. Deutsche Banc Alex. Brown, Life Science Reagent Companies: Helping Decipher the Genetic Code (2001), p. 9.
2. The Lewin Group (under subcontract to Battelle Memorial Institute), “Laboratory Medicine: A National Status Report,” p. 67 (May 2008) (hereinafter “Laboratory Medicine National Status Report”).
3. Secretary’s Advisory Committee on Genetic Testing, “U.S. System of Oversight of Genetic Testing: A Response to the Charge of the Secretary of Health and Human Services” (April 2008), p. 39.
4.N Williams, “How Reliable Is Laboratory Testing?” http://www.labtestsonline.org/understanding/ features/reliability.html (last modified May 19, 2003).
5. GH Javitt and K Hudson, “Public Health at Risk: Failures in Oversight of Genetic Testing Laboratories” (September 2006), 6. Also A Pollack, “Quest Acknowledges Errors in Vitamin D Tests,” The New York Times (January 8, 2009).
6. A Pollack, “Quest Acknowledges Errors in Vitamin D Tests,” The New York Times (January 8, 2009).
7. The Lewin Group, “The Value of Diagnostics: Innovation, Adoption and Diffusion Into Health Care” (2005), p. 83.
8. The Lewin Group, “The Value of Diagnostics: Innovation, Adoption and Diffusion Into Health Care” (2005), p. 79.
9. The Lewin Group, “The Value of Diagnostics: Innovation, Adoption and Diffusion Into Health Care” (2005), p. 75.
10. SK Galson, “Federal and State Role in Pharmacy Compounding and Reconstitution: Exploring the Right Mix to Protect Patients,” hearing before the Senate Committee on Health, Education, Labor, and Pensions, 108th Congress (October 23, 2003) (hereinafter “Galson Statement”).
11. J Spencer and AW Mathews, “Stirring Debate: As Druggists Mix Customized Brew Tests, FDA Raises Alarm,” The Wall Street Journal (February 27, 2004), p. A1; see also Galson Statement.
Bradley Merrill Thompson is a member of the healthcare and life sciences practice in Epstein Becker Green’s Washington, DC office, and he is strategic counsel with EBG Advisors Inc. He can be reached at bthompson@ebglaw.com.
Leah R. Kendall is a senior associate in Epstein Becker Green’s healthcare and life sciences practice in the firm’s Washington, DC office. Leah works regularly with IVD clients, assisting them with FDA and other healthcare regulatory issues throughout the product lifecycle. She can be reached at lkendall@ebglaw.com.
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