Laboratories are just beginning to assess the magnitude of operational changes needed to comply with a new federal rule expanding regulatory oversight of lab developed tests (LDTs).
In a major shift, most tests designed by individual labs for in-house use must meet Food and Drug Administration requirements for medical devices under a final rule published in May. Those requirements, including adverse event reporting, premarket review, registration and labeling, will be phased in over the next four years.
Although the policy aims to improve the accuracy and reliability of LDTs, health industry groups warn the regulations will add costs and administrative burdens that will force labs to scale back the tests they provide. LDTs often fill gaps for clinical needs where no commercial tests exist, such as in smaller patient populations or people with rare diseases, lab executives say.
“We remain concerned that many vital tests developed in hospitals and health systems may be subjected to unnecessary and costly paperwork,” said Stacey Hughes, executive vice president of government relations and public policy at the American Hospital Association. “This will cause a substantial reduction in patient access to innovative and targeted diagnostic tests.”
Lab organizations are challenging the rule in court. The American Clinical Laboratory Association and the Association for Molecular Pathology sued the FDA, claiming regulatory overreach, in a case that has been consolidated in the U.S. District Court for the Eastern District of Texas.
Trade groups argue that LDTs are already regulated under the Centers for Medicare and Medicaid Services’ Clinical Laboratory Improvement Amendments (CLIA) program, making the FDA’s rule duplicative.
The FDA maintains, however, that the two regulatory schemes are complementary: CLIA oversees laboratory operations, while the FDA regulates separate, critical activities involving the tests themselves, such as design, development and manufacturing. The agency argues that greater scrutiny is needed because risks associated with LDTs have increased as the tests have become more complex.
With the final rule now in place, labs are not waiting for a legal resolution before planning for compliance.
At Yale School of Medicine, it’s “all hands on deck” in the laboratory medicine department as members prepare to meet the new FDA requirements, said Alexa Siddon, director of the molecular diagnostics and flow cytometry labs.
“We’re trying to provide timely care and personalized care to patients, and so this ruling is pretty frightening to us,” said Siddon. “We want to be prepared as much as we can, and stay on top of it, so that we don’t have any lapse in patient care.”
Labs are still waiting for more guidance from the FDA on implementation of the rule, Siddon said. Staffing to handle the extra workload is another challenge labs face.
“We don’t entirely know the extent of it yet, but we will need experts first in what the FDA is looking for, to help streamline our submissions to the FDA,” Siddon said. Each test submitted will have a cost associated with it, Siddon noted, and personnel will be needed to register the tests.
The FDA is conducting a series of webinars and plans to issue more guidance documents on specific topics to help labs understand and comply with the new regulations, an agency spokesperson said in an emailed statement.
Siddon said the FDA may also need to hire additional people to regulate all of the labs, “so we might be competing for the same pool of potential candidates.”
Adam Schechter, CEO of medical testing giant Labcorp, called out the potential for disruption to patient care on an August earnings call: “The question is, will the FDA even have the ability to approve these quick enough so that all patients have access to these important tests as quickly as possible?”
As labs wrestle with uncertainties around the rule’s impact, lab executives shared their advice for establishing procedures to meet the agency’s timelines in interviews with MedTech Dive.
Here are five steps labs can take now to get ready for the FDA directive:
1. Create a system for complaints or adverse events
The final rule phases out the FDA’s prior “enforcement discretion” approach to LDTs in five stages over four years. Stage 1, which begins May 6, 2025, mandates compliance with medical device reporting, correction and removal reporting, and maintenance of complaint files.
Clinical laboratories are trying to figure out what scenarios would require a recall, correction or removal of a product from the market with the initial deadline quickly approaching, said Jonathan Genzen, chief medical officer at ARUP Laboratories at the University of Utah. “The boundaries feel very blurry to me right now, and I think there is room for better clarification on what is or is not expected,” Genzen said.
Labs will have to report to the FDA under the pathway for manufacturers, which differs from the adverse event reporting responsibilities associated with accreditation programs.
“We need, as a community, to learn how to do the evaluation process in the way the FDA would expect that to be done, so that we’re OK in future audits,” Genzen said.
Still, Genzen called stage 1 the “least burdensome” of the five stages because it applies only when a problem is identified and does not affect all of a lab’s tests.
2. Prepare for future stages now
Stage 2 will introduce requirements for registration and listing, labeling and investigational use. The requirements will be enforced beginning May 2026.
Compiling this data is likely to present a greater burden than stage 1, said Genzen.
“It is going to be a pretty big lift for a lot of organizations, certainly those that happen to have a lot of LDTs, and the FDA didn’t provide clarity on how that information needs to be provided,” Genzen said.
Still unknown, for example, is the type of system expected to be used, or how device identifiers, which are included in other labeling applications, relate to LDTs. Registration fees also factor in, according to Genzen, and some labs may decide they lack the personnel to develop a test further.
“That may be a stage where some labs just decide to take a test off the market,” Genzen said.
3. Avoid reworking LDTs in development
Much work that labs are doing now to develop LDTs will be subject to FDA requirements that will apply in three to four years. Stage 3 will implement quality system procedures, due May 2027. The FDA will expect compliance with premarket review activities for high-risk LDTs in stage 4 beginning in November 2027 and moderate- and low-risk LDTs in stage 5 starting in May 2028.
“If we ignore those now and say, well, that’s down the road, then we’re going to end up doing a bunch of rework,” said Stephen Master, chief of the laboratory medicine division at the Children’s Hospital of Philadelphia.
The FDA’s approach to design control in the validation process is very different from the framework that labs are used to under the CLIA regulations, Master said.
“Figuring out how to comply and developing the infrastructure for compliance is really one of the major challenges that labs face right now,” said Master.
4. Call in the experts
A considerable amount of additional documentation and monitoring is required with an FDA submission, said Inga Rose, CEO of Reference Medicine, a specimen procurement center for oncology diagnostics developers.
Ensuring FDA compliance will mean assembling a team that can include both full-time employees and consultants with experience in key areas, said Rose.
Labs will need people who are knowledgeable in premarket approval and 510(k) submissions and a quality team that’s separate from a CLIA team. Statisticians, process engineers and experts in software validation, bioinformatics and lab operations offer other specialized skills.
“Labs should be prepared to consider bringing in outside consultants in these different areas,” Rose said.
ARUP Laboratories’ Genzen recommended lab directors meet early with their colleagues in corporate compliance to determine who ultimately is going to manage the process. “You really want to sort that out in advance, before you do a lot of legwork,” Genzen emphasized.
5. Watch for exemptions
In the new framework, LDTs already on the market or designed to address unmet needs will remain under the FDA’s enforcement discretion approach.
The FDA’s decision to exercise limited enforcement discretion for currently marketed LDTs “rightly recognized that applying the full scope of its device regulations to these tests would likely prompt many hospital laboratories, particularly small ones, to stop offering safe and effective tests upon which patients and their communities rely,” the AHA’s Hughes said.
“The enforcement discretion in this final rule is of particular importance,” said Hughes. “We also welcome the agency’s attention to the gaps in FDA-authorized commercially available tests in meeting certain patient needs, such as for rare diseases or conditions.”
LDTs approved by the New York State Department of Health’s Clinical Laboratory Evaluation Program are also excluded from the FDA’s premarket review requirements.
For early-stage companies without the resources to dedicate to the FDA’s authorization process, “it’s going to hurt them,” said Reference Medicine’s Rose. “There might be some great ideas for new cures from new Ph.D.s that are coming out of universities, but it may feel insurmountable to them to be able to go through this whole process.”
Carve-outs for small and startup labs can help, as can planned discounts for registration and submission fees, Rose said.
“I think we’re going to see other considerations around that as we get more guidance,” added Rose. “How this is all going to work is still getting sorted out.”