The laboratory testing industry is breathing a collective sigh of relief this week after a federal court struck down the Food and Drug Administration’s (FDA) final rule aimed at increasing regulatory oversight of laboratory-developed tests (LDTs). This ruling marks a significant victory for labs, who argued that the FDA overstepped its authority in attempting to regulate these tests as medical devices. But what does this decision mean for the future of LDT regulation, and what options does the FDA have moving forward?
For years, the FDA has exercised “enforcement discretion” over LDTs, meaning it generally refrained from actively regulating them. However, citing concerns about the increasing complexity and risk associated with LDTs, the agency finalized a rule in 2024 that would phase out this policy and subject LDTs to stricter FDA oversight.
The laboratory testing industry, led by organizations like the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP), quickly challenged the rule in court. They argued that LDTs are a service provided by laboratories, not a product, and therefore fall outside the FDA’s jurisdiction.
This week, a district judge in the Eastern District of Texas sided with the industry, vacating the FDA’s final rule. The court agreed that the FDA’s attempt to regulate LDTs as medical devices exceeded its statutory authority under the Food, Drug, and Cosmetic Act (FDCA) and the Clinical Laboratories Improvement Amendments (CLIA). The court emphasized that Congress intended for the Centers for Medicare & Medicaid Services (CMS), not the FDA, to regulate clinical laboratories.
The ruling has been hailed as a major victory by the laboratory industry. However, the long-term implications of the court’s decision remain uncertain. The FDA now has several options. The FDA could appeal the court’s decision to a higher court. However, given the current political climate and potential shift in priorities within the FDA, this option seems unlikely. Or, the FDA could choose not to appeal but leave the rule on the books, revert to the previous policy of enforcement discretion, and go after the most egregious violators, leaving the bulk of the LDT providers untouched. The third option, which also seems less likely, is that the FDA could withdraw the rule, acknowledging the court’s decision that it lacks jurisdiction.
In recent years, there have been bipartisan efforts to pass legislation addressing the regulation of LDTs, most notably the Verifying Accurate, Leading-edge IVCT Development (VALID) Act. While the VALID Act ultimately failed to pass, it demonstrated a broad consensus that legislative reform is needed. Although a legislative solution is the best path forward, past FDA efforts to get such legislation failed and it is highly doubtful that any legislative proposal will gain traction in the near term.
The future of LDT regulation remains an open question, and the industry must remain vigilant to ensure that any future regulations are reasonable and do not stifle innovation or limit patient access to essential testing services.
