FDA Will Have No Authority Over Laboratory-Developed Tests, HHS Says

With a 252-word statement on Aug. 19, HHS said laboratory-developed tests are not required to obtain an EUA

This is an excerpt of a 2,029-word article in the August 24, 2020 issue of THE DARK REPORT (TDR). The full article is available to members of The Dark Intelligence Group.

CEO SUMMARY: A directive from the federal Department of¬†Health and Human Services (HHS) may have long-lasting implications¬†for the federal Food and Drug Administration‚Äôs efforts to¬†assert regulatory oversight of laboratory-developed tests (LDTs).¬†In a statement last week, HHS said that labs ‚Äúare not required‚Ä̬†to obtain an FDA emergency use authorization or FDA clearance¬†of LDTs. Clinical labs welcomed the news and experts told The¬†Dark Report that this change in policy could be a significant boost¬†to labs seeking to meet the demand for COVID-19 testing.

THERE’S A NEW TWIST in the Food¬†and Drug Administration‚Äôs (FDA)¬†long-running claim that it should¬†oversee and approve the use of laboratory-developed tests (LDTs). Last week¬†the federal Department of Health and¬†Human Services (HHS) said clinical laboratories¬†were not required to obtain an¬†emergency use authorization (EUA) from¬†the FDA for their laboratory-developed tests.

The HHS’ action is a welcome development for many in the clinical laboratory profession. For years, labs and their industry associations have complained that the FDA’s attempts to regulate laboratory-developed tests have been egregious examples of federal regulatory overreach.

Using only 252 words, HHS said that any laboratory seeking an EUA for a laboratory-developed test, or approval or clearance from FDA for a laboratory-developed test, is not required to do so. HHS cited two of President Trump’s executive orders as granting it the authority to, essentially, tell the FDA to stand down on its efforts to regulate laboratory-developed tests.

If clinical labs wish to do so, HHS explained, they could submit a premarket approval application to the FDA, make a premarket notification, or request an EUA, and the FDA will adjudicate those submissions.

Issued Aug. 19 on HHS‚Äô website is a¬†statement, titled, ‚ÄúRescission of Guidances¬†and Other Informal Issuances Concerning¬†Premarket Review of Laboratory¬†Developed Tests.‚ÄĚ A key phrase in the¬†statement about laboratory-developed tests is that labs ‚Äúare not¬†required to‚ÄĚ seek FDA review or approval¬†for laboratory-developed tests (See sidebar, below). HHS¬†issued the statement to be consistent with¬†President Trump‚Äôs executive orders 13771¬†(Executive Order on Reducing Regulation¬†and Controlling Regulatory Costs, issued¬†in February 2017), and 13924 (Executive¬†Order on Regulatory Relief to Support¬†Economic Recovery, issued in May), the¬†agency said. Also, HHS issued the statement¬†as part of its, ‚Äúreview of regulatory¬†flexibilities enacted since the start of¬†COVID-19.‚ÄĚ

Increased Liability

While labs may welcome the loosening of FDA’s LDT regulations, the change comes with an increased risk of liability. Any lab choosing to use a laboratory-developed test without FDA premarket review or authorization would not be eligible for immunity protectionunder the Public Readiness and Emergency Preparedness Act (PREP Act) unless the lab gets approval, clearance, or authorization from the FDA, the statement said.

The PREP Act authorizes HHS Secretary Alex M. Azar II to issue a declaration that would provide immunity fromany liability resulting from claims of loss. Such protection from immunity would not apply, however, if willful acts of misconduct are involved, the statement said.

For labs, immunity from liability goes only so far, said Michael A. Noble, MD, Chair of the Clinical Microbiology Proficiency Testing Program, and of the Program Office for Laboratory Quality Management, in the Department of Pathology and Laboratory Medicine at the University of British Columbia, in Vancouver.

Laboratory standard-setting organizations¬†have made it clear that a lack of regulation¬†that requires rigorous test review¬†prior to a test being sold does not mean¬†the lab that developed the test is free of¬†liability, Noble said. ‚ÄúThe more you leave¬†open the question of verification and validation¬†of tests, the more variability you‚Äôll¬†get with your test results,‚ÄĚ he commented.

‚ÄúThat creates a higher risk of errant results¬†and a higher risk of liability.¬†‚ÄúWhat HHS did is a mistake because¬†it‚Äôs inconsistent with the goal of developing¬†tests in a rigorous manner with the understanding¬†that the results of those tests will be used on hundreds of thousands or millions¬†of people,‚ÄĚ he said.

However, according to Roger D. Klein,¬†MD, JD, a former adviser to the FDA and¬†a Faculty Fellow at the Center for Law,¬†Science and Innovation at the Sandra Day¬†O‚ÄôConnor School of Law, the liability issue¬†may not be a serious one for most labs.¬†‚ÄúLawsuits are extremely rare against¬†clinical laboratories‚ÄĒparticularly for labs at¬†academic medical centers,‚ÄĚ he said. ‚ÄúThose¬†labs validate all such tests, meaning they¬†won‚Äôt run these LDTs unless they work¬†well. Therefore, the risk of a lawsuit is low.

‚ÄúFor big corporate lab companies that¬†run large numbers of tests, this could be¬†an issue,‚ÄĚ he added. ‚ÄúBut for them, liability¬†would be more of a consideration than a¬†real concern. For COVID-19 testing, these¬†labs have typically been obtaining EUAs¬†and thus fall under the protections of current¬†PREP Act immunity.‚ÄĚ

Still Subject to CLIA

Regardless of whether a lab would pursue an LDT, it would still be subject to the regulations of the federal Centers for Medicare and Medicaid Services (CMS) under the Clinical Laboratory Improvement Amendments of 1988, the HHS statement said.

The point about how labs need to continue to comply with CLIA may have been an important consideration behind why HHS issued the statement when it did. Recent developments suggest that one reason COVID-19 testing has lagged in the United States is the FDA’s insistence that only those LDTs that the FDA has reviewed and approved can be used in clinical care under its EUA procedures for testing for the SARS-CoV-2 virus.

Late last month, for example, legal scholars wrote an article in the Yale Law Journal forum about how the FDA’s actions during the coronavirus pandemic slowed testing nationwide. Those scholars are Barbara J. Evans, PhD, JD, LLM, the Stephen C. O’Connell Chair at the University of Florida Levin College of Law; and Ellen Wright Clayton, JD, MD, a Professor of Law Health Policy at the Vanderbilt University School of Law.

Although CLIA-regulated labs traditionally have responded quickly to emerging epidemics, their response was slowed this year after the FDA published guidance suggesting labs need EUAs before they can use LDTs, Evans and Clayton wrote.

‚ÄúMany labs viewed the FDA‚Äôs 2020¬†guidance documents as having a practical¬†binding eÔ¨Äect even though the FDA lacked¬†clear statutory authority to require EUAs¬†for LDTs developed at CLIA-compliant high-complexity laboratories,‚ÄĚ they added.¬†‚ÄúThe FDA‚Äôs guidance documents led¬†to decreased availability of testing, particularly¬†in the early stages of the pandemic,¬†which contributed to the catastrophic¬†course of the COVID-19 pandemic in the¬†United States,‚ÄĚ they wrote.

Evans and Clayton then went a step further, explaining that the FDA lacks authority to require EUAs for COVID-related LDTs. They also outlined how the FDA’s intervention replicates protections CLIA already provides, they wrote.

Bruce Quinn, MD, PhD, a consultant¬†to clinical laboratories at Bruce Quinn¬†Associates in Los Angeles, made a similar¬†point. He noted that the HHS statement¬†came one day after the Wall Street Journal¬†(WSJ) published an article showing how¬†testing failed in the United States since¬†February. ‚ÄúThe HHS announcement follows¬†within days of a scathing article in¬†the WSJ about the administration‚Äôs handling¬†of COVID testing,‚ÄĚ Quinn wrote in¬†an email to The Dark Report.

That article detailed problems that HHS, the FDA, and the federal Centers for Disease Control and Prevention (CDC) had when introducing LDTs to identify SARS-CoV-2 and how those problems, including the FDA’s requirement that labs needed EUAs for LDTs, slowed testing nationwide for three weeks.

Will your lab push ahead without FDA EUA for an LDT, or will you seek clearance to avoid liability? Please share your thoughts with us in the comments below.