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’s efforts to assert regulatory oversight of laboratory-developed tests (LDTs). In a statement last week, HHS said that labs “are not required” 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’s (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 LDTs.
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 LDTs have been egregious examples of federal regulatory overreach.
Using only 252 words, HHS said that any laboratory seeking an EUA for an LDT, or approval or clearance from FDA for an LDT, 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 LDTs.
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’ website is a statement, titled, “Rescission of Guidances and Other Informal Issuances Concerning Premarket Review of Laboratory Developed Tests.” A key phrase in the statement about LDTs is that labs “are not required to” seek FDA review or approval for LDTs (See sidebar, below). HHS issued the statement to be consistent with President Trump’s 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, “review of regulatory flexibilities enacted since the start of COVID-19.”
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 an LDT without FDA premarket review or authorization wouldnot 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. “The more you leave open the question of verification and validation of tests, the more variability you’ll get with your test results,” he commented.
“That creates a higher risk of errant results and a higher risk of liability. “What HHS did is a mistake because it’s 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,” 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’Connor School of Law, the liability issue may not be a serious one for most labs. “Lawsuits are extremely rare against clinical laboratories—particularly for labs at academic medical centers,” he said. “Those labs validate all such tests, meaning they won’t run these LDTs unless they work well. Therefore, the risk of a lawsuit is low.
“For big corporate lab companies that run large numbers of tests, this could be an issue,” he added. “But 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.”
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.
“Many labs viewed the FDA’s 2020 guidance documents as having a practical binding eﬀect even though the FDA lacked clear statutory authority to require EUAs for LDTs developed at CLIA-compliant high-complexity laboratories,” they added. “The FDA’s 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,” 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. “The HHS announcement follows within days of a scathing article in the WSJ about the administration’s handling of COVID testing,” 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.
Quinn made three other important points about the HHS statement. First, he noted that HHS’ guidance appears on the HHS COVID website, but the wording of the guidance appears to apply to FDA review of any type of LDT. Some of the initial press coverage of the announcement noted that the statement covers COVID testing but, in fact, the statement is not specifically limited to COVID LDTs.
Second, Quinn said all labs should note that some FDA actions involving LDTs were consistent with its role of ensuring
lab-test safety. “There have been times when FDA acted with actual safety interests, such as restricting the worst-performing antibody tests for COVID last spring,” he said.
But then he added a caveat. “Often, FDA has acted against LDTs by stating that collection devices or other paraphernalia were being used off-label. Since that isn’t part of the LDT itself, it’s unclear if FDA maintains the power to take those types of actions,” he said.
Third, FDA review is still required in some cases, he added. “HHS notes that other policy requirements for clearance and emergency use authorizations may still apply, for example, where they are already written into last spring’s coverage and payment laws for COVID tests.”
While some regulations remain in place, clinical labs are likely to welcome the new HHS action, Klein said. “What this statement does is confirm flexibility for labs, particularly for smaller labs and academic medical centers,” he noted. “Most labs often want to revise the tests that have EUAs to make them run more efficiently,” Klein added. “But the EUA requirements prevent tinkering. Now, labs will be able to adjust these tests as needed.
“The HHS statement could have a significant effect on labs and this is really important, particularly if those labs want to subtly deviate from the procedure specified in the EUA,” he explained. “Previously, they could not do that because, if they did, the test would no longer fall within the parameters of the EUA. “In that way, the HHS statement will help labs that purchase tests which don’t fit into their workflows or for which they can’t meet the exact EUA specifications of a test within their laboratories,” he added.
“For example, some labs might not be able to do the extraction method. In those situations, what commonly happens with FDA-cleared or approved tests is that the lab will fine-tune those tests either to meet their workflows or to make them perform better. The HHS statement allows that to happen,” he noted.
Welcome News from HHS
“Another example could be when a lab buys a test from an IVD manufacturer, but maybe there’s a reagent shortage for that test,” he said. “Under the previous rules, the lab would be unable to run that test. But now, they can use the same reagent from another manufacturer. “Plus, labs would have the ability to validate that test independently and not have to submit it to the FDA for review, which is an enormous burden on labs using some tests, particularly smaller labs.”
Contact Bruce Quinn, MD, at 323-839-8637 or email@example.com; Roger Klein, MD, JD, at firstname.lastname@example.org.
HHS: Rescission of Guidances and Other Informal Issuances Concerning Premarket Review of LDTs
HERE IS THE FULL STATEMENT about laboratory-developed tests (LDTs) issued by the Federal Department of Health and Human Services (HHS) on Aug. 19:
The Trump Administration is committed to combating COVID-19, to ensuring that the American people are protected against future pandemics, and to keeping duplicative regulations and unnecessary policies from interfering with those efforts.
Consistent with the President’s direction in Executive Orders 13771 (Executive Order on Reducing Regulation and Controlling Regulatory Costs) and 13924 (Executive Order on Regulatory Relief to Support Economic Recovery), and as part of HHS’s ongoing department-wide review of regulatory flexibilities enacted since the start of COVID-19, the department has determined that the Food and Drug Administration (“FDA”) will not require premarket review of laboratory developed tests (“LDT”) absent notice-and-comment rulemaking, as opposed to through guidance documents, compliance manuals, website statements, or other informal issuances.
Those seeking approval or clearance of, or an emergency use authorization (“EUA”) for an LDT may nonetheless voluntarily submit a premarket approval application, premarket notification or an EUA request, respectively,but are not required to do so, and FDA will adjudicate those submissions.
Those opting to use LDTs in their laboratories without FDA premarket review or authorization may do so with the understanding that they would not be eligible for PREP Act coverage absent approval, clearance, or authorization and would remain subject to regulation by the Centers for Medicare and Medicaid Services under the Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. § 263a, and its implementing regulations at 42 C.F.R. pt. 493.
Those with an active EUA to use an LDT to detect the virus causing COVID-19 or its antibodies are unaffected by this announcement.