Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests

Historically, the U.S. Food and Drug Administration (FDA) has exercised enforcement discretion with respect to most laboratory developed tests (LDTs) and has not required laboratories that furnish LDTs to comply with FDA’s regulatory requirements for medical devices, including registration and listing, pre-market review and post-market controls. In recent years, however, FDA has publicly stated that it intends to regulate LDTs as medical devices, primarily due to concerns that the Clinical Laboratory Improvement Amendments of 1988 and its implementing regulations (CLIA) do not require pre-market review of the clinical claims associated with LDTs.

The Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA) requires the FDA to give two congressional committees (the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor and Pensions) 60 days’ notice of the agency’s intent to issue draft or final guidance on the regulation of LDTs, as well as the anticipated contents of such guidance. Under this requirement, on July 31, 2014, the FDA sent these committees the anticipated details of two draft guidance documents—entitled “Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs)” and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs),” respectively—that outline the agency’s proposed regulatory framework for LDTs. In these documents, FDA describes its priorities for enforcing pre- and post-market requirements for LDTs and how it intends to phase in enforcement of regulatory requirements for LDTs.

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Anticipated Framework for
Regulatory Oversight of Laboratory
Developed Tests
Paul W. Radensky, M.D., Eric Zimmerman, Michael W. Ryan
and John Warren
Historically, the U.S. Food and Drug Administration (FDA) has
exercised enforcement discretion with respect to most
laboratory-developed tests (LDTs) and has not required
laboratories that furnish LDTs to comply with FDA’s regulatory
requirements for medical devices, including registration and
listing, pre-market review and post-market controls. In recent
years, however, FDA has publicly stated that it intends to
regulate LDTs as medical devices, primarily due to concerns
that the Clinical Laboratory Improvement Amendments of 1988
and its implementing regulations (CLIA) do not require pre-
market review of the clinical claims associated with LDTs.
The Food and Drug Administration Safety and Innovation Act
of 2012 (FDASIA) requires the FDA to give two congressional
committees (the House Committee on Energy and Commerce
and the Senate Committee on Health, Education, Labor and
Pensions) 60 days’ notice of the agency’s intent to issue draft
or final guidance on the regulation of LDTs, as well as the
anticipated contents of such guidance. Under this
requirement, on July 31, 2014, the FDA sent these committees
the anticipated details of two draft guidance documents—
entitled “Framework for Regulatory Oversight of Laboratory
Developed Tests (LDTs)” and “FDA Notification and Medical
Device Reporting for Laboratory Developed Tests (LDTs),”
respectively—that outline the agency’s proposed regulatory
framework for LDTs. In these documents, FDA describes its
priorities for enforcing pre- and post-market requirements for
LDTs and how it intends to phase in enforcement of regulatory
requirements for LDTs.
Note: Because neither of these documents has been
published as “draft guidance,” the FDA is not accepting public
comments regarding either document at this time. The agency
is expected, however, to publish the documents as draft
guidance substantially unchanged and to announce the
creation of a docket for public comment regarding the
documents, effective on or after September 29, 2014.
Scope
When officially published, the documents will provide clinical
laboratories instructions regarding the regulatory requirements
FDA intends to extend to LDTs. Under the draft documents,
FDA defines an LDT as “an [in vitro diagnostic (IVD) device]
that is intended for clinical use and designed, manufactured,
and used within a single laboratory.” FDA defines a “single
laboratory” as a facility with a single CLIA certificate.
According the FDA’s definition, a test is not an LDT if it is
designed or manufactured, completely or partly, outside of the
laboratory that offers and uses the test. Consistent with this
limitation, FDA states that the following tests would not be
considered an LDT under the anticipated framework:
 A test developed by one laboratory in a multi-laboratory
entity that is transferred to another clinical laboratory (or
laboratories) within the entity’s network;
 A test developed by an academic institution that is
subsequently manufactured and utilized by a private
corporation that owns a CLIA-certified laboratory;

2 Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests
ON THE SUBJECT
 A test that incorporates a “key component (e.g., coated
microtiter plate, specialized specimen collection kit)”
manufactured by a third party; and
 A test designed by a specification developer, but validated
and used by a laboratory
Summary of Anticipated Policy
As expected, FDA indicates that it intends to end its policy of
general enforcement discretion towards LDTs, and proposes
the implementation of a risk-based regulatory framework. To
this end, the FDA will rely on its existing medical device
classification system to evaluate the risk of a category of LDTs
and, informed by industry’s interest in participating in the
classification process, use expert advisory panels to help
classify tests not previously classified by FDA. In determining
the risk an LDT poses to a patient (or the user), FDA will
consider several factors, including:
 Whether the test is intended for use in high-risk
diseases/conditions or patient populations;
 Whether the test is used for screening or diagnosis;
 The nature of the clinical decision that will be made based
on the test result;
 Whether a physician/pathologist would have other
information about the patient to assist in making a clinical
decision (in addition to the LDT result);
 Alternative diagnostic and treatment options available to
the patient;
 Potential consequences/impact of erroneous results; and
 Number and type of adverse events associated with the test
FDA intends to issue draft guidance that describes what the
agency generally considers to be a Class I, Class II or Class III
device within 24 months of publishing final guidance on the
LDT regulatory framework.
MAIN ELEMENTS OF FDA’S FRAMEWORK FOR
REGULATORY OVERSIGHT
Continued Enforcement Discretion (In Full) for Certain
Categories of LDTs
FDA does not intend to enforce its registration and listing
[nor is FDA requesting notification (see below)], adverse
event reporting, pre-market review or quality system
requirements for:
 LDTs used solely for forensic (law enforcement) purposes
 LDTs used in CLIA-certified, high-complexity
histocompatibility laboratories for tests used in connection
with organ, stem cell and tissue transplantation to perform
high-resolution allele typing, tests used in antibody
screening and monitoring, and cross-match tests (real and
virtual). This exception does not apply to tests used in
blood banking.
Notification to FDA of LDTs Manufactured by a Laboratory (or
Compliance with the Agency’s Registration and Listing
Requirements)
FDA intends to continue to exercise enforcement discretion
with respect to registration and listing requirements for
laboratories that manufacture LDTs, provided such
laboratories notify FDA that they are manufacturing LDTs and
provide basic information regarding each LDT. The required
timing of such notification depends on the relationship
between the date of the test’s initial commercial availability
and the date of publication of the final guidance.
For LDTs that are commercially available when the final
guidance document is published or LDTs that enter the market
within six months of the final guidance being published,
laboratories should provide notification information to the FDA
within six months of the date the final guidance is published.
For LDTs that are first commercialized at least six months after
the final guidance is published, laboratories should notify the
FDA prior to offering the test for clinical use.
Information should be submitted online through the FDA
website. Notification is expected to occur once for each LDT,
although additional notification should be provided if significant
changes are made.
Note: Presumably, the rationale for FDA’s offering
a notification option rather than requiring registration and
listing is to avoid the near-term imposition of medical device
tax liability, which is triggered by registration and listing.
Under this framework, a laboratory is not required to register
and list until a pre-market submission is made.

Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests 3
ON THE SUBJECT
Laboratories that do not notify the agency that they are
manufacturing LDTs will be required to comply with the
registration and listing requirements for devices. FDA does
not intend to enforce these requirements with respect to LDTs,
however, until a pre-market submission [i.e., pre-market
approval (PMA) or 510(k)] has been made to the agency.
MDR Requirements
Beginning six months following publication of the final
guidance, FDA intends to cease its exercise of enforcement
discretion with respect to medical device reporting (MDR)
reporting requirements for laboratories that offer LDTs. The
mechanics of the MDR process are outlined in the above-
referenced anticipated draft guidance.
Pre-Market Review Requirements
FDA intends to phase in the enforcement of pre-market
requirements for certain LDTs based on the risk associated
with the test. The agency intends to focus its initial efforts on
the highest risk tests and gradually phase in enforcement for
lower risk tests over time.
CONTINUED ENFORCEMENT DISCRETION
FDA intends to continue enforcement discretion with
respect to pre-market review requirements for the following
types of LDTs:
 Low-risk LDTs (Class I devices)
 LDTs for rare diseases (i.e., tests for which the number of
persons who may be tested is fewer than 4,000 per year)
 Traditional LDTs—tests like those available when FDA
began its policy of generally exercising enforcement
discretion over LDTs in 1976. In considering whether a test
is a traditional LDT, FDA intends to consider the following:
− Whether the test meets the definition of an LDT (as
defined in the guidance);
− Whether the test is manufactured and used by
a health care facility laboratory for a patient that is
being diagnosed and/or treated at that same facility
(or within the facility’s system);
− Whether the test is comprised of only legally
marketed components and instruments (e.g.,
analyte-specific reagents, general purpose
reagents); and
− Whether the test is interpreted by qualified
laboratory professionals, without the use of
automated instrumentation or software for
interpretation
This definition provides a fairly narrow exemption. LDTs that
include components other than analyte-specific reagents and
general purpose reagents, such as research-use only
reagents, presumably would not fit under this definition. This
exemption would not be available to laboratories outside
health care facilities.
 LDTs for unmet needs—tests that serve unmet needs until
a comparable FDA-cleared or
-approved device becomes available; in considering
whether a test meets unmet needs, FDA intends to
consider the following:
− Whether the test meets the definition of an LDT (as
defined in the guidance);
− Whether there is no FDA-cleared or -approved test
available for that specific intended use; and
− Whether the test is manufactured and used by
a health care facility laboratory for a patient that is
being diagnosed and/or treated at that same facility
(or within the facility’s system)
Key to understanding the scope of this exemption will be
FDA’s intention regarding “specific intended use.” Note that
the term “intended use” for medical devices refers to a distinct
concept from “indication for use.” This exemption is also not
available for laboratories outside healthcare facilities.
END OF ENFORCEMENT DISCRETION FOR CERTAIN
HIGH-PRIORITY LDTs
The agency intends to begin enforcing pre-market review
requirements beginning 12 months after the guidance is
finalized for the following types of LDTs:
 LDTs with the same intended use as a cleared or approved
companion diagnostic
 LDTs with the same intended use as an FDA-approved
Class III medical device

4 Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests
ON THE SUBJECT
 Certain LDTs for determining the safety or efficacy of
blood products
For currently marketed tests in the above categories, FDA
intends to exercise enforcement discretion with respect to pre-
market review requirements for 12 months following
publication of the final guidance. If a laboratory makes
an appropriate pre-market submission during this 12-month
period, FDA intends to continue exercising enforcement
discretion while the submission is under FDA review.
For new LDTs (i.e., an LDT that becomes available after
publication of the final guidance) in the above categories, FDA
intends to begin enforcing pre-market review requirements
immediately upon publication of the final guidance.
PHASED-IN ENFORCEMENT OF PRE-MARKET REQUIREMENTS
FOR OTHER LDT CATEGORIES
For LDTs other than those listed above, FDA plans to use
advisory panels to prioritize tests on the basis of risk.
For the remaining Class III LDTs, FDA expects to announce its
priority list within 24 months of publishing the final guidance.
In the priority list, FDA will describe the order in which the
agency will enforce pre-market requirements and when the
agency intends to enforce the requirements for each category
of tests.
The agency intends to start enforcing the requirements for the
highest-priority remaining Class III LDTs beginning no less
than 12 months after the priority list is announced. LDTs likely
to be included in this highest priority group include:
 Devices that act like companion diagnostics
 Screening devices for serious diseases and/or conditions
intended for use in asymptomatic patients with no other
available confirmatory diagnostic product or procedure
 Diagnostic devices for certain infectious diseases with high-
risk intended uses
If a pre-market submission (e.g., PMA or Investigational
Device Exemption) is submitted within the 12-month period,
FDA intends to continue to exercise enforcement discretion
while the submission is under FDA review. After FDA begins
enforcing the requirements for LDTs in a particular category,
however, FDA will expect laboratories that develop new LDTs
in these categories to comply with pre-market review
requirements before marketing of such LDTs.
FDA intends to finish phasing in the enforcement of
requirements for Class III devices within five years of issuing
final guidance. FDA intends to phase-in enforcement of pre-
market requirements for Class II devices after it has finished
the Class III phase-in process. FDA expects to announce the
enforcement prioritization of Class II devices within four years
of finalization of the guidance and complete phased-in
enforcement of the pre-market requirements for Class II
devices within nine years of finalizing the guidance.
EVALUATION OF CLINICAL VALIDITY
FDA expects that for many LDTs, clinical validity has already
been established in literature. If appropriate, FDA intends to
leverage information from the existing clinical literature that
establishes clinical validity in lieu of requiring additional studies.
In these cases FDA may still require studies demonstrating
device performance (e.g., analytical evaluations).
A critical issue is whether FDA will allow treatment selection
claims based upon clinical literature. For a diagnostic test to
be eligible for coverage under Medicare (and most private
plans, as well), the test must be used by the treating physician
in the management of the patient so that treatment selection
claims are highly relevant for successful commercialization of
diagnostic tests. Historically, FDA has been reluctant to allow
treatment selection claims without evidence from prospective
clinical trials. Moreover, if FDA does accept evidence from the
literature to support pre-market clearance or approval of LDTs,
will the agency also accept these types of data for currently
regulated IVD test kits?
THIRD-PARTY REVIEW
While FDA will generally review pre-market approvals for high-
risk (Class III) LDTs, the agency believes that it will often be
appropriate for third parties to review 510(k) submissions for
lower risk (Class II) LDTs.
QSRs
FDA intends to exercise enforcement discretion with respect to
quality systems requirements (QSR) until the manufacturer of
an LDT submits a PMA or FDA issues a 510(k) clearance

Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests 5
ON THE SUBJECT
order. The clinical laboratory that manufactures and uses the
LDT will be responsible for having a quality system in place
that meets regulatory requirements either at the time of the
PMA submission or prior to market launch for cleared devices.
The agency also specifically encourages laboratories to
implement design controls when developing new LDTs.
Implications
The documents announce an important change in the
regulatory requirements for LDTs. In general, these long-
anticipated documents are consistent with the approach to
regulation of LDTs that FDA described in presentations during
a public meeting the agency held in July 2010.
In these documents, the agency addresses some concerns
that stakeholders have raised with FDA during the past four
years, including the agency’s creation of a “notification”
procedure, which would allow laboratories to comply with
regulatory requirements without triggering the medical device
tax, the agency’s intent to continue its enforcement discretion
with respect to currently available tests while the agency
reviews pre-market submissions for such tests, and the
agency’s intent to exercise enforcement discretion with respect
to the pre-market requirements for tests for whom the eligible
population is extremely small.
At the same time, a number of key questions regarding FDA’s
regulation of clinical laboratories as medical device
manufacturers and regulation of LDTs as medical devices
remain open.
DEFINITION OF LDT IS NARROW: MANY LDTs OFFERED TODAY
WOULD NOT FIT
The anticipated draft guidance considers a test an LDT only
insofar as it is designed, manufactured and used within a single
clinical laboratory with a single CLIA certificate. With certain
limited exceptions, CLIA requires each laboratory facility to have
its own certificate. A laboratory that operates in multiple
buildings that are not directly connected (e.g., two buildings
across the street from one another) may have multiple CLIA
certificates even though it is a single laboratory owned and
operated by a single entity. Such laboratory would not meet the
definition of an LDT under the anticipated draft guidance.
Under the anticipated draft guidance, a test that involves a key
component manufactured by a third party would not be
considered an LDT. It is not clear how broad or narrow FDA
intends the scope of this limitation to be. Any number of
components involved in the performance of an LDT could be
considered a key component. If that term is interpreted
broadly by FDA, the number of tests meeting FDA’s definition
of LDT may be very limited.
In the anticipated draft guidance, FDA recognizes that some
tests offered by laboratories as LDTs would not meet the
agency’s definition of LDT. FDA indicates that such tests are
“out of compliance with the FD&C Act”. However, the FDA
also announces “[I]n the interest of ensuring continuity in the
testing market and avoiding disruption of access to these
tests, FDA intends to apply the same risk-based framework,
described in [this guidance], to any IVD that is offered as
an LDT by a CLIA-certified laboratory.”
APPLICATION OF REGULATIONS MAY RESTRICT LABORATORIES’
FLEXIBILITY TO MAKE TIMELY, INCREMENTAL CHANGES TO
INCORPORATE NEW SCIENTIFIC DISCOVERIES
Currently, under CLIA regulations, a laboratory that makes
an improvement to an established LDT may begin to perform
the revised test once it has established performance
specifications and other quality controls and documented the
changes reflected in the revised test. Under the anticipated
draft guidance, a laboratory that modifies an FDA-approved or
-cleared test may be subject to certain time-consuming pre-
market requirements, such as submission of a subsequent
510(k) notice or a supplemental PMA.
Implementation of medical device regulations over laboratories
and the entire test system of an LDT would result in
substantially different requirements than laboratories offering
LDTs currently operate under, with respect to FDA-cleared or –
approved IVDs. With an FDA-cleared or approved IVD,
a laboratory currently is free to adopt process changes (e.g.,
application of automated specimen preparation for an IVD for
which labeling describes only a manual preparation), as long
as the laboratory has validated the process change under
CLIA requirements. If an LDT is considered to be a finished
medical device, a process change to the operation of the test
would require consideration of the need for a supplemental
FDA submission and delay in implementation of the change
until clearance or approval of the change.

6 Anticipated Framework for Regulatory Oversight of Laboratory Developed Tests
ON THE SUBJECT
DOCUMENTS DO NOT PROVIDE GUIDANCE ON THE AMOUNT
OR TYPE OF CLINICAL VALIDITY DATA REQUIRED TO
SUPPORT APPROVAL OR CLEARANCE
The agency acknowledges that existing publications may be
sufficient to establish the clinical validity of certain LDTs. The
documents do not, however, provide any guidance regarding
the characteristics of studies (e.g., design, sample size,
statistical analysis plan) that the agency will look to support
such a determination.
This has been an area of particular concern to laboratories
developing advanced or molecular LDTs in which multiple
markers and extensive bioinformatics are involved in
producing a patient-specific result that is intended to inform
patient management decisions.
Insofar as LDTs may be cleared or approved with labeling
restricting use for treatment selection (as is the case with
a number of LDTs that have been cleared by FDA), actual use
of such tests for treatment selection would be “off-label.”
Although off-label use in the practice of medicine is accepted
by FDA for medical devices, such as IVDs used off-label by
CLIA-certified laboratories, it is unclear what risks such use
would raise for clinical laboratories once they are considered
to be medical device manufacturers as well as licensed and
certified clinical service providers.
DOCUMENTS DO NOT ADDRESS SEVERAL PRACTICAL ISSUES
PERTAINING TO REGULATION OF LDTs AS MEDICAL DEVICES
Unlike an IVD test kit, an LDT is a not a physical item that can
be transferred in commerce; rather, it is a service performed
by a clinical laboratory. As such, stakeholders have raised
a number of questions to FDA, including: What is the
regulated device within the laboratory test operation? To
whom is the labeling addressed—the laboratory or the treating
physician?
DOCUMENTS DO NOT ADDRESS CERTAIN INCONSISTENCIES
AND CHALLENGES BETWEEN FDA AND CLIA OVERSIGHT
FRAMEWORKS
For example, CLIA’s requirement for the dissemination of
information regarding the use of laboratory tests by CLIA-
mandated clinical consultations can conflict with FDA’s
limitations on promotional communications by device
manufacturers. Moreover, certain provisions of the FDA’s
QSRs, such as design controls, raise significant challenges for
laboratories operating under CLIA quality system regulations.
FDA RESOURCES REQUIRED TO REGULATE LDTs
LDTs are performed in thousands of laboratories across the
country; a single laboratory may perform many LDTs.
Although the agency proposes to continue enforcement
discretion with respect to the pre-market requirements for
certain LDTs, many tests will be subject to pre-market
requirements under the terms of the (anticipated) proposed
guidance. The agency will need substantial additional
resources to implement regulatory oversight of these services.

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The material in this publication may not be reproduced, in whole or part without acknowledgement
of its source and copyright. Anticipated Framework for Regulatory Oversight of Laboratory
Developed Tests is intended to provide information of general interest in a summary manner and
should not be construed as individual legal advice. Readers should consult with their McDermott
Will & Emery lawyer or other professional counsel before acting on the information contained in this
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AUTHORS
For more information, please contact your regular McDermott
lawyer, or:
Paul W. Radensky, M.D.
+1 202 756 8794
pradensky@mwe.com
Michael W. Ryan
+1 202 756 8088
mryan@mwe.com
John Warren
+1 202 204 1451
jwarren@mcdermottplus.com
Eric Zimmerman
+1 202 756 8148
ezimmerman@mwe.com
For more information about McDermott Will & Emery visit
www.mwe.com

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