Academic Medical Centers Uncertain How New FDA Final Rule on LDTs Will Impact Them

By Susan Montgomery - May 20, 2024

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The U.S. Food and Drug Administration’s (FDA) newly released Final Rule for laboratory developed tests (LDTs) has academic medical centers wondering if the new regulations will make it too challenging to continue making LDTs in the future. During the COVID-19 pandemic, many academic medical centers and other facilities with high complexity laboratories were able to rapidly roll out COVID testing developed in house. Now, with the FDA’s new rule, many are wondering whether their laboratories would still be able to assist with pandemic disease response. Their ability to quickly provide patient access to these assays is critical because LDTs are often available to provide quality testing before commercial diagnostic tests can secure FDA approval. 

LDTs in action during COVID 

At the beginning of the pandemic, the FDA announced that high complexity laboratories would be required to obtain Emergency Use Authorization (EUA) to use COVID-19 assays developed in-house. The FDA initially had very stringent requirements that significantly slowed down the rollout of COVID-19 tests. However, on February 29, 2020, the FDA made changes to facilitate EUA submissions, and laboratories that had the expertise to implement LDTs were able to move forward and gain EUA.  

According to Marie Louise Landry, MD, director of the Clinical Virology Laboratory at Yale New Haven Hospital and professor of Laboratory Medicine and Medicine (Infectious Diseases) at Yale University School of Medicine, Yale New Haven Hospital is unique in the state of Connecticut in having a clinical virology laboratory on site. The laboratory has more than 20 years of expertise in implementing laboratory developed, real-time PCR assays for viral pathogens for clinical diagnosis, including a number of respiratory virus assays originally developed by the CDC. Due to its ability to implement LDTs, Yale was the only hospital in Connecticut with on-site COVID testing for weeks until the first commercial tests became available. The Yale Lab began SARS CoV-2 patient testing on March 13, 2020, and later that same day, the first COVID patient at Yale New Haven Hospital was admitted. Yale was the first high complexity laboratory in the U.S., that was not a reference laboratory, to receive Emergency Use Authorization from the FDA for a SARS CoV-2 molecular test.  

The Centers for Disease Control and Prevention (CDC) had had a bumpy roll out of its COVID-19 test to state public health laboratories in early February. The first test was withdrawn, and the second version delayed for weeks. Even then, testing capacity at public health laboratories remained very limited and results took days. Thus, Yale’s ability to establish PCR testing quickly and provide test results within a few hours, for both hospitalized patients and healthcare workers, filled an absolutely critical gap until commercial tests became available.  

“We hope that with the new FDA Rule, the ability of academic medical centers like ours to offer these tests for patient care, and to assist in public health emergencies, will be protected,” Dr. Landry says. “We have a proven and well-documented track record of accurate, high quality LDT testing for patient care for more than 20 years.”   

The Cleveland Clinic was another academic medical center with a high complexity laboratory that received Emergency Use Authorization (EUA) from the FDA to offer COVID testing using assays validated within its own laboratory. In fact, the director of the Cleveland Clinic’s disaster management team had organized a response team before SARS-CoV-2 was documented to be present in the U.S. A part of the Clinic’s readiness was the development/validation of an assay for the detection of SARS-CoV-2. 

“It was important to the team at that time to offer a highly sensitive and specific assay, since decisions regarding isolation would be determined based on the results of this assay,” says Gary Procop, MD, MS, MASCP, CEO of the American Board of Pathology (ABP) who previously spent much of his career at the Cleveland Clinic where he held several leadership positions; he  remains a professor of Pathology at the Cleveland Clinic Lerner College of Medicine and a clinical microbiology consultant at Moffitt Cancer Center, Tampa. “When I told the disaster management director that it usually takes about two months to fully validate an assay, I was told that we had two weeks – and we got it done,” Dr. Procop says. 

He described how the Cleveland Clinic gained FDA permission to use these tests through the EUA review process. “Laboratories that routinely detect and characterize infectious agents have safety and operational protocols as part of their standard operating procedures,” Dr. Procop says. “These formed the basis of how we began assay validation.” 

Unfortunately, at that time, the CDC rollout of its own assay to test for COVID encountered challenges in implementation.  

Initially, clinical laboratories were informed, per governmental restrictions, that they would not be “allowed” to test for this infectious agent and that all specimens would be tested through the nation’s “underfunded, understaffed public health laboratories,” according to Dr. Procop. “As the pandemic surged, it became clear this approach was untenable and that hospital and commercial laboratories were the only option available to meet national testing demands, and that with appropriate triage in place (i.e., not testing non-symptomatic, low-risk individuals). It was only after extensive lobbying efforts by our professional societies that the FDA opened an avenue to test under Emergency Use Authorization, which was its own bureaucratic quagmire, but at least we could test.”  

Impact of new FDA ruling 

Recently, the FDA released a Final Rule claiming oversight authority of LDTs. “The FDA has a four-step phase-in plan that will be implemented over four to five years,” says Matt Schulze, Director of ASCP’s Center for Public Policy. “There are a lot of questions about how this new Final Rule will affect laboratories. Some aspects of the rule are already spelled out, but other aspects will have to be clarified by the FDA. The Agency will have to come out with some guidance for the Final Rule.”  

For example, the Agency had a policy of generally providing enforcement discretion, which meant these tests were not required to undergo pre-market review, quality systems, and other FDA device requirements. Under the new rule, the agency intends to regulate LDTs essentially the same way as commercial diagnostic devices are regulated. This will affect the ability of large academic medical centers, hospitals, and other entities with high complexity laboratories to develop these tests going forward. Some experts fear the impact could be very significant and might even impede laboratories’ ability to create the tests, including during a pandemic. 

Dr. Landry, of Yale, says, “It is my understanding that the application costs of FDA submission will be a minimum of $20,000 per test and up to $500,000 for new tests. If true, the costs would be prohibitive for a hospital laboratory like ours.  We do more than 25 laboratory developed tests just in the Virology Laboratory, and many more LDTs within our other clinical laboratories. In addition, we would expect long time delays, from many months to years before a test would be approved." Thus, Yale’s ability to provide this much-needed testing for patient care, and to respond to viral disease outbreaks, might end. “We could lose the expertise and the infrastructure,” Dr. Landry says. “If so, not only will the rule change be detrimental to patient care, but it will also greatly increase healthcare costs, and stifle much needed innovation.” 

Dr. Procop concurred, adding that FDA oversight of LDTs is expected to “decrease the number of laboratories with the ability to validate high complexity molecular testing because of the additional cost and effort necessary to complete the FDA requirements. Smaller laboratories, some of which provide these necessary services predominantly to underrepresented individuals, are likely to be disproportionately affected and will have to discontinue testing. This will translate into fewer laboratories that are able to respond to the next pandemic, since the necessary skill sets will have been lost.” 

Recently, Dr. Procop was interviewed by a national news reporter concerning the ability of laboratories to respond to the H5N1 avian influenza strain, should a surge in that virus occur.  He was dismayed and stated, “Given these new regulations, laboratories will be less able to respond than we were to COVID-19.” 

ASCP Past President Henry Rinder, MD, FASCP, Professor of Laboratory Medicine and Internal Medicine (Hematology) and Vice-chair (clinical) of Laboratory Medicine at Yale School of Medicine, agrees and said that medical centers are still in limbo with respect to the FDA’s proposed regulation of new (to-be-developed) LDTs. He added that “at best, medical centers may opt to hold on developing future LDTs until there is more experience with practical navigation of the FDA process.”  

Dr. Rinder and other volunteer leaders at ASCP in collaboration with other medical groups have been leading efforts to persuade FDA to make significant changes in the Final Rule to ensure patient safety by preventing infringement on medical practice in pathology and laboratory medicine. Even with release of the Final Rule at the end of April 2024, these organizational efforts must continue in order to preserve laboratories’ abilities to respond to public health crises, as well as pursue advancements in disease diagnosis and management. 

“ASCP has served as an outstanding national focus of response to the FDA proposal and will be moderating a Town Hall on May 21, 2024 to further communicate with stakeholders,” Dr. Rinder says. “By continuously reaching out to its members for their perspectives, ASCP ensures better understanding of the Final Rule’s impact on our members and their institutions. ASCP’s consistent collaboration with other national organizations, such as AMP and AAPath, serves as a model of national coordinated response.”  




Susan Montgomery

ASCP communications writer