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10 May 20246 minute read

Diagnostic landscape remains complex with FDA Final Rule

On May 6, 2024, the Food and Drug Administration (FDA) issued the Laboratory Developed Test final rule (Final Rule), following a Proposed Rule in October 2023 that elicited over 6,000 comments to the public docket during the open comment period.

Although the Final Rule retains the same ten-word addition to the current definition of “in vitro diagnostics” (IVDs) as in the Proposed Rule, FDA changed the scope of the rule. The Proposed Rule preamble described a broad-reaching removal of enforcement discretion over the vast majority of laboratory based diagnostic tests, but the Final Rule preamble contemplates significant grandfathering, additional categories of enforcement discretion that will remain operative, and the opportunity for third-party review processes.

These significant changes to the way FDA will phase-in its regulatory authority and retain options for enforcement discretion may be purposeful to assuage certain stakeholders, and potentially forestall litigation against the Agency. This means that while FDA asserts that all diagnostic tests meet the definition of regulated IVDs under 21 C.F.R. § 809.3(a), the Agency will not actively regulate them all, and will only impose compliance with limited medical device legal and regulatory requirements in some instances.

The decision to continue to exercise enforcement discretion over a broad subset of IVDs likely reflects the limitations on FDA’s resources, and may reflect a desire to align the Final Rule with many of the grandfathering constructs of the proposed Verifying Accurate, Leading-edge IVCT Development (VALID Act). On the other hand, it may be a slight acknowledgement from FDA that there remains continued resistance to FDA’s jurisdictional claim over laboratory based diagnostic tests – a core conflict that remains, and may result in litigation.

In vitro diagnostics

Going forward, test developers and other companies in the development and supply chain for diagnostic innovation (including companies that offer products and consumables for research use only) are encouraged to begin taking steps to identify where they, or their customers, will fit into the complex regulatory scheme that FDA is setting up. It is important to understand whether marketing authorizations will be required, and to account for those timelines. It is equally important to understand which aspects of medical device regulatory obligations (such as registration and listing, adverse event reporting and recalls) and quality system requirements (such as design controls, risk management and supplier controls) will apply to you, your customers, or your suppliers.

Significant opportunities exist for businesses that are willing to view the regulatory framework as having advantages, such as for first movers into an indication, or converting a research use only test business to clinical diagnostic business. 

The five categories of regulatory oversight are detailed below along with the specific types of tests that FDA has indicated will fall into the regulatory oversight category.

Major issues for consideration

FDA took pains to provide a great deal of detail in the 568-page Final Rule. However, significant areas of importance to the diagnostics industry remain unclear and may benefit from further clarification.

  • FDA recently issued its final Quality Management System Regulation (QMSR) to better align FDA’s device quality requirements with the ISO 13485:2016, discussed in detail here. This QMSR final rule, which includes more robust risk management criteria, becomes effective February 2, 2026, and the LDT Final Rule phase-in date for QSR (May 6, 2027). Therefore, the greater emphasis on risk-based decision making throughout the product lifecycle from the QMSR final rule will require significant attention to risk management processes and documentation by diagnostic tests subject to FDA regulation.
  • In January, 2024, FDA announced its intent to initiate the reclassification process for “most IVDs that are currently class III (high risk) into class II (moderate risk),” and that the majority of these are infection disease and companion diagnostics IVDs. This may present challenges – or opportunities – for developers of IVDs that are currently classified as high-risk. We recommend that companies engage with FDA early so they can evaluate whether FDA is likely to continue regulating their tests subject to the PMA requirements, or is considering the IVD product or category for down classification. It remains to be seen whether FDA will issue any additional guidance or transition policies for IVDs affected by the Final Rule and the reclassification process.
  • Diagnostic tests benefiting from FDA’s inclusion of “grandfathering” for IVDs offered as LDTs prior to May 6, 2024, will only remain in the partial enforcement discretion category if they are not modified. The laboratories conducting these tests, and the critical vendors to those laboratories, are advised to immediately establish documentation including SOPs regarding intended use, operating principals, performance characteristics, and other specifications and develop strong procedures to monitor and evaluate modifications post May 6, 2024. We anticipate that FDA will consider to issue future guidance regarding the modification expectations, but it is encouraged that steps are taken to secure the partial enforcement discretion going forward.
  • The Medical Device User Fees Amendments (MDUFA) reauthorization in 2027 is likely to contain user fees for diagnostic tests impacted by this Final Rule. Stakeholders should consider assessing opportunities to influence the reauthorization process, and ensure that appropriate fees and performance goals are established.
  • Litigation against FDA is likely to occur in the coming weeks, and may impact FDA’s implementation of the five stages of phase-in of the Final Rule. We will be monitoring these actions closely to assess the impact on timing and specifics of the phase-in.
  • The enforcement discretion policy around LDTs approved, conditionally approved, or within an approved exemption from full technical documentation under NYS CLEP approval leaves many questions unanswered, such as whether a NYS CLEP approval could potentially streamline the pathway to obtaining a 510(k) or de novo clearance or a PMA approval, and whether FDA will limit the NYS CLEP approval option to a narrower category of tests.
  • Congressional action remains a possibility, particularly in terms of delineating between FDA’s medical device authorities and how professional laboratory services may be regulated. We will continue to monitor proposed legislation related to the VALID Act.

For help assessing your regulatory status in light of the Final Rule, or with ensuring compliance with the phaseout of LDT enforcement discretion, please contact the authors or your DLA Piper relationship partner.