Labs Should Consider Action Now to Meet New FDA Test Regulations

Affected laboratories, hospitals, practitioners, and medical device makers should start preparing for compliance with and enforcement of new regulations for laboratory developed tests and not wait for the outcome of litigation against the Food and Drug Administration.

The FDA in May announced its rule regulating laboratory developed tests, or LDTs, which generally didn’t have to meet the compliance standards of other medical devices under the FDA’s prior approach (characterized by the agency as “enforcement discretion”). A final rule changed that approach by redefining in vitro diagnostic products (diagnostic tests) to explicitly include LDTs that were manufactured and offered by a laboratory as medical devices.

A complaint filed in late May by the American Clinical Laboratory Association and HealthTrackRx claims the FDA violated the Administrative Procedure Act by exceeding its authority to regulate medical devices. The lawsuit says that under the pertinent statute, FDA can only regulate “tangible, physical objects,” not “professional services performed by professional clinicians in a laboratory.”

Even if the FDA’s statutory authority included regulating LDTs as medical devices, its exercise of this authority in the final rule is arbitrary and capricious, the plaintiffs assert.

The complaint was filed shortly before the US Supreme Court’s recent decisions reducing courts’ deference to agencies’ interpretation of ambiguous statutes.

While the litigation is pending in the US District Court for the Eastern District of Texas, the final rule remains in place. Industry can consider several steps to put itself in a good position if the agency’s approach remains in force.

Considerations

First, laboratories should be aware that some of the final rule’s requirements will affect them sooner than others.

The FDA plans to observe a five-stage, four-year phaseout period ending its general enforcement discretion approach to LDTs. At the first stage, which begins on May 6, 2025, the FDA will expect compliance with medical device reporting requirements, correction and removal reporting requirements, and complaint handling requirements. All three center around how a laboratory handles and evaluates complaints, adverse events, and recalls.

Laboratories that don’t already have systems in place to address these requirements will want to start evaluating how quickly they can be implemented, what additional resources they will need to add (including personnel), and how many personnel they will need to train.

At the remaining stages, the FDA will expect compliance with additional requirements, including premarket review and quality system regulation requirements, which describe good manufacturing practices for devices. The FDA in January updated its QSR requirements to align more closely with the International Organization for Standardization requirements used by many regulators outside the US. The effective date of the new quality management system regulation is Feb. 2, 2026.

Laboratories will want to map out the various deadlines and resources needed for compliance with each stage’s requirements well before the FDA’s deadlines.

Second, laboratories will want to take careful inventory of their tests and consider whether each one is the type subject to the phaseout of enforcement discretion. The FDA has suggested that manufacturers take this step in guidance issued last month.

The final rule introduces “targeted enforcement discretion policies” for certain types of tests, meaning that the medical device requirements won’t apply uniformly across all tests. Understanding where tests fall on this spectrum will be essential to determining compliance responsibilities and resource allocation. Some factors include:

Intended uses. Tests used exclusively for public health surveillance (rather than for clinical decision-making at the individual patient level) won’t be affected by the phaseout policy and generally won’t be expected to comply with medical device requirements. By contrast, certain donor screening tests, such as those that screen for infectious diseases among donors, in FDA’s view haven’t been subject to enforcement discretion and are expected to be in compliance today.

Intended users. The FDA’s position is that it hasn’t exercised enforcement discretion for direct-to-consumer tests, which are marketed directly to consumers without a prescription or meaningful involvement of health-care providers. The agency says these tests should follow device requirements now.

Marketing date. For LDTs that were marketed before the final rule was published May 6, the FDA generally doesn’t intend to enforce some requirements, such as premarket review. But if a company modified the test after May 6 in certain ways, such as changes to its indications for use, or will modify it in the future, that action will take a pre-May 6 marketed test outside the scope of the enforcement discretion policy.

Applicability of certain state standards. The FDA states that to promote efficient use of FDA resources, the agency generally doesn’t intend to enforce premarket review requirements for LDTs that have been approved by New York State’s clinical laboratory evaluation program. Compliance with other applicable requirements for those tests will be expected to be in line with the phaseout policy.

Outlook

The new rule is complicated and, as the FDA acknowledged, requires compliance by some entities for the first time. The list above is non-exhaustive but illustrates the complex decisions industry stakeholders face when taking steps to comply with the final rule. Now is the time to start considering what new responsibilities will arise and what prudential steps should be taken as litigation is pending.

The case is American Clinical Laboratory Association v. U.S. Food and Drug Administration, E.D. Tex., Docket No. 4:24-cv-00479, complaint filed 5/29/24.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Deeona Gaskin, partner at Sidley and former associate chief counsel at the FDA, advises pharma and medical device companies on FDA regulatory, compliance, and engagement strategy.

Monica Kofron, associate at Sidley, focuses on regulatory and compliance matters involving the FDA.

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