Government Defends LDT Rule in Much-Anticipated Arguments

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On February 19, a U.S. District Court judge heard oral arguments in a closely watched litigation challenging the FDA’s laboratory developed test (LDT) , which was finalized by the Biden Administration last spring. The final rule changed FDA’s regulations to clarify that it has oversight over LDTs pursuant to its authority to regulate medical devices under the Federal Food, Drug, and Cosmetic Act (FDCA) and announced the agency’s plan to phase out its longstanding enforcement discretion over such tests. The FDA explained when it promulgated the final rule that LDTs are no longer simple, well-characterized tests and that they should be regulated as medical devices to ensure their safety and effectiveness. LDTs are increasingly used in critical health care decisions, and FDA reasoned that without proper oversight, there is no assurance that these tests work reliably, which could lead to incorrect diagnoses and treatment decisions.

The American Clinical Laboratory Association and the Association for Molecular Pathology each brought lawsuits against the government alleging that the FDA lacks the authority to regulate LDTs, which are already monitored by CMS under the Clinical Laboratory Improvement Amendments (CLIA). Both plaintiffs allege that the final rule violates the Administrative Procedure Act (APA)and represents arbitrary and capricious rulemaking, and they seek to enjoin FDA from implementing this rule.

The government vigorously defended the rule, arguing that LDTs meet the definition of “device”; that the final rule was consistent with FDA’s longstanding interpretation of its device authorities; that although CLIA and the FDCA could potentially overlap, the statutes are not in conflict; and that the rule (including its enforcement discretion policies) is not arbitrary and capricious and does not violate the major questions doctrine. The issues that generated the most discussion during the hearing related to the definition of device, actions that constitute manufacturing and commercial distribution under the FDCA, analytical validity versus clinical validity, the legislative history of the FDCA and CLIA, and FDA’s interpretation of its authorities with respect to LDTs during this long period.

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