Laboratory Developed Test Final Rule Vacated in Big Win for Clinical Laboratories and Crushing Loss for FDA
- beckere0
- Apr 1
- 3 min read
The narrative that laboratory developed tests (LDTs) are intangible services whereas medical devices are tangible objects has been a core argument from the laboratory industry for decades as they have battled the US Food and Drug Administration (FDA) on their claimed regulatory authority over the tests. FDA has argued that LDTs are indeed tangible objects – the physical instruments that are analyzing the physical patient specimen and providing a test result. Well, the war of definitions has come to an end.
The laboratory industry received the news they were hoping for. Federal Judge Sean Jordan ruled in favor of the American Clinical Laboratory Association (ACLA) and Association for Molecular Pathology (AMP) in their lawsuits against the FDA, finding that FDA violated the Administrative Procedures Act by issuing the LDT final rule in May of 2024 because in doing so it exceeded the agency’s statutory jurisdiction, authority or limitations. The decision to vacate and set aside the LDT final rule comes about six weeks after Judge Jordan heard oral arguments, and about five weeks before Phase 1 of the LDT enforcement discretion phaseout policy was set to take effect.
The very first term in the Memorandum Opinion and Order is “Laboratory developed test services” (emphasis added). ACLA and AMP were successful in demonstrating to Judge Jordan the soundness of their argument regarding their definition of LDT. The Opinion is 51 pages long, but the crux of the decision appears to be based on two factors:
A plain reading of the Federal Food, Drug and Cosmetic Act (FDCA) does not support the interpretation that LDTs are regulated under that statute; in fact, the definition of “device” supports its application to tangible objects or “articles”, mass-commercialized and mass-distributed, and the Court believes that LDTs are intangible professional services performed in a single laboratory.
The legislative history of the FDCA and the Clinical Laboratory Improvement Amendments (CLIA) does not indicate Congress ever intended FDA to have oversight of LDTs. Instead, “… Congress viewed (1) ensuring medical-device safety and effectiveness, and (2) ensuring laboratory-testing accuracy, as distinct problems requiring different regulatory solutions.” And Congress instilled FDA with being responsible for the former, and CMS the latter.
Judge Jordan also took issue with FDA claiming they had been exercising enforcement discretion over LDTs for so long. Judge Jordan lambasted FDA for implying that clinical laboratories and the professionals, often medical doctors, who work there and perform the procedures have been breaking the law and operating illegally for “decades” (even though in oral arguments the government said FDA’s regulatory authority over LDTs began in 1938 when the FDCA was passed, and they’ve been exercising enforcement discretion since then). He took that as FDA threatening laboratories and their employees and holding civil and criminal action – including imprisonment – over their heads, ready to take action against them at any time FDA chooses.
Often the judge seemed to chide FDA for not only issuing the rule but defending it – calling FDA “creative” for what he interpreted as FDA attempting to “circumvent” Congress and issue itself more jurisdiction under the FDCA; saying FDA was “inventing” new definitions; calling FDA’s claimed authority over LDTs “far-fetched”; stating FDA’s assertion that LDTs are medical devices defies “basic principles of interpretation” and “common sense”; and also stating that FDA “misunderstands” the term “manufacture”.
The Opinion very much mirrors arguments made by ACLA and AMP both in their briefs and in their oral arguments. Judge Jordan was very direct and specific in his decision, stating “Congress considered the unique regulatory issues raised by clinical laboratories and tests they develop and perform. It addressed those issues through the comprehensive but distinct statutory regime of CLIA, not through the FDCA. And Congress vested authority over those regulations in CMS, not in FDA.” He ruled that the FDCA was not ambiguous in its application over clinical laboratories and LDTs (it doesn’t), and there’s most certainly nothing ambiguous about his ruling.