The regulatory landscape of laboratory developed tests: Past, present, and a perspective on the future

The clinical laboratory is a vital component of the healthcare system, providing a wide range of services to help diagnose, treat, and manage patients. Within the laboratory, most tests can be divided into two categories: in vitro diagnostics (IVDs) and laboratory developed tests (LDTs). IVDs are commercially manufactured assays and make up the majority of clinical laboratory tests, such as those in a comprehensive metabolic panel (CMP) and a complete blood count (CBC). LDTs, on the other hand, are developed by individual laboratories and overseen by highly trained and qualified laboratory directors. These tests are often developed out of necessity because no test is available for purchase, or the currently available assays do not meet the needs of a specific patient population. Examples of LDTs include, but are not limited to, panels to monitor immunosuppressant concentrations after organ transplantation, large PCR-based panels to diagnose urinary tract infections and identify antibiotic resistance markers, comprehensive toxicology panels to identify acute drug exposure and monitor pharmacological treatment compliance, newborn screening for early diagnosis of serious but treatable conditions, and genetic testing to detect mutations associated with cancer. Many LDTs are considered the “gold standard” in diagnosing or monitoring specific conditions, making them indispensable to quality patient care.

Regulation of the clinical laboratory

The FDA regulates medical devices, including IVDs, and the Centers for Medicare and Medicaid Services (CMS) regulates clinical laboratories via the Clinical Laboratory Improvement Amendments (CLIA). Since the introduction of CLIA’88 (Fig. 1), tests have been tiered by complexity, with the simplest tests classified as waived tests. These are easy-to-perform tests with a negligible risk for error; users must follow the manufacturer’s instructions exactly [10]. Most other tests performed in a laboratory are considered nonwaived tests and are either moderate or high complexity. FDA-cleared tests that run on automated analyzers are typically classified as moderately complex. Before using these tests on patients, laboratories must verify the specifications claimed by the manufacturer (Table 1). High complexity testing includes any test that the FDA categorizes as high risk and all LDTs. CLIA defines an LDT as (1) any IVD test that is developed, manufactured, and used within a single laboratory, or (2) an FDA-approved assay that has been modified [8]. CLIA requires laboratories to extensively validate and establish performance specifications for LDTs before they are implemented clinically (Table 1) [7], [14]). Clinical laboratories regulated by the New York State Department of Health (NYSDOH) must submit their LDT validation, calculated measures of diagnostic accuracy (sensitivity, specificity, and predictive values), standard operating procedure manuals, and quality assurance methods to the NYSDOH [11]. After a risk assessment and application review, tests may be approved for patient use and are listed publicly on the NYSDOH website.

Fig. 1.

Historical timeline of clinical laboratory regulation. A brief summary of clinical laboratory oversight by the Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA), two divisions within the Department of Health and Human Services, is provided. CMS regulates clinical labs through the Clinical Laboratory Improvement Amendments (CLIA), while the FDA regulates medical devices, such as in vitro diagnostics (IVDs).LDT = laboratory developed test.

Table 1.

Required studies for clinical assay verification and validation.

Method Verification (FDA approved, non-waived assays)	Method Validation (Laboratory developed tests)
Purpose: verify assay performance claims from test manufacturer	Purpose: Establish test parameters and determine assay limits
Assessment of analytical accuracy (Method comparison – estimate bias)	Assessment of analytical accuracy (Method comparison, recovery studies – estimate bias)
Reproducibility study (Inter- and intra-assay imprecision)	Reproducibility study (Inter- and intra-assay imprecision)
Verify the analytical measurement range (Linearity study)	Establish the analytical measurement range (Linearity study, dilutions to extend clinical reportable range)
Verify reference intervals (May use vendor-established reference intervals)	*Establish reference intervals
Carryover studies (If appropriate for test system)	Carryover studies
	Analytical Sensitivity (Limit of blank, limit of detection, and limit of quantification)
	Analytical Specificity (Interferences, cross-reactivity, and matrix effect studies)
	Stability studies (Patient samples, processed samples, and reagents)

*It is not always possible to establish reference intervals in certain LDTs, such as body fluid testing.

Laboratories performing moderate and/or high complexity testing must maintain a Certificate of Accreditation. This means the laboratory is inspected at least biennially by an authorized organization with “deemed status” granted by CMS, such as the College of American Pathologists (CAP). CMS only grants deemed status to organizations that have standards meeting or exceeding CLIA. The Joint Commission (TJC) and the Commission on Office Laboratory Accreditation (COLA) also have deemed status from CMS; however, TJC will no longer accept COLA as an approved laboratory accreditor beginning in 2025 [3]. These inspections ensure that all test performance, quality monitoring, and personnel requirements are met and comply with CLIA standards [2]. Laboratories performing high complexity testing must also meet additional training, education, and certification requirements [6], [7]. To ensure the quality of the peer inspection process, CMS randomly re-inspects a subset of laboratories each year [5].

CLIA provides a regulatory mechanism for LDTs, but the FDA claims to have regulatory authority over all IVDs under the Medical Device Amendments (MDA) of 1976. However, the FDA has chosen not to exercise regulatory oversight of LDTs as “a matter of general practice” [6]. In October 2014, the FDA published guidance documents suggesting that labs performing LDTs should comply with the same FDA process as manufacturers seeking IVD approval. This would include submitting validation data for a stringent “pre-market review” and continuous safety monitoring during “post-market surveillance” in addition to high complexity standards met under CLIA, to address perceived regulatory gaps in LDT oversight. This proposal was met with strong opposition from stakeholders, who were concerned that such regulation would prevent laboratories from providing important tests to patients in a timely manner [9]. The FDA withdrew this proposal in November 2016, stating they would “continue to work with stakeholders, new administration, and Congress to get the approach right” [1], [6] (Fig. 1). Since then, multiple drafts for FDA oversight of LDTs have been circulated in Congress.

The verifying accurate leading edge in vitro clinical tests (IVCTs) development (VALID) Act

The first version of the VALID Act was introduced in 2018, and subsequent versions have been created since then to address concerns from the laboratory medicine community [6], [7]. The 2021 version included in the Federal Food, Drug, and Cosmetic Act proposed a new category of in vitro clinical tests (IVCTs) that included both commercially available IVDs and in-house created LDTs. It proposed a risk-based framework for IVCTs, requiring that assays categorized as high-risk go through pre-market review [4], [7]. Test developers could apply for a technology certification to reduce the stringency of the review process, but this would be at the discretion of the Secretary. Low-risk tests would be exempt from the pre-market review process. Furthermore, it offered a grandfathering provision for currently existing LDTs if certain criteria were met; however, this would only provide temporary relief, as LDTs are continuously updated as technology and patient needs evolve over time.

While the goal of VALID was admirable, it was flawed. It largely ignored the fact that the clinical laboratory is already a highly regulated environment. An LDT must undergo rigorous validation prior to implementation, and these assays are continuously monitored through daily quality control checks, regular proficiency testing, and biennial inspections. Additionally, any laboratory participating in validity and quality review by programs such as the NYSDOH must submit their validations for approval. Some concerns regarding the VALID Act raised by healthcare professionals, patient advocates, medical institutions, pathology departments, and industry organizations included [12]:

• 1.Restriction of patient access to necessary care and potential suppression of innovation.

  This framework would be onerous and costly for clinical laboratories, forcing many hospitals, particularly those in rural areas or underserved communities, to consolidate their test menu by eliminating crucial tests, such as therapeutic drug monitoring or rare disease testing. Moreover, laboratories would not be able to modify their LDTs, without significant regulatory burden, to adapt to a changing medical landscape (e.g., adding newly designed illicit drugs to a toxicology panel).

  A secondary consequence of this is that, as hospitals reduce their test menu, training for these necessary LDTs would be limited, making harder to implement and staff them.

• 2.VALID duplicates requirements of clinical laboratories that comply with federally administered CLIA programs, CAP, TJC, and specific state requirements (ex, NYSDOH).
• 3.The specific definitions, eligibility criteria for the technology certification process, and stratification of assays into risk categories were unclear.
• 4.VALID left significant discretion to the Secretary of State, which would create an unpredictable and ambiguous future for clinical laboratories.
• 5.Subject matter experts most qualified to assess the validity of a diagnostic test would not be involved in the accreditation process, contradicting the scientific peer review process.
• 6.The FDA lacks the resources to meet the proposed obligations.

  This was evident by how quickly the FDA was overwhelmed during the COVID-19 pandemic when they received thousands of Emergency Use Authorization (EUA) submissions over a two-month period. If the FDA could not handle that comparatively small increase in volume, what would happen if they were flooded with hundreds of thousands of pre-market approval applications for LDTs from clinical laboratories nationwide? It would inevitably delay lifesaving tests for critical populations, such as oncology patients.

• 7.The future of the EUA provision is threatened.

  At the onset of the COVID-19 pandemic, there was a critical testing shortage due to restrictions on clinical laboratories that prevented them from offering LDTs without FDA review, combined with the availability of a single, flawed EUA kit. In 2020, the decision to allow qualified clinical laboratories to use LDTs to detect SARS-CoV-2 while awaiting an EUA decision was critical for the response in laboratory testing and diagnosis. This enabled clinical laboratories to quickly mobilize in response to a public health emergency.

The VALID Act was attached to the FDA Safety and Landmark Advancements (FDASLA) Act, which was approved by the Senate Health, Education, Labor and Pensions Committee on July 14, 2022. However, VALID was struck from the final package on September 30th to quickly pass a continuing resolution to extend FDA funding through December 16th, as appropriations were set to expire that day. On December 20, 2022, the final Consolidated Appropriations Act of 2023 was approved without the inclusion of VALID. The exclusion of VALID allowed clinical laboratories to continue to provide high-quality and necessary services to their patient populations. However, this is not the first, nor will it be the last, legislation suggested to further regulate clinical laboratories in a manner that could be detrimental to patient care.

Potential implications of passing the VALID Act

FDA oversight of LDTs would negatively impact patient care. Small laboratories would not have the resources to obtain FDA approval, and as a result, the number of LDTs they offer to patients would decline. Instead of being performed in-house and resulted rapidly, patient samples from these laboratory communities would have to be sent across the country to large reference laboratories, resulting in longer turnaround times and delayed patient care. An example of an LDT where turnaround time is critical is the measurement of immunosuppressants via mass spectrometry. Results are needed quickly so physicians can adjust their patient’s dose to avoid either organ rejection if concentrations are subtherapeutic or toxic side effects if concentrations are supratherapeutic. Immunoassay methods have a quicker turnaround time but are subject to interferences from metabolites and similarly structured drugs [13]. False results can be avoided by using an LDT (mass spectrometry) assay, which provides more accurate and reliable results.

The VALID Act did not consider the successful oversight of clinical laboratories by CLIA, CAP, and state agencies. The increased, ill-defined restrictions would have had an adverse effect on patient care. Rather than granting oversight to the FDA, which does not have the necessary resources for such an undertaking, a more appealing alternative is to update CLIA standards and integrate reform into the existing infrastructure.

Final thoughts: call to action

Laboratory tests, including LDTs, are critical for diagnosing and managing patients. However, few outside the clinical laboratory space understand how a clinical laboratory operates or how it is regulated. Although the VALID Act did not pass in 2022, similar proposals are likely to arise in the future. It is the responsibility of clinical laboratorians to raise awareness of the importance of LDTs in healthcare. As needs arise, laboratorians must advocate for updates to CLIA standards to ensure that patients continue to have access to high-quality and safe laboratory tests, including LDTs. All healthcare professionals and clinical researchers should become familiar with the LDTs offered within their healthcare system and advocate to retain access to these essential tests. Patients should inquire about the types of testing used in their care and share their stories on social media to raise awareness. As we saw when laboratories developed tests to detect SARS-CoV-2, journalists can educate the general public by highlighting the essential role of LDTs in diagnostic medicine. Lastly, lawmakers should collaborate with laboratorians, providers, and patients to ensure that any future legislation does not limit access to laboratory testing, including LDTs.

Conflict of interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.