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Academic Medical Center Exemption in Current VALID Bill Deemed Largely Useless by AACC Rep


NEW YORK – The latest version of the Verifying Accurate Leading-edge IVCT Development (VALID) Act includes a provision that would exempt academic medical centers from the law, but a major industry stakeholder and VALID opponent says this carve-out would be largely useless for labs.

Patricia Jones, chair of the American Association for Clinical Chemistry’s policy and external affairs committee and clinical director of chemistry at Children's Medical Center Dallas, said that, as written, the law's exemption for academic medical centers is so narrow that it "doesn't help [her lab] in any way, shape, or form."

The Verifying Accurate Leading-edge IVCT Development (VALID) Act aims to resolve a decades-long dispute regarding regulation of laboratory-developed tests. If it becomes law, it would formally give the US Food and Drug Administration authority over these tests. The bill's fate is currently up in the air but could be included in the end-of-year federal spending package.

A major challenge to regulating LDTs is the fact that these tests span a wide variety of settings, use cases, and commercial strategies. Traditionally, many LDTs have been developed in hospital labs or at academic medical centers in response to physician requests with labs stepping in to provide assays that doctors need for patient care but for which commercial in vitro diagnostics don't exist.

In recent decades, though, the LDT route has emerged as a popular go-to-market strategy for diagnostic companies looking to commercialize their products without having to first take them through the FDA. While these firms offer their tests out of a single CLIA facility as is required of LDTs, they are typically sold nationally, allowing them to achieve distribution similar to that of an IVD. Many of these tests also use new and complex genomic and proteomic technologies, which has drawn the attention of regulators and helped drive the push for legislation like VALID.

However, opponents of the bill, of which AACC is among the most prominent, are concerned that VALID will prevent hospital and academic labs from developing tests doctors request for patient care. While medically useful, these tests may not have a large base of users or be particularly profitable and, some observers argue, labs could cease or cut back their development in the face of new regulations.

On its face, the carve-out for academic medical centers included in the latest version of the bill — which was drafted by the office of Sen. Richard Burr, R-N.C., a sponsor of VALID and one of its main proponents — seems aimed at addressing this concern. AACC's Jones said, though, that the carve-out is so narrowly written that it would exclude many of the patients who currently use LDTs provided by academic medical centers like hers.

Jones highlighted language in the bill that specifies the academic medical center carve-out applies only to tests "performed solely upon the prescription or order of a healthcare practitioner licensed by law to prescribe or order such test on the staff of such academic medical center; for patients receiving care or treatment at the same physical location as the academic medical center laboratory performing the test protocol; and at the same physical location as specimen collection, testing, interaction with the treating provider, and patient treatment."

She said that, as written, academic medical centers could provide LDTs outside VALID only if the test order was made by a practitioner on staff at the center and for patients being seen and treated at that center. This would exclude a wide range of patients currently using LDTs provided by academic medical centers, though — individuals being treated at other nearby healthcare systems, for instance, or individuals with rare conditions who are being treated by doctors not on the medical center's staff.

Jones cited herself as an example. "This totally wouldn't work for me, because I'm on faculty at UT Southwestern Medical Center, but my primary job and my lab is at Children's Medical Center which is a different physical location than the rest of the academic medical center," she said.

Furthermore, the carve-out wouldn't allow her lab to use its LDTs for diagnosis and management of outside patients.

"Every pediatric physician in the region knows that we run the best and sometimes the only tests for certain disorders, and they send their samples here," Jones said. "But they aren't on staff at the medical center, so I couldn't run any of those samples if I wanted to be exempt under" the carve-out.

She noted that the nature of the LDTs developed at academic medical center labs means these labs are often called upon to serve patients outside the center itself.

Such labs "are running very cutting-edge medicine," Jones said. "The newest procedures, the newest tests. They adapt quickly to new discoveries. And people know that, and they send their patient samples from far away if you have a really good specialty that you are running at your medical center. And we couldn't run any of those under this exemption."

The idea of an academic medical center exemption in VALID was first raised by Sen. Tommy Tuberville, R-Ala., who proposed an amendment providing such an exemption during a Senate HELP committee markup of the bill in June. Tuberville's amendment was broader than the exemption in the current bill, providing an exemption for academic medical centers and "components" of those centers. It did not require that patients receiving testing and treatment do so at the same physical location as the center or that their test order be put in by a practitioner on staff at the center.

While addressing some concerns of VALID opponents like AACC, the Tuberville amendment raised the possibility of new loopholes and challenges for LDT regulation. Would, for instance, large academic medical centers step up development of nationally distributed LDTs? Could they potentially do so in partnership with outside diagnostic firms in ways that would let those firms evade VALID?

The more narrowly written exemption in the current bill leaves much less room for such activities, but in doing so makes the carve-out largely meaningless for academic medical centers, Jones said.

Both Burr and Senate HELP Chair Patty Murray, D-Wash., who have led the push for VALID in the Senate, opposed the Tuberville amendment when it was introduced, with Burr emphasizing the need for all diagnostics to be covered by a single, coherent regulatory framework. The inclusion of a carve-out in the current bill suggests he has become more flexible on this point, perhaps in an effort to bring additional supporters aboard as the deadline for including the bill in Congress' end-of-year spending package — and his own retirement — loom. Burr's office did not reply to requests for comment.

Ultimately, Murray tabled the Tuberville amendment, meaning it was not considered during the HELP committee meeting.

There are other exemptions in VALID that are meant to allow academic centers and other labs to run needed tests without first going through the FDA. The current version of the bill exempts tests for noncontagious disease or conditions that affect no more than 10,000 individuals in the US annually, a number that is subject to upward revision by the US Department of Health and Human Services. It also exempts tests "developed to diagnose a unique pathology or physical condition of a specific patient or patients" provided the test isn't intended for use in more than five patients and isn't included on the performing lab's test menu or in its marketing materials. The five patient threshold is also subject to upward revision by HHS.

These provisions would allow labs to provide specialized assays for rare conditions without having to take them through the FDA, potentially addressing some of the patient needs that Jones said would not be addressed by the academic medical center carve-out.

Susan Van Meter, president of the American Clinical Laboratory Association, which has not endorsed VALID but has advocated for a legislative approach to LDT regulation, said that a "key principle" for the organization "is that all test developers under any new framework should be subject to the same rules of the road."

She said that ACLA believes the accommodations for rare diseases and specialized assays in VALID are important but that the organization "[does] not favor special accommodations for academic medical centers."