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Q&A: ARUP's Jonathan Genzen on Legislative Proposals to Regulate Lab-Developed Tests

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NEW YORK – Since the US Food and Drug Administration announced in 2010 its plans to begin oversight of laboratory-developed tests (LDTs) at some later date, the present and future regulatory status of these tests have been a major area of concern and discussion within the lab industry.

While proposed regulation of LDTs has largely consisted of FDA draft guidance documents addressing the question, the agency recently stated that a legislative approach would be the most appropriate way to move forward on IVD regulatory reform, and since then congressional offices have put out two drafts addressing IVD regulation, the Diagnostic Accuracy and Innovation Act (DAIA) in 2017 and the Verifying Accurate Leading-edge IVCT Development ACT (VALID) in 2018.

Jonathan Genzen, associate professor of pathology at the University of Utah School of Medicine and chief operating officer at ARUP Laboratories, published a commentary last month in the American Journal of Clinical Pathology looking at these legislative proposals to address IVD regulation and the VALID Act, specifically, highlighting what he wrote are "key concerns pertinent to clinical laboratories that should be considered in future IVD regulatory reform efforts."

360Dx spoke with Genzen this week about his commentary, the effort to regulate LDTs generally, and what he sees as key considerations any legislative effort should take into account. Below is a transcript of the interview edited for length and clarity.

From your commentary, it seems that a major area of concern regarding the draft legislation is that it could require laboratories to become, in a sense, manufacturing facilities, and that this would require expertise and resources that they don't necessarily have.

I think there are a couple of broad issues. What you've addressed, and I think you're on target, is the idea of whether creating a laboratory-developed test is an activity that is in itself considered manufacturing. And the FDA in prior comments that are public has stated that they believe that is the case — that developers of laboratory-developed tests are acting as manufacturers.

From the clinical laboratory community perspective, I would say that few labs currently perceive their operations as being manufacturing. And so there's a little bit of a disconnect there in terms of how the regulators perceive that activity and how laboratories perceive it. That is a key issue. And it's unresolved in some ways.

You also note that conceiving of labs as being in the manufacturing business might also limit their flexibility in terms of modifying LDTs when necessary to ensure good clinical performance.

Yes, at an individual test level, laboratories often receive requests from clinicians for, say, working up an assay interference if they don't believe a test result, or accepting a specimen that was collected in a phlebotomy tube that wasn't specifically described by the manufacturer in their kit instructions. Or maybe they will perform dilutions if a result is really high, but those dilutions aren't reflected in a package insert. There are issues that come up that require professional judgment.

You want to protect the ability of qualified laboratory professionals or medical directors or a pathologist to make those judgment calls because you don't want to end up in a situation where you're declining to do testing that could actually help patients just because you're concerned solely about regulatory oversight. I don't think anybody wants to end up there. But if we don't get the balance right, there's a chance that could happen.

There is a range of models for how labs are doing LDT development. On the one hand you have, say, hospital labs developing LDTs for the specific needs of their specific patient population. On the other, you have labs that are not attached to a hospital or larger healthcare system that are developing and offering small numbers of tests as LDTs but are marketing them to outside users much as an IVD firm might. Does it make sense to regulate both of those labs in the same way?

I think there is concern that, and there certainly have been companies that have used that structure of offering a small number of LDTs as an alternative to what the FDA has called a commercially distributed pathway.

And I think to some extent FDA has, to their favor, been very open about the rationale. When they originally announced the background for why they believed they wanted to exercise oversight over laboratory-developed tests, they publicly released a series of statements regarding their rationale. And one of them was this idea that the model you're talking about of a company that develops a very small number of LDTs and markets them clinically to clinicians in a very direct kind of way, in some ways has a favorable business model versus an IVD manufacturer who submits their tests to the FDA.

To what extent is the push to regulate LDTs coming from the IVD industry?

I honestly can't speak directly to their perspective and whether that they're lobbying on these issues. But I think that community is certainly aware of these fundamental differences in how traditional IVD manufacturers submit tests for a regulatory approval whereas there are certainly companies that are choosing the LDT route because it is in some ways a less burdensome process.

You mention is your commentary the New York State Department of Health requirements as a potential model for how LDT regulation might move forward. What do you think the New York approach could bring to the discussion? [As Genzen notes in his commentary, the NYSDOH requires labs testing clinical samples acquired in New York to have a clinical lab permit from the NYSDOH and requires risk-based review of LDTs as well as approval by the Clinical Laboratory Evaluation Program.]

The reason I think the New York case is particularly interesting is, it feels like the community is still working through the idea of how risk-based review should be conducted. To what extent should that be a part of future regulatory oversight? I think in a very common sense perspective, there's some general agreement that high risk tests that are really, really critical for either serious patient conditions or that might really dramatically impact patient care, probably deserve additional regulatory review, because you really want to make sure you get those right.

But where you draw that line is really, really tricky. We've had six to seven years of different proposals coming out from different organizations offering different models of risk-based review. And how those end up shaking out in terms of categorizing individual tests has a dramatic impact on the overall regulatory burden. And I'm not sure we have found the right balance yet.

I brought up the New York model because they are doing [risk-based review] currently, and they should have information and data on how testing is divided out based on risk and how they've managed that review.

Could having LDT regulations in place be good for the testing industry?

Yeah, I do think there are upsides to getting this right and to having this debate at a national level. It is challenging for laboratories to operate under an environment of regulatory uncertainty. And currently, there are certainly some in the clinical lab community who believe that the regulatory approach advocated by FDA or advocated by current legislative drafts may not fit very well with the expectations outlined within CLIA for performing laboratory-developed tests in a clinical laboratory space.

And so, without that certainty of what is truly legally required and expected, it creates an additional challenge when you develop and you test. Because you want to get it right. You want to anticipate the documentation and the requirements. But without clarity, I don't know what those requirements actually are and with the changing landscape on what proposals look like, either from a draft guidance perspective or a legislative perspective, it's difficult.

The idea that FDA regulation of LDTs is coming has been around for years now. Is there any reason to believe that there are going to be concrete steps taken in that direction in the near term?

[The VALID draft] is a fundamental shift in approach. From 2010 through 2016, FDA took the approach of releasing a draft guidance for regulatory oversight. They took the perspective that they always had the right to regulate LDTs… and that they could choose in the future to exercise that oversight.

There's some controversy around that perspective depending on who you ask and what their legal views are. But in 2016, FDA abandoned the effort to move forward with a draft guidance approach to LDT regulation. In the following year, that's when these legislative proposals were ultimately put out for discussion by a small group of congressional offices. And it was last year that the Valid Act was also released, and that is advocating for a legislative proposal to all in vitro diagnostic reform.

And the reason why that's so critical is, if it's legislation and it's passed by Congress and signed into law, that becomes law. So that really would become the regulatory structure that FDA and the community and IVD manufacturers would have to follow. It carries a different weight [than an FDA guidance]. Now, I don't have any insight on the probability of this proposal or future proposals actually moving forward in Congress.