FDA's Stalled Journey to Regulate LDTs and the Final Nail in the Coffin

In the U.S., diagnostic testing is divided into two main pathways: FDA-cleared tests or FDA-approved tests (which are commercial kits produced for widespread use in hospitals) and Laboratory Developed Tests (LDTs) (which are created and used within a single laboratory). LDTs are regulated under the Clinical Laboratory Improvement Amendments (CLIA), ensuring that they meet clinical guidelines and are operated by skilled professionals who comply with federal standards. LDTs are often developed for rare disorders or specialized needs where commercial tests may not exist or fall short, providing highly tailored and precise diagnostic solutions.

For as long as I’ve been in the industry, FDA have sought to regulate LDTs as medical devices, a move that would have increased costs and regulatory burdens on laboratories. This prompted legal challenges, culminating in a decision that dismissed the FDA’s rule, allowing hospitals and labs to continue developing LDTs without facing such stringent regulations. Critics argued that the FDA rule would have stifled innovation and made tests prohibitively expensive, potentially limiting patient access. LDTs account for around 4% of all tests ordered by physicians and play a vital role in diagnosing rare conditions and offering more precision than commercial tests.

The LDT rule was issued on May 6, 2024 and became effective on July 5, 2024. To facilitate compliance, the FDA has implemented a phased approach over four years, with the first stage beginning on May 6, 2025.  Folks in the industry was anticipating what this will mean since the date is looming and we have a new administration that is known to cut down on regulations.

On March 31, 2025, Judge Sean D. Jordan of the U.S. District Court for the Eastern District of Texas ruled in American Clinical Laboratory Association v. FDA, vacating the FDA’s final rule on Laboratory Developed Tests (LDTs). The rule, which would have required labs offering LDTs to meet medical device requirements, was considered an overreach. Judge Jordan concluded that LDTs, characterized as “laboratory-developed test services,” do not fit the FDA’s definition of a “device,” which he argued applies only to tangible, physical products, not professional services.

The decision hinged on the distinction between commercial diagnostic tests, which the FDA regulates, and LDTs, which are developed and used within a single laboratory. LDTs are tailored for specific clinical needs, including rare diseases and conditions where commercial tests may not be available. The ruling was celebrated by laboratories, pathologists, and medical professionals, who argued that the FDA’s rule would have increased costs, limited access to tests, and stifled medical innovation.

Judge Jordan also pointed to the Clinical Laboratory Improvement Amendments (CLIA) of 1988, which already regulates LDTs, as evidence that the FDA lacks authority over them. The ruling underscored the significant role of LDTs in providing personalized, high-quality diagnostics, especially for rare conditions and gene variants where commercial tests are inadequate. Many experts emphasized that LDTs offer targeted information, making them crucial for precise diagnoses and treatments.

So, What is Next for FDA?

Despite the ruling, questions remain regarding the future of LDT regulation. The FDA must determine how to manage the intersection between services and tangible components like software used in test systems. Additionally, while Congress has not yet acted on the issue, there are ongoing discussions about the need for a more comprehensive legislative solution for regulating LDTs and in vitro diagnostics.

Finally with the recent firing of FDA staff, FDA has their own problems in finding resources to oversee medical devices rather than taking on efforts to regulate the CLIA labs.  FDA made many attempts.  First, through public events and conferences repeatedly stating that they “chose to enact enforcement discretion” and that they ultimately have the right to regulate the labs.  Then in 2014, FDA released two draft guidance documents on their framework of regulating LDTs which briefly shook the industry.  Next, their proposal for the VALID Act, their attempt to reform how IVDs and LDTs are approved.  And finally, the LDT Rule of May 2024.   One wonder what else can FDA do in their stubborn effort to regulate LDTs.