Broadly speaking, clinical laboratories perform two types of diagnostic laboratory tests in the form of in vitro diagnostic (IVD) test kits (produced by established kit manufacturers) and laboratory developed tests (LDT), which are developed by and used in high complexity, CLIA certified laboratories. The US Food and Drug Administration (FDA) must review and approve IVDs prior to marketing, which often is a lengthy and costly process. The FDA also asserts regulatory authority over LDTs, but typically applies “enforcement discretion” and does not actively regulate the majority of LDTs. As a practical matter, this means that the design, development, and validation/verification of LDTs is largely governed by the Clinical Laboratory Improvement Amendments (CLIA).
This being said, there are challenges within the current regulatory landscape for LDTs. Some stakeholders believe FDA review is the gold standard for patient safety and express concerns over the safety and reliability of LDTs. Further, IVD manufacturers may claim an uneven playing field, as they are heavily regulated through the medical device requirements, which are fully enforced by the FDA, whereas clinical laboratories that develop LDTs are not held to the same standard allowing for greater flexibility. An alternative view is that clinical laboratories that develop and utilize LDTs face substantial uncertainty regarding which tests the FDA might take a direct interest in actively regulating. To address these concerns, Congress has introduced the Verifying Accurate Leading-edge IVCT Development (VALID) Act, which would create a new class of product—in vitro clinical tests (IVCTs). This Act would seek to fold IVDs and LDTs under the same regulatory umbrella, fully regulated by the FDA.
VALID Act Elements
Concern surrounding the implications of the proposed 2021 VALID Act should be considered in light of the following elements contained in the Act. It is our view that these are the most important aspects of the bill to fully understand, as they have the potential to significantly impact patient access to innovative clinical tests. References to specific sections of the 2021 version of the legislation,1 the most recent version at time of writing, are provided in brackets.
‘Grandfathering’ [587A(c)] and Other Exemptions [587A(g) and 587A(h)]
The VALID Act includes a grandfathering clause wherein any lab developed test on the market prior to enactment will be considered grandfathered and exempt from premarket review. However, LDTs implemented after the VALID Act is enacted will require premarket review—ie, submission of documentation to FDA, review period, addressing questions or concerns raised during FDA review, and, ultimately, approval. It is important to keep in mind that grandfathering may not completely exempt a test from FDA review; any modifications made to a grandfathered LDT may require prospective submission and FDA retains the right to “claw back,” or remove tests from the market, if a test is deemed high risk or is deemed to represent an unacceptable risk for patient harm, see [Special Rule 587A(a)(4)].
Further, while grandfathered tests will otherwise be considered exempt under the VALID Act, FDA will require that each grandfathered test be registered and listed in the FDA’s electronic database, the Comprehensive Test Information System (CTIS) and the test would remain subject to adverse event reporting requirements.
The legislation incorporates other submission exemptions as well, including humanitarian device [587A(g)], and low volume or custom tests [587A(h)]. A humanitarian device exemption is defined as a test for a new or emerging disease or condition where no more than 10,000 individuals in the US are tested in a year. Custom and low volume tests are also exempt from premarket review and would be used in situations where a test is needed in a rare circumstance and is not intended to be used in regular clinical practice, such as off-label body fluid testing. These types of tests are limited to 5 patients per year in a single laboratory and cannot be listed in the laboratory’s test catalog.
Two-tier Risk Classification
The VALID Act includes a two-tier risk classification system, high and low, that serves as the primary driver for determining which tests require premarket review and the extent of required documentation for review. Low risk tests are those where an inaccurate patient result could cause minimal or no harm to a patient, while high risk tests pose an unreasonable risk of serious or permanent harm or death to a patient, or would significantly delay, discontinue, or prevent critical treatment. In either scenario, the use of well characterized and understood technology, the availability of confirmatory tests, or other factors may mitigate the risk. The classification system also has several exemptions, including low volume and humanitarian use tests. The lack of a moderate risk category in the currently drafted bill creates concern that many tests may be inappropriately classified up to high risk.
Notably, low risk tests are considered exempt from premarket review and the developer would have one year to submit the required listing elements in CTIS after the test is offered. This allows developers the ability to offer the test right away while preparing to submit the required information. An example of a low-risk test could be a screening test to detect hypoglycemia that also would be used in conjunction with other clinical findings.
On the other hand, a high-risk test would require full regulatory review by the FDA. The developer would need to submit all elements of registration and listing, including raw data for analytical and clinical validity, a description of the test, a formal risk assessment, and other elements that could be rather burdensome. An example of a high-risk test could be next generation sequencing for cancer detection.
Technology Certification [587D]
Technology certification is a process wherein a laboratory has the potential to demonstrate expertise in a particular technology and thereby receive approval to implement additional tests using that technology without submission to the FDA. This can be referred to as a center of excellence model. For example, a laboratory that utilizes flow cytometry for multiple tests with different intended uses—eg, blood cancer detection or immunodeficiency—this pathway may provide the least burdensome approach for approval of all such tests using that particular technology.
To obtain a technology certification order, the developer would submit a single representative test using the specific related technology. The submission would involve full premarket review, requiring the developer to submit all documents and data supporting the representative test along with other supportive information, such as a description of the laboratory’s quality management system. Assuming the developer is awarded a technology certification order, the lab will then be able to implement additional flow cytometry tests without premarket review. However, each new or modified test implemented under that technology certificate order will need to be listed in CTIS, and tests that are classified as high risk are not eligible for technology certification; they would need to be submitted for premarket review individually. Technology certification orders require renewal every four years by submitting a new or different representative test under that certificate.
Registration and Listing [587I]
Each laboratory (or parent institution) developing an IVCT, regardless of classification or exemption status, must register with the FDA and will be subject to inspections. Registration requirements are straightforward, though, comprising the establishment name and contact information. However, listing requirements are more extensive and are required for all tests, including grandfathered and other exempt categories. Listing requirements include:
Notably, listing information must be maintained and updated with the FDA annually, a potentially significant burden for laboratories with large test menus. Furthermore, any laboratory that is registered in the FDA database must adhere to additional quality system requirements that may overlap with CLIA requirements or accreditation standards, such as: design controls, purchasing controls, acceptance activities, corrective and preventative actions, and record management.
The legislation defines a modification as any change that affects the analytical or clinical validity of the test, many of which would require FDA review and approval prior to implementing the modification. This broad scope could lead to the submission of many tests for minor modifications; laboratories will often validate a new specimen type or adjust reagent volume to better serve their patient population and adjust to the needs of their practice. Simply modifying a purchased test kit renders the laboratory a “developer” and would necessitate submitting that modified test to the FDA for review and approval. As mentioned, most modifications to a grandfathered test would result in forfeiting the grandfathering exemption, qualifying the test as a new IVCT requiring review.
Transition Period [Sec. 5]
The VALID Act has been gaining traction within Congress and there is potential for the bill to pass this year. The legislation includes a transition phase of four years after enactment, where FDA will develop final regulations and issue guidance, followed by labs having the remaining two years to educate themselves, develop new processes, and comply with the law.
High complexity CLIA laboratories that offer or plan to offer LDTs need to be engaged and educate themselves on the regulatory burden that will be introduced, as well as the potential impact this bill may have on their test menu offerings.
In theory, the VALID Act would address issues related to clinical laboratory uncertainty around the regulation of LDTs, but would represent a significant change for high-complexity CLIA laboratories that develop LDTs. While there is no set timeline as to when VALID is likely to pass, it appears the bill will be attached to other must-pass legislation this fall. Thus, 2022 is shaping up to be a very active year for clinical laboratory regulations.
Shannon Bennett, MS, MBA, CMQ/OE(ASQ), is the director of regulatory affairs within the Department of Laboratory Medicine and Pathology at Mayo Clinic, with a principle focus on clinical laboratory test development, verification/validation, and regulatory submissions. Shannon holds bachelor’s degrees in microbiology and biotechnology from North Dakota State University, a master’s degree in biochemistry and structural biology from the Mayo Clinic Medical School, and an MBA in project management from NorthCentral University. Shannon is a certified manager of quality and organizational excellence from the American Society for Quality.