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Breaking Down the Regulation of LDTs: Public Health, First Amendment, and Innovation

Mon, 07/07/2014 - 11:52am
Richard Park, Contributing Editor

During the past few weeks, I’ve been reporting on a letter that Bradley M. Thompson, JD, and James A. Boiani, JD, attorneys at Epstein Becker Green, recently sent to FDA Commissioner Margaret Hamburg. The attorneys sent this letter on behalf of the Combination Products Coalition (CPC), an association of drug, biologic, medical device, and IVD manufacturers dedicated to working with FDA to improve the regulation of combination products. In the letter, they discussed the regulation of laboratory-developed tests (LDT) and made the argument for “creating a single regulatory framework for IVDs and LDTs.” This week’s blog presents further information from this letter.

Read: Breaking Down the Regulation of LDTs: FDA Jurisdiction

Public Health Hazards and First Amendment Violations
According to the letter, for the past 38 years, the FDAs of seven Presidential administrations have failed to confront the problem of the existence of dual regulatory systems for IVDs and LDTs. To compensate for this, the agency has attempted to regulate LDTs indirectly by imposing significant limits on IVD manufacturer speech. Unfortunately, FDA’s approach has worked against the public health by diminishing the scientific expertise that emerges during LDT development.

“For example, in 1997, FDA created the analyte specific reagent (ASR) device classification to cover the sale of certain reagents used in manufacturing LDTs,” said the letter. “Under the ASR regulation, manufacturers are prohibited from including any statement regarding the analytical or clinical performance of their products in advertising and promotional materials, and may not provide any information resembling support for LDT development.”

The letter added that in 2007, FDA adopted further restrictions on ASRs, stating that the combinations of two or more reagents (e.g., a primer and probe) could not be sold as ASRs. As a result, only the most basic reagents can be sold to laboratories, leaving it solely to them to create their own reagent combinations outside of an FDA-regulated quality system, and with no information on how they might be used safely or effectively.

Read: Breaking Down the Regulation of LDTs: FDA Authority

“These restrictions do not further the public health. They harm it,” said the letter. “To ensure development of the best possible tests, FDA should be fostering communication between IVD manufacturers of LDT components and the laboratories that manufacture LDTs. Instead, laboratories, some of which may have considerably less expertise in test development than the IVD manufacturers selling LDT components, are left to figure out things on their own. This may lead to worse tests, and worse care, than could be achieved with collaboration.”

The letter stated that FDA’s approach also violates IVD manufacturers’ First Amendment rights. The First Amendment protects speech from unwarranted government regulation and represents a belief dating back to the founding of the U.S. that the free exchange of information is better than limiting information.

“For that reason, the Supreme Court has held that the government may only restrict lawful commercial speech of manufacturers (such as sales-related scientific discussion) when the government has a substantial interest in the activity, the restrictions forward the asserted government interest, and the restrictions are not more extensive than they need to be to advance the government interest,” said the letter. “FDA’s interest in ensuring the safety and effectiveness of IVD tests is admittedly substantial. However, its approach to regulation fails the second and third criteria.”

The letter found that FDA’s approach does not advance the government’s interest in ensuring the safety and effectiveness of IVD tests. Inhibiting the exchange of scientific information between IVD manufacturers and laboratories that make LDTs will actually prevent labs from developing safer and more effective tests. In addition, the agency’s restrictions on ASRs are not narrowly drawn because there are other ways to achieve the government’s interest. An obvious and direct means of forwarding the government’s interest without any restrictions on speech is to regulate LDTs like other IVDs.

“The solution to all of these problems is to directly regulate LDTs,” said the letter. “With direct regulation, laboratories and their suppliers (other IVD companies) can freely discuss the best possible products or combination of products for a test, as well as ways to ensure their safe and effective use. The laboratory, as the ultimate manufacturer of the finished diagnostic test, would have final responsibility for ensuring its product meets the applicable regulatory standards. However, laboratories would be able to make better tests as the result of open scientific exchange.”

Breaking Down the Regulation of LDTs: Access to Innovative IVDs

Spurring IVD Innovation
The letter stated the American Clinical Laboratory Association (ACLA) has argued that FDA regulation of LDTs will hinder future innovation by laboratories. This may be true, assuming that the current FDA system for IVDs is imposed on LDTs to equalize regulation (as opposed to deregulating IVDs). However, the total level of IVD innovation may improve under a single regulatory system for two reasons.

“First, a single regulatory system will encourage investment and innovation by IVD manufacturers because it will remove the unfair competitive advantage that laboratories currently have,” said the letter. “Second, though not as efficient as non-regulation of laboratories, there are accelerated pathways to market that currently exist for IVDs, and others that are being developed, which offer better balance between innovation and regulation. As a result, a dual regulatory system is not needed to preserve innovation.”

The letter found that by maintaining a dual system of regulation, FDA favors development of LDTs while erecting barriers to IVD manufacturer innovation. This provides an economic disincentive to IVD manufacturers. The agency has recognized this and stated at a 2010 public meeting, “FDA recognizes that while the absence of FDA oversight may make it easier for laboratories to develop and offer tests on a rapid timeline, the absence of a level playing field creates a disincentive to innovation by other manufacturers whose tests are approved or cleared by the agency. As a result, diagnostics critical for patient care may not be developed in a manner that provides a reasonable assurance of safety and effectiveness.”

“The problem was also highlighted in an article, which explained that the lack of protections on IVDs as a result of unfair LDT competition can stymie collection of important clinical evidence evaluating the benefits of their use,” said the letter. “Essentially, if the LDT manufacturer can ride the coattails of an FDA-approved IVD and avoid the same cost of market entry, it will be difficult for IVD developers to continue putting resources into IVD development under the FDA system.”

In the coming weeks, I’ll continue to discuss how the attorneys explain why FDA can and should create a single regulatory system that treats manufacturers equally, whether they call themselves a lab, an IVD company, or something else. I’ll also discuss their proposed actions that FDA should take to establish equal regulation.

Read: Breaking Down the Regulation of LDTs: Moving Forward

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