Thursday, May 30, 2024

ACLA Slams FDA With Hard-Hitting Lawsuit over LDT Regulation

On May 6, FDA published a 160-page complex new regulatory regime for lab-developed tests, to be rolled out (with many carveouts and complications) by 2027.

Now, on May 29, FDA has filed a whopping 450-page case, including supporting documents  As I predicted at several conferences, it filed the case in Texas, where I think an initial ruling against the government is likely, which will start the ball rolling on various appeals and counter-attacks.   The Texas filing, I think, raises the chance of an injunction while issues simmer.  Grounds for this include the $101M in projected spending by labs to comply, just in the first months of the 5-year plan.

Much may depend on the next administration: if it is a change of regime they might provide a lukewarm defense, or less, of the regulation.  For example, some LGBT-related regulations have gone through three literal 180 degree flip-flops across the three Obama, Trump, and Biden administrations. 

Read About It

  • See the ACLA press release here.
  • See the 7 mb PDF download (450pp) here.
  • See coverage at CAP TODAY here.
  • See MedTech Dive here.
  • See 360Dx here.  (I think, open access).
  • See a supportive 23-page filing from ARUP, here, here.

ARUP notes, as does ACLA, that the regulation makes LDTs illegal, except only for the FDA's discretionary non-prosecution.

360Dx Quotes ACLA Press Conference

360Dx quotes a press conference held by ACLA.  Here's an important remark they provide from ACLA's President, Susan van Meter:

"Indeed, the fact that the FDA found it necessary to establish a complex regulatory system with multiple carve-outs only serves to emphasize that the [medical] device regime is a terrible fit for laboratory testing services."

The Case in Brief

While the full FDA posting is 450-pages, the first 59 pages are the pivotal new court document, building up to its request for a declaratory decision that the FDA proposal is contrary to law, and an order that enjoins the FDA from carrying it out.  (ACLA would want the regulation to be on hold during the subsequent legal appeals.)

There follows a supportive filing from Jay Reddy PhD, Denton Texas, regarding HealthTrackRx clinical lab operations in Texas.   This facilitates filing the case in a Texas jurisdiction of the federal courts.  This continues to PDF page 77.   

PDF page 78 kicks off with a statement of Marcia Eisenberg PhD, LabCorp.  She discusses adverse effects of the FDA plan.

PDF page 86 opens a statement by Yuri Fesko MD, Quest.  Again, the FDA plan is a very bad idea.

PDF page 96 opens a statement from Jonathan Gensen MD PhD, ARUP.   This was released separately by ARUP in a press release (above).

Page 120 opens a statement from William Morice MD PhD, Mayo.   

Page 146-162  is a very detailed, authoritative 2020 memo from the General Counsel of HHS under Trump, William Charrow, to the then-commissioner of FDA William Hahn, that FDA lacks legal authority to regulate LDTs.   As I recall, the Biden administration navigated this legal positioning not by rebutting it, but by simply deleting it from the HHS website.  

At 164ff, we have the FDA's very elaborate comments, and devastating refutation of the FDA's shadowy economic assertions, filed in December 2023. The economics, from Prof. Carrigan, begin at page 245.   

Page 272ff provides the FDA final rule in typescript form, not the typeset May 6 form.

I would add re Agency Discretion

In many ways, the FDA's plan is like the guy who gets three wishes from a genie, and he asks for unlimited wishes.   

Stakeholders ask that FDA only make new major policies for LDTs "by regulations."  OK.  What we got is, FDA responds by a regulation, a few words long, that it can regulate any LDTs in any way it wants (by time-to-time agency use of discretion vs crackdown, on its own rolling basis, as it sees fit, without any further notice and comment regulation, ever again.)   (See section below about "major questions" doctrine).

As ACLA and ARUP make clear, the law makes LDTs "manufactured by a laboratory" illegal if not approved by FDA.   It's only that FDA gives discretion against prosecution.  This is like saying that IRS makes fraudulent  $100 charity deductions illegal, except that it will not prosecute them if they are $100 or less.  

AI Corner: Chat GPT 4 Reviews Filing

(Begin AI) 

The lawsuit filed against the FDA by the American Clinical Laboratory Association and HealthTrackRX focuses on challenging the FDA's plan to regulate laboratory-developed tests (LDTs) as medical devices. Here are the main points, key arguments, and requests for action from the plaintiffs:

Main Points

  1. Historical Regulation: LDTs have historically been regulated under a separate framework, the Clinical Laboratory Improvement Amendments (CLIA), which did not involve the FDA's device-oriented regulatory framework. The plaintiffs argue that LDTs are services performed by skilled professionals, not tangible medical devices that are manufactured and sold.

  2. FDA Overreach: The FDA's new rule seeks to redefine LDTs as medical devices under the Federal Food, Drug, and Cosmetic Act (FDCA), a move that plaintiffs argue exceeds the FDA's statutory authority. They contend that Congress has never granted the FDA the authority to regulate LDTs in this manner.

  3. Impact on Healthcare: Plaintiffs argue that the FDA's regulation would dramatically disrupt laboratory operations by imposing device approval requirements on tests that are currently under a different regulatory regime. This could hinder innovation, increase costs, and delay the availability of new LDTs, adversely affecting patient care.

Key Arguments

  1. Statutory Overreach: Plaintiffs claim the FDA's actions are contrary to law and exceed its statutory jurisdiction, arguing that LDTs are not "devices" under the definitions provided in the FDCA. They assert that these are professional services rendered using various tools, not products distributed in commerce.

  2. Administrative Overreach: The rule is described as arbitrary and capricious under the Administrative Procedure Act. The plaintiffs argue that the FDA has not justified the reclassification with substantial evidence and that the move does not consider the actual operation and context of LDTs in clinical settings.

  3. Impact and Practicality: The imposition of medical device regulations on LDTs is argued to be not only beyond the FDA's authority but also impractical and harmful, risking critical diagnostic services and potentially harming public health due to reduced access to essential tests.

Requests for Action

  1. Injunction and Vacatur: Plaintiffs request the court to vacate and set aside the FDA’s final rule. They seek a declaratory judgment that the rule is unlawful and an injunction to prevent the FDA from implementing or enforcing the rule.

  2. Declaratory Relief: The plaintiffs are seeking a judicial declaration that the FDA does not have the authority to regulate LDTs as medical devices and that its attempt to do so via the final rule is invalid.

  3. Judicial Review: The plaintiffs invite the court to review the FDA's rule under the standards of the Administrative Procedure Act to determine its legality and appropriateness under federal law.

In summary, the lawsuit focuses on defending the historical regulatory distinction between LDTs and medical devices, challenging the FDA’s statutory interpretation and its practical implications for healthcare services. The plaintiffs are seeking a court order to halt the FDA’s reclassification of LDTs as medical devices, arguing it is beyond the agency’s authority and would negatively impact the healthcare system.   (end AI)

More About Major Questions

As to the Major Questions Doctrine, ACLA writes,

FDA’s attempt to regulate laboratory testing services as devices also implicates the major questions doctrine. See West Virginia, 597 U.S. at 724. FDA’s rule would mean that the entire clinical laboratory sector, which is a significant part of the U.S. healthcare system, has been breaking the law for nearly 50 years, and possibly much longer. And it would mean that going forward, the entire profession is operating unlawfully and can be subject to civil and criminal penalties at any time, with its only protection coming from a policy of enforcement discretion that FDA insists it is free to revoke at any time. The rule would also wreak havoc on clinical laboratories and the doctors and patients they serve, imposing billions of dollars in immediate, unnecessary costs....

An agency cannot impose massive costs and place an entire profession under its thumb in this manner without, at minimum, a clear statement from Congress. The Supreme Court has repeatedly warned that agencies should not attempt, and courts should not abide, such drastic expansions of the agency’s authority under a “‘long-extant statute’”—especially where, as here, Congress has “conspicuously and repeatedly declined to enact” such an expansion itself.