The FDA’s public workshop on their draft guidance framework for the regulation of laboratory-developed tests (LDTs) continued yesterday, featuring sessions on three additional issues: 1) notification and adverse event reporting, 2) public procedures for classification and prioritization, and 3) quality system regulation.
Many issues that had been raised during Thursday’s sessions reappeared in the context of these new subjects. Commenters considered whether and when laboratories should be able to submit one (rather than many) LDT notifications and/or registrations, the relationship between clinical use and risk classification, and the need to be sensitive to the diversity of LDTs and their providers in formulating the final guidelines. Other, more legal aspects were also raised again, including concerns about redundancy between FDA regulations and those already promulgated by the Centers for Medicare & Medicaid Services under the Clinical Laboratory Improvement Amendments, whether the FDA possesses the legal authority to regulate most LDTs, and whether the FDA is required to proceed by notice-and-comment rulemaking rather than acting through the guidance process. (Litigation is almost certain to arise on these last two topics, about which I’ll have more to say in future posts.)
But I want to briefly highlight one theme that cropped up on both days more frequently than I had anticipated: the role of insurers and insurance reimbursement. Panelists considered whether insurers or other payers should have a seat at the table when advisory committees are convened to classify and prioritize LDTs for review. They discussed the effect of FDA approval on insurance coverage, debating whether the proposed regulations would increase or decrease access to FDA-approved LDTs. But most importantly (at least in my view), they explicitly considered the way in which increased FDA regulation would combine with decreasing insurance reimbursement to decrease incentives for innovation in diagnostic testing.
I’ve thought about this last question a lot, because I happen to be writing a paper about this very problem. Essentially, over the last five years the incentives to invest in diagnostic technologies have been severely damaged. It is becoming more expensive to develop diagnostics (because of the FDA’s proposed requirements), more difficult to protect diagnostic technologies with patents (due to Federal Circuit and Supreme Court opinions), and more difficult to recoup investments into diagnostic testing (as Congress has cut reimbursement rates). Each of these developments on its own may be salutary (in keeping with this blog post, I’ve written previously about several potential benefits of the FDA’s proposed regulations), but together they threaten the ability of scientists to create and develop badly needed diagnostic tests. Fortunately, just as each legal system has contributed to the problem, each system can also be used to solve it, and there are particular legal interventions that might be leveraged to restore an appropriate balance in incentives to innovate in diagnostic technologies. As it relates to LDTs, the point here is not that companies are wrong to worry about the effects of the FDA’s proposal on innovation. It’s instead that the FDA is not alone in its ability to affect innovation incentives, and it’s not solely the FDA’s responsibility to address these issues. This is a complicated issue, and I look forward to seeing how the FDA decides to proceed.