The Food and Drug Administration (FDA) is being sued in two lawsuits after releasing its Final Rule on Laboratory Developed Tests (LDTs). The Final Rule requires laboratories to adhere to the same preapproval and post-marketing requirements of mass-produced medical devices.

In its Final Rule, the FDA emphasizes that the agency has always had the discretion to enforce legal requirements concerning LDTs. However, the FDA refrained from exercising this authority under the Medical Device Amendments of 1976, since LDTs were initially manufactured by specialized personnel in smaller volumes for a local patient population. Therefore, now that the landscape is riskier since LDTs are manufactured nationwide for diverse populations, the FDA holds that it may enforce these other applicable legal requirements.

After the Final Rule, two cases were filed challenging it. In American Clinical Laboratory Association et al v. U.S. Food and Drug Administration et al. (ACLA) and Association for Molecular Pathology and Michael Laposata v. U.S. Food and Drug Administration et al.(AMP), the plaintiffs argue that forcing labs to require the FDA to regulate professional laboratory testing will be a massive setback for the medical community, hindering medical innovation, reducing competition, imposing billions of dollars in regulatory mandates, and jeopardizing the health of millions of Americans. Both cases have been consolidated under ACLA and are pending in the United States District Court, Eastern District of Texas.

The now consolidated complaint asserts that the FDA has exceeded its statutory authority. Citing the Congressional Record, the plaintiffs argue that Congress authorized the FDA to regulate medical devices, specifically distinguishing between mass-produced medical devices manufactured for third-party use and customized LDTs, which are developed and performed by highly trained health care professionals working within a licensed and accredited facility. The complaint adds that Congress has not provided the FDA with the appropriate resources to implement this authority over thousands of testing services. The plaintiffs further contend that LDTs have already been subject to a distinct regulatory regime under the Clinical Laboratory Improvement Amendments (CLIA.) 

The plaintiffs filed a motion for summary judgment earlier this year, and the FDA filed a cross-motion for summary judgment and in opposition to the plaintiffs’ motion for summary judgment. Just recently (on December 23, 2024), the plaintiffs filed their reply in the case, completing the briefing.

Docket Timeline

• September 20, 2024:­ The motion to consolidate both lawsuits under ACLA was granted.
• September 27, 2024: AMP plaintiffs submitted a summary judgment motion.
• October 7, 2024: The Association for Diagnostics & Laboratory Medicine, American Association of Bioanalysts, American Society for Clinical Pathology, American Society for Microbiology, and the Infectious Disease Society of America filed an amicus brief supporting the plaintiffs’ position that the FDA’s final LDT rule exceeds the agency’s statutory authority. The brief urges the court to strike down the rule to avoid patient harm.
• October 25, 2024: The defendants jointly respond to plaintiffs’ briefs.
• November 25, 2024: Plaintiffs’ closing briefs filed.
• December 23, 2024: Defendants’ closing brief in support of their cross-motion is filed.
• Q1 2025: Oral argument before the court is anticipated.
• May 6, 2025: Labs expected to comply with Final Rule Phase 1 requirements unless the challenge is successful or otherwise changed.

Plaintiffs’ Motion for Summary Judgement

ACLA’s September 2024 motion for summary judgment urged the court to vacate the Final Rule and enjoin the defendants from its enforcement. ACLA argued in principle that (1) the FDA faces a heavy burden to justify its classification of laboratory testing services as medical devices; (2) Congress did not grant the FDA authority to regulate professional laboratory-developed testing services in light of the major questions doctrine and statutory construction; and (3) the FDA lacks justification.

Similarly, AMP’s motion for summary judgment urges the court to vacate the Final Rule and enjoin the defendants from enforcement. AMP argues that (1) the Federal Food, Drug, and Cosmetic Act (FDCA) does not authorize the FDA to regulate LDTs as medical devices, and (2) the Final Rule is arbitrary and capricious.

The plaintiffs collectively assert that Congress only authorized the FDA to regulate devices (defined as tangible goods) to provide premarket review and postmarket action against misbranded or adulterated devices. As defined by Congress, LDTs are neither tangible goods nor commercially distributed. Under CLIA, LDTs are not devices, but as AMP noted, “multi-step, protocol-based procedures developed and performed by highly trained professionals within a laboratory.” Further, the FDA has never exercised oversight, and even when Congress strengthened CLIA’s regulatory framework in 1988, it refrained from extending laboratory oversight. The amended regulations imposed stringent quality and performance standards while allowing laboratories the flexibility needed to meet patient demand. The plaintiffs argue that per CLIA, laboratories’ biennial certification process is designed to continuously improve testing procedures.

In contrast, the FDA’s quality requirements are designed to keep commercial devices “static” and only monitor for adverse events. The motion also notes that, since 1976, the FDA has never formally expressed its belief that LDTs fall under the agency’s regulatory authority, nor at any point did Congress identify the agency as a regulator. Both plaintiffs argue that the FDA may not attempt to assert power under decades-old legislation after Congress has repeatedly declined to grant the agency that power. As a result, this is a “major questions” issue for the court to interpret.

The AMP motion also highlights that the FDCA clearly prohibits the FDA from interfering with or limiting the authority of a health care practitioner to prescribe any legally marketed device to a patient.

AMP also asserted that the Final Rule is arbitrary and capricious. AMP argues that the Final Rule mischaracterizes anecdotal reports the FDA used to justify the rule’s implementation. For instance, the FDA argues its “concerns” about LDTs have worsened over time; however, of the 160,800 LDTs currently in use, it has only identified 52 concerns since 2008. In response, AMP maintains that subjecting LDTs to the FDA’s enforcement process is not based on reasoned agency thinking and will instead incur billions per year in compliance costs, reduce competition, close laboratories, stifle innovation, and harm patients.

Both ACLA and AMP rely on the 2024 headline case of the Loper Bright Enterprises v. Raimondo decision to argue against the discretion given to the FDA. The Loper Bright ruling limited the extent to which federal agencies may interpret vague laws passed by Congress. In the motions, plaintiffs urge the court not to defer to an agency interpretation of a vague law but to rather “exercise its own independent judgment” and decide “whether the FDCA clearly and unambiguously authorizes FDA to regulate LDTs.”

FDA/DOJ Closing Reply Brief

The defendants’ closing reply brief, asked that the court not order universal vacatur and, if the court rules against the defendants, to allow for further briefing on the subject of an appropriate remedy. In defense of their position, the defendants focused on: (1) the Final Rule did not implicate the major questions doctrine or the rule of lenity; (2) the FDA has “unambiguous” statutory authority over LDT testing; and (3) the Final Rule is not arbitrary and capricious.

The defendants continue to assert that they have unambiguous authority to implement the Final Rule and that they “did not make [their] own policy judgment that [they] should have jurisdiction over laboratory-made IVD tests. Rather, the agency simply implemented Congress’s plain textual directive that it does.”[1] The FDA significantly challenged the plaintiffs’ interpretation and analogies of the statutory language and impact and argues that the plaintiffs’ statutory interpretation is “artificially narrow.” The FDA further argued that there is no conflict with CLIA and that it is empowered to ensure there are clinically valid results to protect patients’ safety and the efficacy of treatments relying on the results. Finally, the defendants argue that the action was not arbitrary and capricious because the FDA considered the laboratory industry’s current interests and weighed that interest against problematic testing.

Next Steps

The case is now fully briefed before the court. Whether or not the plaintiffs will be successful is yet to be seen. So far, no other changes have been announced. We will continue to monitor this and any other updates related to the Final Rule.

[1] Defendants’ Reply Brief, available at https://www.amp.org/AMP/assets/File/advocacy/DOJ_ClosingBrief_12_23_2024.pdf?pass=40