Industry, Dems and GOP clash on looming diagnostics regulations

ACLA president Alan Mertz

Stakeholders unleashed dueling statments in reaction to FDA's long-anticipated move toward regulating laboratory developed tests announced July 31, reflecting the financial and political fault lines of the proposed framework.

Clinical labs that carry out the test themselves will be subject to FDA's strict scrutiny following the release of a final guidance (which won't occur in the near term), putting them on equal footing with manufacturers of diagnostic kit equipment which are already under the purview of the agency. Accordingly, the American Clinical Laboratory Association said it "expresses concern" with the looming guidance, while AdvaMed, which represents test kit manufacturers like Roche ($RHHBY) and Qiagen ($QGEN) through its AdvaMedDx diagnostics arm, commended FDA's reforms.

"AdvaMedDx welcomes the publication of the draft framework on a risk-based approach to the regulation of LDTs and looks forward to reviewing the draft guidance when it is issued. These types of tests are increasingly being used to diagnose and guide the treatment of potentially life-threatening conditions, and FDA oversight of higher risk diagnostic tests including companion diagnostics, regardless of the manufacturer, is essential to patient safety," AdvaMedDx executive director Andrew Fish said in a statement.

AdvaMed said its position is supported by various professional societies, but ACLA is not one of them. The leading opposition figure to FDA regulation of LDTs urged "the agency to exercise caution, and expressed concern that another layer of regulation could stifle diagnostic innovation and ultimately jeopardize patient access to timely and effective treatments" in its statement. The federal Clinical Laboratory Improvement Amendments that govern lab-developed tests are "a thorough and detailed regulatory process," said ACLA president Alan Mertz in the statement.

Mertz has an ally in Rep. Michael Burgess (R-TX) who in 2011 introduced a bill that would ban the FDA from regulating genetic diagnostic testing, and secured the requirement that the FDA notify Congress before prior to issuing its draft guidance--the event that occurred yesterday.

"Applying FDA's regulatory approach to LDTs is redundant, will stifle innovation and will require additional taxpayer funding for the FDA. To the extent concerns about 'higher-risk' tests exist; these can be addressed at no cost to the government through a modernization of The Clinical Laboratory Improvement Amendments," he said in a statement.

"Professional medical services are not regulated by FDA. More importantly, the question of agency jurisdiction over LDTs has never been legally clarified. LDTs neither constitute 'medical devices' nor are commercially distributed among states--both requirements for FDA jurisdiction under the Federal Food, Drug, and Cosmetic Act," it continues. (But FDA's Jeffrey Shuren, who heads agency's devices arm emphatically said that LDTs are medical devices when asked about the potential for a law suit following yesterday's announcement.)

Sen. Edward Markey (D-MA) praised the announcement, saying, "Once this guidance is finalized, doctors and patients can rest and test assured knowing that certain high-risk diagnostic tests have been subject to the additional oversight by the FDA that will help ensure that diagnoses based on these tests are sound." He was one of the 5 Democratic senators that signed a July 2 letter to the White House Office of Management and Budget calling for the release of the guidance; the document had been held up in the agency since 2010.

Leerink Partners equity analyst Dan Leonard offered some important perspective amid the various reactions. In a research note he said the news from FDA "is likely to affect investor sentiment more so than actual fundamentals for companies impacted." Those companies include Qiagen, NanoString Technologies, Foundation Medicine, Genomic Health, Veracyte, and Myriad Genetics.

The draft guidance will be released after at least 60 days, though the FDA described its content to Congress. Implementation will follow a public comment period and the issuance of a final guidance, which could take months to years to arrive. But judging by the strong reaction on all sides, as well as the fierce support and opposition FDA encountered to get to this point, the announcement is still a big deal, and not just in terms of stakeholder sentiment.

- here's the announcement from the FDA
- read AdvaMed's release in favor of the form
- read ACLA's release opposed to it
- read Sen. Markey's statement in support
- read Rep. Burgess's statement in opposition

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