FDA will not collect user fees to support its planned pre-market reviews of laboratory-developed tests, according to a draft agreement with industry.

The agency and industry agreed to a draft commitment letter and proposed legislative language for the reauthorization of the Medical Device User Fee Act in negotiations that concluded Feb. 17. The letter and legislative language are undergoing concurrent review at HHS and the Office of Management and Budget, and will be published in the Federal Register for public comment before being sent to Congress. (See in this issue Also see "Industry, FDA Agree On Draft User Fee Commitment Letter" - Medtech Insight, 5 March, 2012..)

One primary area of discussion between the parties since they reached an agreement “in principle” a month ago was a proposed user-fee waiver for laboratory-developed tests, according to meeting minutes recently released by FDA.

Laboratory-developed tests are created and performed as diagnostic services within a laboratory and are not currently subject to FDA approval or clearance, based on an enforcement discretion policy by the agency. But FDA is developing a new framework to actively regulate LDTs for the first time. (See Also see "FDA: Draft Guidance For Laboratory-Developed Test Regs Taking Extra Time" - Medtech Insight, 25 April, 2011..)

FDA says reviews of lab-developed tests would not be subject to the performance goals outlined for other device submissions.

The lab industry is generally opposed to FDA oversight, but within the context of user fee negotiations the American Clinical Laboratory Association pushed for LDTs to be exempt from user fees if an FDA review process were to be established.

FDA agreed to waive the fees for LDTs as part of its agreement with industry to reauthorize the user fee program from fiscal 2013 through 2017. Reviews of lab-developed tests will not be subject to the performance review goals that are outlined for other devices in the commitment letter. (See Also see "Device Industry Expects Quicker Path To Market In Exchange For Doubling Of User Fees" - Medtech Insight, 6 February, 2012..)

The agency says it assuaged concerns of the broader device industry that the waiver “could throw off the balance of resources and commitments achieved in the agreement,” by stating that any planned policy change for LDTs would not be the basis for FDA missing performance goals.

The lack of LDT user fees means the reviews will be supported primarily through congressionally appropriated funding, which FDA suggests will be sufficient. However, the lack of user fee funding does not imply that LDT reviews “go to the back of the line,” the agency said in Feb. 16 meeting minutes.

FDA estimates LDT review will cost the device center about $3 million per year. Included in the proposed legislative language is a 2% annual cap on the fee waivers, based on the total annual fee revenues. The discretionary fee waiver provision would expire at the end of the user fee agreement on Oct. 1, 2017. FDA says it does not anticipate exceeding the annual waiver cap.

LDT Policy Under “Administration Review”

When FDA will actually begin requiring reviews for LDTs is yet unknown, and is a separate matter from the user fee negotiations.

The agency has said it plans to introduce a risk-based, phased-in LDT framework through the release of three separate guidance documents on regulatory oversight, standards for FDA notification and medical device reporting, and quality system requirements. (See Also see "CDRH In 2012: More Pilots, Guidances And Regs" - Medtech Insight, 30 January, 2012..)

FDA spokeswoman Karen Riley said the agency’s plan to adjust its enforcement discretion policy for LDTs is currently under “administration review."

“If that revised policy is implemented, and additional LDTs are submitted for review under that revised policy, they will be reviewed in the same timelines as other diagnostic devices,” Riley told “The Gray Sheet.” However, “the timing of when any such policy change would be implemented is outside the scope” of the MDUFA reauthorization effort, she said.

FDA views LDTs as another type of diagnostic test that should comply with the same standards as commercial test kits, according to Riley.

FDA’s draft commitment letter indicates that an independent analysis of FDA’s management of its pre-market review program will include an assessment of the impact that the review of LDTs would have on the entire pre-market review process.

But efforts in Congress could change things. The American Clinical Laboratory Association says it is giving its “full and strong” support to the Modernizing Laboratory Test Standards for Patients Act, introduced by Rep. Michael Burgess, R-Texas, last October to exclude LDTs from FDA regulatory oversight. (See Also see "Lab Group Makes Economic Case For Gene Testing Industry" - Medtech Insight, 30 January, 2012..)

FDA Agrees To Waive User Fees For Reviews Of Lab-Developed Tests

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