One Step Closer to Final: The LDT Rule Arrives at OMB, Making A Lawsuit More Likely

FDA’s proposed rule to regulate laboratory developed tests (LDTs) as devices took one more step towards publication as a final rule – and to a likely judicial showdown.  On March 1, the Office of Management and Budget (OMB) received the draft final LDT rule for review (here).

The LDT rule has moved forward with astonishing speed, advancing from the release of the proposed rule on October 3, 2023 to OMB in less than five months.  This stands in marked contrast to FDA’s prior efforts to regulate LDTs (see posts here, here, and here), and to the agency’s more typical, deliberate pace for rulemaking.  For comparison, it took FDA nearly two years from issuance to finalization of the proposed rule to harmonize the Quality System Regulation with international standards.

This extreme rapidity has been attributed to FDA’s desire to avoid having the rule being overturned by Congress under the Congressional Review Act.  Of course, if a new administration takes over next year, the rule’s future would be questionable, even without congressional action.

The speed of the LDT rule is even more astonishing in light of the nearly 7,000 comments that were submitted in response to the proposed rule. Under the Administrative Procedure Act (APA), the FDA is obligated to address all major substantive comments.  While some comments were duplicative or brief, others pointed out major flaws.  See for example our firm’s comments on the proposed rule (here). For  FDA to review and respond in a matter of months to comments that raised substantial issues about a major rule that would transform the laboratory industry is nothing short of breathtaking.  It seems unlikely that FDA would have made significant revisions and meaningfully addressed these concerns..  It remains to be seen whether FDA’s hasty review of these comments will provide additional fodder under the Administrative Procedure Act for failing to have adequately addressed major substantive comments.

With the release of the final rule by the Department of Health and Human Services to OMB, litigation is now virtually inevitable.  There had been some speculation that the release of the proposed rule would spur Congress to take action.  That hasn’t happened yet.  Given that Congress struggles to keep the government funded, it is far-fetched now to expect Congress to enact this complex legislation – especially since it has repeatedly failed to do so.  Congress has engaged in multiple attempts to pass the VALID Act (see posts here and here).

Barring unexpected action by OMB, we would expect the final rule to be published in the next few months.  And at that point, given the large number of laboratories and clinicians that will be adversely affected, it would be very surprising if FDA were not sued by one or more plaintiffs.  As we have previously noted, there are plenty of grounds for challenging any final rule that is released.  See our prior post here.

For years, lawyers have debated what the courts would do if FDA sought to regulate LDTs via a regulation.  It now appears that we will not have long to wait to find out.