Final FDA rule on LDTs creates a paradigm shift for laboratory manufacturers and partners, announces Avalere

WASHINGTON, D.C., April 30, 2024 –The Food and Drug Administration’s (FDA) final rule has reclassified laboratory developed tests (LDTs) as medical devices, according to Avalere. The rule leads to a paradigm shift that will create new burdens on laboratory manufacturers.

“By explicitly defining LDTs as a type of in-vitro diagnostic tests (IVDs), LDTs become subject to FDA enforcement both pre- and post-market, affecting commercialization through requirements for an expanded level of evidence demonstrating safety and efficacy,” said Laura Housman, Practice Director for consulting firm, Avalere, part of Avalere Health.

There are more than 320,000 laboratories in the U.S., according to the American Clinical Laboratory Association. Only an estimated 12,000 labs are certified to develop and deploy LDTs. Examples of LDTs include:

• Coronavirus/COVID 19 tests obtained for the nasal passages
• Flu tests on fluid obtained from the lower respiratory tract
• Genetic tests, such as BRCA for breast cancers, and genetic tests for rare diseases, such as Huntington disease
• Predictive and prognostic screening and diagnostic tests for a range of diseases, such as colorectal cancer, breast cancer, and diabetes

“The FDA rule changes the paradigm,” noted Housman. “Diagnostic manufacturers will need to consider adapting current development and commercialization strategies in response to policy changes. Pharmaceutical sponsors with therapeutics that rely on biomarker diagnostics will have a new set of considerations as they map their companion diagnostic partnership strategies.”

Avalere experts have begun alerting laboratory developers and manufacturers about the implications of the new rule and provided the following recommendations for these companies to consider:

• Reevaluate marketed and pipeline diagnostics in light of FDA requirements
• Reassess prioritization of products based on market potential and evidence burden
• Establish and expand evidence generation, including health economics and outcomes research
• Capitalize on the value of real-world data
• Assess development and commercialization opportunities with new targeted evidence
• Collaborate with partners to enhance treatment access

About Avalere

Avalere, part of Avalere Health, is a strategic advisory company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington, D.C., the firm delivers actionable insights, product solutions and custom analytics for leaders in the healthcare business and policy. Avalere's experts span 230 staff drawn from Fortune 500 healthcare companies, the federal government (e.g., CMS, OMB, CBO and Congress), top consultancies and nonprofits. The firm offers deep substance on the full range of healthcare business issues affecting the Fortune 500 healthcare companies. Avalere’s focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications and interactive programs, Avalere insights are accessible to a broad range of customers. For more information, visit avalere.com, or follow us on LinkedIn.