Reform in the Time of Coronavirus? Diagnostics Bill Surfaces as Pandemic Escalates

Progress toward long-sought reforms to coalesce the fragmented US diagnostics regulatory system has come just as the COVID-19 pandemic is shining a bright light on some of the quirks and shortcomings of the current system. How this unprecedented experience will shape the future debate is still open to question.

Comprehensive reform legislation called the VALID Act was introduced March 5 by a set of Democrats and Republicans in both the House and Senate. It would create a new regulated product category distinct from medical devices, called In Vitro Clinical Tests. IVCTs would combine manufactured test kits and laboratory developed test (LDT) services into one consistent regulatory framework based on the standard of analytical and clinical validity (as opposed to the “safety and effectiveness” standard for devices).

It is the latest evolution in what has been a decades-long effort to reach the right balance in a system where tests are subject to different oversight depending on who makes them (manufacturer vs. lab) and how they are offered to the market (packaged kit vs. service). FDA has been trying to exert authority over LDTs for years, after what it describes as an initial decision in the 1970s to practice “enforcement discretion;” that is, allowing “high-complexity” laboratories, which have the highest level certification and oversight under the Clinical Laboratory Improvement Amendments (CLIA) from CMS, to make and offer their own tests on patient samples sent to the lab without review.

Since then, the advent of pharmacogenomics and next-generation sequencing among other technology advancements has increased the complexity and impact of diagnostics on patient care. At the same time, laboratory business models have evolved to include large commercial chains and specialized diagnostics firms that set up shop as certified labs rather than kit manufacturers. As a result, FDA has made multiple attempts to bring at least the higher risk LDTs into its regulatory paradigm. But those efforts have been unsuccessful in the face of a skeptical lab community. The agency’s decision to push the issue before Congress several years ago was seen as the best hope to reach a solution. And the VALID Act seems like it could fit the bill.

The chances of the bill passing this year, a highly contentious election year, remained low. Then came the novel coronavirus, spotlighting some of the oddities of the current system for all the country to see. 

Not only does it have bipartisan, bicameral (House and Senate) support, but it has strong backing from FDA, whose recommendations formed the basis of a draft version circulated in 2018. And stakeholders from both the in vitro diagnostics (IVD) and LDT communities were able to provide feedback on the discussion draft before the legislation was introduced (although some in the lab community remain more skeptical compared to the IVD industry). Even with this strongest of starting positions, though, the chances of the bill passing this year, a highly contentious election year, remained low.

Then came the novel coronavirus, spotlighting some of the oddities of the current system for all the country to see.

Emergency Response

Just as the sponsors were preparing to introduce the legislation, concern about a lack of US testing capacity for COVID-19 was escalating. A test developed by the US Centers for Disease Control and Prevention gained Emergency Use Authorization (EUA) from FDA February 4, but problems soon arose when multiple public health labs couldn’t successfully pass the test through necessary validation steps. That was one factor that set off the big delays in testing in the US that are still being felt today. As one strategy to speed up testing, FDA issued an emergency policy allowing high-complexity labs to offer clinical testing 15 days in advance of submitting an EUA. It followed that up several weeks later with an unprecedented move to allow IVD manufacturers to distribute commercial COVID-19 test kits for clinical use up to 15 days in advance of submitting for emergency approval, as long as they have internally validated the test and posted the data online.

The full impact of those policies still remains to be analyzed, but it’s clear that the coronavirus pandemic has raised some issues that sit on the fault lines of the diagnostics reform debate. A publicly declared emergency is the one case in which FDA does consistently enforce regulatory review requirements on clinical laboratories, with the rationale that it would be especially damaging to rely on an inaccurate test during an emergency. That’s why the Centers for Disease Control and Prevention and other labs were expected to submit for emergency authorizations and why FDA had to issue the special 15-day leeway policy to get around that requirement. Outside of an emergency, these labs would just perform their own validations before offering a new test.

The tension between needing to get virus tests out as quickly as possible, but having to take an added regulatory step to produce the emergency assays frustrated academic labs and others. “The current coronavirus pandemic highlights the inefficient FDA oversight processes and, at the same time, underscores the integral role that public health, local academic, and community laboratories play to both patient care and public health surveillance,” the Association for Molecular Pathology, a professional society for laboratorians, noted in a March 18 press release.

AMP is using the opportunity to push another piece of legislation that runs directly counter to the VALID Act—the VITAL Act, introduced by Sen. Rand Paul, R-KY, which explicitly affirms that clinical labs should be regulated under CLIA and not by the FDA. That bill also comes in the context of FDA’s actions over the past year to enforce its regulations on certain labs offering drug treatment guidance based on pharmacogenetic LDTs that FDA says needs more evidence.

The VALID Act does not remove CLIA oversight, but seeks to align FDA IVCT rules with CLIA standards to avoid duplication. Lab operations are currently guided by CLIA standards along with state health department regulations, while IVD firms have to comply with FDA’s Quality System Regulation for manufacturing processes. The counterpoint to AMP’s argument for the IVD sector is that it was manufacturing issues that led to the CDC test mishap. Aligning those manufacturing standards is one important goal of the VALID Act and it is something that will improve lab operations, IVD industry advocates tell Market Pathways on background.

The VALID Act does not remove CLIA oversight, but seeks to align FDA IVCT rules with CLIA standards to avoid duplication.

In either case, it’s clear the evolving COVID-19 situation will impact the VALID Act reform process. Lawmakers made a last-minute addition to the bill before introducing it, essentially incorporating FDA’s 15-day EUA leeway for high-complexity labs into the proposed statute. That is a provision that is likely to be looked at more closely as the legislation and the pandemic move forward.

In addition, the very high-profile focus on diagnostics and lab regulations in light of the coronavirus could conceivably fuel political momentum for the legislation. The House sponsors of the bill are framing the legislation in part as a response to the system weakness spotlighted by the testing shortage in the wake of the epidemic. The headline of their March 5 press release emphasized that the legislation would “expand nation’s diagnostics testing capabilities.”

Susan Van Meter, executive director of AdvaMedDx, the principle trade group for the IVD kit industry, told Market Pathways in an interview:“The coronavirus circumstance ...[is] really an important inflection point for us to focus concretely on what we all can do to ensure we have a system that's flexible, that embraces innovation and does allow patients and providers to get access to tests that ... are reliable and accurate, as rapidly as possible.”

A More Flexible System

But, of course, the legislation is about a lot more than emergency-use infectious disease tests. Diagnostics test-kit makers say the bill as written isn’t perfect, but it offers big opportunities for a more flexible system that prioritizes regulatory resources for the most novel, highest-risk assays for the full range of clinical applications.

“The way I'm looking at it is, it should allow both the agency, as well as the companies, to focus on the things that are important, and the things that are less important we don't need to have the same level of effort or resources,” said Brian Armstrong, the Ad Interim Executive Vice President, Americas Region, for diagnostics firm BioMérieux Inc. “I think it's going to allow everybody to be more efficient.”

That aligns with FDA’s goal and expectation for the reforms. According to FDA’s estimates of its technical assistance documents provided to Congress, which form the basis of the introduced legislation, only about 10% of IVCTs would be subject to full-fledged, individual pre-market review. That’s in part because the bill will exempt outright about 50% of IVCTs from pre-market review. This includes not only low-risk tests from pre-market review, but also a range of other categories, such as rare-disease tests. And the legislation would “grandfather” tests that were already offered by clinical laboratories under LDT enforcement discretion policy prior to the bill’s enactment. Such a grandfathering policy is one of the central demands of the clinical laboratory industry representatives that have engaged in negotiations over the legislation.

The remaining 40% of IVCTs, in FDA’s estimate, should qualify for a completely novel regulatory paradigm that the latest bill calls “technology certification.” Tech certification has some similarities to the “precertification” approach that FDA has been trying to develop for several years for digital health software devices. It asks test-makers to prove the robustness of their development and validation processes and, in return, grants them an allowance to roll out new tests in the same technology group without pre-market review. 

“It would allow the agency to authorize suites of tests that utilize the same technology through analysis of a representative assay and evaluation of the developer's methods and practices,” explained AdvaMedDx’s Van Meter. “We're really excited about that. We're digging into the details of it. But we think it holds great promise.”

Compared to the discussion draft from 2018, the introduced legislation includes more leeway for the types of tests that can be addressed as part of a technology certification. But it still includes restrictions that concern some in the IVD and lab communities. In particular, it defaults to a position that “first-of-a-kind” tests, home-use tests, and a few other specific tests can’t quality for a technology certification unless FDA makes a specific determination after a notice-and-comment process. Test-makers are interested in more risk-based flexibility to apply tech certifications.

Another VALID Act feature that is designed to add regulatory flexibility is the inclusion of “change protocols,” where FDA and the test developer agree in advance on planned types of modifications that the sponsor can perform without going back for agency approval.

“Things like, we can streamline activities for shelf life extension [and] sample changes,” BioMérieux’s Armstrong explained. “FDA and the company will be aligned on where the focus needs to be and, going forward, [agree] on what each party needs to do. We're looking at it very positively.”

Also of note in the bill: a “Breakthrough” pathway for IVCTs that mirrors the existing Breakthrough Device pathway, and a “comprehensive test information system” (CTIS) that will serve both as an electronic submissions platform and as a publicly searchable database of all IVCTs on the market.

“We think it's a really important component of the package to have that level of transparency,” AdvaMedDx’s Van Meter said. “So we would want to ensure that we were able to support standing [CTIS] up as soon as possible, and that all test developers would be subject to having their tests be notified as soon as possible in the CTIS.”

Quality System Scrutiny

The IVD sector and clinical lab community have for decades been on opposites sides on the issue of regulation of LDTs by FDA. The kit industry has pushed for a level regulatory playing field with lab-developed tests, while labs have argued that the services they provide are fundamentally different than packaged products and that CLIA certification combined with lab oversight by state health agencies is more than sufficient.

Efforts taken over the past few years toward the VALID Act have been unusual in that IVD and lab groups have sat at the table with FDA and Congress to hatch out a compromise and they have issued joint statements in support of the process. But one area where labs remain most skeptical about the reforms is in areas tied to FDA’s quality system oversight. That’s the area that offers the most potential for regulatory duplication—both CLIA and FDA’s existing medical device Quality System Regulation (QSR) involve government officials (or contractors) coming to inspect facility operations and records.

One area where labs remain most skeptical about the reforms is in areas tied to FDA’s quality system oversight. 

Stakeholders are closely vetting the VALID section on “test design and quality requirements,” which is intended to adopt some of the elements of the QSR while recognizing some of what CLIA already addresses for labs. Lab stakeholders were critical of the 2018 discussion draft, saying that it would result in too many duplicative requirements. Groups are still reviewing the new legislative text (and the pandemic has obviously reshuffled priorities to other pressing issues), but early signs suggest the bill’s provisions might have attracted some more support.

Patrick Godbey, MD, president of the College of American Pathologists, noted March 6, “The CAP appreciates the changes from the previous versions of the bill so that it now relies on current regulatory structures and directs the administration to ensure there is no regulatory duplication between CLIA and FDA requirements.”

Meanwhile, IVD manufacturers want to ensure that regulations apply equally to kit makers and lab developers. They say FDA’s QSR offers a more robust assurance of production consistency and quality.

The problems that came up with the CDC SARS-CoV-2 test when it was distributed to public health labs last month might be pointed to as a potential case study. Notably, according to press investigations, it was an FDA official, Timothy Stenzel, MD, PhD, head of FDA’s IVD office, who first observed quality control issues in the CDC lab that likely resulted in the problems. Stenzel was there to provide technical assistance to CDC. Stenzel affirmed that it was a manufacturing issue, rather than a pre-market test review issue, that led to the problems during a March 2 FDA webinar.

“We believe the design of the original CDC assay that was reviewed in the EUA application was solid,” Stenzel said. “The design was good,” he said. “It was a manufacturing issue that we [CDC with FDA’s assistance] have now resolved.”

Next Steps

Right now, Congress is completely focused on emergency pieces of legislation addressing healthcare and testing access, as well as economic stimulus. No longer term measures are under consideration. And, with some members of Congress coming down with COVID-19, it’s not clear what steps Congress will be taking to remain in session in the near term.

Once the US gets past the crisis, it is likely that diagnostic testing and lab infrastructure will be one major focus for public policy reform. Testing delays are at the top of just about everyone’s list as to why the country fell behind in responding to the pandemic. It’s possible the VALID Act or parts of it could be folded into a broader response legislation. Although, it’s also possible that labs could follow AMP’s lead in pushing against the framework, arguing that FDA adds inefficiencies.

It is hard to imagine that emergency access to diagnostics won’t need to be addressed in some way. The bill’s sponsors added FDA’s 15-day pre-EUA policy for labs to the bill, but the agency’s subsequent approach evolved as testing fell further behind the virus. Based on the language in the bill introduced on March 5, IVD makers were looking at ways to establish more equal footing with labs on EUA policies. They envisioned an allowance for companies to “pre-position” tests at labs in advance of authorization during a declared emergency to speed up testing access once an EUA is granted. That is exactly the approach FDA took for its March 12 EUA granted to Roche for its cobas SARS-CoV-2 assay. But only four days later, the agency changed its policy to allow not only pre-positioning, but actual clinical use of the commercial tests in advance of an EUA.

Overall, it’s clear that diagnostics policy, among many other interconnected systems in healthcare and beyond, will need some rethinking in the wake of this global emergency. But when the world will be ready for that type of broader focus on reforms, as everyone still deals with the day-to-day crisis, remains to be seen.

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