The International Lyme and Associated Diseases Society (ILADS) is a nonprofit, international, multidisciplinary medical society dedicated to the diagnosis and treatment of Lyme and other complex inflammatory diseases. With these educational blog posts from experts and members of our board, ILADS aims to promote awareness and understanding of health and wellness, especially as it relates to complex inflammatory diseases, so that we can all learn and grow together. If you have any questions or want more information, you can email us at contact@ilads.org. 

Disclaimer: Every patient is an individual with unique characteristics. This blog article is not medical advice. It does not constitute a physician-patient relationship. It is for educational purposes only. Do not try out what is in this article without medical advice, working with your licensed physician and licensed healthcare providers

By Nicole Danielle Bell, CEO of Galaxy Diagnostics and Author of What Lurks in the Woods

I’m typically not one to follow politics. I spend most of my mental energy working to fix the diagnostic challenges plaguing tick-borne illness, and that alone is enough for any one person. But a storm has been brewing over diagnostic testing—and on May 6, 2024 it came to a head. That was the day the FDA issued a “Final Rule” for more rigorous regulation of Lab Developed Tests or LDTs. This Final Rule will have a massive impact on the diagnostic industry. 

Laboratories, clinicians, and people who need testing should be paying close attention.

The ABCs of LDTs

Before we start talking about the rules governing Lab Developed Tests or LDTs, it is important to understand what LDTs are. LDTs are diagnostic tests that are not commercially distributed to other laboratories, but rather are developed, validated, and performed in-house by a single laboratory. 

That may sound like a small percentage of tests, and in 1976, when the FDA implemented the Medical Device Amendments to regulate devices for human use, it was. At that time, the LDT market was generally limited to small laboratories serving their local communities. 

As such, the FDA has historically applied “enforcement discretion” for LDTs, choosing not to enforce regulatory requirements. Instead, they delegated authority to the Centers for Medicare and Medicaid Services (CMS) under the Clinical Laboratory Improvement Amendments (CLIA). 

Fast forward almost 50 years and the diagnostic landscape has changed. Growing demand for specialized testing in cancer, genetic disorders, infectious disease, and personalized medicine has caused the LDT market to explode. In 2023, the LDT market was valued at around USD $8.9B – and yes, that’s a B. 

Lyme, Theranos, and COVID, Oh My!

Debate over LDT regulation began in earnest in the 1990s, when several government advisory groups recommended greater FDA oversight. Over the last decade, the debate has intensified. 

In 2015, the FDA published a report that presented 20 cases of problematic LDTs that caused or may have caused real harm to patients. The very first example in their list of cases? Lyme Disease. The FDA cited that the “Dot Blot” test for Lyme led to “consistently false positive” results and “should not be used for Lyme disease detection.”

Another frequently cited example is Theranos. This company claimed it could use LDTs to diagnose common conditions like diabetes, cancer, and cardiovascular disease using a finger prick. Their unreliable results led one consumer to believe she had HIV when she did not, and another to believe she had miscarried her baby, when she had a healthy pregnancy. In the end, Theranos CEO, Elizabeth Holmes, was sentenced to over 11 years in federal prison for defrauding investors. 

And of course, there is COVID. In February of 2020, the FDA allowed COVID-19 diagnostic tests (which were LDTs) to remain on the market until the FDA had a chance to review their applications for emergency use authorization (EUA). When they analyzed the 125 EUA requests from laboratories, they found that 82 (66%) had design or validation problems, and several were denied authorization.

Is Reform Needed? 

In my humble opinion, YES. 

I’m an engineer, and as such, I like to get to the root of the problem. So what is the root of these systematic issues with LDTs spanning over a decade? Well, CMS regulates laboratories—including their testing processes—but it does NOT regulate the clinical utility of tests. 

What do I mean by this? CMS and CLIA require labs to demonstrate what is known as an “analytical validation.” This means that they can detect the target of interest (i.e. a protein, DNA target, antibody, etc.) reliably. CMS does not require a “clinical validation,” which assesses the accuracy of the test in identifying a particular disease or susceptibility for disease. While many labs offering LDTs comply with a minimum clinical validation standard, FDA clearance requires an additional standard of “clinical utility” which establishes test performance in a specific patient population.

Put more simply and in the context relevant to the ILADS community, labs can release tests reporting results of a protein, antibody, or DNA target and market the tests as tick-borne disease diagnostics, without providing data that those targets are clinically relevant. In the world of recombinant proteins and synthetic DNA, the system is susceptible to errors since the true end game—the patient—is often not in the loop. 

Labs can also provide testing supported by clinical validation in 15-20 patient samples, without providing data supporting comparative test performance in a specific patient group against the current standard of diagnostic care. 

Lab experts generally agree that some form of reform is needed to ensure patient safety and reliability, but the key question is HOW to reform the system. 

I’m From the Government, and I’m Here to Help

The FDA first drafted guidance to provide oversight of LDTs in 2014, but this elicited a strong negative response from the industry. In 2017, the agency released a discussion paper that summarized feedback on the draft guidance and left it to Congress to address the issue.

Congress attempted to address the issue with the Verifying Accurate, Leading-edge IVCT Development (VALID) Act, which aimed to streamline LDT approval through a new “technology certification” pathway and apply a three-tier risk categorization system. This bill was introduced in 2020, revised in 2021, and then again in 2023. Despite years of discussion among stakeholders, The VALID Act has remained controversial, gaining support from organizations such as AdvaMedDx and the Friends of Cancer Research, and criticism from organizations like the Association for Molecular Pathology (AMP).

With Congress failing to provide a solution, the FDA once again picked up the baton and on May 6, 2024, issued the FDA Final Rule on LDTs. This final rule announced the agency’s intent to phase-out their enforcement discretion policies for LDTs and require pre-market approval alongside other diagnostic devices. 

The FDA Final Rule on LDTs – What Does It Say?

So, what did the FDA actually rule? The rule amends its regulations to make it explicit that LDTs are medical devices regulated under the Food, Drug, and Cosmetic Act. As such, they outline increased regulatory oversight of LDTs via a five-stage compliance model, focusing on medical device reporting, labeling, investigational use, and, by 2028, full pre-market review for all LDTs.

Adapted from velsera.com

The rule means that the multi-billion-dollar LDT market has new regulatory hurdles to navigate. Labs will be forced to submit their data for the FDA to review their safety and accuracy, unless they fall under specific (and limited) exemptions. 

How Will the FDA Rule Impact You?

Well, that was a lot of preamble to get to the heart of the conversation – can the FDA rule impact you? The answer is yes, yes it can.

The reality is, many of the tests used in clinical practice are LDTs. A published study of an academic hospital system noted that 45% of the tests run in 2021 were LDTs. Now this was by test type, not volume, but I would ask, when you look at a test menu, do you know which of the almost 50% of tests offered are LDTs and which are FDA-approved?

The tick-borne disease community often relies upon innovative, specialty testing to unravel complex chronic diseases. Most of these tests are LDTs, so this is a key legislative issue and a huge threat to patient care. 

So, is the FDA Final Rule Actually Final?

Given the massive stakes at play, labs across the country have united against the FDA rule, noting critical impacts to the diagnostic industry. The top criticisms include: 

1. Increased costs to bring tests to market. 

Increased regulation and FDA approval can increase the cost of development by 10-20x. Opponents of the Final Rule project increased costs to laboratories of between $2.39 and $19.45 billion annually.  Increased laboratory costs will inevitably drive the price of testing up for consumers and payers. 

2. Decreased innovation in the diagnostic market.

The increased regulatory burden and cost will reduce the development of low-profit, but high need tests. Niche and emerging markets may not generate the revenue needed to justify the associated costs, as noted by experts at Yale School of Medicine. A lack of innovation leads to massive gaps in patient care for esoteric diseases or infections.

3. Reduced access to tests.

Nearly 61% of labs said they will likely remove current tests from their menu in response to the FDA rule, and an additional 33% of respondents said they don’t know what they will do. 

Industry protests go well beyond criticisms. The American Clinical Laboratory Association (ACLA) and its member company, HealthTrackRx, filed a lawsuit against the FDA in May 2024. ACLA noted that the “medical device framework is inappropriate and ill-suited for regulating lab developed tests” and will create “negative consequences for the entire healthcare system, including millions of vulnerable patients.” The Association for Molecular Pathology (AMP) also filed a similar lawsuit in August 2024, contesting the FDA’s authority to regulate LDTs as medical devices, which AMP argues could severely disrupt laboratory medicine. 

Other lab-focused organizations have joined ACLA and AMP. In October 2024, the American Association of Bioanalysts, American Society for Microbiology, American Society for Clinical Pathology, Association for Diagnostics & Laboratory Medicine, and the Infectious Disease Society of America filed a brief supporting the position that the Final Rule be overturned. 

The recent Chevron ruling by the US Supreme Court also complicates matters, since it diminishes federal agencies’ authority to interpret ambiguous statutes. This change means the courts could take a more active role in interpreting the FDA’s regulatory authority. 

Finally, Congress has made it clear that they also are part of the discussion. In May of 2024, Senator Rand Paul and Congressmen Brad Finstad and Dan Crenshaw introduced Senate and House resolutions providing for congressional disapproval of the FDA Rule. Then, in July of 2024, the House Appropriations Committee, through its committee report, directed the FDA to suspend its efforts to implement the Final Rule. With a new administration coming in January, it isn’t clear how legislators will handle this growing quagmire.

What Can I Do?

While the laboratory industry has launched robust critiques, protests, and lawsuits against the FDA Rule, there is broad consensus in the industry that high complexity testing requires more oversight. Increased standards can and should be implemented, but it is important that this oversight does not negatively impact patient care. 

As a clinician, patient, disease advocate or laboratory worker, you can make your voice heard on this legislative issue. Write to or meet with your Congressional representatives to express your concerns. Encourage them to support legislation or hearings addressing the Rule’s implications. Share personal stories about how lab testing innovations have impacted you or others in the tick-borne disease community. 

The Center for Lyme Action coordinates legislative outreach and their Fly-in in February is a great way to have your voice heard with your federal and state legislators. 

As a parting thought, what would you do if you lost access to specialty lab testing? Get involved in this important issue, or that may be a question we all need to answer.