US FDA tightens scrutiny of lab-developed tests with new rule

(Reuters) -The U.S. Food and Drug Administration (FDA) on Monday tightened regulations for clinical laboratories with a new rule that gives it more oversight of diagnostic tests developed by them.

For years, the agency had allowed labs to use their in-house tests to diagnose a range of conditions if they met certain standards, without a traditional authorization process.

However, the risks associated with most modern lab-developed tests (LDTs) are much greater now with the larger and wider use of the tests, the agency said.

"No one truly knows how many of these tests are out there or who makes which one, let alone which tests have a concerning number of issues such as inaccurate results," FDA executive Jeff Shuren said on a call.

The FDA intends to create a database of available LDTs and related information to better inform patients and healthcare providers, Shuren said.

Under the new rules, these tests would be required to meet the same requirements as other diagnostic tests from medical device makers, including the FDA's review of their applications and the reporting of adverse events.

The FDA said it will phase out its earlier approach for LDTs over a period of four years.

It plans to continue regulating some LDTs through its older approach, including those that were first marketed prior to the final rule, and those cleared by the New York State's Clinical Laboratory Evaluation Program (CLEP).

LDTs make up about 5% of lab operator Labcorp's diagnostic testing volumes and 10% of rival Quest Diagnostics, according to the brokerage Jefferies.

Almost all LDTs marketed by Labcorp and Quest are CLEP approved, said EvercoreISI analyst Elizabeth Anderson.

The new rule would limit the regulatory burden and minimize ongoing approval costs for the test providers, Anderson added.

(Reporting by Mariam Sunny in Bengaluru; Editing by Shinjini Ganguli, Shailesh Kuber and Vijay Kishore)