A Regulatory Haze of Uncertainty Continues as the Clock Ticks Toward Phase One of FDA’s LDT Final Rule

Clinical laboratories still face uncertainty and the difficult decision of whether to start the work needed to comply with the with Phase 1 expectations under FDA’s Laboratory Developed Tests Final Rule (the “LDT Final Rule”), which remain set to go into effect on May 6, 2025.

To be sure, the shift in priorities of the new administration has kept the health care industry on its toes for the last few weeks, especially as the leadership and messaging of the Department of Health and Human Services (“HHS”) has started to come into sharper focus. The theme of ‘deregulation’, particularly when it comes to the activities of the Food and Drug Administration (“FDA”), has sparked interest and discussion among stakeholders in the life sciences industry – including clinical laboratories that are weighing how to approach the upcoming May 6 deadline for compliance.

We discussed the details of the LDT Final Rule in a previous Insight, explaining that as of the May 6, 2025 Phase 1 deadline FDA will expect all laboratories that manufacture LDTs to comply with medical device reporting (“MDR”) requirements, correction and removal reporting requirements, and quality system (“QS”) requirements regarding complaint files.

As is often the case with a major regulatory landscape change, the LDT Final Rule has been subject to scrutiny and legal challenges since its publication in May 2024. Perhaps the most watched of these is the ongoing litigation in which the American Clinical Laboratories Association (“ACLA”) and the Association for Molecular Pathology (“AMP”) have challenged the FDA’s authority to regulate LDTs by way of the LDT Final Rule. The presiding federal district court just heard arguments on the parties cross-motions for summary judgment, and noted a decision on those motions would be issued soon, likely before the Phase 1 deadline. The outcome will have significant implications for labs in the U.S.

In addition to the ongoing litigation, there is a growing possibility that FDA could be instructed, whether by Congress or by leadership at HHS, to retract the LDT Final Rule or delay the implementation of Phase 1. Of note, during the previous Trump administration there was resistance to FDA's authority to regulate LDTs, in that HHS publicly required continued enforcement discretion for LDTs during the beginning of the COVID-19 pandemic. Now, with the touted theme of deregulation and public calls by trade associations like ACLA to mitigate the impact of the LDT Final Rule, there is a chance that HHS under the new Trump administration could take a similar approach. All of this is coupled with currently mounting pressure on all federal agencies to reduce spending and regulatory oversight, which may make it increasingly difficult for FDA to enforce the rule as originally written.

Nonetheless, unless there is a definitive ruling that the LDT Final Rule is retracted, or that its implementation is delayed, laboratories developing LDTs remain subject to the Final Rule’s Phase 1 requirements at this time.  Arguably, even if the outcome results in removal, delay, or a change to the LDT Final Rule, the political cycle could flip again with reinvigorated efforts to bring more regulation around LDTs, whether through Congress or again through the rulemaking process.

EBG will continue to monitor these developments closely, as well as the forthcoming court ruling, and any potential administrative actions that could significantly reshape the regulatory landscape for LDTs. Stay tuned for ongoing updates as we assess the evolving legal and regulatory environment.