CLIA or FDA approval? – US Regulatory strategies for commercializing biomarker based tests

Current landscape of medical diagnostics,  public considerations and significance

From a scientific perspective, this may be a “Golden Age” of diagnostics. The development of methods for identifying and quantifying minute amounts of biomarkers, and new computational techniques that allow the development of algorithms that define relationships between biomarkers and clinical conditions have combined to stimulate the development of thousands of new tests. The development of an assay, though, does not mean that it ever will be commercialized. Many obstacles need to be surmounted, including regulatory ones. The gatekeeper for the market entry of IVDs in the United States is the Food and Drug Administration (FDA). One of the threshold decisions for an IVD developer—particularly for the most novel assays—is whether to seek clearance or approval from FDA, or to market the assay as a laboratory developed test (LDT).

Current routes to market for diagnostic developers include:

  • Obtain pre-market regulatory clearance from the FDA to sell a diagnostic kit (a packaged product) or companion diagnostic. Three different paths currently exist: (a) If the new test can be shown to be substantially equivalent to an existing predicate test on the market, then the 510(k) is the regulatory path for new device approval. (b) If the new diagnostic technology cannot be considered substantially equivalent to an existing technology, and will be used to make a critical medical decision concerning the diagnosis, treatment, or medical management, then the premarket approval (PMA) is the regulatory path of choice. (c) If no predicate device exists and the test is of low or moderate risk, it may be eligible for a de novo reclassification.
  • Develop a laboratory-developed test (LDT) and sell the in-house performance of the test as a service. These so-called “home brews” are regulated via the Clinical Laboratory Improvement Amendments (CLIA) of 1988.
  • Sell one or more of the components of diagnostic tests as analyte-specific reagents (ASRs). ASRs, individually, are exempt from pre-market notification, thus enabling early-market penetration and enhancing early adoption of the technology.
  • Position the product for investigational use only (IUO), used for diagnostics that have not established clinical utility, although this will not allow widespread commercialization of the test.

Nevertheless, for tests that have strong clinical potential, diagnostic developers usually need to choose between FDA and CLIA approval. Within the FDA route, the overwhelming majority of new IVD assays enter the market through the 510(k) process rather than PMA. For example, in 2005, the Office of In Vitro Diagnostic Device Evaluation and Safety (OIVD) cleared 434 510(k)s and approved nine PMAs. However, the more than 1,000 biomarkers that are currently marketed as diagnostic tests are almost all offered as homebrew tests (LDTs) in central laboratories. For example, in the U.S. cancer molecular diagnostics market in 2007, the revenue distribution between CLIA- and FDA-approved products was 98% CLIA, 2% FDA. In total, there are an estimated 2,000 laboratories in the US offering approximately 11,000 LDTs.

From the enactment of the Medical Device Amendments of 1976 until the past few years, these were two entirely separate and discrete categories. This formerly fine line has become blurred. FDA has now asserted a larger role over laboratories and some LDTs have undergone FDA premarket review and clearance. Thus, laboratories are now being regulated by FDA. Concurrently, some IVD kit manufacturers have acquired or established laboratories. Many aspects of FDA regulation over LDTs are unclear. However, it seems likely that the role played by FDA in regulating laboratories will grow.

Current CLIA and FDA regulatory pathway pros and cons

The FDA route has not been the path of choice for most IVDs to date as it is inherently the costliest and most time-consuming option. To some degree this distribution also reflects the difficulty of obtaining adequately controlled clinical data to support the IVD. However, while opting for a strategic pathway that bypasses rigorous regulatory scrutiny may lower that particular hurdle, it can dramatically make it more difficult to effectively market the test. Clinical adoption is one of the biggest barriers to the success of a new test (and ultimately the drug), and meeting the high standards of a regulator like the FDA goes a long way toward convincing clinicians and payers of a test’s validity and clinical utility. That said, PMA tests can cost laboratories significantly more than unapproved generic versions of these tests, a factor which can also influence market uptake since an expensive patient selection test places higher hurdles for a new drug’s adoption, even though they usually cost a fraction of a single month of treatment of an oncology targeted therapeutic. Table 1 outlines some of the pros and cons of deciding between CLIA and FDA for obtaining regulatory approval for a new test.

Table 1: CLIA and FDA Pros & Cons. *For more on Intellectual property strategy considerations, see:

Just as drugs need to be safe and effective for treating diseases, so to do medical devices used to help diagnose disease and direct therapy. Some example of the FDA finding evidence of inaccurate LDTs that may have led to: patients being over- or undertreated for heart disease; cancer patients being exposed to inappropriate therapies or not getting effective therapies; incorrect diagnosis of autism; unnecessary antibiotic treatments; and exposure to unnecessary, harmful treatments for certain diseases such as Lyme disease. Ultimately, many believe that regulation and the law are “necessary evils” where the ideal is to limit as much regulation as possible and, at the least, make it very easy to understand and follow. On the one hand, regulation needs to be carefully drafted to encourage, rather than hinder, innovation in diagnostics while ensuring patients are adequately protected from harmful tests.

Move towards “risk-based” oversight of LDTs?

Since the implementation of Medical Device Amendments in 1976,the FDA has generally exercised enforcement discretion for LDTs meaning they weren’t as rigorously scrutinized as general medical devices. However, these LDTs  were generally simple lab tests, intended to be of low risk often for rare diseases and restricted to be used by  laboratory of a healthcare facility responsible for the care of a patient and intended to meet the needs of a local patient population.

Since then, LDTs have evolved significantly with advances in technology and business models resulting in ones that are more complex, have nationwide reach, available for more common diseases and involve higher risks to patients if inaccurate. In some instances, LDTs are being marketed directly to the patients. There is concern that due to the increased application of LDTs for genetic testing and personalized medicine, the use of LDTs outside of the physician-patient context, and the development of LDTs by larger corporations, that some LDTs may not have been properly validated for their intended use, putting patients at risk via inaccurate diagnoses and incorrect treatment decisions. Arguably, because of it’s less rigorous scrutiny, CLIA may fail to ensure tests are sufficiently reliable, accurate and clinically meaningful. Therefore the FDA, with it’s extensive experience in regulating IVDs, may be better suited to protecting patients especially for tests that may pose a “high risk”. However, there is a need for a clear framework for how tests are regulated so diagnostic developers can make strategic decisions on what path may be most suitable for their products.

The FDA is currently deciding on a regulatory framework which should be formally implemented in the near future. This is likely to impact tests previously approved via CLIA and future tests seeking regulatory approval hence forcing test developers to rethink their regulatory strategy. To provide some guidance, the FDA has recently issued a “Framework for Regulatory Oversight of  Laboratory Developed Tests (LDTs)”. Under these draft guidance documents, the FDA will likely take a risk-based approach to regulating LDTs and has proposed three levels of LDTs: 1) LDTs subject to full enforcement discretion; 2) LDTs subject to partial enforcement discretion; and 3) LDTs subject to full FDA regulation. Table 2 briefly  describes the three levels of LDTs proposed.

Table 2: Risk-based regulatory levels of LDTs

For a smooth transition into this Phase-in period of a potentially new regulatory framework, diagnostic developers considering CLIA approval should seek assistance of Regulatory consultants to develop an optimal strategy.

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See References

Supriya Shekar

Co-founder at Medbiomarkers
Supriya Shekar is a Co-Founder of Medbiomarkers, a company accelerating the translation of biomarker research via providing data and software solutions and building biomarker related consortia. Supriya has over 8 years of experience in developing molecular diagnostics including IVD assays and companion diagnostics in the areas of infectious diseases and oncology. Most recently she worked in the Companion Diagnostics division of Novartis.'

Mandeep Metharu

Co-Founder at Medbiomarkers
Mandeep Metharu is a co-founder of Medbiomarkers, a company accelerating the translation of biomarker research via providing data and software solutions and building biomarker related consortia.. Mandeep is passionate about utilizing emerging technologies to enable start-ups to create and successfully commercialize products/services that radically improve the quality of people's lives.
  • Bill Smith

    “For example, in the U.S. cancer molecular diagnostics market in 2007, the revenue distribution between CLIA- and FDA-approved products was 98% CLIA, 2% FDA. In total, there are an estimated 2,000 laboratories in the US offering approximately 11,000 LDTs.”

    Do you have a source for these data?