District Court Vacates LDT Rule: What’s Next?

On May 6, 2024, the Food and Drug Administration (FDA) published a final rule amending its regulations to make explicit that all in vitro diagnostic products (IVDs), including tests that FDA has historically considered “laboratory developed tests” (LDTs), are medical devices under the Federal Food, Drug, and Cosmetic Act (FDCA) and would be regulated as such. A Texas federal district court judge vacated the rule and remanded it back to the Department of Health and Human Services (HHS) on Monday, March 31, 2025.

LDTs are diagnostic tests intended for clinical use that are designed, manufactured, and used within a single laboratory that is certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity testing. 

For many years, FDA exercised its enforcement discretion over LDTs, permitting these tests to be marketed without required premarket review and without complying with other medical device regulations. However, as LDTs became increasingly more complex, and more common, FDA began to reevaluate its enforcement discretion policy, undertaking efforts to increase its regulation of LDTs to ensure the safety and effectiveness of these diagnostic tests.

These activities included a workshop in 2010, draft guidance documents in 2014, and a discussion paper in 2017. FDA also engaged with congressional and industry stakeholders, including on the VALID Act and the VITAL Act, which would have created new regulatory schemes for IVDs, including LDTs.  After the failure of the VALID Act and VITAL Act to pass Congress, FDA issued the May 2024 final rule formally amending the regulations to include LDTs within the definition of medical device.  With this change, FDA made clear that laboratory developed tests (LDTs) are devices regulated by FDA under the FDCA.

Almost immediately after publication of the final rule, industry stakeholders, including two laboratory trade and professional associations, filed lawsuits challenging the rule as exceeding FDA’s statutory authority and as “arbitrary, capricious, and an abuse of discretion” under the Administrative Procedures Act.  The lawsuits were consolidated into one case in federal district court for the Eastern District of Texas.

FDA and the plaintiffs both filed motions for summary judgment, arguing that there are no genuine issues of fact in the case, and thus judgment may be rendered as a matter of law. Interestingly, the Trump Administration vigorously defended the rule on behalf of FDA during oral arguments in February.  Many stakeholders did not expect the new Administration to support the pro-regulatory policy, particularly because the government’s defense of the final rule was inconsistent with the policy of the first Trump Administration.

However, despite the strong defense, on March 31, the district court judge granted plaintiff’s motion for summary judgment, vacating the rule in its entirety and remanding it back to HHS for further consideration.

In a 50-page opinion, the judge drew a distinction between medical or clinical “services” (regulated by the Centers for Medicare and Medicaid Services (CMS) under CLIA and specifically exempted from FDA regulation) and “physical objects” (regulated by FDA).  The judge made it clear that LDTs are “services” and not “physical objects,” noting that “the plain text of [the FDCA definition of device] does not support FDA’s assertion that laboratory-developed test services are ‘devices’ subject to the FDCA.”

Furthermore, although the judge stated that the plain text of the statute itself is enough to conclude that FDA lacks authority to regulate LDTs as medical devices, the opinion goes on to note that “the broader statutory framework of the FDCA and CLIA, and the historical underpinnings of these laws, reinforces the conclusion that the final rule attempts to assert authority over professional medical services that FDA lacks.”

The court concluded that “FDA’s asserted jurisdiction over laboratory-developed test services as ‘devices’ under the FDCA defies bedrock principles of statutory interpretation, common sense,

and longstanding industry practice. The FDCA—a statute targeted at mass produced, mass-marketed, and mass-distributed drugs and devices moving in interstate commerce—is a poor fit for the distinct regulatory issues raised by laboratories that provide vital diagnostic tools for doctors.”

Although this is a district court opinion, the rule is vacated nationwide, and the ruling is applicable to all LDTs, not just those manufactured by the parties to the case (or manufactured by companies that are members of the parties to the case).

Thus, for now it appears that LDTs are no longer subject to FDA regulation and may be marketed without premarket review or complying with other applicable device regulatory requirements such as registration and listing and quality system requirements.  They remain subject only to the CLIA requirements.

In ruling that LDTs are not medical devices and are outside of FDA’s jurisdiction, the court has effectively prevented FDA from engaging in its past practice of selectively withdrawing enforcement discretion and actively regulating those LDTs that it perceived as posing a particular risk to patients and public health.  For example, FDA historically sent enforcement letters to labs marketing direct-to-consumer (DTC) tests without meaningful involvement by a licensed healthcare professional.  Under the court’s ruling, labs are now free to market such tests, and FDA is barred from taking action in the future against other types of LDTs that it sees as posing increased risk.  The threat of such FDA enforcement action in the past has always loomed over labs, but now that this threat is gone, the regulatory risk assessment for labs has changed.

It is possible that Congress will once again take up the cause and pass legislation regulating LDTs as medical devices or creating a new oversight framework for LDTs, but unless and until Congress acts, or the administration successfully appeals the ruling, FDA is limited in its authorities over LDTs. That said, the court-maintained FDA’s jurisdiction to regulate in vitro diagnostic test kits as tangible articles packaged as a product for commercial distribution in interstate commerce.

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