FDA Pulls the Plug on EUA Review of COVID-19 LDTs

Companies like Quest, LabCorp and others have been in the forefront of pandemic response by creating innovative new laboratory diagnostic tests (LDTs) for detecting the SARS-CoV-2 virus. The FDA has also played a vital role in making these molecular, antibody and antigen tests available to the public by granting Emergency Use Authorization (EUA) to these products. But now the FDA has left the industry and patients in the cold by abdicating its EUA review function for LDTs targeting coronavirus.

The Controversy and Context

The FDA’s authority to perform premarket review of LDTs has been a sore spot since well before the pandemic. Particularly nettlesome is the agency’s reliance on regulating via informal guidance instead of submitting his rules to public comment and review under the rulemaking process required to establish new federal regulations.

In August, HHS suddenly intervened by requiring the FDA to use the rulemaking process for regulating LDTs as part of a broader administration policy to cut government regulation over business. The lab industry supported the move. But on Oct. 7, the FDA dropped a bomb shell by announcing that it was getting out of the business of performing EUA review for coronavirus LDTs altogether.

The Aftershocks

The FDA decision to stop reviewing LDTs may thwart development of innovative tests. Specifically, it gives test makers three good reasons not to launch new COVID-19 LDTs:

1. Reimbursement Uncertainty

One problem is the new uncertainty it creates over reimbursement. That’s because the Family First Coronavirus Act (FFCRA) requires commercial payors to cover medically necessary SARS-CoV-2 testing without cost sharing, but only if they have EUA from the FDA. Consequently, labs developing new SARS-CoV-2 LDTs face the prospect of not being reimbursed for their tests.

2. Liability Risks

In addition to reimbursement risk, taking EUA off the table heightens test makers’ liability exposure by stripping away the immunity protections afforded by the Public Readiness and Emergency Preparedness (PREP) Act. Like reimbursement under FFCRA, immunity from claims for use of tests during the public health emergency under PREP applies only to tests with EUA. And because of the urgency of the situation and need to get tests out faster than normal, test makers need these liability protections in case things go wrong. COVID-19 litigation has already become big business for trial lawyers and labs that develop inaccurate or faulty LDTs will be a sitting duck.

3. Harm to Competitiveness

While it’s not full FDA approval, EUA status raises the credibility of a lab test product in the eyes of payors, clinicians and even patients. So, taking EUA off the table may make it harder for new LDTs to compete in the market, particularly against tests that have EUA.

Takeaway

 The FDA’s justification for no longer performing EUA review on COVID-19 LDTs is the need to prioritize its scarce review resources on more innovative tests needed to respond to the pandemic. Of course, this rationale overlooks the fact that many of the LDTs that have already received EUA are just the kind of innovative tests the agency’s new policy is purported to promote.