Advocacy and Legal Update

Summer Regulations Impact on HTCs

The Food and Drug Administration Finalizes Regulation of Laboratory Developed Tests
by Issie Karan, Artemis Policy Group

Earlier this year, the Food and Drug Administration (FDA) finalized a rule making explicit that all in vitro diagnostic (IVDs) products will be considered devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act), including when the manufacturer of the IVD is a laboratory. This made clear that Laboratory Developed Tests (LDTs), which are considered IVDs, would be regulated by FDA.

Prior to the final rule, FDA utilized its enforcement discretion to allow LDTs intended for clinical use and are designed, manufactured, and used within a single laboratory, to be regulated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). With the publication of the final rule, FDA will end its current general enforcement discretion approach to LDTs in stages, phased in over four years (see below for a timeline).

As background, IVDs are intended for use in the collection, preparation, and examination of specimens taken from the human body, such as blood, saliva, or tissue. These tests can be used to measure or detect a wide variety of substances or analytes in the human body, including for clinical decision making related to treatment of bleeding and clotting disorders. For example, an HTC may need to rely on LDTs to determine dosing of factor for pediatric patients if the standard assay kits do not accommodate this subpopulation and must be modified. The CDC estimates that 70 percent of medical decisions are based on laboratory test results.

Given the importance of LDTs to clinical decision making and their increased use in recent decades, many stakeholders have closely watched this policy area for many years, culminating in the FDA receiving more than 6,500 comments on the proposed rule released in 2023. Opponents of FDA regulation of LDTs argue that subjecting them to the same rules for approval of medical devices will increase costs of production, slow their adaptation, and create patient access concerns.

In response to comments during the rulemaking process, FDA made changes to its approach. First, the FDA will continue to apply its enforcement discretion to LDTs that were first marketed prior to the date of issuance of the final rule. Second, FDA will continue to apply enforcement discretion to LDTs manufactured and performed by a laboratory integrated within a health care system to meet an unmet need of patients receiving care within the same health care system when an FDA-authorized test is not available. Both changes likely are intended to address concerns about patient access given the perceived costs of compliance with the new requirement.

The Hemophilia Alliance will continue to monitor implementation of the FDA’s final rule on IVDs. If your Hemophilia Treatment Center has concerns about this area of policy, please reach out to your primary contact.

Timeline for Implementation of LDT Final Rule

• Stage 1: beginning on May 6, 2025, which is 1 year after the publication date of the final LDT rule, FDA will expect compliance with medical device reporting (MDR) requirements, correction and removal reporting requirements, and quality system (QS) requirements regarding complaint files.
• Stage 2: beginning on May 6, 2026, which is 2 years after the publication date of the final LDT rule, FDA will expect compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements.
• Stage 3: beginning on May 6, 2027, which is 3 years after the publication date of the final LDT rule, FDA will expect compliance with QS requirements (other than requirements regarding complaint files which are already addressed in stage 1).
• Stage 4: beginning on November 6, 2027, which is 3½ years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.
• Stage 5: beginning on May 6, 2028, which is 4 years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that require premarket submissions), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.

Contact Issie Karan with any questions at ekaran@artemispolicygroup.com.

Medicare Physician Fee Schedule Proposed Rule – Clotting Factor/Gene Therapy Proposal
by Ellen Riker, Artemis Policy Group

On July 10, the Centers for Medicare and Medicaid Services (CMS) released the annual proposed Medicare Physician Fee Schedule (MPFS) and Hospital Outpatient PPS rules. Included in the MPFS rule and highlighted in the CMS fact sheet is a proposal to clarify when the furnishing fee for clotting factor would be paid. The proposal maintains the current allowance for the furnishing fee under the hospital inpatient and outpatient prospective payment systems.

It appears that the purpose of this proposal was for CMS to clarify that that the intent of the clotting factor furnishing fee was to recognize the cost of distributing products when self-administered by the patient. The rule goes into detail on why the furnishing fee would not be provided for the provision of hemophilia gene therapy products. The language also clarifies that the furnishing fee is only available to the entities that provide the factor. The language from the rule summarizing the proposal follows:

In section III.A.5. of this proposed rule, we are proposing to update § 410.63(b) to clarify existing CMS policy that blood clotting factors must be self-administered to be considered clotting factors for which the furnishing fee applies. Additionally, we are proposing to clarify at § 410.63(c) that the furnishing fee is only available to entities that furnish blood clotting factors, unless the costs associated with furnishing the clotting factor are paid though another payment system, including the PFS. That is, we are proposing to clarify through revisions to § 410.63 that clotting factors (as specified in section 1861(s)(2)(I) of the Act) and those eligible to receive the clotting factor furnishing fee (as specified in section 1842(o)(5) of the Act) are the same subset of products. Accordingly, the clarification will not be adding a furnishing fee to any new products. Therefore, we believe that this clarification will have no impact on Medicare spending.

In a meeting in February 2024, Jeff Blake, Jennifer Borrillo, and Zack Duffy joined the Artemis team in a call with CMS staff to discuss the importance of Medicare coverage and payment for gene therapy. At the meeting the Alliance explained that gene therapy should not be considered a clotting factor under Medicare. The Alliance team reiterated that CMS should not provide a furnishing fee for gene therapy as it is a one-time infusion and that there are sufficient CPT codes that could be used to bill for the needed services to provide the product.

The Alliance plans to submit a comment letter in support of this proposal. The final MPFS rule is anticipated in early November, with the provisions of the rule taking effect on January 1, 2025. Please contact Ellen Riker with any questions at eriker@artemispolicygroup.com.

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