Clinical laboratories should closely watch the Trump administration as it contemplates a court appeal, a revised LDT rulemaking, or abandoning the rule altogether
With a US District Court judge’s decision to vacate the Food and Drug Administration’s (FDA) rule on laboratory-developed tests (LDTs), perhaps the most intriguing aspect for clinical laboratories is what the next move will be by the federal government.
It’s hard to predict whether the administration of President Donald Trump will either appeal the judge’s decision, direct the FDA to come up with a new version of the rule that passes legal muster, or simply back off further scrutiny of LDTs.
Let’s look more closely at the options for clinical laboratory professionals to monitor.
US District Court Judge Sean Jordan, JD (above), vacated the federal Food and Drug Administration’s final rule to regulate laboratory-developed tests (LDTs) on March 31, 2025. In a lawsuit, the Association for Molecular Pathologists and the American Clinical Laboratory Association accused the FDA of overstepping its legal authority in issuing the LDT rule in 2024. The outcome of this ruling will affect clinical laboratories’ future development their own tests. (Photo copyright: Jackson Walker LLP.)
Will the Trump Administration Appeal the LDT Decision?
The FDA’s final rule—which came out in 2024 and was about to hit its first compliance milestone on May 6, 2025—had been discussed for at least 10 years prior, covering multiple presidential administrations. Because the final rule was published by the FDA under former President Joe Biden, it surprised some observers to see Trump’s Department of Justice defend the FDA’s right to implement the rule during oral arguments in February before Judge Sean Jordan in US District Court for the Eastern District of Texas.
That hearing was the culmination of a combined lawsuit from American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP) challenging the LDT rule. The suit sought summary judgment on the matter, which Jordan granted on March 31 in his decision to vacate the FDA’s rule.
“The Court vacates and sets aside, in its entirety, the FDA’s final rule titled Medical Devices; Laboratory Developed Tests,” Jordan wrote. “The Court remands this matter to the secretary of Health and Human Services for further consideration.”
Trump’s legal team set a precedent early in the president’s second term to aggressively challenge any court decisions that buck his authority. From that perspective, an appeal of the LDT judgment seems probable, although there is no official word yet about that.
Trump ran on an anti-regulatory, smaller government platform. In that sense, the DOJ’s defense of the FDA’s standing to carry out the LDT rule was a surprise.
Will the FDA Create a Revised Version of the LDT Rule?
The court sent the rule back to the FDA, which leaves the door open for the agency to construct and issue a new rule.
The clinical laboratory industry argued that LDTs should not be classified as medical devices, which the rule instead emphasized. That could be an area where a new version of the rule bends.
Congress could also step in here. For many years, a proposed bill known as the VALID Act (formally the Verifying Accurate Leading-Edge IVCT Development Act) was filed in the House of Representatives to increase LDT oversight.
But then—after the FDA’s LDT rule came out—the VALID Act looked to be the lesser of two evils to lab professionals. It’s possible labs and lawmakers could work out a new version of the VALID Act to avoid another potentially onerous FDA-issued rulemaking.
Will Trump and the FDA Do Nothing?
Even though it would go against the current pattern of challenging court decisions, the Trump administration could simply step back and choose to do nothing with the FDA’s vacated rule.
In that case, presumably LDTs would continue to be overseen by the Clinical Laboratory Improvement Amendments of 1988 (CLIA). The medical lab industry has long preferred to see CLIA reform as the pathway to regulating LDTs in the future rather than formal FDA involvement. The FDA referred to this arrangement as “enforcement discretion,” as LDT oversight has always been on the books at the FDA, but the agency deferred to CLIA for many years.
Of related interest was a news release last week from the federal Department of Health and Human Services (HHS) announcing a sweeping number of layoffs under its individual agencies. The FDA is slated to lose 3,500 employees, although the “reduction will not affect drug, medical device, or food reviewers, nor will it impact inspectors,” HHS noted in a fact sheet.
Revisiting an LDT rule that will require more reviewers and inspectors seems at odds with a shrinking FDA.
Clinical Labs Must Monitor the Near-term Future of LDTs
After coming out ahead in one of the biggest court showdowns in clinical lab history, medical laboratory scientists and industry leaders now must keep their eyes on the various avenues that LDT regulation could head down in the near future.
Watch for further analysis of the business implications of this court decision in The Dark Report.
Tim Stenzel, MD, PhD, will discuss what clinical laboratories need to know about the draft LDT rule, FDA memo on assay reclassification, and ISO-13485 harmonization
Many clinical laboratories anxiously await a final rule from the US Food and Drug Administration (FDA) that is expected to establish federal policies under which the agency will regulate laboratory developed tests (LDTs). The agency released a proposed rule on Oct. 3, 2023, setting a Dec. 4 deadline for submission of comments. The White House’s Office of Management and Budget received a draft of the final rule less than three months later on March 1, 2024.
“Given how fast it moved through HHS, the final [rule] is likely pretty close” to the draft version, wrote former FDA commissioner Scott Gottlieb, MD, in a post on LinkedIn. Gottlieb and other regulatory experts expect the White House to submit the final rule to Congress no later than May 22, and perhaps as soon as this month.
Stenzel, who retired from the FDA last year, emphasized that he was not speaking on behalf of the federal agency and that he adheres to all FDA confidentiality requirements. He formed a new company—Grey Haven LLC—through which he is accepting speaking engagements in what he describes as a public service.
“I’m taking a wait and see approach,” said Tim Stenzel, MD, PhD (above), former director of the FDA’s Office of In Vitro Diagnostics, in an interview with Dark Daily. “The rule is not finalized. The FDA received thousands of comments. It’s my impression that the FDA takes those comments seriously. Until the rule is published, we don’t know what it will say, so I don’t think it does any good to make assumptions.” Clinical laboratory leaders will have an opportunity to learn how to prepare for FDA regulation of LDTs directly from Stenzel at the upcoming Executive War College in May. (Photo copyright: LinkedIn.)
FDA’s History of LDT Regulation
Prior to his five-year stint at the agency, Stenzel held high-level positions at diagnostics manufacturers Invivoscribe, Quidel Corporation, Asuragen, and Abbott Laboratories. He also directed the clinical molecular diagnostics laboratory at Duke University Medical Center in North Carolina. In the latter role, during the late 1990s, he oversaw development of numerous LDTs, he said.
The FDA, he observed, has long taken the position that it has authority to regulate LDTs. However, since the 1970s, after Congress passed the Medical Device Amendments to the federal Food, Drug, and Cosmetic Act, the agency has generally exercised “enforcement discretion,” he said, in which it declined to regulate most of these tests.
At the time, “many LDTs were lower risk, small volume, and used for specialized needs of a local patient population,” the agency stated in a press release announcing the proposed rule. “Since then, due to changes in business practices and increasing ability to ship patient specimens across the country quickly, many LDTs are now used more widely, for a larger and more diverse population, with large laboratories accepting specimens from across the country.”
Clinical Labs Need a Plan for Submission of LDTs to FDA
The FDA proposed the new rule after Congress failed to vote on the VALID Act (Verifying Accurate Leading-edge IVCT Development Act of 2021), which would have established a statutory framework for FDA oversight of LDTs. Citing public comments from FDA officials, Stenzel believes the agency would have preferred the legislative approach. But when that failed, “they thought they needed to act, which left them with the rulemaking path,” he said.
The new rule, as proposed, would phase out enforcement discretion in five stages over four years, he noted. Labs would have to begin submitting high-risk tests for premarket review about three-and-a-half years from publication of the final rule, but not before Oct. 1, 2027. Premarket review requirements for moderate- or low-risk tests would follow about six months later.
While he suggested a “wait and see” approach to the final rule, he advises labs that might be affected to develop a plan for dealing with it.
Potential Lawsuits
Stenzel also noted the likelihood of litigation in which labs or other stakeholders will seek to block implementation of the rule. “It’s a fairly widespread belief that there will be a lawsuit or lawsuits that will take this issue through the courts,” he said. “That could take several years. There is no guarantee that the courts will ultimately side with the FDA.”
He acknowledged that it is a controversial issue among clinical laboratories. Many labs have voiced opposition to the rule as well as the Valid Act.
Currently in retirement, Stenzel says he is making himself available as a resource through public speaking for laboratory professionals and other test developers who are seeking insights about the agency.
“The potential value that I bring is recent experience with the FDA and with stakeholders both inside and outside the FDA,” he said, adding that during his presentations he likes “to leave plenty of time for open-ended questions.”
In the case of his talks at the Executive War College, Stenzel said he anticipates “a robust conversation.”
He also expects to address other FDA-related issues, including:
A recent memo in which the agency said it would begin reclassifying most high-risk In Vitro Diagnostic (IVD) tests—those in class III (high risk)—into class II (moderate to high risk).
The emergence of multi-cancer detection (MCD) tests, which he described as a “hot topic in the LDT world.” The FDA has not yet approved any MCD tests, but some are available as LDTs.
A new voluntary pilot program in which the FDA will evaluate LDTs in situations where the agency has approved a treatment but has not authorized a corresponding companion diagnostic.
An FDA effort to harmonize ISO 13485—a set of international standards governing development of medical devices and diagnostics—with the agency’s own quality system regulations. Compliance with the ISO standards is necessary to market products in many countries outside the US, particularly in Europe, Stenzel noted. Harmonization will simplify product development, he said, because manufacturers won’t have to follow two or more sets of rules.
To learn how to prepare for the FDA’s future regulation of LDTs, clinical laboratory and pathology group managers would be wise to attend Stenzel’s presentations at this year’s Executive War College. Visit here to learn more and to secure your seat in New Orleans.
Executives and pathologists from many of the nation’s most prominent clinical laboratories are on their way to the Crescent City today to share best practices, hear case studies from innovative labs, and network
NEW ORLEANS—This afternoon, more than 900 lab CEOs, administrators, and pathologists will convene for the 28th Annual Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management conference. Three topics of great interest will center around adequate lab staffing, effective cost management, and developing new sources of lab testing revenue.
Important sessions will also address the explosion in next-generation sequencing and genetic testing, proposed FDA regulation of laboratory-developed tests (LDTs), and innovative ways that clinical laboratories and pathology groups can add value and be paid for that additional value.
All this is happening amidst important changes to healthcare and medicine in the United States. “Today, the US healthcare system is transforming itself at a steady pace,” explained Robert L. Michel, Editor-in-Chief of The Dark Report and Founder of the Executive War College. “Big multi-hospital health systems are merging with each other, and payers are slashing reimbursement for many medical lab tests, even as healthcare consumers want direct access to clinical laboratory tests and the full record of their lab test history.
“Each of these developments has major implications in how clinical laboratories serve their parent organizations, offer services directly to consumers, and negotiate with payers for fair reimbursement as in-network providers,” Michel added. “Attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management equips lab leaders with the tools they’ll need to make smart decisions during these challenging times.”
Now in its 28th year, the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management convenes April 25-26 in New Orleans. Executive War College extends to a third day with three full-day workshops: LEAN fundamentals for lab leaders, a genetic testing program track, and a digital pathology track. Learn more at www.ExecutiveWarCollege.com. (Photo copyright: The Dark Intelligence Group.)
Challenges and Opportunities for Clinical Laboratories
With major changes unfolding in the delivery and reimbursement of clinical services, clinical laboratory and pathology practice leaders need effective ways to respond to the evolving needs of physicians, patients, and payers. As The Dark Report has often covered, three overlapping areas are a source of tension and financial pressure for labs:
Day-to-day pressures to manage costs in the clinical laboratory or pathology practice.
The growing demand for genetic testing, accompanied by reimbursement challenges.
Evolving consumer expectations in how they receive medical care and interact with providers.
Addressing all three issues and much more, the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management features more than 80 sessions with up to 125 lab managers, consultants, vendors, and in vitro diagnostic (IVD) experts as speakers and panelists.
Old-School Lab Rules Have Evolved into New-School Lab Rules
Tuesday’s keynote general sessions (to be reported exclusively in Wednesday’s Dark Daily ebriefing) will include four points of interest for clinical laboratory and pathology leaders who are managing change and pursuing new opportunities:
Positioning the lab to prosper by serving healthcare’s new consumers, new care models, new payment models, and more, with Michel at the podium.
How old-school lab rules have evolved into new-school lab rules and ways to transition the lab through today’s disrupters in healthcare and the clinical laboratory marketplace, with Stan Schofield, Managing Principal of the Compass Group.
Generating value by identifying risk signals in longitudinal lab data and opportunities in big data from payers, physicians, pharma, and bioresearch, with Brad Bostic, Chairman and CEO of hc1.
Wednesday’s keynote sessions (see exclusive insights in Friday’s Dark Daily ebriefing) explore:
Wednesday’s keynotes conclude with a panel discussion on delivering value to physicians, patients, and payers with lab testing services.
Clinical Labs, Payers, and Health Plans Swamped by Genetic Test Claims
Attendees of the 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management may notice a greater emphasis on whole genome sequencing and genetic testing this year.
As regular coverage and analysis in The Dark Report has pointed out, clinical laboratories, payers, and health plans face challenges with the explosion of genetic testing. Several Executive War College Master Classes will explore critical management issues of genetic and genomic testing, including laboratory benefit management programs, coverage decisions, payer relations, and best coding practices, as well as genetic test stewardship.
This year’s Executive War College also devotes a one-day intensive session on how community hospitals and local labs can set up and offer genetic tests and next-generation sequencing services. This third-day track features more than a dozen experts including:
During these sessions, attendees will be introduced to “dry labs” and “virtual CLIA labs.” These new terms differentiate the two organizations that process genetic data generated by “wet labs,” annotate it, and provide analysis and interpretation for referring physicians.
State of the Industry: Clinical Lab, Private Practice Pathology, Genetic Testing, IVD, and More
For lab consultants, executives, and directors interested in state-of-the-industry Q/A and discussions concerning commercial laboratories, private-practice pathology, and in vitro diagnostics companies, a range of breakout sessions, panels, and roundtables will cover:
Action steps to protect pathologists’ income and boost practice revenue.
Important developments in laboratory legal, regulatory, and compliance requirements.
New developments in clinical laboratory certification and accreditation, including the most common deficiencies and how to reach “assessment ready” status.
An update on the IVD industry and what’s working in today’s post-pandemic market for lab vendors and their customers.
Federal government updates on issues of concern to clinical laboratories, including PAMA, the VALID Act, and more.
Long-time attendees will notice the inclusion of “Diagnostics” into the Executive War College moniker. It’s an important addition, Michel explained for Dark Daily.
“In the recent past, ‘clinical laboratory’ and ‘anatomic pathology’ were terms that sufficiently described the profession of laboratory medicine,” he noted. “However, a subtle but significant change has occurred in recent years. The term ‘diagnostics’ has become a common description for medical testing, along with other diagnostic areas such as radiology and imaging.”
Key managers of medical laboratories, pathology groups, and in vitro diagnostics have much to gain from attending the Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management, now in its 28th year. Look for continued coverage through social media channels, at Dark Daily, and in The Dark Report.
Prior to that, however, the FDA had already announced its intention to issue a proposed rule giving the agency regulatory oversight of LDTs.
“The FDA has continually supported the passage of the VALID Act by Congress,” attorney Charles Dunham IV, a Shareholder at Greenberg Traurig LLP in Houston, told Dark Daily. “In fact, there is speculation that the VALID Act will be attached to the Pandemic and All Hazards Preparedness Act as it moves through Congress.”
“The FDA may not actually proceed with promulgating rules to regulate LDTs if it is concerned it will not be successful in court if the rules are challenged, which would happen,” said attorney Charles Dunham IV (above), a Shareholder at Greenberg Traurig, LLP. Clinical laboratory leaders can learn more from Dunham during a panel discussion at next week’s 2023 Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management in New Orleans. (Photo copyright: Greenberg Traurig LLP.)
Arguments For and Against FDA LDT Regulation of LDTs
Supporters of the VALID Act contend that putting LDTs under FDA regulation will lead to improved patient safety and less review for low-risk tests. Their argument is that LDTs should undergo the same FDA review and approval process as other medical devices.
Hospital laboratory managers and pathologists—particularly in academic medical center laboratories—have largely opposed FDA regulation of LDTs. They prefer to keep the current setup under which lab-developed tests are validated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). They argue that FDA intervention will slow down development of new tests.
In response, an FDA official indicated during the American Clinical Laboratory Association’s (ACLA) annual meeting on March 1 that the federal agency plans to issue a proposed rule to regulate LDTs, BioWorld reported. That rulemaking has not yet emerged. It’s possible the FDA will wait and see what happens in Congress with the VALID Act.
“Some legal experts have suggested that one significant new legal challenge FDA may face is the Supreme Court’s West Virginia v. EPA decision last summer that limited the ability of the EPA to cap power plant emissions by regulation due to the EPA’s lack of explicit congressional authority to do so,” said Gee, who also will appear on the Executive War College legal panel next week.
“The West Virginia v. EPA ruling provides support for those in the clinical lab industry who point to the FDA’s lack of clear statutory authority to regulate LDTs and therefore fundamentally disagree with FDA’s longstanding position that LDTs are medical devices subject to FDA’s authority to regulate,” he added.
Actions Clinical Laboratory Managers Can Take
Clinical laboratory managers who want to share their thoughts about the future of LDT regulation may want to take one or both of the following actions:
Contact their representatives in Congress.
Find out whether any trade associations they belong to have taken a position on the VALID Act.
Clinical laboratory professionals should monitor the VALID Act’s progress while also paying attention to industry groups and manufacturers that support or oppose the bill.
Doing so will provide a clearer indication of who has the most to gain or lose should the legislation be passed. Pathologists and medical laboratory managers should also remain alert for further efforts by the FDA to issue proposed rulemaking to regulate LDTs.
But even though the College of American Pathologists (CAP) and nine other organizations signed a December 12 stakeholder letter to leaders of key House and Senate committees urging passage of legislation that would enable some regulation of LDTs, the VALID Act was ultimately omitted from the year-end omnibus spending bill (H.R. 2617).
That may be due to pressure from organizations representing clinical laboratories and pathologists which lobbied hard against the bill.
Responding to criticism of its stance on FDA oversight of LDTs, in a May 2022 open letter posted on the organization’s website, anatomic pathologist and CAP president Emily Volk, MD, said “we at the CAP have an honest difference of opinion with some other respected laboratory organizations. … We believe the VALID Act is the only viable piece of legislation addressing the LDT issue. … the VALID Act contains many provisions that are similar to policy the CAP has advocated for regarding the regulation of laboratory tests since 2009. Importantly, the current version includes explicit protections for pathologists and our ability to practice medicine without infringement from the Food and Drug Administration (FDA).” (Photo copyright: College of American Pathologists.)
Organizations on Both Sides Brought Pressure to Bear on Legislators
The AAMC and AMP were especially influential, Bucshon told ProPublica. In addition to spending hefty sums on lobbying, AMP urged its members to contact legislators directly and provided talking points, ProPublica reported.
“The academic medical centers and big medical centers are in every state,” Bucshon said. As major employers in many locales, they have “a pretty big voice,” he added.
Discussing CAP’s reasoning behind its support of the VALID Act in a May 26 open letter and podcast, CAP president Emily Volk, MD, said the Valid Act “creates a risk-based system of oversight utilizing three tiers—low, moderate and high risk—in order to target the attention of the FDA oversight.”
While acknowledging that it had room for improvement, she lauded the bill’s three-tier risk-based system, in which tests deemed to have the greatest risks would receive the highest level of scrutiny.
She also noted that the bill exempts existing LDTs from an FDA premarket review “unless there is a safety concern for patients.” It would also exempt “low-volume tests, modified tests, manual interpretation tests, and humanitarian tests,” she wrote.
In addition, the bill would “direct the FDA not to create regulations that are duplicative of regulation under CLIA,” she noted, and “would require the FDA to conduct public hearings on LDT oversight.”
Pros and Cons of the VALID Act
One concern raised by opponents relates to how the VALID Act addressed user fees paid by clinical laboratories to fund FDA compliance activities. But Volk wrote that any specific fees “would need to be approved by Congress in a future FDA user fee authorization bill after years of public input.”
During the May 2022 podcast, Volk also cast CAP’s support as a matter of recognizing political realities.
“We understand that support for FDA oversight of laboratory-developed tests or IVCTs is present on both sides of the aisle and in both houses of Congress,” she said. “In fact, it enjoys wide support among very influential patient advocacy groups.” These groups “are very sophisticated in their understanding of the issues with laboratory-developed tests, and they do have the ear of Congress. There are many in the laboratory community that believe the VALID Act goes too far, but I can tell you that many of these patient groups don’t believe it goes far enough and are actively pushing for even more restrictive paradigms.”
Also urging passage of the bill were former FDA commissioners Scott Gottlieb, MD, and Mark B. McClellan, MD, PhD. In a Dec. 5 opinion piece for STAT, they noted that “diagnostic technologies have undergone considerable advances in recent decades, owing to innovation in fields like genomics, proteomics, and data science.” However, they wrote, laws governing FDA oversight “have not kept pace,” placing the agency in a position of regulating tests based on where they are made—in a medical laboratory or by a manufacturer—instead of their “distinctive complexity or potential risks.”
In their May 22 letter, opponents of the legislation outlined broad areas of concern. They contended that it would create “an onerous and complex system that would radically alter the way that laboratory testing is regulated to the detriment of patient care.” And even though existing tests would be largely exempted from oversight, “the utility of these tests would diminish over time as the VALID Act puts overly restrictive constraints on how they can be modified.”
CLIA Regulation of LDTs also Under Scrutiny
The provision to avoid duplication with the Clinical Laboratory Improvement Amendments (CLIA) program—which currently has some regulatory oversight of LDTs and IVCTs—is “insufficient,” opponents added, “especially when other aspects of the legislation call for requirements and activities that lead to duplicative and unnecessary regulatory burden.”
Opponents to the VALID Act also argued that the definitions of high-, medium-, and low-risk test categories lacked clarity, stating that “the newly created definition of moderate risk appears to overlap with the definition of high risk.”
The opponents also took issue with the degree of discretion that the bill grants to the US Secretary of Health and Human Services. This will create “an unpredictable regulatory process and ambiguities in the significance of the policy,” they wrote, while urging the Senate committee to “narrow the discretion so that stakeholders may better evaluate and understand the implications of this legislation.”
Decades ago, clinical laboratory researchers were allowed to develop assays in tandem with clinicians that were intended to provide accurate diagnoses, earlier detection of disease, and help guide selection of therapies. Since the 1990s, however, an industry of investor-funded laboratory companies have brought proprietary LDTs to the national market. Many recognize that this falls outside the government’s original intent for encouragement of laboratory-developed tests to begin with.
