FDA Oversight of Laboratory Developed Tests: A New Era of Compliance for Clinical Labs

swichansky2
1 day ago
5 min read

For decades, Laboratory Developed Tests (LDTs) operated under an unusual carve-out in U.S. regulation. These tests, designed and performed within a single laboratory, were technically medical devices under the Federal Food, Drug, and Cosmetic Act. However, the FDA historically exercised “enforcement discretion,” allowing labs to operate under the Clinical Laboratory Improvement Amendments (CLIA) without being subject to the same premarket review, quality system requirements, or post-market obligations as traditional in vitro diagnostic (IVD) manufacturers.

That era is over. In May 2025, the FDA finalized its framework for LDT oversight, initiating a phased transition that will bring LDTs into alignment with medical device requirements. This represents one of the most significant regulatory changes in the diagnostics industry in decades. Laboratories that once focused only on CLIA compliance now face the full spectrum of FDA obligations, from complaint handling to premarket submissions.

This blog will explore the background behind this shift, the phased implementation, the challenges laboratories face, and the strategic implications for executives in the diagnostics and life sciences sectors.

Why FDA is Regulating LDTs Now

Several factors pushed the FDA to act:

Patient Safety Concerns: The expansion of LDTs into high-risk areas, such as cancer diagnostics, genetic testing, and companion diagnostics for therapies, increased the stakes. FDA argued that inaccurate or poorly validated LDTs could cause serious harm.
Industry Growth: LDTs are no longer limited to hospital labs running simple assays. Commercial reference labs now perform high-volume, complex molecular and genomic testing, making the market indistinguishable from IVDs sold by traditional manufacturers.
COVID-19 Experience: The pandemic exposed weaknesses in diagnostic oversight. FDA initially granted emergency use authorizations to numerous LDTs, some of which later proved unreliable. This highlighted the risks of leaving LDTs unregulated.
Regulatory Pressure: Congress, patient advocacy groups, and some IVD manufacturers pressured FDA to level the playing field. FDA’s final rule signals a long-anticipated policy shift that many in industry had expected for years.

The New Regulatory Framework

Phased Implementation

FDA is phasing in requirements over several years to give laboratories time to adapt. The key milestones are:

2025: Labs must implement complaint handling, Medical Device Reporting (MDR), and recall procedures. These are foundational post-market systems, and FDA expects compliance within months.
2026: Labs must begin establishing quality management systems aligned with FDA’s QMSR and ISO 13485. Document control, CAPA, supplier oversight, and management review will all become mandatory.
2027–2028: Premarket review begins for higher-risk LDTs. Class III LDTs (such as those guiding critical treatment decisions) will require premarket approval (PMA). Class II tests will likely need 510(k) clearance or de novo classification. Lower-risk tests may remain under general controls, but all will be subject to registration, listing, and QMS requirements.
2029 and beyond: Full enforcement across the industry, with FDA inspections of laboratories expected to be as routine as inspections of IVD manufacturers today.

Scope

The framework applies to nearly all LDTs, with limited exemptions for rare diseases, forensic tests, and certain low-risk categories. Academic medical centers will be subject to the same requirements as commercial labs if they market tests broadly.

What Laboratories Must Do Now

Build a Quality Management System

Most laboratories have CLIA-compliant systems, but CLIA focuses on laboratory processes, proficiency testing, and personnel qualifications. It does not address many device quality requirements such as design controls, supplier qualification, or CAPA.

Labs must implement a QMS that includes:

Document control and record retention.
Design control procedures for test development.
Risk management aligned with ISO 14971.
CAPA processes with root cause analysis and verification of effectiveness.

Management review and internal audits.

Establish Complaint Handling and MDR Processes

Under CLIA, complaint handling was informal. Under FDA oversight, labs must:

Maintain complaint files.
Investigate all complaints related to test performance.
Determine whether events are reportable under MDR regulations and file reports within required timelines.

Prepare for Premarket Submissions

For higher-risk tests, labs must begin planning for FDA premarket review. This involves:

Collecting clinical performance data to support safety and effectiveness.
Preparing analytical validation reports.
Developing labeling and instructions for use that meet FDA standards.

Train Personnel

Laboratory staff, many of whom have no experience with FDA regulation, must be trained in quality system requirements, documentation practices, and regulatory reporting.

Challenges Facing Laboratories

Cultural Shift: Many labs view themselves as clinical service providers, not manufacturers. Adapting to a device manufacturer mindset will be a significant change.
Resource Constraints: Implementing a QMS, training staff, and preparing premarket submissions require substantial investment. Smaller labs may struggle.
Data Gaps: Many LDTs lack the type of clinical validation data FDA will require for premarket review. Generating this evidence may delay market access.
Inspection Readiness: Laboratories unaccustomed to FDA inspections must prepare for rigorous audits that go beyond CLIA assessments.
Competitive Pressure: Large reference labs with strong regulatory teams will adapt more quickly, potentially leaving smaller labs behind.

Case Examples

Genomic Testing Company: A large genomic testing firm proactively implemented ISO 13485 years ago in anticipation of regulation. When FDA announced its framework, the company was ready. Investors rewarded the foresight, and the firm is positioned to expand market share as competitors scramble.
Hospital Lab: A hospital laboratory offering an oncology LDT had limited documentation of test validation. Under the new framework, it must generate clinical performance data, delaying expansion of its test into other hospitals. The lab is considering partnering with an IVD manufacturer to share the compliance burden.

Strategic Implications for Executives

For CEOs and Boards

FDA oversight of LDTs changes the business model for many laboratories. Compliance costs will rise, but so will barriers to entry. Well-resourced firms may benefit strategically by outcompeting smaller players who cannot adapt. CEOs must allocate budget and resources to regulatory compliance as a core capability.

For Quality and Regulatory Leaders

QA/RA leaders must build entirely new systems in some labs. This includes drafting SOPs, implementing electronic quality systems, and leading staff training. Partnerships with consultants experienced in FDA compliance will be critical in the short term.

For Clinical Leaders

Clinical directors must collaborate with regulatory teams to generate robust validation data. Evidence that satisfied CLIA will likely be insufficient for FDA. Clinical and regulatory functions must work hand in hand.

Final Thoughts

FDA’s oversight of LDTs marks a fundamental shift in the diagnostics landscape. Laboratories that once operated in a relatively unregulated environment must now build quality systems, prepare submissions, and undergo inspections. While the transition will be challenging, it also levels the playing field and strengthens confidence in the accuracy of diagnostic tests.

How PRP Compliance Can Help: We support laboratories in building FDA-compliant quality systems, designing complaint handling and MDR processes, and preparing for premarket submissions. Whether you are a hospital lab adapting for the first time or a commercial lab scaling up, PRP Compliance can provide the expertise to make this transition successfully.