B-336326
May 20, 2024
tThe Honorable Bernard Sanders
President
The Honorable Bill Cassidy
Ranking Member
Health, Education, Work and Pensions Committee
United States Senate
The Honorable Cathy McMorris Rodgers
Chair
The Honorable Frank Pallone, Jr.
Ranking Member
Energy and Commerce Committee
House of Representatives
Subject: Department of Health and Human Services, Food and Drug Administration: Medical devices; Tests developed in the laboratory
Pursuant to section 801(a)(2)(A) of title 5 of the United States Code, this is our report on an important rule promulgated by the Department of Health and Human Services, the Food and Drug Administration ( FDA) titled โMedical Devices; Tests developed in the laboratoryโ (RIN: 0910-AI85). We received the standard on April 30, 2024. It was published in the Federal register as a final rule on May 6, 2024. 89 Fed. Reg. 37286. The effective date of the rule is July 5, 2024.
This final rule amends FDA regulations to make explicit that in vitro diagnostic (IVD) products are devices under the Federal Food, Drug, and Cosmetic Act (FD&C Act), even when the manufacturer of the IVD is a laboratory. In conjunction with this amendment, the FDA is phasing out its general discretionary enforcement approach for laboratory-developed tests, so that IVDs manufactured by a laboratory will generally be subject to the same enforcement approach as other IVDs.
Attached is our assessment of FDA's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or would like to contact GAO officials responsible for evaluation work related to the rule issue, please contact Charlie McKiver, Deputy General Counsel, at (202) 512-5992.
Shirley Jones
General Counsel Associate Manager
Enclosure
CC: Samuel A. Shipley
Senior Policy and Regulatory Coordinator
Department of Health and Human Services
ENCLOSURE
REPORT UNDER 5 USC ยง 801(a)(2)(A) ON A MAJOR STANDARD
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
FOOD AND DRUG ADMINISTRATION
ENTITLED
โMEDICAL DEVICES; TESTS DEVELOPED IN THE LABORATORYโ
(ALSO: 0910-AI85)
(i) Cost-benefit analysis
The Food and Drug Administration (FDA) conducted an economic analysis of this final rule. The FDA estimated annual benefits over 20 years to range from $0.99 billion to $11.1 billion at a 7 percent discount rate, with a primary estimate of $3.51 billion, and $1 .24 billion to $13.62 billion at a 3 percent discount rate, with a primary estimate of $4.34 billion. The analysis included a quantification of the benefits to patients of avoided health losses due to problematic in vitro diagnostic (IVD) products offered as laboratory-developed tests (LDTs), with a particular focus on certain broad categories of diseases associated with most harms related to misdiagnoses. in the U.S. The FDA stated that additional benefits included non-health-related losses avoided by reduced spending on problematic IVDs offered as LDTs โโand an unquantified reduction in lawsuit costs.
According to the FDA, the annualized costs of the rule range from $566 million to $3.56 billion at a 7 percent discount rate, with a primary estimate of $1.29 billion, and from $603 million to $3.79 billion. million at a 3 percent discount rate, with a primary estimate of $1.37 billion. The FDA stated that it quantified the costs to affected laboratories of complying with legal and regulatory requirements, as well as the costs to the agency.
(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 USC ยงยง 603โ605, 607 and 609
FDA determined that this final rule is likely to impose a significant economic impact on a substantial number of small entities.
(iii) Agency actions relevant to sections 202โ205 of the Unfunded Mandates Reform Act of 1995, 2 USC ยงยง 1532โ1535
FDA estimated that this final rule will result in spending by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more, adjusted annually for inflation, in any year. FDA analyzed the estimated benefits, costs, pass-throughs, and effects of the rule and developed an Economic Impact Analysis that evaluates the impacts of the phase-out policy.
(iv) Agency actions relevant to the Pay-As-You-Go Administrative Law of 2023, Pub. l.
No. 118-5, div. B, title III, 137 Stat 31 (June 3, 2023)
Section 270 of the Pay-As-You-Go Administrative Act of 2023 amended 5 USC ยง 801(a)(2)(A) to require GAO to evaluate agency compliance with the Act, which establishes requirements for administrative actions that directly affect spending, in GAO's major rule reports. In guidance for Executive Branch agencies issued on September 1, 2023, the Office of Management and Budget (OMB) instructed that agencies must include a statement explaining that: โthe Act does not apply to this rule because it does not direct spending increases; The Act does not apply to this rule because it meets one of the exemptions in the Act (and specifies the relevant exemption); the OMB Director granted a waiver from the requirements of the Act pursuant to section 265(a)(1) or (2) of the Act; or the agency has submitted a written notice or opinion to the Director of OMB as required by section 263(a) or (b) of the Actโ in its rule submissions to GAO under the Congressional Review Act. OMB, Memorandum for Heads of Departments and Executive Agencies, Subject: Guidance for the Implementation of Administrative Regulations
Pay-As-You-Go Act of 2023, M-23-21 (September 1, 2023), at 11-12. OMB also states that the memorandum directives supplementing the Act's requirements do not apply to proposed rules that have already been submitted to the Office of Information and Regulatory Affairs; however, agencies must comply with applicable requirements of the Act before finalizing such rules. .
FDA did not discuss the Act in this final rule. In its filing, the FDA stated that the Act does not apply to the rule because it does not increase direct spending.
(v) Other relevant information or requirements under laws and executive orders
Administrative Procedure Act, 5 USC ยงยง 551 And next.
On October 3, 2023, the FDA published a proposed rule. 88 Federal Reserve. Reg. 68006. FDA received more than 6,500 comments on the proposed rule from a variety of entities, including medical device associations, members of the pharmaceutical and medical device industries, medical and healthcare professional associations, hospitals, and medical centers. academics, accreditation organizations, and other advocacy organizations. , government agencies and individuals. FDA responded to comments in this final rule.
Paperwork Reduction Act (PRA), 44 USC ยงยง 3501โ3520
FDA determined that this final rule does not contain information collection requirements under the Act. FDA noted that it expected that the phasing out of its generally applicable discretion approach for LDTs โโwould require an adjustment to the burden estimates for various data collections. approved information, before the corresponding elimination stage begins.
Legal authorization of the standard
FDA promulgated this final rule in accordance with sections 201(h)(1), 301, 501, 502, 510, 513, 514, 515, 518, 519, 520, 701, 702, 704, and 801 of the Federal Law. of Food, Drugs, and Cosmetics Law, and article 351 of the Public Health Service Law. See sections 321(h)(1), 331, 351, 352, 360, 360c, 360d, 360e, 360h, 360i, 360j, 371, 372, 374, and 381 of title 21; and section 262 of title 42, United States Code.
Executive Order No. 12866 (Regulatory Planning and Review)
FDA determined that this final rule is significant under the Order and sent it to the Office of Information and Regulatory Affairs for review.
Executive Order No. 13132 (Federalism)
FDA determined that this final rule does not have federalism implications. The FDA stated that the rule does not contain policies that have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities between different levels of government.
