On March 31, 2025, a pivotal ruling from the U.S. District Court for the Eastern District of Texas delivered a resounding victory for the biotech and clinical laboratory sectors, striking down the FDA’s attempt to regulate laboratory-developed tests (LDTs) as medical devices. In a case brought by the American Clinical Laboratory Association (ACLA), the Association for Molecular Pathology (AMP), HealthTrackRX, and Dr. Michael Laposata against the U.S. Food and Drug Administration (FDA), the court vacated the FDA’s controversial Final Rule, Medical Devices; Laboratory Developed Tests (89 Fed. Reg. 37,286, May 6, 2024). This ruling marks a significant victory for the laboratory sector and reinforces the distinct regulatory framework governing laboratory-developed tests (LDTs) under the Clinical Laboratory Improvement Amendments (CLIA) of 1988.
What Exactly is an LDT?
A laboratory developed test, or LDT, is a diagnostic test designed, manufactured, and used within a single specific laboratory. These tests analyze samples like blood, tissue, or saliva to diagnose or monitor medical conditions and can range from simple tests to advanced genetic sequencing for cancer and rare diseases. LDTs differ from commercially available tests in that they are not sold or distributed to or through other labs.
History of the FDA’s Attempt to Regulate LDTs as Medical Devices
The FDA, responsible for ensuring the safety and effectiveness of medical devices, has historically exercised enforcement discretion for most LDTs. This essentially meant they haven’t enforced the same regulations as for other diagnostics, and other agencies (e.g. CMS, CLIA) have been considered as potentially appropriate authorities for effective oversight.
However, on May 6, 2024, the FDA shifted the landscape by issuing a Final Rule declaring LDTs as medical devices subject to regulation under the Federal Food, Drug, and Cosmetic Act (FDCA). This move aimed to impose premarket review, quality system requirements, and other device-specific mandates on laboratories—regulations traditionally applied to mass-manufactured products like pacemakers and test kits, not professional services.
The FDA argued that increased oversight is necessary to ensure the safety and effectiveness of all diagnostic tests, including LDTs. They point to concerns about the potential for inaccurate results with some LDTs, which could lead to misdiagnosis and improper treatment. Additionally, the lack of standardized regulations creates an uneven playing field for LDT developers compared to commercially available diagnostics.
The Legal Challenge: A Question of Authority
The plaintiffs—representing a broad swath of the clinical laboratory and molecular pathology sectors—argued that the FDA overstepped its statutory authority under the FDCA. They contended that LDTs are professional services, not tangible “devices” as defined by the FDCA, which lists items like “instruments,” “apparatus,” and “in vitro reagents”—all physical products. The plaintiffs asserted that Congress intentionally assigned oversight of LDTs to CMS via CLIA, not the FDA, and that the Final Rule violated the Administrative Procedure Act (APA) by exceeding the agency’s jurisdiction.
The FDA countered that its authority under the FDCA encompassed LDTs, claiming that these tests were akin to “systems” or “contrivances” manufactured by laboratories. The agency framed its prior restraint as “enforcement discretion,” suggesting it had always possessed this power but chose not to exercise it until now
The Court’s Ruling: A Clear Rejection of FDA Overreach
In a detailed 51-page opinion, Judge Sean D. Jordan sided unequivocally with the plaintiffs. The court’s analysis hinged on three key points:
- Statutory Text: The FDCA defines “devices” as physical objects and, therefore, the court concluded that LDTs fall outside the FDCA’s scope, aligning instead with CLIA’s service-oriented framework.
- Regulatory History: For decades, the FDA refrained from regulating LDTs, while CMS enforced CLIA’s rigorous standards. Congress repeatedly declined to grant the FDA authority over LDTs, rejecting bills like the VALID Act and reinforcing CLIA as the unified regulatory mechanism.
- Practical Implications: The court highlighted the absurdity of the FDA’s position—that the entire laboratory industry had been operating illegally for nearly 50 years, shielded only by discretionary leniency. The projected $12.57 billion to $78.99 billion in compliance costs over 20 years underscored the rule’s impracticality.
Finding the Final Rule unlawful under the APA, the court vacated it in its entirety and remanded it to the FDA, affirming that CLIA, not the FDCA, governs LDTs.
What This Means for Biotech and Clinical Laboratories
This ruling removes the ongoing uncertainty that has surrounded this issue and is of immediate and practical significance for labs innovating in diagnostics, risk assessment and predictive testing:
- Preserving Innovation: By rejecting the FDA’s burdensome device regulations, the decision ensures labs can continue developing cutting-edge LDTs without facing crippling compliance costs or delays in premarket approvals.
- Clarity in Regulation: It reaffirms CLIA as the tailored, effective framework for LDT oversight, avoiding overlap with the FDCA’s product-focused regime.
- Patient Access: With no risk of LDTs being pulled from the market due to regulatory overreach, physicians and patients retain access to critical diagnostic tools.
Looking Ahead
For professional societies and biotech professionals, this victory underscores the importance of advocating for regulatory frameworks that match the realities of the field. The court’s emphasis also reflects current statutory limits and ongoing legislative and legal battles regarding whether agencies can rewrite their mandates or whether only congress holds that power.
While the FDA could appeal or seek new legislation, the decision sets a high bar for any future attempts to regulate LDTs as devices. Under the current ‘day after’ scenario, the biotech community can breathe easier, focusing on what we do best: advancing science to improve lives. Stay tuned as this debate evolves—your input as physician, laboratorians and industry leaders will shape its future.
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References
FDA: Final ruling
FDA: Laboratory Developed Tests
Scotus Blog: Supreme Court strikes down Chevron, curtailing power of federal agencies
Federal Court Vacates FDA Rule on Laboratory Developed Testing Services, Siding with ACLA – American Clinical Laboratory Association
US District Court: ACLA AMP vs FDA Memorandum Opinion and Order
US District Court: ACLA AMP vs FDA Final Judgement