District Court Ruling on FDA Final Rule Regarding Laboratory Developed Tests (LDTs)

By Sarah Fitzgerald and Linda Chatwin

Court decision on LDTs

On March 31, 2025, the US District Court (Eastern District of Texas, Sherman Division) ruled that the FDA’s Final Rule on Laboratory Developed Tests (LDTs) published in 2024, which phases out enforcement discretion and phases in standard medical device requirements, be vacated and set aside. This court determined that Congress has vested authority of test services to the Centers for Medicare and Medicaid Services (CMS) while medical devices are under the authority of the FDA. They ruled these to be services, rather than devices, and so they fall under the domain of the CMS. They further remanded the matter to the Secretary of Health and Human Services (HHS) for further consideration.

Potential additional actions on LDTs

HHS is the center that presides over the CMS, the FDA and other US health-related agencies. This means that HHS could consider a revised approach and continue to move forward with a variation of this Rule. Further, it is possible that Congress could step in, such as to pass a law to amend the Federal Food, Drug, and Cosmetic Act (FD&C Act) to provide a more definitive jurisdiction.

We note that the FDA included in the Final Rule its understanding of jurisdiction, including in relationship to the jurisdiction of CMS (See Sections III Introduction and A, V B, and VI D and E). Further, the FDA outlines the risks that made them determine that this additional oversight was needed (See Section III B). They also incorporated reasoning and responses to comments, concerns and objections.

Because of the issues cited, the FDA may appeal the U.S. District Court’s decision. If appealed, it would next go to the U.S. Court of Appeals for further consideration and determination. From there, it could be appealed again by either side, in which case the U.S. Supreme Court could make a final determination.

Background information on LDTs

It should be noted that there are valid concerns on both sides. This is only a very brief, high-level overview, and Section III of the Final Rule provides more details.

From the laboratory side, there were concerns of overlapping jurisdiction between CMS and FDA, increased regulatory burden, which could increase costs, and decreased access to certain tests that could affect clinical interventions.

From the FDA side, there were concerns that not all LDTs are sufficiently designed, evaluated, and manufactured, leading to incorrect results and therefore to inappropriate clinical interventions. Further the FDA believes that traditional medical device manufacturers have been de-incentivized from developing in vitro diagnostics (IVDs) that cover the same tests as LDTs, and so there is greater variability in what tests are available in which locations and the performance of those tests, potentially leading to greater variability in ultimate clinical care and outcomes. It should also be noted that the Final Rule included certain exemptions helping confirm that access would be adequately maintained, including for otherwise unmet needs.

The FDA has held industry discussions since 2010 and issued draft guidance documents (starting in 2014). Also, the FDA has published information related to the need for further regulation for LDTs. Perhaps most notably, in 2015 when they published a report regarding 20 LDTs that caused or may have caused patient harm through false positives or false negatives.

Concluding remarks

The U.S. District Court is a Federal Court, so its ruling stands unless the decision is successfully appealed, Congress intervenes, or the HHS revises the overall approach. Therefore, the FDA cannot enforce the requirements of the Final Rule, including Stage I, which requires implementation of procedures related to complaint evaluation, medical device reporting of serious adverse events and recalls and corrections, which was due to take effect May 6, 2025.

If any relevant action is taken that may result in reinstating the rule, there is no automatic delay of the rule’s requirements. Laboratories with LDTs should watch developments around this uncertainty and be prepared to comply with requirements quickly, as these requirements may or may not be delayed.