The FDA to Closely Regulate Lab-Developed Tests by Laura Lorenzetti @FortuneMagazine November 17, 2015, 12:31 PM EST E-mail Tweet Facebook Linkedin Share icons The U.S. Food and Drug Administration is ready to take on a new task: closely regulating laboratory developed tests. The reason: such tests “may have caused or have caused” actual harm to patients by misdiagnosing potentially serious conditions. “FDA oversight would help ensure that tests are supported by rigorous evidence,” Peter Lurie, the FDA’s associate commissioner for public health strategy and analysis, wrote in a blog post. “That patients and health care providers can have confidence in the test results, and that LDTs have more scientifically accurate product labeling.” Laboratory developed tests, or LDTs, are used to diagnose various diseases and are designed, manufactured, and used in a single laboratory. They’ve been around for some time and differ from standard diagnostic tools that require strict regulatory oversight and are widely distributed to doctors’ offices, hospitals, and other laboratories. Theranos, a blood-testing company that develops LDTs, captured headlines in recent weeks after a Wall Street Journal report alleged that the company cheated on proficiency tests and suggested that its proprietary LDTs lacked high-levels of consistency and accuracy. CEO Elizabeth Holmes, the subject of a Fortune cover story, rebutted those allegations and said there was no deception. Holmes has supported FDA regulation of LDTs and said Theranos would voluntarily submit its tests for FDA review, whereas most of the industry has aggressively campaigned against such a move. Theranos already has one FDA approval for its herpes simplex-virus type 1. Up until now, the FDA has “exercised enforcement discretion” towards LDTs, meaning that they haven’t held these tests to the highest level of scrutiny under existing laws. LDTs rarely undergo FDA review to ensure their accuracy, reliability, and confirm that they provide clinically meaningful results. The primary reason LDTs flew under the radar until now is that they previously focused on relatively simple tests, usually for rare conditions. However, LDTs have ventured into more and more complex conditions in recent years and are now used to diagnose common and serious medical conditions, such as cancer and heart disease. The effect on patients is much broader, and any misdiagnosis could result in real harm to patients–and significant public health costs. A test could provide a false positive, resulting in unnecessary treatments and mounting costs. But, even more dangerous is a false negative, thus leaving a patient in harm’s way. For instance, one LDT used to detect a HER2 gene mutation, which is connected to an aggressive form of breast cancer that requires special HER2-targeting drugs, failed to detect the mutation about 20% of the time. That means that these patients didn’t receive the best-in-class treatment, compromising their ability to battle breast cancer. The social cost per each false-negative case totaled $775,278, according to analysis by FDA economists. The FDA is now stepping in and proposing to step up its oversight of these tests. The agency issued a draft guidance last year and is now working to put the finishing touches on the proposal to phase in implementation of premarket review for LDTs.