[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


 21ST CENTURY CURES: EXAMINING THE REGULATION OF LABORATORY-DEVELOPED 
                                 TESTS

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 9, 2014

                               __________

                           Serial No. 113-171
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado               PETER WELCH, Vermont
MIKE POMPEO, Kansas                  BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois             PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia         JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                         
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     3
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     5
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, prepared statement..............................    40
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   141
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................   142

                               Witnesses

Jeffrey Shuren, M.D., J.D., Director, Center for Devices and 
  Radiological Health, Food And Drug Administration..............     6
    Prepared statement...........................................     9
    Answers to submitted questions \1\...........................   170
Andrew Fish, Executive Director, AdvaMed Diagnostics.............    45
    Prepared statement...........................................    47
Kathleen Behrens Wilsey, Ph.D., Co-Founder, Coalition For 21st 
  Century Medicine...............................................    66
    Prepared statement...........................................    68
    Answers to submitted questions...............................   171
Alan Mertz, President, American Clinical Laboratory Association..    83
    Prepared statement...........................................    85
    Answers to submitted questions...............................   174
Christopher Newton-Cheh, M.D., Assistant Professor of Medicine, 
  Harvard Medical School, Cardiologist, Massachusetts General 
  Hospital.......................................................   108
    Prepared statement...........................................   110
Charles Sawyers, M.D., Immediate-Past President, American 
  Association for Cancer Research................................   116
    Prepared statement...........................................   118

                           Submitted Material

S. 976 \2\.......................................................     6
Statement of the American Medical Association, submitted by Mr. 
  Burgess........................................................   144
Statement of the Clinical Laboratory Improvement Amendments 
  program, submitted by Ms. Shakowsky............................   152
Statement of the Small Biotechnology Business Coalition, 
  submitted by Mr. Pitts.........................................   155
Statement of the Association for Molecular Pathology, submitted 
  by Mr. Pitts...................................................   157
Statement of Invitae Corporation, submitted by Mr. Pitts.........   159
Statement of the American Association of Bioanalysts and the 
  National Independent Laboratory Association, submitted by Mr. 
  Pitts..........................................................   162
Statement of Combination Products Coalition, submitted by Mr. 
  Pitts..........................................................   164
Article entitled, ``How Bright Promise in Cancer Testing Fell 
  Apart,'' in The New York Times, July 7, 2011, submitted by Mr. 
  Waxman.........................................................   166

----------
\1\ Dr. Shuren did not respond to questions for the record.
\2\ The bill is available at http://docs.house.gov/meetings/IF/
  IF14/20140909/102625/HHRG-113-IF14-20140909-SD009.pdf.

 
 
 21ST CENTURY CURES: EXAMINING THE REGULATION OF LABORATORY-DEVELOPED 
                                 TESTS

                              ----------                              


                       TUESDAY, SEPTEMBER 9, 2014

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:32 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Blackburn, Guthrie, Griffith, Bilirakis, Ellmers, Pallone, 
Schakowsky, Green, Barrow, and Waxman (ex officio).
    Also present: Representative Eshoo.
    Staff present: Clay Alspach, Chief Counsel, Health; 
Leighton Brown, Press Assistant; Noelle Clemente, Press 
Secretary; Sydne Harwick, Legislative Clerk; Robert Horne, 
Professional Staff Member, Health; Carly McWilliams, 
Professional Staff Member, Health; Tim Pataki, Professional 
Staff Member; Chris Sarley, Policy Coordinator, Environment and 
Economy; Heidi Stirrup, Health Policy Coordinator; John Stone, 
Counsel, Health; Ziky Ababiya, Democratic Staff Assistant; Phil 
Barnett, Democratic Staff Director; Eric Flamm, Democratic FDA 
Detailee; Debbie Letter, Democratic Staff Assistant; Karen 
Nelson, Democratic Deputy Committee Staff Director for Health; 
and Rachel Sher, Democratic Senior Counsel.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. The subcommittee will come to order. The chair 
will recognize himself for an opening statement.
    Today's hearing is another in a series of 21st Century 
Cures hearings. Primarily focuses on FDA's July 31, 2014, 
notification to Congress that it intends to issue draft 
guidance on a framework for oversight of the laboratory-
developed test, the LDTs. This notification was required by 
Section 1143 of the Food and Drug Administration's Safety and 
Innovation Act of 2012, and provides us with an opportunity to 
hear from the Agency about whether it has adequately answered 
the myriad of procedural and substantive questions that were 
the subject of much debate leading up to the passage of FDASIA.
    It is indisputable that the draft guidance documents the 
Agency recently released would fundamentally alter the 
regulatory landscape for the review and oversight of LDTs and 
the clinical labs that develop them. That fact alone has raised 
legitimate concerns about whether FDA can or should use 
guidance to promulgate a new regulatory approach. It is also 
indisputable that innovative laboratories and health care 
providers develop and perform tests and procedures that advance 
personalized patient care. Because of the critical role they 
can play in the decisions patients make with their doctors, 
these tests, regardless of who develops or manufactures them, 
must be accurate and reliable. Any framework adopted must not 
only prioritize patient safety, which should always be 
paramount, but also encourage robust investment and allow for 
continued innovation. In order for that to happen, a company or 
venture capitalist that invests in the development, testing, 
and FDA review of a diagnostic product must have the certainty 
that labs will not copy it and promote their alternatives the 
next day. On the other hand, many innovative tests and 
procedures are developed in labs, including continuous, 
iterative improvements to FDA-approved products that often 
become the standard of care. Any regulatory approach must 
carefully address these complex issues.
    Dr. Shuren has been a key voice throughout the 21st Century 
Cures Initiative, and I thank him for his willingness to come 
to the table yet again. The Committee invited CMS to testify on 
its roles and responsibilities administering the Clinical 
Laboratory Improvement Amendments regulations, which includes 
lab practices, certification, and personnel, but they were 
unable to do so.
    We have a number of questions about FDA's proposed path 
forward, and I look forward to hearing from all of our 
witnesses on the second panel about its potential impact.
    And with that, the chair yields back, and now recognize the 
Ranking Member, Mr. Pallone, for 5 minutes.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The Subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    Today's hearing is another in a series of 21st Century 
Cures hearings and primarily focuses on FDA's July 31, 2014 
notification to Congress that it intends to issue draft 
guidance on a framework for oversight of laboratory developed 
tests (LDTs).
    This notification was required by Section 1143 of the Food 
and Drug Administration Safety and Innovation Act of 2012, and 
provides us with an opportunity to hear from the agency about 
whether it has adequately answered the myriad of procedural and 
substantive questions that were the subject of much debate 
leading up to the passage of FDASIA.
    It is indisputable that the draft guidance documents the 
agency recently released would fundamentally alter the 
regulatory landscape for the review and oversight of LDTs and 
the clinical labs that develop them. That fact alone has raised 
legitimate concerns about whether FDA can or should use 
guidance to promulgate a new regulatory approach.
    It is also indisputable that innovative laboratories and 
health care providers develop and perform tests and procedures 
that advance personalized patient care. Because of the critical 
role they can play in the decisions patients make with their 
doctors, these tests-regardless of who develops or manufactures 
them-must be accurate and reliable.
    Any framework adopted must not only prioritize patient 
safety-which should always be paramount-but also encourage 
robust investment and allow for continued innovation.
    In order for that to happen, a company or venture 
capitalist that invests in the development, testing, and FDA 
review of a diagnostic product must have the certainty that 
labs will not copy it and promote their alternatives the next 
day.
    On the other hand, many innovative tests and procedures are 
developed in labs-including continuous, iterative improvements 
to FDA-approved products that often become the standard of 
care. Any regulatory approach must carefully address these 
complex issues.
    Dr. Shuren has been a key voice throughout the 21st Century 
Cures initiative, and I thank him for his willingness to come 
to the table yet again.
    The Committee invited CMS to testify on its roles and 
responsibilities administering the Clinical Laboratory 
Improvement Amendments regulations, which includes lab 
practices, certification, and personnel, but they were unable 
to do so.
    We have a number of questions about FDA's proposed path 
forward, and I look forward to hearing from all our witnesses 
on the second about its potential impact.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman Pitts.
    New technologies and advances in medicine can improve the 
quality of life for millions of Americans, but the use of these 
advances can also pose serious risks to individual patients if 
they are not clinically accurate. And this is why we have 
regulation, and it is why the FDA has proposed commonsense 
changes that merely bring safety regulations up-to-speed with 
medical progress.
    Lab-developed tests have come a long way since Congress 
gave FDA the authority to regulate all in vitro diagnostic 
tests in 1976. Advances in science and technology have enabled 
labs to develop more sophisticated tests that allow physicians 
to identify genetic factors in diagnosing disease, and this has 
allowed for early detection and more targeted medical 
interventions.
    Recently, genetic tests have identified specific gene 
sequences which can help doctors design an approach that 
patients are more likely to respond to. Identifying the HER2/
neu gene in patients allowed oncologists to target this unique 
form of breast cancer with the drug Herceptin, instead of 
radiation, vastly improving patient outcomes. Similarly, the 
identification of mutations of the BRCA2 gene--or BRCA1 and 
BRCA2 genes--can tell doctors if a patient is at an increased 
risk for developing breast or ovarian cancer. Last year, the 
actress Angelina Jolie revealed that she learned she was 
carrying the BRCA1 gene and had an 87 percent risk of 
developing breast cancer. Armed with this information, the 
actress and her doctors took drastic action to prevent the 
likely onset of cancer later in life, and based on the results 
of this test, she took her future health into her own hands and 
obtained a preventative double mastectomy. And while the 
actress's actions have inspired considerable debate as to who 
should get tested, and to what extent they should undertake 
preventative measures, the fact remains that many of these 
tests, including those used in detecting the BRCA genes, never 
obtained FDA approval.
    The consequences of information provided by tests like 
these is great, which is why in 2010 the Subcommittee on 
Oversight and Investigations and GAO explored tests directly 
marketed to consumers. In its investigation, GAO found that 
these tests provided individuals with a wide array of results, 
with little consistency from test to test. And given the impact 
on patients of the results of these tests, whether leading some 
to miss real risk and others to seek treatment they don't need, 
it should be clear that the information LDTs provide is of 
grave consequence, and that is why many of the major cancer 
advocacy groups welcome greater FDA oversight. In response to 
the FDA's announcement, Calaneet Balas, Chief Executive of the 
Ovarian Cancer National Alliance, said, and I quote, ``We in 
the ovarian cancer community know firsthand the danger of a 
test that hasn't gone through FDA approval. Oversure and early 
detection tests for ovarian cancer came to market in 2008, 
without independent verification and oversight, and this test 
didn't accurately predict ovarian cancer cases, leading 
otherwise healthy women to have their ovaries removed based on 
bad information. When a test routinely provides false 
positives, it is a problem, however, when that test is used to 
diagnose and treat cancer, it is a potentially fatal problem 
for millions of patients, and the clear demonstration of the 
need for greater FDA oversight.''
    I believe, Mr. Chairman, we have a responsibility to 
provide patients with greater certainty. Furthermore, we want 
to empower the medical community to harness these new 
technologies to improve patient health and outcomes, and 
eventually perhaps bend the lost curve. And while doctors have 
years of training and their patients' interests at heart, they 
are only as good as the tools they use. Physicians need to be 
able to trust the results of diagnostic tests so they can 
develop effective interventions.
    It seems to me that regulating LDTs and other tests 
differently based on who makes them doesn't make sense. This is 
especially true given the scientific progress that has enabled 
lab-developed tests to have even greater impacts, both for good 
and for bad. If we want to promote the development of 
personalized medicine, which I think we all recognize is the 
future of medicine and the foundation of 21st Century Cures, 
then we need to ensure that highly complicated and potentially 
groundbreaking advances are clinically valid.
    So, Mr. Chairman, this regulatory proposal has been in the 
work for some time, so I think we are all eager to hear from 
FDA about it. In addition, I look forward to hearing from other 
stakeholders about their views of the FDA proposal, because it 
is critical that its implementation ensures the safety of 
patients, but also allows for the continued advancement of 
cutting-edge personalized medicine, and I do not believe the 
two are mutually exclusive, but rather can be mutually 
supportive.
    I also wanted to tell you again I enjoyed coming out to 
Lancaster for the field hearing that we had a few weeks ago.
    Thank you.
    Mr. Pitts. Thank you. That was very productive and thank 
you for coming out.
    Chair now recognizes the Vice Chairman of the Subcommittee, 
Dr. Burgess, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman, and let me agree with 
Mr. Pallone that the Cures roundtable that you had in Lancaster 
was very worthwhile, and I think we all learned a lot. It is 
just ironic that as we are proceeding with the Cures 
Initiative, and trying to remove some of the barriers, we are 
trying to facilitate the faster Cures, the promise of the 21st 
Century, that this morning we are having a hearing on what I 
consider to be a potential new roadblock or bottleneck on that 
path to Cures.
    I have been to every Cures event here in D.C., I have been 
to several around the country. Repeatedly, we hear the 
potential for genomic medicine to help us understand illness, 
quickly diagnose it, and target treatment. This has been 
embraced in a bipartisan manner, and I strongly believe in that 
potential. Here is an example. A few months ago, the Centers 
for Disease Control briefed my office on an emerging global 
threat in the form of a virus. They had sequenced the virus, 
provided information to researchers, and even knew where in the 
particular country's jungle the virus had originated. It was 
impressive, to say the least.
    Here is another one. Back in 2009, H1N1, and many of us 
remember, that subtype of the influenza A virus spread very 
rapidly. During the first week of the outbreak, 16 laboratories 
had laboratory-developed tests that could identify H1N1 from 
other H1 viruses. Most were available within 24 hours. The 
speed helped inform public health reactions. The FDA had no 
approved commercial kit, however, if they had, under this 
proposed framework which we are discussing this morning, if 
they had had a test, even if it was much older and inferior, 
these laboratory-developed tests would have been blocked from 
doctors and public health officials.
    The Food and Drug Administration regulation of tests like 
these will be burdensome, and will slow the ability of clinical 
laboratories to develop tests that can allow us to respond to 
public health crises when they occur. This is also duplicative. 
Congress established a regulatory framework applicable to labs 
and laboratory testing, known as the Clinical Laboratory 
Improvement Acts of 1988, or CLIA. I am concerned that 
additional review of certain tests may be warranted, but 
previously I did introduce legislation to meet patient needs 
and ensure tests are accurate, reliable, and clinically valid 
by making improvements to CLIA, not replacing it. I authored 
Section 1143 of the Food and Drug's Safety Innovation Act so we 
would be able to discuss how patients, the practice of 
medicine, innovation and the economy could be harmed if the FDA 
tried to fit laboratory-developed tests into a misaligned 
definition of a medical device.
    I fundamentally believe that the FDA has no statutory 
authority to regulate laboratory-developed tests. For FDA to 
have jurisdiction, it must have a traditional device and be 
commercially distributed among the states. LDTs do not fall 
under either category. Professional medical services are 
currently not regulated by the FDA, and I do not believe they 
should be.
    In addition to these significant jurisdictional issues, the 
process the Food and Drug Administration is considering is of 
great concern. Even the courts determined that the FDA 
authority over laboratory-developed tests, the Agency would 
need to amend its current regulations through rulemaking. The 
Food, Drug, and Cosmetic Act, the Administrative Procedures Act 
of the Supreme Court all require disseminating rules to modify 
current regulation, or to create legally-enforceable 
regulations. Instead, the Agency continues on with its 
jurisdictional power grab by attacking innovation, threatening 
professional practice, and risking jobs in order to claim 
authority over everything they see. They are doing this even at 
the expense of allowing the core mission of the FDA to suffer 
as a consequence. I can't think of a worse result: denying 
patients and doctors innovative tests, while redirecting 
resources that could be used to approve the next miracle drug 
or device.
    Mr. Chairman, I would ask unanimous consent to insert into 
the record a statement by the American Medical Association on 
the topic of this hearing this morning.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. And further, Mr. Chairman, I would also like 
to submit into the record a copy of a bill, Senate Bill 796, 
introduced March 23 of 2007, by Senator Obama and Senator Burr, 
and this was the personalized medicine for all Americans by 
expanding, accelerating genomics research and initiatives, and 
one of the key parts of this legislation was to create within 
CLIA a specialty area for molecular medicine and genetics and 
clinical tests, instead of supplanting CLIA with the FDA, this 
proposal would have actually modernized CLIA in an approach 
that I think would be much more useful. So I will submit a copy 
of this legislation for the record also.
    I appreciate the indulgence, and I am going to yield back.
    Mr. Pitts. Without objection, so ordered. \1\
---------------------------------------------------------------------------
    \1\ The information has been retained in committee files and is 
also available at http://docs.house.gov/meetings/IF/IF14/20140909/
102625/HHRG-113-IF14-20140909-SD009.pdf.
---------------------------------------------------------------------------
    Mr. Pitts. All Members' opening statements will be made a 
part of the record.
    We have two panels today. On our first panel, we have Dr. 
Jeff Shuren, Director, Center for Devices and Radiological 
Health, U.S. Food and Drug Administration. Thank you very much, 
Dr. Shuren, for coming today. You will have 5 minutes to 
summarize, and your written testimony will be made a part of 
the record. So at this point, Dr. Shuren, you are recognized 
for 5 minutes for an opening statement.

 STATEMENT OF JEFFREY SHUREN, M.D., J.D., DIRECTOR, CENTER FOR 
 DEVICES AND RADIOLOGICAL HEALTH, FOOD AND DRUG ADMINISTRATION

    Dr. Shuren. Mr. Chairman and Members of the subcommittee, 
thank you for the opportunity to testify today.
    FDA's risk-based proposal for oversight of laboratory-
developed tests, or LDTs, is intended to ensure that patients 
and their health care providers make major medical decisions 
based upon accurate, reliable, and clinically-meaningful test 
results, while encouraging development and access to new tests. 
It would focus on those LDTs that pose the greatest risk to 
patients if the results are not accurate.
    FDA historically exercised enforcement discretion over 
LDTs, namely, we opted not to enforce requirements LDT makers 
were subject to, because back in 1976, LDTs were limited in 
number, relatively simple tests, and typically were used to 
diagnose rare diseases and uncommon conditions. LDTs offered 
today, however, are often very different from those 40 years 
ago. These tests have increased in both complexity and 
availability, and many are now used to diagnose common diseases 
and conditions. Increasingly, patients and their health care 
providers are relying on the results of LDTs to make major 
medical decisions. This evolution in complexity and volume has 
significantly increased patient risk of harm from higher-risked 
LDTs, and in some cases, there were already FDA-proved tests 
available; tests proven to be safe and effective. So using an 
LDT may put patients at unnecessary and avoidable risks.
    These risks are not theoretical. There are cases of faulty 
LDTs for cancer, infectious diseases, heart disease, and other 
conditions leading to the wrong diagnosis, sometimes resulting 
in the wrong treatment, or the failure to treat when an 
effective therapy is available, and resulting in unnecessary 
costs to our health care system and American taxpayers.
    Numerous stakeholders believe the current system of uneven 
oversight is having a negative impact on innovation. 
Conventional device manufacturers may go through the premarket 
review process and obtain clearance or approval for an IVD kit, 
only to be faced with immediate competition from labs 
manufacturing and marketing similar tests which did not obtain 
premarket review or meet other requirements to assure their 
tests are accurate and reliable. This has created disincentives 
for them to invest in developing innovative tests, and creating 
more U.S. jobs. But we have also heard from some academic 
medical labs that they make tests to address unmet needs, 
because there are no FDA-approved tests. We understand the 
value of and the need for these types of tests. Therefore, 
after listening to the perspectives from a broad range of 
stakeholders, we opted not to propose the same level of 
oversight for all the LDTs, nor to create a completely level 
playing field between tests developed by labs and those made by 
conventional manufacturers. Instead, we would continue to 
exercise enforcement discretion for many LDTs, including those 
that are low risk, LDTs for rare diseases, LDTs for unmet needs 
where no FDA clear or approved test exists for that specific 
intended use if made by a health care facility responsible for 
the care of the patient. FDA would also focus on high and 
moderate risk LDTs, and phase-in premarket review requirements 
for this subset over 9 years using a public process that 
includes expert advisory panels, as even recommended by the lab 
community. This flexible approach would balance the importance 
of accurate test results, with the need to facilitate 
innovation and prevent disruption of access to diagnostics. The 
more narrowly tailored and balanced oversight approach that we 
would propose for LDTs is also critical to the success of 
personalized medicine. Getting the right treatment to the right 
patients depends upon having accurate and reliable tests to 
identify who are, in fact, the right patients, and who should 
not receive a treatment that can cause them harm but provide no 
benefit. LDTs that steer patients to the wrong treatments 
unnecessarily hurt patients, while jeopardizing the advancement 
of personalized medicine altogether.
    We seek to facilitate innovation and test development, and 
we seek to assure that tests are safe and effective. The issue 
should not be do we regulate, but rather how we should regulate 
to best achieve both of these important objectives, the dual 
objectives that are at the core of the FDA's statutory mission: 
to protect and promote public health. Patients deserve no less, 
and our health care system can afford no less. That is the 
dialogue we need to have with laboratories, conventional device 
industry, as well as patients, providers, and other members of 
our medical device community.
    So thank you for the opportunity to testify today, and I 
will take any questions that you may have.
    [The prepared statement of Dr. Shuren follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Pitts. The chair thanks the gentleman.
    And we will now go to questioning. I will begin the 
questioning, and recognize myself 5 minutes for that purpose.
    Dr. Shuren, issuing this guidance document would constitute 
a significant change to almost four decades of Agency policy. 
It goes well beyond a set of recommendations or a description 
of current Agency thinking. How would implementing this new 
regulatory framework via guidance comply with the 
Administrative Procedures Act?
    Dr. Shuren. So we have in place what we call an enforcement 
discretion policy. Labs are currently subject to the 
requirements of the Food, Drug, and Cosmetic Act. We have, as a 
matter of policy, opted not to enforce compliance. Those kinds 
of general policy statements where we are not imposing a new 
requirement, that requirement is there but we are enforcing it, 
we are not interpreting legal norms, are not subject to 
Administrative Procedures Act to rulemaking.
    Mr. Pitts. Understanding this approach would be a departure 
from existing practice, and have a substantial impact on 
regulated industry. Is the FDA not required to proceed with 
notice and comment rulemaking?
    Dr. Shuren. No. Under the Administrative Procedures Act, 
this change in enforcement discretion policy is not subject to 
those requirements.
    Mr. Pitts. If a company or any other individual or entity 
invest in the research and development of an innovative 
diagnostic test and it is approved or cleared by FDA, I feel as 
though labs should not be able to simply copy the technology 
and market their own version the next day. This is particularly 
relevant if the test was reviewed as a companion diagnostic in 
concert with a drug. How frequently does this situation occur, 
and what can we do to address it?
    Dr. Shuren. Well, our understanding is it does happen 
commonly. It has particularly occurred with some of our 
companion diagnostics. So one example is Roche made a drug for 
treating metastatic melanoma, and it only worked in a subset of 
patients so they had a diagnostic test to identify which 
patients should get the drug and which shouldn't. The day they 
go on the market, there are 9 other labs who say we make the 
same test; in fact, some of them said they make a better test. 
But the only clinical study, all that data, Roche had it. They 
are the ones who had the drug, they did the study. So those 
labs made these claims, they are saying that, in fact, they 
have a better test, but there was no data there to actually 
show it. Those are kind of the risks, and even Roche has said 
this has created disincentives for them to create new drugs for 
personalized medicine and have companion diagnostics.
    Mr. Pitts. While I do have some concerns about the process 
by which FDA is proposing this new regulatory approach, patient 
groups have questioned whether there are gaps in the current 
system that are jeopardizing patients' safety. If that is the 
case, we must work together to address them, and in your 
testimony, you cite several examples where FDA is aware of 
faulty or unproven LDTs. Can you provide the committee with 
detailed descriptions of each of the instances of harm you 
referenced, and any other adverse event or anecdotal data FDA 
has compiled that forms the basis for proposing this new 
regulatory framework?
    Dr. Shuren. Yes, we can provide you with more details. I 
will say too, one of the challenges here is that there is no 
requirement for reporting adverse events or related 
malfunctions, so you don't have a surveillance system in place 
to even identify problems. Many of these have been found 
because researchers looked at the data, the reports in 
scientific articles, whistleblowers have come forward, or 
sometimes the labs have come to us. We have seen the data, and, 
in fact, we were able to see, you know what, the data isn't 
good, this test doesn't work. And that is just the tip of the 
iceberg, because we don't have a system in place to actually 
identify problems.
    One of the things we are proposing is having that system in 
place so we know when problems arise. This isn't bureaucratic, 
it is actually good medicine, so that if problems are there, we 
want to make sure they get fixed, and we are aware of it.
    Mr. Pitts. You state on the one hand that all high-risk 
tests should be reviewed by the FDA, regardless of whether they 
are developed in a lab or manufactured as a kit. That may very 
well be necessary. You go on, however, to discuss that the 
Agency will continue to exercise enforcement discretion with 
respect to tests that do not have an FDA-approved equivalent. 
Are these consistent positions?
    Dr. Shuren. So we are trying to strike a balance between 
assuring that there is availability of tests in cases where 
there aren't tests, but to have some protections in place, some 
mitigations for the risks that occur in those settings where 
you may not have a properly validated test that we have been 
able to see to assure it is safe and effective. On the same 
token, if you do now have an FDA-approved test on the market 
and you have another test for the same intended use, then we 
should be reviewing it or go ahead and use the test that has 
been proven to be safe and effective. That is the balance that 
we tried to strike, and our focus still is on those higher-risk 
devices, because the low-risk devices we have said we are 
exercising enforcement discretion towards, regardless. All we 
ask is, tell us what they are, and if there is a problem, 
report it, but other requirements you do not need to comply 
with.
    Mr. Pitts. My time has expired. I have a few follow-up 
questions on--with that question, but I will submit them to you 
in writing.
    The Chair recognizes the Ranking Member, Mr. Pallone, 5 
minutes for questions.
    Mr. Pallone. Thank you, Chairman Pitts.
    Dr. Shuren, I want to start out with some basic questions 
about FDA's role with respect to LDTs. I know you described 
this in your testimony but I would just like to hear more.
    Some have questioned whether FDA has the authority to 
regulate LDTs in the first place. Specifically, they say that 
LDTs are not medical devices at all, instead, they assert LDTs 
are services that are offered in one place, making them more 
akin to a form of practice of medicine than to an article that 
can be sold in state commerce.
    So, first, can you respond to this claim? Why does FDA 
believe the Agency has the authority to regulate LDTs?
    Dr. Shuren. Well, LDTs are in vitro diagnostics. They are 
reagents, instruments or systems that are intended to be used 
to diagnose a disease or other condition. And essentially, at 
its core you have a process, you have instructions for use for 
how you prepare a specimen from the body, like blood, and then 
how you go ahead and examine and analyze it to identify a 
particular substance in there that then is linked to the 
diagnosis of a disease. And when you make that test, those 
various components, the reagents, the instruments, the device 
developer may not make those. They may assemble them together, 
put them out, or they may tell you what their instructions for 
use, their process, which components to use. Labs do the same 
thing; they develop this process which, by the way, is IP, they 
get patents on a lot of these, and then they put together those 
reagents or those instruments and assemble that device. And 
that is, in fact, a device, and they have that in commercial 
distribution. They are out there marketing those tests.
    The law doesn't distinguish between who makes the test, it 
is just if you make the test, if you make the device.
    Mr. Pallone. All right.
    Dr. Shuren. And as for regulating, even CMS has recognized 
that LDTs are IVDs, they are subject to FDA oversight. Even 
labs have come in for approval. I have to tell you one lab, 
very vocal opponent, and they have orally and in writing 
publicly stated they don't make IVDs, they make services, but I 
have here their submission to the FDA in-house right now where 
they say here is our test, it is an in vitro diagnostic test. 
They describe the method, the process they made, and then they 
identify the various components that they don't make but they 
form part of the test.
    Mr. Pallone. OK. Well, let me follow up a little bit about, 
you know, how traditional device manufacturers differ from 
clinical labs with respect to LDTs.
    The ACLA claims they are two totally different entities 
because manufacturers make and sell kits, while labs design, 
validate, perform, and interpret tests and furnish the results 
to physicians. And one question ACLA raises in its testimony is 
how to define where the manufacture ends and the performance 
begins.
    So, again, I would like to know your response to that. 
Specifically, what is the implication, significance and 
relevance of that question for FDA regulatory purposes?
    Dr. Shuren. Yes, so we define who is a manufacturer that 
sits in our regulations, and essentially it is a person who 
manufactures, prepares, propagates, compounds, assembles, or 
processes a device by chemical, physical, or biological or 
other procedure. They make the test, they design the test, they 
develop the test. That is the manufacturer. When they perform 
the test, they are acting as more of a traditional lab. And a 
lab can do both, and some only do the testing, some develop the 
test and they perform the test.
    Mr. Pallone. All right, and then lastly, there has been a 
lot of concern about whether a stronger FDA regulatory stance 
with respect to LDTs might hinder the innovation that has been 
flourishing in this area. And that is obviously something we 
have to be concerned about.
    Presumably, all sides would agree that there should be 
enough oversight of tests to ensure that they are accurate and 
clinically relevant, but the oversight should not be so 
burdensome as to prevent or unnecessarily delay the development 
of important new tests or the improvement of existing tests. 
The difficulty, of course, is in achieving that balance. Our 
second panel will have witnesses who believe your guidance 
appears to achieve that balance, and other witnesses who 
believe FDA is inherently the wrong agency to even attempt to 
achieve that balance.
    So I would like to get your response to some of the 
criticism that is being leveled at your whole approach. How do 
you respond to claims that FDA's involvement will hinder 
innovation?
    Dr. Shuren. Well, our intent is try to strike the right 
balance. We have proposed a risk-based framework in which we 
continue to exercise enforcement discretion for a subset of 
LDTs to try to make them available, but by the same token, try 
to assure in other cases that we do have that proper validation 
that those tests are safe and effective. And the point for 
putting all of this out is, let us have that dialogue. If what 
we are proposing doesn't hit the mark right, then let us talk 
about what is the best way to hit that mark. Whatever we come 
up with, we are not going to satisfy everyone, I will tell you 
that. Whatever we get at the end of the day, someone is not 
going to be happy because there are so many different 
perspectives, but we are going to try to hit it the best as we 
can. And the real solution is we need the parties at the table, 
we need the lab community to come in and talk to us, to 
hopefully move away from, you don't have oversight for us, we 
don't want to talk, rather say, OK, we get it, let us figure 
out how to make this work. Let us hit that right balance on 
innovation and safety and effectiveness, the right balance on 
protect public health and promote public health.
    Mr. Pallone. All right. I thank you for your response. And 
I just think it is clear, we need to have the FDA overseeing 
these tests.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the Vice Chairman of the Subcommittee, Dr. 
Burgess, 5 minutes for questions.
    Mr. Burgess. Thanks, Mr. Chairman. Dr. Shuren, good to see 
you again. I am happy to hear you talk about a spirit of 
openness and cooperation. I just find it curious that my 
discussion with my own office staff and committee staff, there 
was no outreach by the FDA to talk about this prior to issuing 
the letter that you did at the end of July, triggering the 
guidance that you are putting forward. So I hope that perhaps 
you have just signaled a change in tone. I hope there is the 
willingness to indeed work with many of us who are concerned 
about this, and clearly the concern exists, you knew that 
because of the language that was in the FDA reauthorization 
bill, and again, I just find it curious you would not have had 
any discussion with committee staff prior to issuing that 
notice about guidance.
    Let me just underscore something that the chairman asked 
you. Will you provide our committee with all internal FDA 
assessments of the harm that has been completed or were the 
bases for the Agency's concern in this proposed framework?
    Dr. Shuren. Well, we were asked if we could provide details 
on those cases, and we will provide the details as requested.
    Mr. Burgess. But all internal documents that you have 
received at the FDA that formed the basis of this decision, may 
we look forward to you sharing those with us in this new spirit 
of openness that you just proclaimed?
    Dr. Shuren. So let me go back and talk with people. When 
you say all documents, if I have draft documents, we usually 
try to move forward to things that are final and the completed 
information. So we want to get you everything that is right, 
and we will go ahead and do that.
    Mr. Burgess. Well, specifically, we are looking at how many 
of these tests are performed daily, what is the extent of the 
harm, have there been similar problems with FDA approved and 
cleared kits, and then lastly and perhaps most importantly, do 
you believe physicians are not concerned about patient harm?
    Dr. Shuren. Right.
    Mr. Burgess. So those would be the specifics that we would 
be asking for.
    Now, we have had these discussions before, and I firmly 
believe the FDA lacks statutory authority to regulate medical 
practice. Laboratory-developed tests are a service and not 
commercialized devices.
    Do you have or did you rely on any legal opinion or memo 
from FDA counsel, and if so, can you produce that legal 
guidance for us?
    Dr. Shuren. We did get guidance from legal counsel, and I 
will go back to them to see what materials we have or areable 
to provide.
    Mr. Burgess. It is critical that, again, that information 
be shared with us.
    So let me ask you a question. In 30 days, we had asked for 
a notification 60 days prior to undergoing the guidance. So you 
notified us at the end of July, so what is going to happen in 
about 30 days, will the FDA be releasing guidance, draft 
guidance, or regulation based on this framework?
    Dr. Shuren. Our intent is to release draft guidance, to 
have a public process to get input on that, to have a dialogue 
that includes not only an open public docket, public meetings, 
opportunities to discuss in-person with us. We want to have an 
open dialogue moving forward, and that is the process. Very----
    Mr. Burgess. You----
    Dr. Shuren [continuing]. Public, very collaborative.
    Mr. Burgess. So the FDA is proposing to modify a regulation 
through a guidance document. Regulation the FDA specifically 
indicated it would not regulate laboratory-developed tests, so 
where is the legal authority for this decision?
    Dr. Shuren. Actually, we have been consistent for years 
that we do regulate LDTs. If you have statements that say that 
we don't have authority over LDTs, that would be helpful to 
see. We have always said we have authority. We haven't enforced 
requirements. That is a matter, that is decision on the part of 
the Agency, that is enforcement discretion, and that is what we 
have done. We are not changing a particular regulation, we are 
not imposing a requirement that isn't already imposed upon the 
labs, but simply we have not been enforcing.
    Mr. Burgess. Well, forgive me, but enforcement discretion 
does not give me a warm fuzzy feeling, and it is not just with 
this Administration, it was with the previous Administration as 
well. We are all familiar with the statement, ``I am from the 
government, I am here to help.'' We are not going to bother you 
because we have enforcement discretion, so we won't bother you 
up until the day that we do. Most people find that as a very 
nebulous framework in which to work, and a very difficult 
framework in which to plan, plan for the future and plan for 
expenses.
    So how will this all work? Guidance should not, and the 
courts have determined does not, have the enforcement power of 
regulation, so how does the FDA intend to bring this framework 
upon the world and have it function without clear authority 
from Congress, and without providing the normal regulatory 
framework?
    Mr. Shuren. Well, again, there is authority under the 
statute and that authority is there and it is applied now. We 
haven't enforced it. And while this discussion isn't new, we 
have been talking about enforcing those requirements in LDT as 
the existing requirement since the 1990s. We have been called 
upon by the Department of Energy. We had two Secretary Advisory 
Committees, Secretary of HHS, saying that we should be 
exercising our authority over LDTs. The Institute of Medicine 
came back to say that. In 2007, we issued draft guidance 
withdrawing enforcement discretion for a subset of LDTs, but 
the lab community came back and said please don't do this 
piecemeal because that is not predictability for us. Please 
instead put in place an overarching framework. Seven years 
later, 7 years later, that is what we are doing, 4 years after 
we had a public meeting in 2010 to do this. This is no sudden 
change; this is years. The question shouldn't be where did this 
come from, the question should be, FDA, what the heck took you 
so long?
    Mr. Burgess. Mr. Chairman, I have additional questions 
which I will submit for responses in writing, and look forward 
to the speedy responses, and yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Georgia, Mr. Barrow, for 
questions. No questions? Who is next? The chair recognizes the 
gentleman from Virginia, Mr. Griffith, 5 minutes for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    I am going to follow up a little bit, although maybe a 
little different than what Dr. Burgess was going after. And I 
understand some of the concerns, but the Supreme Court has held 
that an agency has a right to change its policy so long as it 
supplies a reasoned analysis for that change. An agency, 
however, may not change its policies in a way that simply 
disregards rules that are still on the books. FDA's current 
regulations specifically exempt clinical labs from medical 
device registration and listing requirements.21 C.F.R. 
807.65(i).
    In an attempt to avoid directly conflicting with this 
regulatory exemption, the proposed guidance documents claim not 
to require a clinical laboratory to register and list their 
tests, but to create a new notification option where labs could 
notify the FDA of the types of LDTs they develop. If, however, 
a lab does not submit a notification, it will then be subject 
to registration and listing requirements, along with the 
related fees.
    Now, it doesn't seem like there is a whole lot of choice in 
there. So, Dr. Shuren, where in the statute does FDA claim the 
authority to establish such a notification process?
    Dr. Shuren. So the labs are currently subject to 
registration and listing. Our interests for many of these is to 
know which are the LDTs out there so we can use that 
information to then determine the risk classification for them. 
We have offered as an option for not complying to provide the 
notification. I will tell you the reason we did it. If you 
notify and you don't do, instead, registrational listing, you 
are not subject to the device tax. That is what we did, plain 
and simple.
    Mr. Griffith. Because there is a lot of pressure regarding 
the medical device tax?
    Dr. Shuren. No. We, in looking at this, said, you know 
what, for a lot of these too, if we are not going to then 
subsequently actively regulate them, because they are going to 
be under enforcement discretion, we weren't going to trigger 
all the other things that come with that. And that is what we 
tried to do, we were trying to give labs a break.
    Mr. Griffith. If a lab fails to submit a notification and 
is therefore subject to registration listing, how would this 
not directly conflict with the FDA's current regulations?
    Dr. Shuren. I am not aware that there is a conflict with 
current regulations.
    Mr. Griffith. You know, you indicated earlier, and I 
thought this was kind of interesting based on some of the 
things I have read, that it is not a question of, and I am 
paraphrasing a little bit, but it is not a question of do we, 
but how we regulate, and yet by doing guidance, you are not 
going through the normal administrative process active 
procedures, and there is a lot of concern that folks won't be 
able to get their input put into the Agency.
    So if it is a question of do we--not do we, but how do we 
regulate, shouldn't you be going through the APA?
    Dr. Shuren. No. So, again, this is a general policy 
statement. These requirements already apply. They are supposed 
to be complying with it. We are not enforcing those 
requirements as a matter of policy. Making those changes, the 
Administrative Procedures Act does not impose rulemaking on 
those kinds of policies.
    However, you raised the point about input, because notice 
and comment is about do I have the opportunity to provide 
input. In rulemaking, notice and comment is, yes, you can 
submit comments on the rule. In our guidance document, you will 
be able to submit comments on the guidance document. We will be 
holding a public meeting. We will have opportunities in other 
venues to talk about this. There will be lots of opportunity 
for public discussion, for people to get their viewpoints on 
the record or off the record. That is what we will do so we can 
have a fully informed decision. And we want to hear from 
people, so we ultimately hit this right.
    I do want to get back to you on that particular regulation. 
The regulation pertains to labs who are using an FDA-approved 
test, not to labs when they are making an FDA test. When they 
are making the test, they then become a manufacturer. It 
triggers all the requirements. That is what the regulation is 
about.
    Mr. Griffith. I think there is some disagreement on that, 
and it clearly is not what is stated in the regulation. It just 
says clinical laboratories are exempt under Part 807 as well, 
but anyway.
    With that being said, Mr. Chairman, unless somebody else 
would like my time, I will--well, Dr. Burgess, I yield to Dr. 
Burgess.
    Mr. Burgess. Does the gentleman yield for the last few 
seconds?
    Mr. Griffith. You got it.
    Mr. Burgess. Let me just ask you a question, Dr. Shuren, as 
far as the scalability. I mean do you have the personnel, the 
resources? We are constantly confronted during the Cures 
Initiative discussions that the FDA is kind of behind in its 
information architecture. Do you have the personnel and the 
scalability to take on this vast new regime that you are 
proposing?
    Dr. Shuren. One of the reasons we proposed the long phase-
in was in part so that labs could have the time to get used to 
the framework. The second is taking into account our resources 
so that we are not imposing these day one. The phase-in on 
premarket review is over 9 years, so that we are able to then 
identify based upon risk, calling in in segments these 
particular tests those who would be subject to review, and then 
there are a number that will still be under enforcement 
discretion, but those that would be----
    Mr. Burgess. Will you collect user fees from those labs?
    Dr. Shuren. For which ones?
    Mr. Burgess. For the labs that you are now regulating under 
guidance.
    Dr. Shuren. So for the ones who come in in premarket 
review, we actually have the authority to waive fees, and one 
of the reasons was put into MDUFA III when we did this with the 
device industry was specifically for that purpose, that if we 
withdrew enforcement discretion on labs during MDUFA III, we 
would have the ability not to enforce user fees, but then the 
labs should be at the table for those discussions. Now, we 
invited them to the table for MDUFA III, they declined to come, 
but we would hope if we are moving forward then they would come 
to the table in MDUFA IV and then let us talk about that, but 
for right now, we have the ability to waive fees. Again, none 
of this starts until we are out with final guidance. We still 
have to get the proposed guidance out, go through the public 
process, then final guidance, and then the first round for 
submissions doesn't start until a year after that for premarket 
review.
    Mr. Burgess. I yield back to the gentleman.
    Mr. Griffith. And, Mr. Chairman, I would also ask--Dr. 
Burgess previously asked the question about legal memorandums, 
and if we could have both in-house and outside counsel 
memorandums if they exist. And I yield back.
    Mr. Pitts. The chair thanks the gentleman.
    I now recognize the gentleman from Texas, Mr. Green, 5 
minutes for questions.
    Mr. Green. Thank you, Mr. Chairman. Again, welcome.
    I understand the number of FDA cleared or approved tests 
represents a small fraction of the tests relative to the number 
of LDTs. Do we know how many LDTs are actually out there?
    Dr. Shuren. We don't have an absolute number on those, in 
part because there is no system on notification where you put 
them in a database. We have estimates of what we think are out 
there.
    Mr. Green. OK. Given the number of LDTs that are now the 
subject of premarket review under this proposed framework, how 
will FDA implement this proposal and will additional resources 
be needed?
    Dr. Shuren. So, again, the phase-in was an attempt to try 
to fold this in with the current resources that we already 
have, and, again, during this time, tests remained under 
enforcement discretion. So if it turned out, as we get a better 
lay of the landscape of what is out there, if we need more time 
on implementation or for review, we can do that, it is not 
going to put that lab to have to take that test off the market. 
And if it turns out there is a need for additional resources, 
that is the kind of conversation we have as a part of user fee 
reauthorization.
    Mr. Green. I have heard that----
    Dr. Shuren. And then there were discussions about 
legislation previously, and I do know when CMS looked at that 
bill, they thought that the cost for that would be about $50 to 
$100 million to implement, starting with $20 million at the 
outset to create a duplicative bureaucracy. And that isn't the 
best way of investing dollars or spending dollars, to simply 
rogue government and have duplicative oversight, and a costly 
one. So here we have experts already, we are leveraging them to 
do their kind of work they do every single day and they have 
been doing for decades, and now let us fold this in with the 
resources we have and if we need to address more, we will have 
those conversations----
    Mr. Green. OK.
    Dr. Shuren [continuing]. And user fee discussions.
    Mr. Green. OK. I have heard the proposed framework would 
actually put the FDA in the business of regulating the practice 
of medicine, since LDTs is a service rather than medical 
device. How does FDA respond to this assertion and at what 
point is LDT a medical device,when does its use, 
interpretation, application, and modification become a service 
provided by a pathologist or physician on behalf of a patient? 
What is the breaking point?
    Dr. Shuren. Well, again, if they are making the test, all 
right, and that can be as a manufacturer assembling the test, 
they have developed the process and they put it together then 
with reagents and instruments, and now they are out there 
marketing it, they have made a test. When they are running the 
test, they are performing the test, then they are acting as a 
laboratory, then providing a service. That is subject to 
oversight under CLIA. The FDA framework is complementary to 
assure the safety and effectiveness of the tests that they use, 
whether that is made by someone else or they make it themselves 
in the laboratory.
    Mr. Green. OK. Under the framework, will professionals 
working in CLIA-regulated labs be treated as both device 
manufacturers and users?
    Dr. Shuren. So if they are making tests, then we would 
treat them as a manufacturer, keeping in mind that for a 
variety of categories of LDTs, we are still exercising 
enforcement discretion. So even though they make a test, like a 
test for an unmet need, we are saying to them tell us what it 
is, report problems, but otherwise you don't have to come in 
for premarket review, you don't have to put in place quality 
systems, the kinds of controls to assure that when you make a 
test, you make a high-quality test.
    Mr. Green. But they are actually manufacturing it and using 
it, so does this framework create a duplicate system, 
regulatory oversight between CLIA and FDA?
    Dr. Shuren. No. We view these as complimentary. CMS views 
them as complimentary. In fact, even when CLIA was passed in 
1988, the then-administrator of what was the Health Care 
Finance Administration, former name for CMS, Bill Roper even 
said CLIA is complimentary to what FDA does. But we really need 
both. If labs are in the business of acting as manufacturers 
and making tests, then there is complimentary of FDA oversight 
to assure the tests are safe and effective, and there is CLIA 
oversight to assure that the services that are performed by the 
laboratory are done at high quality, that the people are 
appropriately trained.
    Mr. Green. Well, the history of our committee, we sometimes 
have trouble for two agencies actually trying to cooperate 
together, and sometimes it takes statute to do it, but looking 
at the future of medicine, the importance of innovation and 
effective diagnosis are impossible to overestimate, and looking 
forward to working with the FDA, the committee and the 
stakeholders to see that the regulatory framework ensures 
patient safety while unleashing the potential for LDTs and 
diagnostics in general. So, discretion is important and the 
partnership between the two agencies is really important 
because we don't want to stop the success that we are seeing in 
that individual health care.
    Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentleman.
    I now recognize the gentleman from Illinois, Mr. Shimkus, 5 
minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to be 
here. Dr. Shuren, welcome.
    Just on a side, over the break, we had a 21st Century Cures 
panel hearing in the State Capitol of Springfield. It just went 
phenomenal. I think there is a lot of excitement on both sides 
and in the health care communities, and I hope we can keep 
moving forward, and I know this isn't really specifically about 
that, but there is a new era coming in health care delivery and 
the like, and I just wanted to report back that that was a very 
productive hearing we had, Mr. Chairman.
    So, Dr. Shuren, again, welcome. Under the practice of 
laboratory medicine, CLIA requires disclosure of known 
information relevant to use of a test by a certified laboratory 
to a treating physician, without regard to, and I quote, 
``labeling claims.'' This proactive approach to dissemination 
of information by a clinical laboratory may be in consistent 
with the restriction on dissemination of information by a 
medical device manufacturer under FDA regulation.
    How would FDA manage conflicting requirements governing 
consultations with physicians about patient test results?
    Dr. Shuren. So we don't view that as in conflict because 
the labs can have those kind of communications. That does not 
run afoul of the Food, Drug, and Cosmetic Act.
    The issue becomes if they are out there promoting, they are 
marketing I have this test that I can perform, and if they are 
marketing it in a case where they should have come in for 
review, they need to come in for review, but they can have 
those discussions with treating physician--treating physician 
can ask them to run a test in an off-label fashion. That is 
fine, that is not inconsistent with our program.
    Mr. Shimkus. What types of diagnostic or patient treatment 
claims would be permissible, and what kinds of evidence would 
be required by the FDA?
    Dr. Shuren. Yes, so in terms of permissible, one would be 
permissible without coming to the FDA, and we have mentioned, 
well, first of all, the low-risk tests you don't come in 
anyway, and we have said we are exercising enforcement 
discretion for a number of the requirements. For rare diseases, 
we are continuing to exercise enforcement discretions. You 
don't come into us, where otherwise a conventional manufacturer 
would have to come into us. And even if there is an approved 
test for a rare disease, we are still saying you don't have to 
come into us.
    If you are making a test where there is no FDA-approved or 
cleared test, you can go ahead and do that until the point 
where there is an FDA-approved test. Now, we have a mitigation 
in place which is a lab and a health care facility where you 
are treating that patient, or within that health care system, 
because you have a shared accountability for both testing the 
patient and treating the patient. That is the mitigation we 
have put in place because here, we don't have that independent 
validation the test is actually safe and effective, and that is 
a balance we have tried to put in. But then in other cases 
where, for example, we have an FDA-approved test, if you want 
to continue to market as such a test, you would come in the 
door, much like the other manufacturer, to show you are safe 
and effective, because at that point, we have a test we know 
which works. That is in the best interests of patients to use 
it. If you have one that is good, or you think you have one 
better, then provide the data to show you are better because 
you may not be, and if you are not, that hurts patients because 
doctors and patients can go, it is a better test, I will use 
that one, in fact, it may not be.
    Mr. Shimkus. Great. On the medical device quality system 
regulation requirements would apply upon filling of a premarket 
submission with the Agency, but the draft guidance does not 
adequately tell clinical laboratories how to comply. As one 
example, what constitutes a malfunction of a finished device if 
the test is an LDT?
    Dr. Shuren. So a malfunction is where the test does not 
meet its performance specification, or it doesn't perform as 
intended. That is a malfunction, and that has applied for IVDs, 
and we have information about that.
    Now, I will say in terms of the application of quality 
systems, we have been working with the Clinical and Laboratory 
Standards Institute on developing education modules about how 
quality systems would apply to laboratories, and to get that 
out there for better training for the labs so they have 
information, they have people who will have training programs 
with them, we will get feedback on that. If people feel they 
need more information, we will work with the lab community on 
what they need to be successful, but we will have more 
information that is out there.
    Mr. Shimkus. I thank you for your time.
    And Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman.
    I now recognize the gentlelady, Ms. Schakowsky, 5 minutes 
for questions.
    Ms. Schakowsky. Thank you, Mr. Chairman. And I apologize, 
Dr. Shuren, that I just arrived from another meeting, but I did 
want to ask you an important question.
    CMS, obviously, could not be here today to participate in 
this hearing, and I think it is unfortunate because much has 
been made of the role that CMS plays in overseeing LDTs under 
the authority provided by the Clinical Laboratory Improvement 
Amendment. To be sure, CMS plays a critical role in regulating 
laboratory practice in this country, but I think we need to be 
clear about the limitations of that role as well.
    So I have a document that I obtained from the CMS Web site. 
It is entitled CLIA Overview, and it contains CMS's responses 
to several frequently asked questions, and I would like, Mr. 
Chairman, unanimous consent to enter this document into the 
record.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. So let me refer to a couple of excerpts 
that appear to explain the difference between the roles that 
CMS and FDA play with respect to LDTs.
    First, this document states, ``when a laboratory develops a 
a test system such as an LDT in-house without receiving FDA 
clearance or approval, CLIA prohibits the release of any test 
results prior to the laboratory establishing certain 
performance characteristics relating to analytic validity for 
the use of that test system in the laboratory's own 
environment. This analytic validation is limited, however, to 
the specific conditions, staff equipment, and patient 
population of the particular laboratory. So the findings of 
these laboratory-specific analytic validation are not 
meaningful outside of the laboratory that did the analysis. 
Furthermore, the laboratory's analytic validation of LDTs is 
reviewed during its routine biannual survey after the 
laboratory has already started testing.'' And it goes on to 
describe the FDA's role. In contrast, the FDA's review of 
analytic validity is done prior to the marketing of the test 
system and, therefore, prior to the use of the test system on 
patient specimens in the clinical diagnosis/treatment context. 
Moreover, FDA's premarket clearance and approval process assess 
the analytic validity of the test system in greater depth and 
scope. The FDA's processes also assess clinical validity.
    According to this document, CMS does not assess clinical 
validity. So let me ask you this. Here is the question. Can you 
please describe the difference between CMS's review of analytic 
validity and the FDA's review of clinical validity?
    Dr. Shuren. So for analytical validity, we dive into the 
data to make sure that, in fact, you have demonstrated there is 
analytical validity. And just so folks know, what you are doing 
there, it is the accuracy of measuring something in a human 
specimen. So let us say measuring protein in the blood. So we 
do a deep dive into that to make sure, in fact, that validation 
was accurate.
    In CLIA, it is a much lighter look. In some cases, it is a 
checklist to make sure you have it, or maybe a sampling of the 
analytical validity that has been done, not of all the tests.
    Ms. Schakowsky. But----
    Dr. Shuren. And clinical validity is then the association 
of what you measure in the body with a disease, so that you, in 
fact, are making a diagnosis. This protein, if we find one of 
these markers, means you have this disease. CLIA doesn't have 
that. We have that to make sure then when you do the test, and 
people are doing a test to make a diagnosis, that, in fact, it 
is accurate in making that diagnosis. And the Web site for CMS 
also says as a result--and this is talking just about 
analytical validity, as a result, FDA review may uncover errors 
in test design or other problems with a test system. Errors 
that will not be found under the CLIA system. Again, they are 
complementary.
    Ms. Schakowsky. So I just have a couple of--so how do you 
plan to coordinate then with CMS to make sure that we are 
getting the best data?
    Dr. Shuren. Yes, so we already work with CMS. We have a 
very close relationship. We are part of the CLIA program. When 
they talk about, to make an LDT you have to be in a high 
complexity lab, we make those determinations too regarding 
complexity. We make the determination on a waiver for 
complexity if they want to do some of these lower-risk tests. 
And in developing this framework, we have been in discussions 
with CMS. When we look at quality systems, we are in 
discussions with them too because there is a little bit of 
overlap----
    Ms. Schakowsky. Yes.
    Dr. Shuren [continuing]. And our plan is not to duplicate 
those requirements, it is to just go with the pieces that are 
complementary. What we are doing with CLSI is also to focus on 
the parts that are different, not to sort of talk about the 
things that you may already be covering on CLIA, and then we 
don't need to touch that. In fact, we have proposed--we would 
propose to have the option for a third party review model for 
both moderate risk tests and for inspections, for audits. And 
we know some of the CLIA auditors are interested in being 
accredited by FDA to do those reviews, and to actually, when 
they are in the lab, to go look at it for CLIA to be able to do 
the additional look for FDA to try to minimize any disruption 
with the labs, and to work with those entities that they are 
already accustomed to working with.
    Ms. Schakowsky. Thank you for that clarification. 
Appreciate it.
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize the gentlelady from North Carolina, Mrs. 
Ellmers, 5 minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman, and thank you, Dr. 
Shuren, for being with us today.
    I just want to go back and clarify some of the responses 
that you have given to some of the questions, because as this 
is going along, I am getting a little confused as to what the 
whole process is and why we are approaching this, or why the 
FDA has taken this approach.
    One, I want to go back to the user fees and the medical 
device tax. Now, my understanding is, from what you have said, 
that the FDA has no intention of putting a tax on these lab 
tests, is that correct?
    Dr. Shuren. Well, and just to clarify, we don't handle the 
medical device tax. We have nothing to do with it.
    Mrs. Ellmers. But----
    Dr. Shuren. The trigger is registration and listing of that 
device then triggers----
    Mrs. Ellmers. OK, so----
    Dr. Shuren [continuing]. The device tax.
    Mrs. Ellmers [continuing]. The part that the FDA would play 
does not intend, can you definitively give us an answer today 
that this will not be an item that will be taxed for the 
American people?
    Dr. Shuren. So some of the tests and labs would be taxed if 
they are making a test that then has to come in for premarket 
review. If they opt for doing that, at that point then they 
would move over to register and list with us, because we have 
requirements--it is the registration and listing that then is 
the trigger for some of the other requirements.
    Mrs. Ellmers. So then this is open-ended? So this is--these 
tests can be taxed?
    Dr. Shuren. If they are the tests that have to come in for 
FDA----
    Mrs. Ellmers. And they are not presently being taxed?
    Dr. Shuren. They are not presently being taxed.
    Mrs. Ellmers. But they can in the future.
    Dr. Shuren. They can in the future.
    Mrs. Ellmers. OK, that is a good clarification right there.
    Now, we talked a little bit about user fees as well between 
some of the labs that are being regulated. Can you just--and 
there again, I would just like to have you go back and discuss 
what you have already said, but I just need clarification.
    Dr. Shuren. Certainly. If our framework were to be 
implemented during the course of MDUFA III, we would not impose 
any user fees. We would waive those user fees. We have the 
authority to do that.
    Mrs. Ellmers. Now, you have the authority----
    Dr. Shuren. Right.
    Mrs. Ellmers [continuing]. But you can't say definitively 
today that that is not going to happen, correct? I mean----
    Dr. Shuren. That----
    Mrs. Ellmers [continuing]. That could be changed at any 
moment. The FDA could decide tomorrow that now we are going to 
institute user fees.
    Dr. Shuren. If the framework in place--yes, if people 
change their mind, but that is actually why we had expanded the 
waiver provision. It was intentionally put in. Now, for MDUFA 
IV, we would like to have the labs at the table to have that 
discussion, like we invited them for MDUFA III, come to the 
table in MDUFA IV and then talk about----
    Mrs. Ellmers. Yes.
    Dr. Shuren [continuing]. User fees. Should they apply, what 
should they look like, that is the discussion to have, just as 
we have with other device developers.
    Mrs. Ellmers. I want to go back again to where the origin 
of all this came from. My understanding is you have stated in 
your testimony and in discussion that FDA has always had this 
ability to put this forward, but has not in the past and now 
has determined to do so, is that correct?
    Dr. Shuren. Yes, we have the authority over LDTs, and 
subject to those requirements, we haven't enforced it.
    Mrs. Ellmers. Where did that come from, what statute, and 
when did it become part of the ability for the FDA to institute 
this? Can you go back, give us a date, a time, a rule?
    Dr. Shuren. So 1976, the law was changed to give us 
oversight on in vitro diagnostics. It is agnostic as to who 
makes it. That is the FDA law. It doesn't distinguish between 
who makes the test, it is if you make the in vitro diagnostic, 
that is where we have the authority. When CLIA was passed in 
1988, which, remember, was an amendment to a 1967 law that put 
in all the licensing structure, that didn't change. Nothing 
that was changed in the law, there is nothing there on the 
legislative history, that authority for FDA simply persisted.
    Mrs. Ellmers. OK, now, what has changed now----
    Dr. Shuren. And even recognized by CMS when the law was 
passed.
    Mrs. Ellmers. And what has changed now that has caused the 
FDA to now look at this as something that needs to be 
implemented?
    Dr. Shuren. Yes, and keep in mind we have been looking at 
this for years. We have had these discussions starting in the 
1990s, and even started taking steps in 2007 with the draft 
guidance to withdraw enforcement discretion for a subset of 
LDTs, and again, we heard from the lab community, don't do it 
piecemeal, do an overarching framework. Why we have done this 
is because the tests have changed. Years ago, these were very 
simple tests. They tended to be rare conditions, they were used 
locally. There were really within a facility and a treating 
physician, and you have the laboratory. Today, we have 
increasingly more complex and sophisticated tests, higher-risk 
tests, being used for common diseases, being used nationally, 
increasingly doctors and patients relying on the results of 
that test, and then examples of faulty LDTs. That has been the 
push, and the push doesn't just come from us, it is from 
outside bodies.
    Mrs. Ellmers. Can you cite for the committee or provide--I 
realize you probably can't do that right--at this very moment, 
can you give the committee those tests that have shown 
inaccuracies that you feel that the FDA needs to address this 
issue as tests have been innovated, and obviously you are 
seeing something that is indicating that we need to implement 
more regulation, and I would just like for you, if you could, 
to provide for the committee what those tests are that you feel 
are being--or are coming up with inaccurate results.
    Dr. Shuren. Yes, we will do that.
    Mrs. Ellmers. Thank you. Thank you.
    And I apologize, Mr. Chairman, I went over on my time, but, 
yes, if you could provide the committee with that, that would 
be wonderful. Thank you.
    Mr. Pitts. The chair thanks the gentlelady.
    I now recognize the gentleman from Florida, Mr. Bilirakis, 
5 minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it 
very much.
    During the August recess, I held two 21st Century Cures 
Roundtables in my district, and I heard from patients and some 
of their problems. I also heard from providers and some of 
their problems. There were two themes that came up: outdated 
payment policies and also the barriers to innovation. I am glad 
that we are holding this hearing today because the specific 
issue of FDA regulations of labs develop tests was one of these 
issues that came up. We had a company talk about their concerns 
that the FDA's regulations could slow innovation.
    At the end of the day, we want safety, of course, but we 
also want to keep innovation products to get to the market. If 
we don't, then the patients, in my opinion, will suffer.
    Dr. Shuren, I have a couple of questions. Has FDA done a 
thorough economic analysis that considers the direct cost to 
laboratories and taxpayers if FDA goes through with their 
guidance?
    Dr. Shuren. So we don't have a formal economic analysis. On 
the other hand, we also hear from labs who say, well, when we 
make tests, we validate them. CLIA says they are supposed to be 
validating those tests when they make them or they modify them. 
And so if that is the case and they have that data, the cost 
should be a lot less to be able to then provide that to us.
    Mr. Bilirakis. Thank you. Under the Regulatory Flexibility 
Act, the RFA, federal agencies are required to assess the 
impact of their regulations on small businesses. The analysis 
should include such things as how many small businesses there 
are, the projected reporting, recordkeeping and other 
compliance requirements of the proposed rules, any significant 
alternatives to the rule that would accomplish the statutory 
objectives while minimizing the impact on small entities, and 
it requires agencies to ensure that small businesses have the 
opportunity to participate in the rulemaking process. However, 
if FDA goes forward with guidance and not formal rulemaking, it 
undermines laws that protect due process, such as the RFA or 
the Administrative Procedures Act.
    Will the FDA go through with the traditional process of 
rulemaking?
    Dr. Shuren. No, because this is a policy of enforcement 
discretion. The requirements are already there. They are 
subject to the requirements. We are not imposing that. We have, 
as a matter of policy, decided not to enforce them. We are now 
changing that policy and enforcing requirements in certain 
cases. Those general policy statements under the Administrative 
Procedures Act are not subject to rulemaking, and actually have 
significant impact if they are for our ability to do so. 
However, as part of the process with guidance, there is a 
public process for small businesses and others to weigh in, not 
only on the docket and written comments with public meeting, we 
will have meetings that are occurring in other venues and other 
discussions. Some groups have already been in talking with us 
about the framework, and we will have that dialogue. What we 
hope is that people will come and talk to us, that the lab 
community will be in the door and have those conversations. 
Some have. We would like to see the full community come in the 
door, not talk about we provide services, these aren't IVDs, 
don't regulate us, but rather come and say, OK, we get it, but 
let us figure out how to do this right because we think labs 
developing tests is a good thing. We are not here to stop that, 
we are here to try to have that balance between the development 
of new tests, but also tests that work, making sure it is safe 
and effective, because there is no value to doctors and 
patients if the test doesn't work. That hurts people and that 
is a cost on our health care system.
    Mr. Bilirakis. How many labs would suddenly fall under the 
FDA authority under the proposed guidance?
    Dr. Shuren. In part, we will see that with notification. We 
are estimating that that number--we know for the labs who can 
make LDTs, who are allowed to, according to CMS that number is 
6,000, but not all of them make LDTs. That number is much 
smaller. And we think a number of these LDTs are also subject 
to the continued enforcement discretion. So for some of these 
labs that are making tests that, again, they are not coming in 
the door for us.
    Mr. Bilirakis. I believe this was mentioned earlier, but I 
will ask the question again. I have heard concerns that some of 
the guidance that FDA issues may be duplicative or 
contradictory with the requirements under CLIA. Will FDA ensure 
that its guidance will harmonize with the current regulations 
required under CLIA?
    Dr. Shuren. Yes, and in developing our framework and other 
materials, we have been coordinating with CMS. Our goal is not 
to be duplicative.
    Mr. Bilirakis. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman.
    And now recognizes the ranking member of the full 
committee, the gentleman from California, Mr. Waxman, 5 minutes 
for questions.
    Mr. Waxman. Well, thank you very much, Mr. Chairman.
    Dr. Shuren, one of the themes of the 21st Century Cures 
Initiative has been that advances in molecular medicine and 
information technology will enable the use of smaller, more 
efficient clinical trials and faster development of new cures. 
For those improvements to be realized, we will need to rely on 
increasingly sophisticated tests that can both accurately 
analyze the genetic and molecular properties of diseases as 
expressed in individuals, and recommend treatment regimens 
based on those analyses. Thus, these sophisticated tests appear 
to be central to what the 21st Century Cures Initiatives is all 
about.
    Could you describe for us the kind of genomic and other 
sophisticated tests that are in existence or under development 
that are aimed at helping to guide clinical decisions, and can 
you tell us what role they play or hope to play in developing 
and improving treatments, and can you explain what FDA's role 
is or will be in their development and use?
    Dr. Shuren. OK. So increasingly, we are seeing tests to 
identify those patients who would benefit from particular 
therapies and those who would not, so that you are not giving a 
treatment and exposing that person to side-effects when they 
are not going to get a benefit in return. And we see this a lot 
in cancer, we are seeing it in some other fields as well.
    Getting the right treatment to the right patient depends 
upon having accurate and reliable test results. If they are 
not, that is where mistakes happen, and that is what has 
happened with people who didn't get treatment who should. So 
tests that were there for breast cancer had high false 
negatives, so people were being told the treatment that is 
available, you are not a candidate for, when, in fact, they 
would have been a candidate. We heard earlier about Oversure 
where one of the treatments is having surgery because if you 
have ovarian cancer, have it taken out. And you had examples 
where a woman didn't have cancer, had the surgery, woman who 
had cancer told not, didn't have the treatment when they should 
have had treatment at that point. And we see it even in heart 
disease. So there is a case of a test for risk of heart 
disease, and then the use of statins--responsive to statins. 
Well, it turns out--we wound up seeing the data on this, and 
there was a subsequent study that showed these markers didn't 
actually predict it. The test was not valid, didn't do it, but 
at the time when that data was there, over 150,000 people got 
tested. We estimate the cost may be over $2 billion. Even Eric 
Topol, who many of you were talking about with personalized 
medicine and some of the work there, he actually talked about 
that this was a great example. Going forward, this story should 
serve as a valuable reminder of the potential pitfalls present 
in prematurely adopting a genomic test without sufficient 
evidence.
    Mr. Waxman. Well, on the next panel, Mr. Mertz, from the 
American Clinical Lab Association, will testify that if there 
were problems with LDTs, we would have more publicity about 
them. He cites a 2008 statement by the Advisory Committee on 
Genetics, Health and Society that there have been few 
documented cases in which patients experienced harm because of 
errors in a CLIA-regulated genetic test.
    Do you agree with that, would doctors and patients 
necessarily know if tests weren't giving good advice for 
clinical decisions? Your testimony mentions some of these, but 
please describe any examples of the risks or harms of LDTs that 
have led FDA to change its enforcement policy in this area.
    Dr. Shuren. Yes. So doctors and patients wouldn't know. I 
mean you order a test, you don't know it is FDA approved or it 
is not FDA approved. That is the state of affairs. And so you 
don't know if you have those guarantees or not. That is the way 
things are today. And of course you are relying on those test 
results then for making a decision on how to care for the 
patient.
    Mr. Waxman. Well, CLIA regulates the labs. If CLIA 
regulates the labs, should we rest assured that the tests from 
that lab will be accurate?
    Dr. Shuren. No. CLIA's purpose is not to assure the tests 
are safe and effective. CMS recognizes that too and has noted 
distinctions between what FDA does and what CMS does. They are 
complimentary systems, and in going forward, we need to make 
sure we are coordinated and we avoid any duplication, but they 
are complimentary systems. And the Secretary's Advisory 
Committee did note, yes, there were a few reports of problems 
because there isn't a system there for identifying those 
problems. That is one of the things that we would put in place, 
but that same committee, that same Advisory Council, also said 
the absence of evidence doesn't mean that there is an absence 
of a problem. And, in fact, they came back and said we 
recommend the FDA begin enforcing requirements for LDTs. That 
was their conclusion.
    Mr. Waxman. So even though we know it is a decent lab, they 
live up with the good standards, we don't know if the result of 
the test is going to be accurate in helping the patients or 
not?
    Dr. Shuren. Right. We have for----
    Mr. Waxman. May even do them harm.
    Dr. Shuren. Right, and we had for H1N1, so when that came 
out, by the way, the original samples came from China. Only the 
CDC had them. And then when the emergency was declared, CDC had 
developed a test and we gave them an EUA within days. Then they 
made the samples available to other labs. The labs who 
developed things beforehand had no access to the H1N1 samples, 
and then they came in the door. Now, we cleared--we gave EUA 
authority to some of the labs----
    Mr. Waxman. EUA is----
    Dr. Shuren [continuing]. But some of them----
    Mr. Waxman. EUA is?
    Dr. Shuren. I am sorry, emergency use authorization, in the 
setting of that pandemic. But some of the labs, their data and 
from pretty prestigious academic institutions, their tests were 
problematic. And we saw the data, that is how we know, and then 
they weren't out there on the market. That is what FDA does, 
but again, we are trying to strike that right balance in 
innovation, access, and safety and effectiveness.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    And now recognizes the vice chairman of the full committee, 
the gentlelady from Tennessee, Mrs. Blackburn, 5 minutes for 
questions.
    Mrs. Blackburn. Thank you, Mr. Chairman. And I appreciate 
the emphasis that we have on 21st Century Cures, and the 
opportunity for all of us to visit with you, Dr. Shuren, and we 
thank you for your time and for being willing to come over here 
and talk with us and answer the questions. I think that we are 
all interested in solving access issues for our constituents, 
and part of that being preserving access to affordable health 
care for all Americans. And right now the cost of health care 
seems to be going through the roof, and we hear about it every 
day.
    Let us go back and talk a little bit about the guidance 
document. I know Mrs. Ellmers and Mr. Bilirakis have both 
touched on is with you, and when you are looking at the 
guidance document and the LDT issue, you know that there could 
be numerous requirements that could be put in place from your 
guidance document. We know that you all contend that guidance 
documents are not binding on the industry.
    Now, when we are out there talking with some of our 
innovators, and talking with those that are trying to work 
through the process with you all, what we hear is, well, they 
might not do something, but they could, and the uncertainty 
that exists in that. So how do you, as we talk about answering 
the questions for constituents, how do you reconcile that 
difference, you might not but you could, and the guidance 
documents aren't binding? So how do you reconcile that?
    Dr. Shuren. So just to flip around in this case, here we 
are talking about the requirements to comply with the Food, 
Drug, and Cosmetic Act are already in place for the labs. We 
have chosen not to enforce those requirements. We haven't taken 
action for the people who aren't meeting it, for the most part, 
but that is the change that we are making. So unlike in other 
cases where we are imposing a requirement, we are 
reinterpreting that requirement under the law, we are not doing 
that here, we are simply withdrawing enforcement discretion, 
saying here are the requirements, they are already on the 
books, there are regulations about them, some cases there are 
guidances, and you would meet that just like you would as a 
conventional manufacturer, but we maintain enforcement 
discretion still in some cases where we say these particular 
requirements, as outlined here, you don't have to comply with, 
we will not enforce those.
    Mrs. Blackburn. Yes, and I appreciate that and I 
appreciated your comments about the medical device tax, and you 
and I have talked about the Software Act and the medical apps 
that are there, but I just want to highlight with you again 
that sometimes that discretion, that uncertainty is very 
difficult for many that are innovating in that space because 
they know you might not do something, you probably won't do 
something right now, but it doesn't state what you are going to 
do if you change your mind. And as they look at federal 
agencies, you all included, mission creep is something that 
is--that they are concerned about, and also lack of economic 
analysis. So I would just--I would highlight that to you.
    Let me go back to something Mr. Griffith raised earlier. In 
addition to Section 807.65(i) of the federal regulations which 
specifically list clinical labs as a class of entity that is 
exempt from establishment, registration, and device listing, 
the preamble to these final regulations implementing the 
registration requirement unequivocally emphasizes this point in 
stating the commissioner believes that full-service labs and 
similar establishments are exempted from registration. Were you 
aware of these regulatory provisions currently on the books?
    Dr. Shuren. Yes, so this provision pertains to labs when 
they are using tests. It does not pertain to when they are 
manufacturing----
    Mrs. Blackburn. OK.
    Dr. Shuren [continuing]. Tests. That is the distinction. 
And I am also sympathetic, I understand the predictability when 
people say, well, if you put a policy in place, and here people 
are saying when you exercise enforcement discretion, what 
about, you could take it away tomorrow. This should be a poster 
child about our taking away enforcement discretion. We have 
been at it for years. I was a very young man when this started 
back in the 1990s. I now have gray hair. So it does not happen 
overnight. In some respects, I hate to say it, I wish it would. 
I would probably not have the gray hair.
    Mrs. Blackburn. Well, I think we all end up having gray 
hair. It is one of the blessings that comes our way from being 
able to solve problems and work through issues that affect all 
Americans, and we look for a good resolution to those, and I 
hope that you are going to commit to work with us on the 
software component, the medical apps and keeping these free of 
the medical device tax. We have got a lot of people that are 
looking to expand access, and that is a good way to do it.
    I yield back.
    Mr. Pitts. The chair thanks the gentlelady.
    Now the chair recognizes the gentlelady from California, 
Ms. Eshoo, 5 minutes for questions.
    Ms. Eshoo. Thank you, Mr. Chairman. I appreciate the 
legislative courtesy. While no longer a member of this 
subcommittee, the committee rules do allow members of the full 
committee to participate, and I appreciate it.
    I have a statement that I would like to submit for the 
record, and ask unanimous consent to do so.
    Mr. Pitts. I am sorry, I didn't hear you.
    Ms. Eshoo. Yes, I just ask----
    Mr. Pitts. I am trying to get those----
    Ms. Eshoo. You mean you weren't paying----
    Mr. Pitts [continuing]. Klieg lights turned off.
    Ms. Eshoo. You weren't paying attention to me, Mr. 
Chairman. No, I just asked unanimous consent to produce a 
statement into the record today.
    Mr. Pitts. Without objection----
    Ms. Eshoo. Thank you very much.
    Mr. Pitts [continuing]. So ordered.
    [The prepared statement of Ms. Eshoo follows:]

                Prepared statement of Hon. Anna G. Eshoo

    Mr. Chairman, thank you for holding this hearing today to 
examine the regulation of laboratory developed tests (LDTs). I 
appreciate the opportunity to learn more about this issue and 
to hear from the FDA and from stakeholders about how the 
agency's proposed changes will affect patients, doctors, and 
health care innovation.
    The FDA's primary mission is to ensure that drugs and 
devices are safe and effective. Diagnostics are a critical part 
of our health care ecosystem, helping doctors target what's 
wrong with a patient so that they can be treated with the 
utmost precision, focusing on the necessary therapies while 
reducing unnecessary interventions.
    While the FDA regulates some diagnostics, many are never 
reviewed by the agency. This is because our bifurcated 
regulation of diagnostics means that the FDA regulates 
diagnostics developed as ``kits'' while CMS regulates LDTs 
under the Clinical Laboratory Improvements Act (CLIA). The FDA 
has the authority to regulate LDTs but until now, has exercised 
regulatory discretion in allowing these tests to be regulated 
solely by CLIA.
    As diagnostics become more complex and lead to greater 
clinical decision making, it's important that they receive 
increased scrutiny to protect patient safety. FDA's proposal to 
fundamentally change the regulatory paradigm for LDTs can lead 
us in the right direction, but the new regulations must be 
implemented in a way that furthers innovation and the 
development of personalized medicine.

    Ms. Eshoo. Dr. Shuren, it is good to see you, as always.
    I think the benefit of sitting here and listening to all 
the questions and your responses is the following. When I go to 
either Stanford University or the Palo Alto Medical Foundation, 
part of all of these exams, and if there need to be further 
examination of things, are tests. I want my tests to be 
accurate. I want my tests to be accurate, and I think every 
single one of us do too. And I think that we are at a juncture 
today where we should be celebrating something, and that is 
that there has been so much innovation that has moved forward 
relative to diagnostics, they are far more sophisticated, we 
have a broader and greater capacity to make determinations 
relative to diseases that were at one time a death sentence and 
today can be manageable if, in fact, there is a correct 
diagnosis. And so these tests are really central in all of our 
lives, and I think that, speaking for myself, the older I get, 
I can't wait for the results of the tests to come back to know 
that everything is all right, but we depend on accuracy. And I 
think that the FDA, in terms of its role, a key role is to 
ensure safety and efficacy of drugs and devices.
    This is really more of discussion of how this is going to 
work. I know that there is a question that has been raised 
about whether the Agency has the authority. It seems to me that 
you do. My concern is that this be done in a very smooth and 
fair way because if in moving through this process, I want to 
ask you why it is 9 years. I mean a lot of things can happen in 
9 years. I mean can't you do something in a shorter period of 
time so that the stakeholders have predictability and know what 
the rules of the game are going to be? That is one of my 
questions. I know that this was stuck at OMB for a long time, 
and I am very curious to know what all of a sudden loosened 
this up, so that OMB changed its mind. What was it that 
concerned them that held it up for so long, and what is it that 
put them in a better mood and gave you the hand signal to move 
on? And what would you say to the stakeholders, because I have 
listened to many of them, I don't have the answer, but I have 
listened to many of them about the effects of the proposed 
changes and what is burdensome, what isn't, what would you say 
to them about innovation not being damaged as we move forward 
to protect the efficacy and the safety that I spoke to both as 
a member representing 700,000 people and as a patient, as an 
individual?
    Dr. Shuren. So phase-in for 9 years, we picked that number 
for a couple of reasons. One, we wanted to give labs time to 
better understand what requirements were, we wanted to have a 
process to also classify----
    Ms. Eshoo. But may I----
    Dr. Shuren [continuing]. The tests----
    Ms. Eshoo. I just want to interject something. If it is 
going to take 9 years to understand something, I don't think 
that sends the right signal, honestly, because it--then it must 
be so enormously complex that it is going to take almost a 
decade for people to figure out, so it doesn't seem like it is 
a source of comfort to me. Now, maybe it is the flipside. Maybe 
that is a comfortable zone for people, that they want to take 
it very, very, very slowly, but if your assumption is that it 
is going to take 9 years for people to understand something, 
that, to me, suggests some kind of complexity that is deep and 
broad.
    Dr. Shuren. Yes, and if people are looking for faster, that 
is a conversation to have. It is a risk-based phase-in, so the 
highest risk ones we bring in first. There are a lot of tests 
out there that the risk classification hasn't been determined 
yet, so we need time for the public process and expert panels 
to look at that when we get notification of tests, and then we 
want to fold this in with the resources we have so we are able 
to manage reviews in a way that doesn't overtax the system that 
we have. So that is how we came up with the 9 years.
    Ms. Eshoo. Yes.
    Dr. Shuren. As to OMB, what I can say is a higher authority 
weighed in and we are moving authority. It sounds like Hebrew 
National Hot Dogs.
    Ms. Eshoo. Higher--it does. I was going to say it sounds 
like an ad. Yes.
    Dr. Shuren. Yes.
    Ms. Eshoo. Yes.
    Dr. Shuren. And then in terms of, with innovation, one 
thing I will say is innovation isn't just something new----
    Ms. Eshoo. Yes.
    Dr. Shuren [continuing]. It is also valuable----
    Ms. Eshoo. Yes.
    Dr. Shuren [continuing]. To patients. If you have an 
innovative test, doesn't matter if it is new, it has to be safe 
and effective otherwise we are not doing service by patients, 
and then it isn't real innovation.
    Ms. Eshoo. Yes.
    Dr. Shuren. Newness for the sake of newness isn't good, and 
spending our health care dollars just because it is new but it 
may not work is a fool's errand.
    Ms. Eshoo. Yes.
    Dr. Shuren. So how do we strike that balance on 
innovation----
    Ms. Eshoo. Yes.
    Dr. Shuren [continuing]. And safety and effectiveness. That 
is the dialogue we are trying to have. We put something out, at 
least now people can react to it and have a much more 
structured conversation.
    Ms. Eshoo. Thank you, Dr. Shuren.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentlelady.
    That completes the round of questioning. We have one 
follow-up per side. Dr. Burgess, you are recognized 5 minutes 
for follow-up.
    Mr. Burgess. Mr. Chairman, I just really, really like to 
know the higher authority at OMB, because you and I talked 
about this at the end of July when you called me and said, OK, 
I am exercising the 60-day requirement, and my question went to 
the economic impact and the questions such as Ms. Eshoo asked 
at OMB. These are valid questions and, to the best of my 
knowledge, you have not answered those. You didn't answer it in 
July, you haven't answered it today, so what was the deal at 
OMB with assessing the economic impact, or, in fact, are we 
proceeding on this where we really have no earthly idea as to 
the economic impact?
    Dr. Shuren. Well, so two different things. I guess the 
question originally was the holdup at OMB, the holdup wasn't 
overdoing an economic analysis on this. They had----
    Mr. Burgess. Is that not part of OMB's job to look at the 
economic impact of changes made by the agencies----
    Dr. Shuren. They----
    Mr. Burgess [continuing]. Just as a general rule?
    Dr. Shuren. They do that in rulemaking for certain rules 
when they review those.
    Mr. Burgess. Is that why we avoided rulemaking in this 
instance?
    Dr. Shuren. No, because this is enforcement policy and we 
do that with guidance. We have done that historically with 
guidance. There is nothing different here, and, in fact, as I 
mentioned, we came out with guidance in--7 years ago----
    Mr. Burgess. OK, well----
    Dr. Shuren [continuing]. In 2007.
    Mr. Burgess. But back to the question of the economic 
impact.
    Dr. Shuren. Yes.
    Mr. Burgess. Do we, as we sit here today, do we have any 
idea as to the economic impact of this guidance that you are 
proposing?
    Dr. Shuren. I do not have hard numbers to share with you. 
And in part, some of this if you want to look at it is when we 
have the lay of the land for those labs that would have to come 
in the door and be subject. Part of it too is what will the 
final framework be. This is starting a dialogue so we can have 
that discussion about what the final policy will look like. And 
then lastly, as I mentioned before, labs are supposed to 
validate their tests. They are supposed to do the studies. As 
people said, hey, it is expensive to do studies. They are 
supposed to do that. So if they have done it, the cost to them 
is, in certain cases they would be sending it to us so we can 
review that.
    Mr. Burgess. Thank you, Mr. Chairman. I will yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman, Mr. Pallone, 5 minutes for 
follow-up.
    Mr. Pallone. Thank you, Mr. Chairman.
    The ACLA claims that once a manufacturer gets a test 
approved, it never improves it because of fear of needing new 
approval. And they give the example of an HIV Western Blot Kit 
not having significant improvement since first one was approved 
in the '80s, and the first kit to be approved by FDA was 2 
years after the first LDT test was used without FDA approval. 
And ACLA also gives the example of a lab making improvements to 
an FDA-approved test kit, and says that the approach under the 
guidance of requiring labs to seek FDA approval for such 
activities is unreasonable, and encroachment on the practice of 
medicine and a disincentive that will limit patient access to 
cutting-edge diagnostics.
    So I just wanted to know how would you respond to that 
claim?
    Dr. Shuren. Well, so test developers do improve their 
tests, and I turn to the people representing that community to 
maybe address that on the next panel, but yes, they do come 
back and they do improve their tests. In the setting where 
there wasn't a test available, one of the things we have in our 
framework is an LDT for an unmet need where there is no 
approved or cleared test to allow then labs in certain 
circumstances to have that test, have it out there and not go 
through FDA review, but then when a company comes in and they 
make the test for the same intended use, now we have an FDA-
approved test, we have seen the data, we know it is safe and 
effective, that is the time for the other lab to say I either 
want to bring in my test and share the data, or I will use the 
FDA-approved test. And then if they want to improve a test or 
they want to make a better test, then have the data to support 
it because we have seen where you make a claim it is better but 
is it really a better test, because you are telling doctors it 
is a better test, so use my test because it is better than the 
one the FDA approved. Well, how do doctors know that? That is 
what we are here for, to try to make those assurances if you 
are truly making it better. And we have seen sometimes you 
claim a test is better, you add other markers on, but it turns 
out you haven't shown those markers actually better inform the 
diagnosis. But you should do that.
    Mr. Pallone. All right, thanks. I think we need to achieve 
the right balance, but I appreciate it.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    That concludes the questions of the committee at this time. 
We will have follow-up questions for you that we will send. We 
ask you please respond promptly. And thank you for your 
patience and responsiveness this morning.
    This concludes the first panel. We will take a 3-minute 
recess as the staff sets up the second panel.
    [Recess.]
    Mr. Pitts. The subcommittee will reconvene. We will ask 
everyone to please take their seats, and ask the witnesses to 
please take their seat at the table. Please take your seats. I 
would like unanimous consent to submit the following for 
today's hearing record: Comments of the Small Biotechnology 
Business Coalition; a statement from the Association for 
Molecular Pathology; a letter from Randy Scott, Chairman, CEO 
of InVitae Corporation in San Francisco; and a letter from the 
American Association of Bioanalysts, the AAB, and the National 
Independent Laboratory Association, NILA, representing 
independent community and regional clinical laboratories.
    Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. On our second panel today we welcome each of 
you, and I will introduce the panel in the order of their 
presentations. First, Mr. Andrew Fish, Executive Director, 
AdvaMed Diagnostics; then Dr. Kathleen Behrens Wilsey, Co-
Founder of Coalition for 21st Century Medicine; Mr. Alan Mertz, 
President, American Clinical Laboratory Association; Dr. 
Christopher Newton-Cheh, Assistant Professor of Medicine, 
Harvard Medical School, and Cardiologist, Massachusetts General 
Hospital, testifying on behalf of the American Heart 
Association; and finally, Dr. Charles Sawyers, Immediate-Past 
President, American Association for Cancer Research.
    Thank you all for coming. Your written testimony will be 
made a part of the record. You will be each given 5 minutes to 
summarize your testimony.
    And, Mr. Fish, we will start with you. You are recognized 
for 5 minutes.

    STATEMENTS OF ANDREW FISH, EXECUTIVE DIRECTOR, ADVAMED 
   DIAGNOSTICS; KATHLEEN BEHRENS WILSEY, PH.D., CO-FOUNDER, 
  COALITION FOR 21ST CENTURY MEDICINE; ALAN MERTZ, PRESIDENT, 
 AMERICAN CLINICAL LABORATORY ASSOCIATION; CHRISTOPHER NEWTON-
 CHEH, M.D., ASSISTANT PROFESSOR OF MEDICINE, HARVARD MEDICAL 
   SCHOOL, CARDIOLOGIST, MASSACHUSETTS GENERAL HOSPITAL; AND 
   CHARLES SAWYERS, M.D., IMMEDIATE-PAST PRESIDENT, AMERICAN 
                ASSOCIATION FOR CANCER RESEARCH

                    STATEMENT OF ANDREW FISH

    Mr. Fish. Thank you, Chairman Pitts, Ranking member 
Pallone, and Members of the subcommittee, for the invitation to 
testify at today's hearing. My name is Andrew Fish, and I am 
the Executive Director of AdvaMed Dx, the trade association 
representing the leading manufacturers of medical diagnostic 
tests. I have submitted a longer statement for the record, and 
will summarize key points for you this morning.
    AdvaMed Dx member companies develop FDA-cleared diagnostic 
tests for use in a wide range of health care settings, not only 
in clinical laboratories, but also in numerous point-of-care 
environments, including emergency rooms, doctors' offices, 
clinics, and even in the home.
    Whether developing a rapid molecular test for flu or TB, an 
implantable blood glucose monitor that interfaces with a 
smartphone, advanced genetic tests designed to guide use of 
specific cancer drugs, or the first FDA-approved platform for 
high-speed gene sequencing, diagnostic manufacturers are proud 
to wear the mantle of innovation in this critical area of 
health care.
    AdvaMed and AdvaMed Dx have been pleased to work closely 
with the Energy and Commerce Committee on many issues related 
to FDA regulation of medical devices and diagnostics, and 
appreciates the committee's continued leadership.
    The questions before the committee today are whether and 
how laboratory-developed tests or LDTs should be regulated to 
assure their safety and effectiveness. Three essential points 
support our conclusion that FDA should regulate LDTs under a 
risk-based approach. First, LDTs are diagnostic tests, and all 
diagnostics present the same patient risks, regardless of 
whether they are developed by a manufacturer or a laboratory. 
Second, the LDT market has changed dramatically in recent years 
to encompass even the most advanced, complex, and high-risk 
tests, and under our current oversight paradigm, LDTs are not 
reviewed for safety and effectiveness, when the same tests made 
by a manufacturer are subject to FDA clearance or approval. 
Third, existing statute and FDA regulation already encompass 
LDTs, and FDA's decision to enforce those regulations with 
respect to LDTs is an appropriate policy decision by the only 
agency with the authority, expertise, and infrastructure 
necessary to assure the safety and effectiveness of 
diagnostics.
    We have spoken earlier in this hearing about CMS's 
authorities over laboratories under CLIA. CMS itself as the 
agency that implements CLIA has made it clear that CLIA does 
not duplicate FDA regulation. FDA regulation encompasses 
numerous elements that were never intended to be covered by 
CLIA, including premarket review and assurance of clinical 
validity. It makes no sense to create a new set of authorities 
at CMS when FDA has a well-developed regulatory system and 
infrastructure that already encompasses LDTs.
    For years, stakeholders have recognized the inadequacy of 
current oversight of LDTs, and have called for FDA to enforce 
existing regulations that apply to LDTs, just as they do to all 
other diagnostics. I submitted a document noting comments from 
a variety of stakeholders supporting FDA action on LDTs, and 
ask that it be included in the record.
    The current diagnostics oversight paradigm results in a 
tremendous public health gap, and highly disparate treatment of 
tests that are the same from the perspective of patient risk 
and safety, simply on the basis of whether they are developed 
by a manufacturer or a laboratory. This is bad public policy, 
provides an opportunity to use tests in a clinical setting that 
have insufficient clinical data, and stifles investment in 
high-quality products that are assured safe and effective for 
patients.
    We see these challenges arise, for example, when, shortly 
following an FDA approval of a pharmaceutical, along with its 
companion diagnostic, laboratories advertise that they can 
perform an LDT version of that diagnostic test.
    It is important to note that the threshold question of 
whether LDTs should be regulated by FDA turns first and 
foremost on patient safety. From this perspective, we believe 
that FDA oversight of LDTs is necessary. While FDA regulation 
is not without challenges for our industry, we have worked 
constructively with the Agency on various improvements to its 
regulation of diagnostics, and are pleased with significant 
progress, including increased use exemptions and a new triage 
program to speed reviews. We look forward to continuing to work 
with this committee on ways to help improve FDA oversight.
    The risk-based approach to LDT regulation that FDA has set 
forth addresses current gaps in LDT oversight by focusing 
Agency resources on tests that pose the highest risk to 
patients. At the same time, FDA appropriately recognizes the 
important role that LDTs can play in providing care to patients 
in the medical institution setting, and explicitly preserves 
the ability of laboratories in those settings to continue 
innovating in the area of LDTs. AdvaMed Dx commends FDA for 
moving forward to address the patient safety gaps that 
currently exist in LDT oversight, and supports the key elements 
of the oversight framework that FDA recently announced.
    Again, thank you for the opportunity to speak to this 
important issue at today's hearing.
    [The prepared statement of Mr. Fish follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize Dr. Behrens Wilsey 5 minutes for an opening 
statement.

          STATEMENT OF KATHLEEN BEHRENS WILSEY, Ph.D.

    Ms. Behrens Wilsey. Good morning, Chairman Pitts, Ranking 
Member Pallone, and Members of the subcommittee. I am Dr. Kathy 
Behrens Wilsey, Co-Founder of the Coalition for 21st Century 
Medicine. On behalf of the Coalition, thank you for convening 
today's important hearing to address this critical issue in 
health care innovation, and for inviting the Coalition to 
testify.
    Today, we live in a world in which a woman with breast 
cancer can confidently and reliably reject toxic and 
potentially life-threatening chemotherapy because testing has 
confirmed she will not benefit from such treatment. Without 
such testing, she would only experience harmful side-effects 
from a treatment protocol that has been, until very recently, 
both standard and routine care. With diagnostic test 
information, she has more certainty that conventional treatment 
would neither improve the quality of, nor prolong her life. 
This woman benefits from significant progress in new advanced 
diagnostics. Most importantly, this progress has substantially 
improved patient outcomes without diminishing safety, though 
occurring in the midst of formidable regulatory uncertainty.
    I am here today because, despite some well-known examples 
like the women who now have far greater certainty about their 
treatment pathway, investment in advanced diagnostics suffers 
from great uncertainty; uncertainty about evidence development 
and reimbursement. The overall return is lower for diagnostics 
than for pharmaceuticals, so while the challenges may appear to 
be the same, this lower return has resulted in attracting fewer 
investors and less capital.
    Investment in and development of advanced diagnostics has 
declined in recent years as a direct result of 8 years of 
regulatory uncertainty. The lack of a clear path for innovation 
in vitro diagnostics under the current FDA regulations has been 
evident as FDA proposes and withdraws different proposals, each 
time rolling back its historic flexible regulatory approach. 
Prolonging the current regulatory limbo, or worse, implementing 
an incomplete or overly burdensome regulatory framework, will 
accelerate the shift to venture capital investment out of 
advanced diagnostics and into more predictable endeavors.
    And so we find ourselves at a crossroads. The overwhelming 
success of the human genome project and its medical and 
scientific advances are closer than ever to accelerating what 
this committee calls 21st Century Cures: early, rapid and 
comprehensive diagnosis, followed by individualized targeted 
treatments against serious and life-threatening diseases, and 
yet the proposed regulation of laboratory-developed tests 
control progress and fight against cancer, cardiovascular 
disease, deadly infectious diseases, and countless rare 
diseases and disorders that can be more effectively and 
efficiently combated through advanced diagnostics.
    The framework put forth by the FDA is no doubt an 
improvement over the initial draft guidance published in 2006. 
Yet, in the interest of extending our impressive progress in 
the development of new advanced diagnostics to help patients, 
and at the same time avoiding additional barriers to 
innovation, the Coalition recommends the FDA provide detailed 
substantive guidance on many outstanding issues before its 
proposed framework is finalized--a framework that starts a 
clock for compliance among affected laboratories. Specifically, 
the FDA must, among other things, identify the device within 
the LDT service, harmonize FDA and CLIA quality systems 
regulations, which have different and, in certain areas, 
incompatible purposes, provide clear guidance on requirements 
for obtaining labeling that is useful for clinicians and 
patients, and accommodate medical communications between 
laboratories and treating physicians under an FDA regulatory 
framework that imposes substantial limitations on proactive 
communications by medical product manufacturers. We also need a 
flexible regulatory system which enables the rapid translation 
of scientific and clinical evidence that so powerfully enables 
timely access to the newest generation of tests. Additionally, 
clear and meaningful labeling is critical for physicians and 
patients, otherwise public and private payers resist providing 
coverage and patients do not get tested. It literally takes 
years for payers to approve coverage and payment for advanced 
diagnostics, and they are not likely to pay if the FDA-approved 
label suggests that the test cannot be used in a clinically 
meaningful way. Given the FDA's recent framework, we caution 
the subcommittee about the potential number of tests that might 
be subject to premarket review.
    Finally, we have concerns that the FDA underestimates the 
challenges associated with translating regulatory processes 
developed to oversee diagnostic products that are designed for 
both broad distribution and use, in contrast to services 
performed by individual labs. Most venture capitalists 
appreciate that there are significant differences between the 
two that could substantially risk the successful implementation 
of the FDA's plans.
    We applaud the subcommittee for exercising its oversight 
function by holding this hearing, and encourage Congress to 
continue to work with the FDA throughout the public comment 
process. We also encourage the subcommittee to consider 
legislation where necessary, to fill gaps in the regulatory 
framework, and address potential inconsistencies and 
duplication across regulatory authorities to ensure that the 
balance between advancing the public health and facilitated 
American innovation is maintained.
    Thank you.
    [The prepared statement of Ms. Behrens Wilsey follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize Mr. Mertz 5 minutes for opening statement.

                    STATEMENT OF ALAN MERTZ

    Mr. Mertz. Thank you, Chairman Pitts and Ranking Member 
Pallone, for the opportunity to testify today. I am Alan Mertz, 
President, American Clinical Laboratory Association, ACLA, and 
we represent the Nation's leading providers of clinical 
laboratory services.
    I also want to begin by applauding Chairman Upton and 
Representative DeGette for launching the 21st Century Cures 
Initiative.
    Through the innovations in clinical laboratories, we are 
diagnosing diseases earlier and more precisely for diabetes, 
cancer, and infectious and rare diseases. With these powerful 
new diagnostic tools, patients have access to more targeted and 
effective therapies sooner, which inevitably increases the 
quality of care, saves lives and lowers cost.
    America is the leader in this diagnostic medicine 
revolution, and recent advancements in genetic and genomic 
tests have created over 116,000 jobs, and $16.5 billion in 
annual economic output. A reasonable and flexible framework is 
essential to preserving this vital leadership role that we have 
in the United States.
    ACLA is greatly concerned by the FDA's notice of intent to 
issue guidance that would completely alter how clinical 
laboratory tests will be made available to patients. We do not 
believe that the FDA has the statutory authority to regulate 
laboratory services, and even if they did, we do not believe 
that it is appropriate to create a whole new regulatory process 
through guidance documents.
    The laboratory industry is already extensively regulated 
under an interlocking framework of federal laws, state laws, 
and peer review-deemed authorities. As has been discussed 
today, the primary federal law governing labs is CLIA, which 
creates stringent requirements governing the operation of 
clinical labs and their personnel to ensure the safe and 
accurate function of labs and testing services they provide. 
Further, peer review authorities add additional expertise in 
reviewing both the operation of the lab, and the analytical and 
clinical validity of the tests. Operating under this 
comprehensive yet flexible LDT oversight framework, the field 
of laboratory medicine has produced some of the most 
spectacular advances in diagnostics.
    In short, LDTs have become ubiquitous in clinical patient 
care. They range from the most common tests that many of us 
will be familiar with, like pap smears, to the most advanced 
molecular and genetic tests in cancer and heart disease. 
Importantly, the vast majority of new genetic and molecular 
tests are LDTs, and most FDA-approved and cleared kits are 
based upon tests originally offered as LDTs. Although the FDA 
claims that it has no interest in duplicating CLIA's oversight 
requirements, the FDA notification that came out does not 
address how they avoid such duplication. There has not been any 
discussion of how any additional regulation by the FDA would 
interact with the regulation already under CLIA. There are many 
areas of commonality and overlap, specifically as it pertains 
to validation, inspections, quality system regulation, and yet 
the FDA has not clarified how it propose the two regulatory 
authorities working in such a way as to not overburden the lab 
industry, and slow the development of and access to these vital 
diagnostic tools. Frankly, we are deeply concerned that the 
documents released failed to take into account the fundamental 
differences between a device manufacturer and a clinical 
laboratory. Unlike a device manufacturer, a clinical laboratory 
is an integrated operation consisting of highly trained and 
certified personnel who design, validate, perform, and 
interpret laboratory tests. Defining exactly what the device is 
that FDA seeks to regulate, or where the manufacture of the 
test ends and the performance of the test begins, has yet to be 
explained.
    Lastly, I need to emphasize the enormous scale of the 
increase in regulatory oversight. According to FDA's framework, 
the Agency will not define high risk or identify how many tests 
will require premarket approval for several years. The 
potential workload for the FDA is staggering. There are over 
11,000 highly complex laboratories that perform laboratory-
developed tests, and the total volume of LDTs numbers at least 
in the tens of thousands, and our own surveys of our members 
indicate it may be over 100,000 laboratory-developed tests. In 
comparison, last year the FDA approved only 23 premarket 
applications for diagnostic tests.
    In conclusion, the ACLA shares the goals of everyone here 
in ensuring patient access to accurate, reliable, and 
meaningful tests. We have long supported modernizing the 
regulatory requirements under CLIA to keep pace with changing 
technology. We are confident that this can be accomplished 
without duplicative regulation, oversight, and cost, while 
maintaining our status as a global leader in diagnostic 
innovation. We look forward to continuing to work with this 
committee, with Congress, the FDA, CMS, and other stakeholders 
on policies that encourage innovation, ensure safety, and 
maintain patient access to these diagnostic services.
    And with that, I thank you and look forward to your 
questions.
    [The prepared statement of Mr. Mertz follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
        
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognizes Dr. Newton-Cheh 5 minutes for an opening 
statement.

            STATEMENT CHRISTOPHER NEWTON-CHEH, M.D.

    Dr. Newton-Cheh. The Chairman Pitts, Ranking Member 
Pallone, and Members of the subcommittee, thank you for giving 
me the opportunity to testify before you today. My name is 
Christopher Newton-Cheh, I am a cardiologist at Massachusetts 
General Hospital, specializing in heart failure and cardiac 
transplantation, and an Assistant Professor of Medicine at 
Harvard Medical School. I am also a cardiovascular geneticist, 
investigating the root causes of cardiovascular disease, the 
leading cause of morbidity and mortality worldwide.
    Today, I speak to you not only as a clinician and 
researcher, but also as a volunteer for the American Heart 
Association, a nonprofit organization dedicated to building 
healthier lives, free of cardiovascular disease and stroke. I 
am concerned about the lack of enforcement of regulation on 
laboratory-developed tests.
    The potential for personalized medicine to improve health 
and improve the practice of medicine is great. Biomedical 
research continues to build on the sequencing of the human 
genome to better understand the genetic component of disease, 
notably in the discovery of new genetic markers associated with 
disease risk, as well as drug advocacy and toxicity.
    As we continue to develop a greater understanding of the 
genetics of human disease, we will move away from one-size-
fits-all medicine, to more targeted and effective prevention, 
treatments and even cures. However, it is imperative that these 
tests are scientifically credible.
    Over the past few years, a greater number of LDTs have come 
onto the market without FDA review that purport to inform 
individuals of their risk for cardiovascular disease, and which 
medicines and dosages will be most effective or ineffective in 
treating their disease. Expert consensus guidelines summarize 
research evidence, but there is no regulatory mechanism 
enforced that attempts to compare such evidence to claims made 
in marketing these tests. The current CLIA-approval process 
ensures only the analytical validity or accurate measurement, 
but fails to address clinical validity; whether a test result 
is clinically important to a patient's health decision-making.
    In the absence of such an independent examination, health 
care professionals, patients, and payers have no assurance of 
the value and limits of each test. The genetics of some 
relatively rare cardiovascular conditions caused by single 
mutations, like long QT syndrome and hypertrophic 
cardiomyopathy, has been well characterized, and LDTs have been 
critical components of medical care, family screening, and 
development of therapeutics for such diseases. However, we are 
in the early stages of understanding how each person's risk for 
common disease is influenced by their DNA. An individual's risk 
of heart attack, heart failure, or atrial fibrillation is a 
complex interaction of their genetics, their behavior, and 
their environment.
    A 2006 investigative study by the GAO observed the genetic 
testing companies they investigated ``mislead consumers by 
making predictions that are medically unproven and so ambiguous 
that they do not provide meaningful information to consumers.'' 
And the FTC issued a statement warning the public to be ``wary 
of claims about the benefits these products supposedly offer.'' 
The public is not equipped to do this on its own.
    Despite the remarkably rapid progress that has been made in 
our understanding of the genetics of cardiovascular disease in 
recent years, it is not yet possible to assess a person's DNA 
to evaluate their risk for most common diseases with sufficient 
accuracy on which to base treatment decisions. It is clear that 
some genetic tests lack scientific credibility. Allowing these 
tests to continue to be marketed without rigorous oversight 
increases the risk of undermining public and health care 
provider confidence in the utility of employing genetic tools 
to improve health care. There are differences between a test 
kit shipped out to laboratories and an LDT that is performed in 
a single laboratory. However, regardless of how and where the 
test is performed, the interests of health care providers and 
patients remain the same. They need to have the same degree of 
confidence that it is a high quality test, where the claims of 
its validity are substantiated by science, and its application 
to improve patient health established.
    I have had patients come to me with genetic tests that 
suggest slightly increased risks of atrial fibrillation or 
heart attack, but they are confused because their regular 
physicians do not know how to interpret results. They ask me 
whether they should take aspirin, cholesterol-lowering statins, 
or blood thinners. These are medications with risks and 
benefits that must be carefully matched to individual patient 
risks. Statins have been well established to lower risk of 
heart attack, and people with coronary disease are at high risk 
of it. A currently marketed genetic test purports to determine 
whether they are likely not to respond to a statin, or to have 
higher risk of heart attack. The small studies that initially 
supported this claim have been completely debunked by much 
larger studies, but the marketing continues. Not taking a 
statin because a patient or their doctor believes falsely that 
they will not respond could contribute to a potentially fatal 
outcome. This cannot continue. The AHA applauds the FDA for its 
decision to reconsider its enforcement discretion with regard 
to the regulation of LDTs. This is the right thing to do for 
patients.
    Thank you very much. I will be happy to answer any 
questions you may have.
    [The prepared statement of Dr. Newton-Cheh follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize Dr. Sawyers 5 minutes for opening 
statement.

               STATEMENT OF CHARLES SAWYERS, M.D.

    Dr. Sawyers. Good morning, Mr. Chairman and distinguished 
Members of the subcommittee. My name is Dr. Charles Sawyers. I 
am an oncologist and a cancer researcher, and the chair of a 
cancer research department at Memorial Sloan Kettering Cancer 
Center in New York. I am also the immediate Past-President of 
the American Association for Cancer Research, or ACR, which is 
the world's oldest and largest cancer research organization, 
with over 35,000 members, representing basic translational, 
clinical researchers, health care professionals, patients, and 
advocates in the U.S. and abroad, and I am honored to appear 
before you today.
    I want to begin by reminding us what a remarkable time it 
is in cancer research and with the development of many new 
cancer drugs. This all dovetails from our investment as a 
country in 1971 to defeat cancer through the National Cancer 
Act. Now, more than 4 decades later, this commitment is finally 
paying off. By my last count, over 45 new lifesaving cancer 
drugs were approved just in the last 10 years, including one 
just last Friday.
    So I want to point out three things that came together to 
make this slope of increase in cancer drug development happen 
so quickly over the last 10 years. First, we finally understand 
the cause of cancer. Cancer is a disease of mutant genes, and 
by knowing the names of those genes and how they cause cancer, 
we can discover new drugs that kill cancer cells by attacking 
them at their roots. The second is the human genome project. By 
knowing the names of all the genes in our DNA, we have been 
able to catalog over the last several years all the ones that 
are mutated in cancer. This knowledge teaches us that cancer is 
not just 10 or 20 different diseases called lung, colon, breast 
and prostate cancer, but hundreds of diseases defined by the 
mutant genes that cause them. This also empowers us to develop 
the drugs to treat each cancer more effectively. And the third 
is technology. Just 5 years ago, DNA sequencing was so 
specialized that it could only be carried out in research 
settings, using highly curated tumor specimens, but today, this 
technology is routinely deployed in many of the major cancer 
centers throughout our country, and tomorrow, this technology 
will become a routine part of workup of all cancer patients.
    I know this from firsthand experience. Fifteen years ago, I 
co-led the first clinical trial of a drug called Gleevec that 
is a highly effective drug for a form of blood cancer known as 
chronic myeloid leukemia, or CML. All patients with CML have a 
very specific gene mutation, and prior to Gleevec, had a life 
expectancy of just a few years, but now CML patients live for 
decades simply by taking this pill once a day that targets the 
cancer cells without the side-effects of chemotherapy or 
radiation. In fact, many of the patients I treated on the first 
clinical trial back in 1999 are alive and well today. And 
similar stories can be told for melanoma, lung cancer, colon 
cancer, and sarcoma and so on, and medical historians will look 
back and call this the golden age of cancer therapy.
    So why am I here today to talk about LDTs? Well, it is 
obvious, because diagnostics are critical to the success of 
this targeted cancer therapy. Indeed, as we have heard from 
many of the speakers today, the mantra of personalized medicine 
is the right drug for the right patient. And the FDA recognizes 
this and approves these new targeted cancer therapies in 
conjunction with the so-called companion diagnostic which we 
have heard about, which undergoes a rigorous validation 
process, just like the drug. Therefore, a safe, reliable, and 
effective diagnostic test is as important as a safe, reliable, 
and effective drug.
    Now, the problem is urgent because gene sequencing will 
soon become a routine part of cancer care. Hundreds of 
thousands, if not millions, of patients are going to be 
impacted by this technology in the coming years, and I think we 
all agree that physicians and patients must be able to trust 
the claims made by the developers of these tests, especially 
when they are used to determine the treatment regimen for a 
cancer patient. Too much is at stake to compromise on the 
regulatory standards that govern them.
    And gene sequencing technology is evolving very rapidly, 
one of the most innovative industries I have seen, and we are 
just at the tip of the iceberg of what may be possible. I think 
we will soon be able to detect cancer mutations in a single 
drop of blood. Many innovative companies are entering the field 
and are looking for clarity from the FDA on how to 
commercialize these and related technologies. Just as with drug 
approvals, a clearly-defined regulatory process will lead to 
greater innovation and investment.
    For all these reasons, ACR, which I represent, as well as 
my own experience in the cancer research field, I applaud the 
FDA for proposing a classification of LDTs based on the risks 
posed by the test to the patient. Having a single strict 
regulatory approval standard will reassure the American public 
that the tests used in a high-risk health care setting are 
safe, accurate, and effective, and will encourage the private 
sector to invest in this promising area of medicine.
    I want to close by submitting for the record the ACR's 
policy statement on the regulation of diagnostics entitled, 
reliable and effective diagnostics are keys to accelerating 
personalized cancer medicine and transforming cancer care.
    Thank you.
    [The prepared statement of Dr. Sawyers follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Mr. Pitts. The Chair thanks the gentleman.
    Thanks to all the witnesses for your opening statements.
    I have a unanimous consent request. Submit for the record a 
letter dated September 8 from the Combination Products 
Coalition. Without objection, that will be entered into the 
record.
    [The information appears at the conclusion of the record.]
    Mr. Pitts. I will begin the questioning, and recognize 
myself 5 minutes for that purpose.
    Mr. Fish, we will start with you. I have heard companies 
and past witnesses remark that regulatory uncertainty and a 
lack of incentives in the diagnostics space have contributed to 
innovative products sitting on companies' shelves. Do you 
believe this guidance document would address these issues or 
create more regulatory uncertainty?
    Mr. Fish. Mr. Chairman, we believe that this proposed 
framework by the FDA would help reduce the current uncertainty 
in diagnostics by ensuring similar review for tests that 
present a similar level of risk, and make it clearer for both 
laboratories and manufacturers alike what the path forward is 
to provide the clinical diagnostics to patients. So in our 
view, we believe this would help address the stifling of 
innovation we see under the current system.
    Mr. Pitts. Mr. Mertz, you state in your testimony that 
enhancing CLIA may be the way to go. CMS, the agency that 
implements CLIA, recently stated, ``CLIA does not address the 
clinical validity of any test, that is the accuracy with which 
the test identifies measures or predicts the presence or 
absence of a clinical condition or predisposition in a patient. 
On the other hand, FDA does.'' CMS has clearly indicated that 
it does not want, nor could it handle, additional testing 
responsibilities authority in this area. Why are you still 
proposing it?
    Mr. Mertz. Thank you. And we have known over the years that 
CLIA has taken the position that they do not regulate clinical 
validity. We actually believe under their statutory authority 
that they could, and the regulations on CLIA actually touch on 
that. They are required the clinical accuracy of the test, the 
performance of the tests are regulated. However, because there 
is this perceived gap that they do not regulate clinical 
validity, we have been very supportive for many years for 
modernizing CLIA, for strengthening CLIA so that it would 
specifically require CLIA to look at the clinical validity of 
all new laboratory-developed tests. We were supportive of 
Congressman Burgess' bill, the Modernizing CLIA Act, which 
would specifically have an approval process for all new 
laboratory-developed tests, not just a few that the FDA will be 
able to look at, but they would review the clinical validity of 
all new laboratory-developed tests.
    In addition, I would touch on the resource issue that has 
been talked about today. The FDA is supported by--20 to 30 
percent of their funding is from the user fee. They only 
approved 23 tests. CLIA actually is funded 100 percent by a lab 
user fee, and a GAO report from a couple of years back 
indicated that they had $70 million in carryover money they 
hadn't spent. They have a lot of resources there that they 
could use. The other thing is they--CLIA would not have to--FDA 
is proposing to duplicate all of the things underlying looking 
at clinical validity. They will have new inspections, new 
registration, licensing, labeling, all these things will be 
done a second time. You could very surgically, with CLIA, go 
in, add that clinical validity requirement, have adverse 
reporting, and it would be fully funded by the laboratory 
industry with the funds that we provide in the user fee. So we 
think that would actually be a much more effective way to 
guarantee the safety of these tests, and establish the clinical 
validity of them.
    Mr. Pitts. Thank you.
    I have a couple of questions for each of you. So regardless 
of whether you agree or disagree with the substance of the 
guidance, do you believe it would be a significant shift in 
longstanding Agency policy and a departure from existing 
practice for the regulated industry?
    Mr. Fish, we will start with you. Just go down the line.
    Mr. Fish. So we concur with FDA's assessment that this 
framework would represent a change in practice by the Agency, 
but not a change in regulation. Since the FDA is essentially 
not proposing to change any current regulation that applies to 
diagnostics, but simply to extend its enforcement of those 
regulations to laboratory test developers. So we share that 
opinion with FDA.
    Mr. Pitts. OK, and you can answer yes or no if you would 
like. Do you believe, Dr. Behrens Wilsey, that it would be a 
significant shift in longstanding Agency policy, and a 
departure from existing practice for the regulated industry?
    Ms. Behrens Wilsey. The Coalition does think it would be a 
significant shift and change in long-term policy, but that is 
the reason why we believe many of these questions need to be 
answered in advance to finalizing guidance.
    Mr. Pitts. Mr. Mertz?
    Ms. Behrens Wilsey. And we think if that were the case, 
that it would go to resolving a lot of the issues.
    Mr. Pitts. Mr. Mertz?
    Mr. Mertz. We do think it would be a completely substantial 
shift in what they have regulated. From the time that the 
device amendments were enacted in 1976 until the early '90s, 
they never said anything about regulating laboratory-developed 
tests, even while CLIA was being enacted in '88. There was no 
mention in Congress, in FDA. They asserted absolutely no 
authority over laboratory-developed tests for 16 years after 
the Device Act, and there were many, many hundreds of LDTs 
being created at that time. So we think this is a significant 
shift in their policy.
    Mr. Pitts. Dr. Newton-Cheh?
    Dr. Newton-Cheh. Yes. This would be an important and 
significant shift in the practice of the FDA, exercising 
enforcement discretion, and it is welcome.
    Mr. Pitts. Dr. Sawyers?
    Dr. Sawyers. I would take a slightly different take. I 
don't think it is a shift in the sense that companion 
diagnostics have been a standard part of the approval of 
targeted cancer drugs now for about 8 to 10 years. I think the 
shift, of course, is expanding that to LDTs that are measuring 
the same thing, but not subject to the same regulation.
    Mr. Pitts. All right, and then the second question, we can 
go in the reverse order. Dr. Sawyers, do you believe FDA should 
establish a new framework of this nature by guidance or 
regulation?
    Dr. Sawyers. I think guidance would be the start to get it 
right, as Dr. Shuren pointed out, through dialogue, and then I 
think it should move to regulation.
    Mr. Pitts. Dr. Newton-Cheh?
    Dr. Newton-Cheh. I think the FDA's use of guidance is 
consistent with its past practices and its open to public 
comment seems acceptable.
    Mr. Pitts. Mr. Mertz?
    Mr. Mertz. Well, we question and challenge their statutory 
authority to even do guidance or regulation in this area. 
However, if they were to proceed, it definitely should be done 
through notice and comment rulemaking.
    Mr. Pitts. Dr. Behrens Wilsey?
    Ms. Behrens Wilsey. I am not an attorney and so I am not 
going to comment on FDA's authority, but I will say that the 
Coalition believes that guidance could be an effective tool if 
used properly and exercised properly.
    Mr. Pitts. Mr. Fish?
    Mr. Fish. As FDA has noted, it is not proposing to change 
existing regulation, but simply to enforce it with respect to 
LDTs, and we concur with that assessment.
    Mr. Pitts. Thank you.
    The Chair recognizes Mr. Green 5 minutes for questions.
    Mr. Green. Thank you, Mr. Chairman, and thank our witnesses 
for being here.
    We have heard a great deal about the boom of innovation in 
LDTs since Congress enacted the Medical Device Amendments in 
1976. Over the last 4 decades, like many areas in medical 
innovation, the products used in patient care have 
significantly grown and evolved. When there are revolutionary 
advancements in health products, a new oversight framework 
tailored to the specific type of device or product may be 
warranted. Patient safety cuts both ways, ensuring a product is 
safe and effective, and also ensuring fostering innovation so 
clinical care improves over time. Since 1976, LDTs have evolved 
from being limited in number and relatively simple tasks 
primarily used to diagnose rare diseases and conditions. Today, 
they have increased in number, complexity, and accessibility.
    I understand that nearly all FDA-approved and FDA-cleared 
test kits began as LDTs. Some of the innovation we have seen in 
LDTs base from labs developing new tests or modifying existing 
tests to meet patient needs. Yet, as the complexity and 
accessibility of highly sophisticated tests have grown, there 
is a need to promote continued innovation, while recognizing 
the risk of LDTs posed to patients is much greater than in the 
past.
    Mr. Fish, we have heard concerns that FDA oversight will 
stifle innovation for tests that are for rare diseases, and 
will slow patient access to new tests. Can you provide a 
response to these concerns, and how the FDA proposes to address 
this?
    Mr. Fish. Well, I think we recognize that any regulation 
comes with a burden, and we think the appropriate question is 
not whether or not there is a burden associated with 
regulation, but whether there is a rationale for that 
regulation and whether the burden is commensurate with a public 
health issue. And our feeling is that FDA is seeking to 
achieve, and largely is achieving through this framework, a 
balance between additional enforcement of regulation with 
respect to LDTs, and continued enforcement discretion. FDA has 
pointed out, I think pretty clearly in its framework, that with 
respect to a number of different categories of LDTs and 
settings in which LDTs are both developed and used, that it 
will continue to exercise enforcement discretion, thereby 
allowing LDT innovation to continue to flourish and serve 
patients in those settings.
    Mr. Green. OK. Mr. Mertz, I understand that once a test kit 
is FDA approved and enters the market, the laboratories may 
modify the kits, which is in many cases expanded uses that even 
improve tests.
    Can you speak to this, and how does the FDA proposal impact 
this practice?
    Mr. Mertz. Yes, thank you. And this is one of the areas we 
are very concerned about because, as has been pointed out, most 
of the LDTs, 1,000 or so new LDTs a year, most of them are 
created because there is no FDA-approved kit, and the patient 
needs the test and there is no kit. For many others, most of 
the rest if there is a kit that was originally LDT, now it is 
an approved kit by the FDA, but it actually needs modifications 
in order to have it keep up with technology. And interestingly, 
the one example that Dr. Shuren said earlier was sort of a copy 
of a kit that was being used. He was actually referring to the 
BRAF test for melanoma patients, and he said the labs claim it 
was better. Well, in fact, if you look at the testimony by the 
AMA, in fact, the FDA-approved kit turns out that, because it 
was frozen in time, you have an approval process and that 
technology is frozen in time, that test cannot distinguish 
between two different mutations for melanoma, and the AMA 
pointed out the clinicians, they actually must know that the 
specific mutation, and really to detect the right mutation and 
to have the right treatment, they have to use the LDT 
modification of the BRAF test.
    We see many, many other cases of this where the original 
HIV test back in 1987, which was approved still has not been 
updated. It is the LDT that has served for 25, 30 years now 
because that technology was frozen in time. So really the FDA-
approved kit actually never was the standard of care. And this 
is actually what most LDTs are either unmet need or they have 
actually made some change that is absolutely essential to 
clinicians in treating a patient.
    Mr. Green. Do you believe that there should be premarket 
review of LDTs to ensure their safety and effectiveness?
    Mr. Mertz. Well, first of all, actually what the FDA is 
proposing is--in the case of high-risk LDTs is not premarket 
approval.
    Mr. Green. I know, but would you go as far as----
    Mr. Mertz. OK, but in terms of our position--thank you. 
First of all, as I said before, we believe that the clinical 
validity of the test should be established. That is generally 
done within the lab, through the reviews of the crediting 
organizations, but to make it absolutely clear that it is, we 
supported legislation that would add that requirement under 
CLIA to require all new laboratory-developed tests, all 800 or 
1,000 a year there are, to go through an approval process at 
CLIA to establish the clinical validity. So yes we do, but we 
think that would be a much better way than doing it than 
duplicating CLIA again under FDA, and putting a much more 
burdensome process that will make it really, really untenable 
for most tests to go through that process.
    Mr. Green. Thank you.
    Mr. Chairman, I have one more question, if I could ask?
    Mr. Pitts. Go ahead. Proceed.
    Mr. Green. Mr. Fish, some of your fellow panelists have 
raised questions about whether the FDA has the authority to 
regulate LDTs, suggesting that LDTs are more akin to services 
provided by physicians than devices. I would like to ask your 
views. We heard today, Congress amended the Federal Food, Drug, 
and Cosmetic Act in 1976 to give the FDA authority over in 
vitro diagnostics, IVTs. Can you describe what the differences 
are, if any, between FDA-regulated IVTs and so-called 
laboratory-developed tests, and how do you respond to the claim 
that LDTs are not subject to FDA jurisdiction?
    Mr. Fish. Well, first of all, as you note, the statute 
clearly refers to medical devices as including in vitro 
diagnostic products, which are the equipment and materials used 
to produce in a test. Our view is that LDTs are the same as 
diagnostics produced by a manufacturer. The question of whether 
or not LDTs are solely services I think obscures the fact that 
when a laboratory performs a test, there is still a test at the 
heart of what it performs, analogous to a doctor's office or a 
medical center providing chemotherapy. There is a service 
provided in the application of chemotherapy for a patient, but 
there is still a drug at the center of what is being performed 
as a service. So our view is that LDTs, from a practical 
standpoint, still constitute a regulated article under the 
Medical Device Amendments, and FDA has made that case and we 
concur with it.
    Mr. Green. Thank you, Mr. Chairman, for your courtesy.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the Vice Chairman, Dr. Burgess, 5 minutes 
for questions.
    Mr. Burgess. Thank you, Mr. Chairman, and I do thank all of 
our witnesses for being here today. It is an important topic 
that we do need to discuss.
    Dr. Behrens Wilsey, let me just ask you a question about 
something that could affect, say, the off-label use of a 
diagnostic. If you have a manufacturer-distributed test, the 
laboratory can use the test off-label in the practice of 
laboratory medicine, and that is not going to upset the FDA. 
But with a laboratory-developed test, if the FDA considers the 
laboratory to be a manufacturer, and considers the LDT service 
to be a device subject to the FDA's labeling rules, this could 
raise concerns that the laboratory is promoting off-label use.
    From your perspective as an investor in laboratories 
performing laboratory-developed tests, how would this risk 
impact your decision to invest in a particular company?
    Ms. Behrens Wilsey. Thank you. I appreciate this question.
    This is a concern that the Coalition raised several years 
ago, and has discussed with the Food and Drug Administration, 
and the question that came up a little bit earlier today, and 
we greatly appreciate Dr. Shuren's assurance that this issue 
would be resolved reasonably. However, what I would say, the 
longstanding practice of labs consulting with physicians about 
patient management based on the results of the test is actually 
a requirement under CLIA. And at the same time, if labs become 
manufacturers under FDA regulations, depending upon the label 
and the physician use of the information, the lab consultation 
could be considered off-label promotion. And what we believe 
needs to occur is we need to wrestle down specifically what 
precisely would constitute a consultation, and what would 
precisely constitute off-label promotion, or else there is no 
question that, as an investor, that would chill investment in 
this area. That would be of great concern to investors.
    Mr. Burgess. Let me ask you a question. Mr. Mertz, I think, 
referenced the disparity between the number of tests and the 
number of approvals. From the investment perspective, I am not 
a lawyer, I am not an investor, I am a physician, I simply live 
downstream from all of this, but from the investor perspective, 
what does that do when you are looking at whether or not to put 
money into one of these products, the vast number that are 
available, the few that have been approved through the FDA, if 
there is a furtherance of the FDA's reach into this area, what 
is that likely to do?
    Mr. Mertz. So----
    Mr. Burgess. Dr. Behrens Wilsey.
    Ms. Behrens Wilsey. I apologize.
    Mr. Burgess. Yes.
    Ms. Behrens Wilsey. I----
    Mr. Burgess. From the investor's perspective, this 
discrepancy between number of tests coming around and the 
number of approvals, if the FDA's grasp is indeed increased, 
what does that do to the viability from the investor community?
    Ms. Behrens Wilsey. We are very concerned about the number 
of tests. I was running out of time in my oral comments so that 
I didn't cite the same numbers that were provided by ACLA.
    Having said that, we are very concerned. What would concern 
me as an investor is that you would create a very long line and 
a very protracted period of time in which these tests would 
have to go through the regulatory process. That absolutely 
would diminish interest in investing in this area.
    Mr. Burgess. And some of the financial return from a 
laboratory-developed test is de minimis when you compare it to 
a blockbuster pharmaceutical, is that not correct?
    Ms. Behrens Wilsey. Absolutely. I made the point earlier 
that the two most important issues affecting investors in 
financing companies that develop these types of tests are 
regulation and reimbursement. And the quantity of evidence and 
the time in which you are required to develop that evidence so 
that you can provide it for the purposes of an FDA approval 
substantially lengthen the period in which you might generate 
some sort of a return. Actually, it substantially generates the 
period in which you have any hope of even getting reimbursed. 
So that is a great concern, and one of the reasons why this 
area does not have the same number of investors as the 
pharmaceutical area.
    Mr. Burgess. Mr. Mertz, I appreciate your comments about 
the legislation introduced in the last Congress. I haven't 
planned to reintroduce it yet, just with that caveat, but when 
President Obama was Senator Obama and he introduced the bill 
that I put into the record this morning, the concept was the 
harmonization between CLIA and the FDA. Do you think that the 
bloom is off that rose, has that hour now passed and we are 
into a different realm where that is no longer possible?
    Mr. Mertz. No, and just interestingly, I was at ACLA when 
Senator Obama introduced that, and it was in reaction, in part, 
to what the FDA was proposing on an earlier iteration of this 
guidance, the IVDMIA. They were going to regulate some of the 
LDTs, and it was in reaction to that and a much more measured 
approach which would rely on CLIA. But I don't think it is too 
late to do this with CLIA. As we heard earlier, it is going to 
take the FDA 9 years to recreate all of this regulation within 
their realm. So, no, I think--and they could ramp up much more 
quickly at CLIA because they have the foundation.
    If I could, Congressman, quickly on the investment issue. 
Of the many hundreds of new LDTs a year, some of them are 
created by small startups, they are investor-funded, but 
hundreds and hundreds of them are created by academic medical 
laboratories. There is a letter that the--that you have and the 
committee has from 23 of the most esteemed medical institutions 
in the country, the Harvards and Stanfords and all of them, and 
they are very concerned. They said FDA regulation of LDTs would 
stifle innovation and be contrary to public health. So they are 
not really funded by investment capital. The Mayo Clinic, which 
is one of our members, they create over 100 new laboratory-
developed tests a year, and they are worried that they are not 
going to be able to innovate. It is not even an investment 
capital issue.
    Mr. Burgess. OK, thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The Chair thanks the gentleman, and now 
recognize the ranking member of the full committee, Mr. Waxman, 
5 minutes for questions.
    Mr. Waxman. Thank you, Mr. Chairman.
    I don't hear anybody on the panel argue that there 
shouldn't be a very careful scrutiny of these tests. It seems 
like the question is who should do it; CLIA or the FDA, and I 
don't think CLIA has the kind of expertise that we see at FDA.
    Dr. Sawyers, you note in your testimony that we have been 
able to shift from classifying cancers by their site of origin 
in the body, to classifying them by their molecular subtype. I 
think this exemplifies the kinds of advances we need to 
capitalize on to further develop into targeted therapies for 
personalized medicine, and to speed new treatments to patients. 
However, we also see what was described in a 2011 New York 
Times article as a mini gold rush of companies trying to market 
tests based on the new techniques, at a time when the good 
science has not caught up with the financial push.
    Mr. Chairman, Mr. Chairman, I would like to insert into the 
record that article from the New York Times dated July 7, 2011.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Waxman. Thank you.
    Dr. Sawyers, as you note in your testimony, the success of 
a targeted therapy is inextricably linked to the successful 
development of its companion diagnostic test. You also note 
that implementation of FDA's risk-based framework would balance 
the need for encouraging innovative medical product development 
with the need for ensuring patient safety.
    Could you describe some of the harms you see from exempting 
lab-developed versions of these tests from FDA oversight, and 
some of the benefits you see from having them subject to FDA 
oversight? And as part of your answer, could you address 
whether you think FDA oversight will unnecessarily limit 
patient access to the best new tests?
    Dr. Sawyers. OK, well, I think that the benefit of having 
more oversight would be more confidence in what I will just 
call the me too tests that develop shortly after the approval 
of a companion diagnostic. The details of what the regulatory 
requirement for approval of those second generation tests is an 
important detail. It can't be such a high bar that it impairs 
or harms second followers from joining in, but I see that this 
next generation cancer drugs develop in a similar way because 
there is a clear set of guidelines and developers know what 
they need to do.
    I also want to make a point about the ability to compare 
test results across different centers and across even the 
world. A point I made was that cancer is now subdividing into 
hundreds of diseases, and so one medical center running an LDT 
in that clinical lab can't easily compare the results from 
other labs. So a more uniform sort of trust in the sensitivity 
and specificity of tests would accelerate the post-approval 
understanding of what patients are most likely to benefit from 
what drugs.
    In terms of harm, the examples have been given earlier of 
tests that didn't hold up to the light of day later on in 
subsequent publications, as made by my colleague in cardiology 
in his oral statement.
    Mr. Waxman. Well, Dr. Newton-Cheh, do you want to comment 
on the question I asked or what Dr. Sawyers had to say?
    Dr. Newton-Cheh. Yes, I think--I mean by way of example, 
the American public has by and large supported FDA's regulation 
of pharmaceuticals. They would not support rolling back to 19th 
Century Wild West where snake oil is indistinguishable from 
safe and effective therapies, and I think by the same token, 
they would not accept continuing unregulated LDTs in the 21st 
Century. I think to draw the----
    Mr. Waxman. Why should FDA regulate it as opposed to CMS?
    Dr. Newton-Cheh. I think that is what FDA does. I mean FDA 
has structures in place with expert advisory committees, and 
consultation with stakeholders evaluating clinical claims, 
evaluating the literature. That is the business that they have 
been in, so I see testing as another component of clinical 
validity. I think CLIA historically has been focused on the 
laboratory structures, the certifications, the personnel, and 
the precision of the measurement of some biologic entity, but 
not necessarily the interpretation or application to medical 
therapy.
    But if I could also draw a distinction between oncology 
where tissue is obtained, a molecular specificity is observed, 
and a therapy is targeted to that molecule. Well, that is a 
greater degree of precision than exists for cardiovascular 
disease. The two big killers are cancer and cardiovascular 
disease. Cardiovascular disease does not have such a precisely 
defined molecular understanding, and so there is, I think, a 
potentially greater harm for misapplying the inferences that 
are gained in oncology, where it has really been revolutionary, 
and I would say in cardiovascular disease it is about 10 years 
behind, and much of the claims that are currently out there for 
genetic testing to predict response to therapies are just 
unsupported.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Florida, Mr. Bilirakis, 
5 minutes for questions.
    Mr. Bilirakis. Yes, I guess it is working, OK.
    Mr. Mertz, some here are saying that the FDA's intervention 
over laboratories is necessary to ``level the playing field.'' 
However, your testimony lays out that laboratories are already 
regulated by CMS, and have been for decades, and that the FDA's 
actions may duplicate regulations rather than streamline then. 
Can you talk about the overlapping regulations and the problems 
that they could create?
    Mr. Mertz. Yes. Thank you, and I appreciate the question.
    And some of those who make that argument that it is 
unregulated, it is actually a bit of a myth because maybe I can 
just describe it best in an example. One of my academic 
institutions, it is a big hospital and a lab, and they told me 
that the lab is actually--they consider it probably the most 
regulated part of the entire hospital, and others in the 
hospital look at the lab as being quite highly regulated.
    The other point I want to make is that a manufacturer and a 
laboratory service are very different, and I think a good 
example of that that people understand is that a laboratory-
developed test is not a product, it is not an article, it is 
not a machine. Most pap smears historically are laboratory-
developed tests, and this is where a specimen is taken from the 
patient, a slide is prepared, a cytologist looks at the slide 
to detect cancer. If it is positive, it will be reviewed by a 
pathologist. Then they make a determination, give it to the OB/
GYN, and that is a laboratory-developed test, and it could be 
considered--there is some risk involved if that diagnosis is 
wrong. I don't think many people would consider that procedure 
and that knowledge, and all of the physician involvement I just 
described, as a physical product that is sold commercially by a 
manufacturer. So that is not a manufactured product, it is a 
process. So that is regulated as that. So we are regulated, 
they are regulated. We are fundamentally different. If you look 
at the regulations under CLIA, labs, they do, they regulate 
them as labs. The personnel, the procedures, the specimen 
collection, the accuracy of the test, which is very important. 
You look at manufacturers, it is more about quality systems and 
the manufacturing process. It is a very different process. But 
adding a whole second layer or a third regulation to 
laboratories is not leveling the playing field, it is making 
two different playing fields. It would make it very difficult 
to innovate, very expensive to innovate, and I would point out 
to others here that have brought up cases that--the KRAS test 
for colorectal cancer, there was--there has been--there was no 
test for 10 years for colorectal cancer until KRAS came along. 
The BRC for leukemia, that was a laboratory-developed test 
originally. A lot of them were laboratory-developed tests. So 
we are sort of playing on an entirely different field. We are 
regulated, and by adding another layer of regulation on top of 
labs is only going to stifle innovation.
    And finally, there are ways if clinical validity, we agree 
it needs to be addressed, you could add that to CLIA without 
duplicating the rest of the playing field.
    Mr. Bilirakis. Very good.
    Thank you, Mr. Chairman, I appreciate it. I yield back. 
Thank you, sir, for your testimony.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the vice chair of the full committee, Mrs. 
Blackburn, 5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman, and I thank each 
of you for being here, and I thank you for your patience. We 
appreciate that you are willing to come in and talk with us.
    We are focused on 21st Century Cures on medical innovation, 
and as I said earlier with Dr. Shuren, how do we preserve 
access to affordable health care for all Americans, because 
right now, the price is going up, the networks are narrowing, 
and it is becoming more difficult for so many individuals in so 
many parts of the country to get that access they want.
    Mr. Fish, I want to come to you and stay pretty much with 
where Mr. Bilirakis is. Looking at how the diagnostics are 
approved the same as the medical devices, and I have heard from 
a lot of your AdvaMed Dx members, and they feel like this 
should be approached differently, that the test should be 
approved and the diagnostics should be treated differently than 
medical devices. So do you support your members' position in 
that they should be handled differently?
    Mr. Fish. AdvaMed Dx's position currently is that we are 
comfortable with FDA's current regulation of diagnostics. I 
think one of the issues that has been recognized is that the 
diagnostics are different than other medical devices, and FDA I 
think has recognized that in terms of the kind of data and 
information that it requires to be provided to approve those 
diagnostics as safe and effective, but we are currently 
comfortable with the existing regulatory system. I would say, 
furthermore, we thank the committee for its 21st Century Cures 
Initiative, and as we always have in the past, if the committee 
is interested in exploring further any ideas around FDA's 
ongoing or changing regulation of diagnostics, we would be very 
pleased to work with the committee on that.
    Mrs. Blackburn. Great, thank you.
    Dr. Behrens Wilsey, I want to come to you. I appreciated 
your comments in your testimony so much. Let me ask you this. 
You heard Dr. Shuren, and if you were providing guidance to the 
FDA as to how they were going to approach their regulation, 
trying to get some regulatory certainty into the process, if 
you were to talk to them about reining in some of the mission 
creep that exists there, and also the LDTs, if you were talking 
to them about the LDTs and how that has impacted health care 
costs, what would you say to them?
    Ms. Behrens Wilsey. We would like to encourage greater 
dialogue, as I mentioned earlier, before finalization of the 
guidance, in part, because there has been such a long period of 
time in which there has been enforcement discretion, because 
this would encourage more dramatic changes in this area, and 
because this area is really not just exciting technologically, 
but the potential applications now of the use of these 
technologies, not just by good actors but all actors, are 
becoming increasingly clearer and very important for the 
patient. So what we would really like to see, and what we would 
encourage by the FDA, is to work through greater levels of some 
of the details that would lay out in advance of any 
finalization of guidance, some of the very specific questions, 
many of which have been raised today in our discussion, so that 
there is a lot less that is assumed by how the FDA will 
approach answering those concerns and those questions after 
guidance is finalized, because at that point in time, the clock 
starts ticking. At that point in time, companies' investors, 
everyone begins to risk the progress and the opportunity for 
these types of technologies, so that the lack of certainty and 
the judgments that would occur after that are far less clear 
than what we think could occur between now and finalization of 
guidance.
    Mrs. Blackburn. OK, thank you.
    I yield back, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentlelady.
    That concludes this first round. We will go to one follow-
up per side.
    Dr. Burgess, you are recognized 5 minutes for a follow-up.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Behrens Wilsey, just before we leave that concept of 
guidance and guidance versus regulation, you heard Dr. Shuren's 
response to my question, are we going with guidance because 
regulation actually triggers a response from the Office of 
Management and Budget as to the financial impact. So I guess 
this is part of the problem. Why are we here talking about a 
regulatory guidance that apparently has been in the making 
since either 1976 or 2006, it is hard to follow, if the onus is 
so severe, why not proceed through a regulatory pathway, 
through that more established pathway, and let us do the 
economic analysis that I think, certainly from the investment 
community, I think you would welcome that, would you not?
    Ms. Behrens Wilsey. Independent of rulemaking versus the 
guidance process, I would say that you could accomplish the 
same goal through both mechanisms. One important distinction 
being, of course, in rulemaking, the Food and Drug 
Administration has to respond to certain questions. On the 
question and the issue in the matter, I should say, of 
economics, I think that is an important question for everyone, 
whether FDA generates the numbers or collaborates with others 
in generating those numbers, those are still very important 
considerations. In fact, we have discussed whether we could put 
our hands on numbers that could be helpful through this 
process. So I would say independent of the process, we would 
encourage assessment on the economics.
    Mr. Burgess. But the economic assessment may be 
circumvented by the fact that it is done through guidance 
rather than through regulation. That was my point----
    Ms. Behrens Wilsey. I understand that.
    Mr. Burgess [continuing]. In the earlier question.
    Ms. Behrens Wilsey. The distinction that I am making is 
that if FDA works through a reasonable process, in our opinion, 
they could perhaps not precisely end up in the same position as 
everyone would like them to through rulemaking, but we could 
certainly come much closer to that. Economics being one of the 
considerations.
    Mr. Burgess. Well, unfortunately, they may have given 
themselves some enforcement discretion on their own purpose.
    Mr. Mertz, let me just ask you a question. It has come up 
several times on the issue of scalability at the FDA, and 
this----
    Mr. Mertz. I am sorry?
    Mr. Burgess. Scalability----
    Mr. Mertz. Yes.
    Mr. Burgess. We are talking about a very broad expansion 
into an area that is large and growing, and I think I heard you 
voice a concern are they actually ready to do this, and I have 
that concern and I asked Dr. Shuren and he assured me that they 
would, but realistically, as part of the Cures Initiative we 
have heard from people saying, look, one of the big problems 
with the FDA is their information architecture is so archaic, 
they have stuff that is written on paper records that should be 
digitized and in the digital age. So, again, I would ask you, 
because it obviously impacts your association a great deal, do 
you think the FDA is ready for the scale of this undertaking?
    Mr. Mertz. No, and as we pointed out, and by the way, Dr. 
Shuren said we weren't part of the MDUFA III negotiations, in 
fact, we were one of the stakeholders, so we became very 
familiar with the process and how much funding they had.
    As I mentioned, there are 11,000 complex labs, not 6,000. 
There are probably tens of thousands of laboratory-developed 
tests. We know that they only were able to look at 23 clear 
FDA-approved tests last year. Just the initial highest-risk 
tests they are talking about, we had heard some reports that 
they may look at 100 highest-risk tests within the first year 
or so. That would be a a fivefold increase in the number of 
PMAs they would be doing in the first year. They have said 
there is no user fee, so they would have no additional money to 
do a fivefold increase in the number of PMAs. So we are 
concerned it would not only slow down innovation with LDTs, it 
could very well slow down the innovation in the FDA, the 
regular manufactured kits, so we are very concerned about that. 
We agree completely that the rulemaking would flush out the 
economic impact because until they define what high risk is, 
they won't know how many LDTs they are going to have to look 
at. Until you know how many LDTs you are going to look at, you 
have no idea what the burden is on industry or the FDA. So I 
think requiring them to do the economic impact would really 
force them to say what they are going to regulate and how many 
LDTs there are, and then it will expose the impact it will have 
on the laboratory industry and the FDA.
    Mr. Burgess. Thank you, Mr. Chairman, and I will yield 
back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the ranking member of the committee, Mr. 
Waxman, 5 minutes for a follow-up.
    Mr. Waxman. Well, thank you very much, Mr. Chairman.
    Dr. Sawyers, Mr. Mertz has testified if there were problems 
with LDTs, we would have more publicity about them. Do you 
agree with that? Would doctors and patients necessarily know if 
tests were not giving good advice for clinical decisions?
    Dr. Sawyers. Yes, I would disagree. I think it is possible 
because physicians are so busy and don't know whether the tests 
they have ordered is an LDT or an FDA-approved cleared test, 
that they may not know, and if there is no requirement for 
reporting back, how would we know?So----
    Mr. Waxman. Yes.
    Dr. Sawyers [continuing]. I think it is an unknown.
    Mr. Waxman. And, Dr. Newton-Cheh, how do you respond? Same 
question.
    Dr. Newton-Cheh. It is completely opaque. I think the 
current environment for the practice of health care is 
increasingly complex, and I think physicians, patients, payers, 
they are all critical stakeholders here, I think they really 
rely on having independent evaluation of the claims that are 
associated with diagnostic tests.
    Mr. Waxman. Thanks.
    Mr. Fish, I would like to ask you a couple of quick 
questions. One often cited critique of FDA's proposal to 
oversee LDTs is that CMS, under its CLIA authority, should 
regulate these tests, not FDA. How do you respond to this, and 
do you think that CMS regulatory authority for LDTs should be 
the sole regulatory authority?
    Mr. Fish. I think it is important to distinguish between 
what an ethical and competent laboratory currently probably 
does, as opposed to what CLIA actually requires, and as Dr. 
Shuren pointed out, what CLIA currently requires is vastly 
different than what FDA requires. CLIA requires that 
laboratories follow good processes and practices to ensure that 
their personnel are proficient, and that they have processes in 
place that ensure the good practices when they perform their 
tests, but FDA, on the other hand, requires a number of aspects 
of laboratory testing that are not present in CLIA, including 
premarket review and approval of tests, it requires that there 
be a demonstration not only of analytical validity but also 
clinical validity, in other words, is it meaningful to 
diagnosis, they require adverse event reporting and quality 
systems regulation, and all of these aspects are missing from 
what CMS does. And given the questions around what agency is 
prepared to regulate LDTs, I think the answer is no agency is 
conceivably as ready as FDA, and they--that is the appropriate 
agency to carry this out.
    Mr. Waxman. Yes. Let me ask you about this claim about 
increased regulatory oversight stifling innovation. How do you 
respond to this claim? I know some members of your trade 
association, AdvaMed Dx, have had the experience of having 
obtained FDA approval for their LDT, only to find that the next 
day a laboratory launches a copy of that LDT without undergoing 
FDA review at all. Please describe your views on the impact 
that this situation can have on innovation.
    Mr. Fish. I would first point out that as a core matter, 
regardless of how this situation gets reconciled, the current 
uncertainty in having two very different paths to market for 
the same test is something that shouldn't stand as a matter of 
public policy, and it has ripple effects from a number of 
different standpoints. It has a ripple effect from the 
standpoint of investor certainty that we talked about, it has 
an impact on the competition that you just raised of LDTs 
coming out that purport to be the same as an FDA-cleared test, 
it has implications for clinician and patient transparency as 
well. So, again, regardless of the decision that is ultimately 
made, perhaps by Congress as well, this is just a situation 
that currently can't stand.
    As far as innovation goes, FDA made a very important point 
when it said that it would not enforce regulations with regard 
to LDTs that are developed and used in the academic medical 
setting. Mr. Mertz referenced this letter that was sent by a 
number of leading academic medical institutions. Shortly 
thereafter, FDA came out with its framework and explicitly said 
we are not worried about the tests that are being performed in 
those settings, we are concerned about stand-alone, independent 
laboratories developing tests that are outside the context of 
patient care. And that is the test where FDA is concerned. So I 
think they acknowledged that innovation could continue on LDTs 
in the academic medical setting.
    Mr. Waxman. FDA appears to be looking at prioritizing those 
tests with the greatest amount of potential harm to patients, 
and exempting a lot of other LDTs that might not be as serious. 
Do you think that is a reasonable way to prioritize the cases, 
or do you think there ought to be a rulemaking, every LDT ought 
to be subject to every test and every evaluation?
    Mr. Fish. Well, I would first say, regarding rulemaking, if 
FDA were to proceed here by rulemaking instead of by guidance, 
there would be nothing new to say, it would simply say and you 
too, because the regulations already exist. So it is not clear 
that there would be any rule to put forth. And FDA, I think, is 
taking exactly the right approach. We have called for years for 
all diagnostics to be regulated under a risk-based approach to 
ensure that the burdens of regulation are commensurate with the 
risks presented by those tests.
    Mr. Waxman. Yes.
    Dr. Behrens Wilsey, I thought your last few statements have 
been very wise. It seems to me what you are saying is you want 
to see what FDA is going to do, you are afraid it could stifle 
innovation, but you think, handled the appropriate way, it 
might not stifle innovation at all, is that a correct 
statement?
    Ms. Behrens Wilsey. Yes. I think even the improvements that 
we have seen in the proposed guidance----
    Mr. Waxman. Yes.
    Ms. Behrens Wilsey [continuing]. Between 2006 and today, we 
have already seen some improvements, and we certainly heard 
from Dr. Shuren earlier, willingness to hear more, so I think--
--
    Mr. Waxman. Yes.
    Ms. Behrens Wilsey [continuing]. If we proceeded down a 
path that allowed greater transparency, allowed the opportunity 
and the time for all parties to discuss the issues, and 
actually give some specific answers to some of the questions 
that have been raised, I think we would find ourselves in a 
very good position.
    Mr. Waxman. Yes.
    Well, Mr. Chairman, I want to commend you on this hearing. 
I think just having this open hearing and getting different 
views and hearing concerns can help FDA, can help everybody 
make sure that the right thing is done, because we don't want 
to stifle innovation, we do want these LDTs to continue, but we 
don't--and you certainly wouldn't want investors to put money 
into something that could end up doing nothing, and might even 
harm people. So let us hope that this process will continue at 
FDA and we will get a good result.
    Thank you. Yield back my time.
    Mr. Pitts. The Chair thanks the gentleman.
    And on that note, that concludes the questioning at this 
time. Members will have follow-up questions. We will send them 
to you. We ask that you please respond promptly. I remind 
Members that they have 10 business days to submit questions for 
the record, and they should submit their questions by the close 
of business on Tuesday, September 23.
    Very important, informative hearing. Thank you very much.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    Today marks the seventh Health Subcommittee hearing 
Chairman Pitts has convened as part of the bipartisan 21st 
Century Cures initiative. I would like to thank him again for 
his tireless work on this effort, including the exceptional 
roundtable he hosted in Lancaster, Pennsylvania, in late August 
that I had the pleasure to attend along with Ranking Member 
Pallone and Dr. Burgess.
    Over August and the early part of September, members from 
both sides of aisle held roundtables across the country to 
solicit feedback on accelerating cures and treatments for 
patients. This really has been a collaborative effort, and we 
need everyone to continue providing us with specific ideas--
none too big, none too small--about how we can make a 
significant reduction in the time and costs associated with the 
discovery, development, and delivery of safe and innovative new 
treatments and cures for patients who need them.
    Personalized medicine has really been a recurring theme 
throughout this entire discussion. According to the 
Personalized Medicine Coalition, ``While the potential benefits 
of personalized [medicine] are straightforward-knowing what 
works, knowing why it works, knowing whom it works for, and 
applying that knowledge to address patient needs-the 
intervening variables that determine the pace of personalized 
medicine's development and adoption are far more complex. Among 
those variables are the laws and regulations that govern 
personalized medicine products and services used in clinical 
practice.''
    Today's hearing is an important opportunity to hear from a 
variety of stakeholders about just that. Particularly since the 
mapping of the human genome, diagnostics provide researchers 
and clinicians with valuable tools to match the right patients 
with the right course of therapy. We must ensure that our laws 
and regulations keep pace so that innovation in this space 
continues and patients benefit from accurate and reliable 
tests.
    On July 31, 2014, FDA notified the committee that the 
agency intends to issue draft guidance to implement a new risk-
based framework governing the review and oversight of 
laboratory developed tests. FDA has indicated for several years 
that it planned on taking this step. Because it will have such 
a substantial impact on how these products and services are 
currently being used in practice, we required the agency notify 
the committee before moving forward This provision in the Food 
and Drug Administration Safety and Innovation Act was not an 
endorsement of such an approach but recognition of the fact 
that a number of legal, procedural, and substantive questions 
about FDA's role in this complex policy area remained 
outstanding.
    I thank Dr. Shuren and our other witnesses for their 
testimony about whether the agency has adequately addressed 
these issues and what role Congress can play in making sure 
that personalized medicine continues to flourish.
                              ----------                              


               Prepared statement of Hon. Henry A. Waxman

    In 1976, Congress first passed a law making it clear that 
FDA should ensure that diagnostic tests were safe and 
effective. At that time, FDA decided that tests developed and 
used by clinical laboratories, so called ``laboratory developed 
tests'' or ``LDTs,'' did not warrant oversight. They generally 
were made in small quantities and were used by local labs. FDA 
opted to conserve its scarce resources by refraining from 
enforcing applicable medical device requirements against 
laboratories making LDTs. That was a policy that made a lot of 
sense at the time.
    Today, things are quite different. As we move closer to 
achieving a new system of personalized medicine, practitioners 
are increasingly using LDTs to help make critical treatment 
decisions. Choices about which chemotherapies or medicines to 
administer-or in some cases, to withhold treatment altogether-
are being made every day on the basis of LDTs.
    Additionally, LDTs are no longer made in small local labs 
and used by physicians and pathologists working in a single 
institution responsible for a local patient population. FDA's 
enforcement discretion policy has become untenable as LDTs are 
increasingly manufactured by large, national laboratory 
corporations, contain sophisticated technologies and complex 
algorithms, and are distributed and used throughout the 
country.
    I applaud the agency for finally taking formal action to 
change its LDT policy by issuing the notification of its 
impending guidance. It is a step that was long overdue.
    One of the primary reasons this step is overdue is that 
there is currently a regulatory void surrounding these tests. 
The Centers for Medicare and Medicaid Services (CMS) oversees 
the laboratories that conduct testing, through the Clinical 
Laboratory Improvement Amendments (CLIA). But CMS does not 
evaluate whether the tests are clinically reliable. In other 
words, under FDA's enforcement discretion policy, no one is 
looking at LDTs to assess whether they accurately identify, 
measure, or predict the presence or absence of a disease or 
condition in a patient.
    In today's world of highly sophisticated tests, that is a 
situation no American patient should tolerate. When a newly 
pregnant woman is given complex genetic tests to determine 
whether her unborn child is genetically predisposed to a 
serious disease or condition, she expects that the tests have 
been found to be accurate. Yet many of these tests are being 
marketed without any oversight from our scientific experts at 
FDA.
    FDA is still in the early stages of its regulatory process, 
but from what I can tell, FDA is striking a reasonable balance. 
FDA is not proposing to oversee every LDT on the market. On the 
contrary, the agency is seeking to regulate only those LDTs 
that pose risks for patients if the tests are not clinically 
valid. And FDA is providing plenty of time and notice for 
companies marketing these tests to comply with any new 
requirements, most of which will be gradually phased in over 
the course of the next 10 years.
    I hope today's hearing will allow our witnesses to exchange 
ideas about ways the draft guidance might be improved, 
including areas in which more detail could help answer 
questions about how FDA intends to oversee these tests and 
allay any concerns that have arisen. If useful suggestions are 
provided, I encourage FDA to consider them and take them into 
account as appropriate.
    But concerns about whether FDA is the appropriate 
regulatory body to oversee these tests in the first place are 
not well-founded. I strongly disagree with those who would 
assert that FDA lacks jurisdiction over LDTs and that CMS alone 
should regulate them under its CLIA authority. These tests are 
a type of ``in vitro diagnostics,'' that is, tests performed 
outside the body, for example on specimens taken from the body. 
In 1976, Congress amended the law to provide FDA with explicit 
authority to regulate in vitro diagnostics. Congress did not 
differentiate FDA's authority over such diagnostic tests based 
on what kind of entity makes them.
    What is most important is the need for FDA involvement. CMS 
has stated that FDA is the agency with expertise in evaluating 
the clinical validity of these tests. CMS evaluates whether a 
particular test finds what it is supposed to find and whether 
labs conduct the test appropriately. But it does not evaluate 
whether what the test finds is clinically meaningful.
    It makes no sense to suggest that CMS should somehow take 
on FDA's role over LDTs, while the FDA continues to oversee 
other medical devices. This would result in a staggering amount 
of bureaucratic duplication. That is not a wise approach for 
patients or taxpayers.
    LDTs offer great promise to improve human health. But we 
need to ensure that the public is protected against unsafe or 
ineffective LDTs.
    And that is why we should support FDA's proposal to take a 
more assertive regulatory stance over these tests.I look 
forward to hearing more from our witnesses on this today.
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