FDA Reverses Final Rule on LDTs: A Win for Labs, a Shift in Regulatory Strategy

By Dan Wittenberg and Emily Statham

In a major regulatory reversal, the U.S. Food and Drug Administration (FDA) has officially rescinded its 2024 final rule that sought to regulate Laboratory Developed Tests (LDTs) as medical devices. The decision, announced on September 19, 2025, follows a federal court ruling earlier this year that vacated the rule, citing that the FDA had exceeded its statutory authority under the Federal Food, Drug, and Cosmetic Act (FDCA).

Background: What Are LDTs?

LDTs are diagnostic tests designed, manufactured, and used within a single laboratory. They play a critical role in patient care, especially in areas like genetic testing, oncology, and infectious disease diagnostics. LDTs are distinct from in vitro diagnostics (IVDs), which are test kits that are manufactured and distributed to clinical laboratories as devices. Historically, LDTs have been regulated under the Clinical Laboratory Improvement Amendments (CLIA) by the Centers for Medicare & Medicaid Services (CMS), with the FDA exercising enforcement discretion — that is, choosing not to enforce medical device regulations on these tests.

The 2024 Final Rule

In May 2024, the FDA issued a final rule that aimed to phase out its enforcement discretion policy and bring LDTs under the same regulatory framework as other IVDs. Specifically, the final rule amended the regulatory definition of “in vitro diagnostic product” to include the words “when the manufacturer of these products is a laboratory.” The rule proposed a five-stage implementation plan, culminating in full compliance with FDA regulations — including premarket review requirements — by 2028.

The FDA justified the rule by pointing to the increasing complexity and widespread use of modern LDTs, arguing that they posed potential risks to patient safety and required more rigorous oversight. However, the rule was met with immediate and widespread opposition from industry stakeholders, including the American Clinical Laboratory Association (ACLA), HealthTrackRx, and the Association for Molecular Pathology (AMP).

Legal Challenge and Court Ruling

On March 31, 2025, the U.S. District Court for the Eastern District of Texas vacated the FDA’s final rule, ruling that the agency lacked the statutory authority to regulate LDTs as medical devices. The court concluded that LDTs are fundamentally different from traditional medical devices, as they are services performed within a laboratory rather than physical products distributed in interstate commerce.

The court emphasized that Congress had intended for CLIA — not the FDCA — to govern laboratory testing, and that the FDA’s attempt to expand its jurisdiction violated both the text and legislative history of these laws. The FDA chose not to appeal the decision, effectively ending its effort to regulate LDTs under the medical device framework.

The Final Reversal

In response to the court’s ruling, the FDA issued a new final rule on September 19, 2025, formally rescinding the 2024 regulation. The agency reverted the definition of “in vitro diagnostic products” in 21 CFR § 809.3 to its pre-2024 language, removing the phrase “including when the manufacturer of these products is a laboratory”. This action restores the status quo, with the FDA continuing to exercise enforcement discretion over LDTs. Laboratories are no longer required to seek FDA clearance or approval for their tests, and the compliance deadlines set forth in the 2024 rule are void. 

Industry Reaction

The reversal has been welcomed by hospitals, clinical laboratories, and industry groups. The American Hospital Association (AHA) praised the decision, noting that applying device regulations to LDTs would have imposed significant burdens on hospital labs, potentially limiting access to critical diagnostic services. “The return to enforcement discretion for LDTs rightly recognizes that applying the device regulations to these tests would likely prompt many hospital laboratories, particularly small ones, to stop offering safe and effective tests upon which patients and their communities rely,” said Roslyne Schulman, AHA’s director of outpatient payment and public health policy.

Implications and What’s Next

While the FDA’s reversal is a relief for many in the lab industry, it leaves unresolved questions about the future of LDT regulation. There is uncertainty about what will happen to LDT approval or clearance submissions currently pending before FDA, and the path forward for LDTs that FDA has already approved or cleared is similarly murky. The court’s decision also makes it difficult for the FDA to pursue similar regulatory efforts without congressional action. Some experts suggest that a legislative solution may be necessary to establish a clear and modern framework for LDT oversight.

In the meantime, laboratories must continue to comply with CLIA requirements and ensure that their tests meet high standards of accuracy and reliability. The FDA retains the authority to intervene in cases where LDTs pose significant risks to public health, but broad regulation remains off the table.

Conclusion

The FDA’s decision to rescind its final rule on LDTs marks a significant shift in the regulatory landscape for diagnostic testing. It underscores the limits of agency authority and the importance of judicial oversight in shaping health policy. For clinical laboratories, the move restores regulatory certainty and preserves access to innovative testing methods — at least for now.