Life Sciences Horizons Brochure 2025 - Flipbook - Page 109
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2025 Horizons Life Sciences and Health Care
A new regulatory frontier for precision diagnostics in the Trump administration
The past decade has seen significant advances
in precision medicine with novel diagnostics for
prevention and treatment of chronic and lifethreatening illness in oncology, neurology,
transplantation, and cardiovascular disease, among
other areas. Key to advances in precision medicine are
regulatory and reimbursement decisions by FDA and
CMS. In the first Trump Administration, numerous
policy changes were considered to facilitate advances
in precision medicine, and it is likely that many of
these issues will be revisited in the next several years.
In the precision diagnostics space, one of the most significant
issues we’ve been monitoring is FDA’s regulation of laboratory
developed tests (LDTs). After three decades of efforts, in May
2024, FDA finalized a wide ranging rule requiring LDTs to undergo
premarket review as medical devices. Then, in March 2025, a
federal court vacated the rule, determining LDTs are “services”
and not “articles of commerce” regulated under the FD A medical
device authorities. Stakeholders could continue to push for
legislative action to unlock cutting-edge tests through a consistent
framework to improve test accuracy and greater predictability for
investment in precision medicine.
Similarly at CMS, a number of reimbursement policies could
significantly impact precision diagnostics. A key barrier to the
adoption of precision diagnostics has been the coverage process
for assessing clinical utility of new diagnostics, including those
cleared or approved by FDA. In January 2021, the first Trump
Administration finalized a rule on Medicare Coverage of
Innovative Technology, which would have provided transitional
coverage for FDA cleared or approved breakthrough devices. This
rule was withdrawn by the Biden Administration in 2021, but it
is expected that some version of this rule will be rolled out again
by the Trump Administration and could benefit certain
novel diagnostics.
Additionally, in the first Trump Administration, CMS and
Congress made modifications to billing and payment rules for
diagnostics. In 2017, CMS updated archaic “Date of Service” rules
that impacted billing for clinical laboratory tests performed at
an independent laboratory on a specimen collected at a hospital.
The ongoing issue of implementation of the market-based pricing
system for clinical laboratory tests is another area ripe for
regulatory improvements. Beginning in 2020, Congress has
delayed reporting requirements for private payor rates under
Section 216 of the Protecting Access to Medicare Act of 2014,
which took effect in 2018.
Lastly, the Trump administration may set regulatory policy for
how new targeted precision medicine technologies are
commercialized, such as multi-cancer early detection tests, and
algorithmic tests that use AI-assisted detection of biomarkers.
These new tests call for new approach by FDA in terms of assay
validation data requirements. They also present novel regulatory
issues for an incoming CMS to define what constitutes a cancer
screening test for purposes of Medicare, and whether algorithmic
tests using AI pathology biomarkers constitute “lab tests,” or
software as a medical device (SaMD).
Brian Carey
Partner
Boston
Lowell Zeta
Partner
Washington, D.C.
Erkang Ai
Counsel
Philadelphia
Erik Schulwolf
Counsel
Boston
Life Sciences
Practice Group
of the Year
Law360, 2024
