The US Food and Drug Administration (FDA) has chosen to axe its ‘Final Rule’ from May 2024, bringing to an end a long-running agency-industry dispute around the proposed classification of laboratory-developed tests (LDTs) as medical devices.

The FDA’s action follows its Final Rule being struck down in a Texas court in March 2025. The lawsuit, brought jointly by the American Clinical Laboratory Association (ACLA), member company HealthTrackRx, and the Association for Molecular Pathology (AMP) at the US District Court for the Eastern District of Texas in 2024, asserted that the use of the medical device framework as mooted in the FDA’s Final Rule was “inappropriate and ill-suited” for regulating LDTs.

US district judge Sean Jordan agreed. Ruling in favour of the laboratory representatives, Jordan set aside the case “in its entirety” and referred it to the US Department of Health and Human Services (HHS) for further consideration.

Whereas the FDA could have challenged the ruling and launched a fresh legal challenge, overseen by health secretary Robert F Kennedy Jr (RFK Jr), the agency has instead elected to amend the wording of the Final Rule.

Issued by RFK Jr, an entry into the Federal Register stated that the FDA was removing the words “including when the manufacturer of these products is a laboratory” from the Final Rule, effectively reverting to the text of the regulation as it existed before the Final Rule's effective date.

Including a budget assessment with its entry into the Federal Register, the FDA forecasted that the Final Rule would have cost $1.29bn-$1.37bn over a 20-year timeline horizon.

The Final Rule: controversial from the outset

The FDA’s Final Rule clarified that LDTs, also known as in vitro diagnostics (IVDs), were medical devices under the Federal Food, Drug, and Cosmetic Act.

If codified into law, the Final Rule would have meant LDTs had to go through a pre-market review process and be subject to post-market quality (PMQ) surveillance following a staggered transition period to this new regulatory landscape.

For this reason, among others, many observers decried the legislation. Critics asserted that enforcement of the Final Rule would problematise patients’ ability to access “accurate and high-quality testing” in a timely fashion and give rise to an unacceptably high regulatory burden for labs. Moreover, many viewed the increased regulatory burden as largely unnecessary, given that a wide proportion of LDTs are ‘spun up’ in short order, for use in individual labs, and are in many cases never commercially marketed.

Commenting on the FDA’s action, Roslyne Schulman, director of outpatient payment, emergency readiness and public health policy at the American Hospital Association (AHA) and a staunch detractor of the Final Rule, said: “The return to enforcement discretion for LDTs rightly recognises 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.

“This action will help to assure patient access to innovative and targeted diagnostic tests while reducing regulatory burden and costs for both hospitals and the federal government.”