Dr Scott Gottlieb Worries About More FDA Regulation in Diagnostic Testing

If the FDA steps in to regulate laboratory-developed tests, it will slow down innovation, add costs to the development of the product, and likely decrease the number of tests that come out, but the public health benefits of increased oversight might be worth it, said Scott Gottlieb, MD, resident fellow at the American Enterprise Institute.

Transcript (slightly modified)

The FDA has called for more regulation of laboratory-developed tests. Is more regulation needed or will it stifle innovation?

There's no question that if FDA steps in to regulate the laboratory-developed tests, it's going to slow down the pace of innovation and add costs to the development of those products. This tends to be a low-margin business to begin with—these diagnostic tests don't necessarily sell for big sums of money. So if you look at a lot of the diagnostic ventures, a lot of them aren't successful. It's a very hard business to get into. A lot of these laboratory-developed tests, it's a very consultative endeavor, it takes a lot of resources to get into that business.

So it's a low-margin business in many cases to begin with, with the exception of a handful of tests. There's no question that if FDA applies regulatory oversight, it's going to increase the costs and decrease the amount of investment that goes into this space and the number of tests that come out. The question is: will the public health benefits of having FDA provide oversight here outweigh that impact on innovation? And I think that's an open question.

There's probably a subset of tests that do merit increased regulation, perhaps by FDA, because they do meet the definition of being a medical device, particularly in multivariate tests. I think FDA could carve out that subset of tests and perhaps provide a regulatory touch. without trying to encompass the whole field, without trying to exert its regualtory reach across the entire space. But they talked in the past about just carving out the multivariate tests, but they seem to have backed away from that and now they want to regulate the entire space.