Editorial: Pen-and-Phone Approach to Regulation Endangers FDA’s Legitimacy

March 28, 2023

Written by Jared Seehafer, CEO & Co-Founder at Enzyme

The FDA is a central component of the medical device and pharmaceuticals industries, entrusted with assessing whether biomedical products are safe and effective for intended use before commercial release. Products — and even entire companies — can succeed or fail based on its judgement. Thus its legitimacy rests on the perception that it is impartial, objective, and restrained in exercising the immense power granted to it. But there is a growing — and disconcerting — trend in which FDA resorts to regulation and lawmaking by fiat, overstepping the authority granted to it by Congress.

The most recent incidence of regulatory overreach is the repeated declarations by agency managers, including Commissioner Robert Califf, that FDA may move forward on rulemaking for laboratory-developed tests (LDTs) despite serious questions as to whether it even has the authority to do so under current law.

FDA’s impatience over legislation for regulation of in vitro diagnostics is understandable given that Congress has had legislation in the works since at least 2017. But that impatience is no excuse for rulemaking that many law professors believe is on uneven legal ground. Let’s not forget that LDTs are already regulated by the Centers for Medicare & Medicaid Services via the Clinical Laboratory Improvement Amendments, which even FDA concedes involves inspections and certification processes.

According to one media report, Califf stated last October that rulemaking was an option, though he did not seem convinced that it was yet time for that. Apparently, the Agency has decided that now is the time to completely abandon any pretense of regulatory modesty according to this media report, even in light of a U.S. Department of Health & Human Services-written analysis that suggests that any rulemaking on the FDA’s part would be subject to a legally plausible challenge.

Lawmaking by fiat is not limited to FDA

This change in posture is mirrored by FDA’s recent action regarding clinical decision support (CDS) software. The Agency’s final CDS guidance from September 2022 was not only drastically different — and significantly more aggressive from a regulatory perspective — than the draft guidance, but it also appears to defy Congress’s intent in the 21st Century Cures Act. The CDS Coalition — which includes many Enzyme customers — has reacted with a citizen petition in formal protest of FDA’s action. In this new environment, innovators must decide whether they assert that they’re following the statute — which nominally deregulates many categories of low-risk CDS — or FDA’s guidance, which asserts the opposite. Considering this regulatory uncertainty, many Enzyme customers have told us they are putting their CDS programs on hold.

I’ve got a pen and a telephone.

The problem of regulatory overreach is clearly not limited to FDA, either. The CHIPS and Science Act of 2022 was an understandable — though perhaps clumsy — reaction to concerns about the offshoring of an industrial sector (semiconductors) so critical to the U.S. economy to a region of the world that is increasingly geopolitically unstable. Now the Department of Commerce is mandating that those semiconductor firms that receive money under CHIPS pay more for childcare benefits than is required of other industries. Commerce Secretary Gina Raimondo’s position is that because Congress failed to act to expand childcare requirements, the solution can come from the pen of a member of an administration that had previously complained that it couldn’t act in the absence of legislation. The underlying message seems to be that if you can’t get a job done with legislation, the Executive Branch can do what it wants regardless.

If this message sounds familiar, it’s the same rationale President Barack Obama provided for his Deferred Action for Childhood Arrivals (DACA) program, which directed the Department of Homeland Security to implement the policies underlying the Dream Act, providing amnesty for certain illegal immigrants who entered the U.S. as minors. In the absence of Congressional action on the matter, Obama famously declared that he had a “pen” to enact Executive Orders and a “telephone” to rally the public behind his action.

In each case we see a theme. The Executive Branch starts with a premise of “We can’t do X without Congressional authorization.” Congress drags its feet, and then the Executive Branch decides for public policy reasons X should occur, and they do it anyway. And there are often compelling public policy arguments. There were obvious benefits for the Dreamers as a result of DACA, and it’s hard to resist aiding those who are here precariously through no fault of their own. But there are downsides to the Executive Branch acting unilaterally. In this case, the DACA program remains in legal limbo, the issue of immigration has been further polarized, and a lasting resolution to our cumbersome and arcane immigration policy is ever more distant.

Broad changes in regulatory policy should be initiated by Congress

Without explicit congressional authority, FDA will be subjecting LDTs to overlapping and possibly duplicative regulation that in the end may fundamentally damage an ecosystem that provides a high-speed response to emergencies such as the COVID-19 pandemic. That is, of course, when regulatory agencies allow them to do so. FDA’s last encounter with LDT regulation was in spring 2020, when it asserted its authority to regulate COVID-related LDTs due to the declaration of the public health emergency, and as a result, impeded the ability of labs to develop tests that would have helped better manage the early days of the pandemic.

The public’s trust of FDA is already suffering. No one, regardless of their political affiliation, benefits from a system wherein FDA is a keystone institution and at the same time distrusted. And to those who would argue that administrative agencies must act in a world of near-constant Congressional gridlock and dysfunction, the last two pieces of major FDA legislation (the 21st Century Cures Act and the FDA Modernization Act 2.0) were passed with broad bipartisan support under divided governments. In the world we’ve built, only charlatans and snake-oil salesmen would benefit from an FDA that has damaged its own credibility with regulatory and enforcement activity that is not explicitly authorized via legislation.