National Maintenance Cost for Precision Diagnostics Under the Verifying Accurate Leading-Edge In Vitro Clinical Test...

Area of Science:

• In vitro diagnostics
• Health economics
• Regulatory science

Background:

• The Verifying Accurate and Leading-edge In vitro clinical test Development (VALID) Act aims to grant the US Food and Drug Administration (FDA) regulatory authority over laboratory-developed tests (LDTs).
• Lack of FDA oversight for LDTs has been linked to erroneous results, particularly impacting cancer diagnostics and patient safety.
• The proposed 'Technology Certification' provision in VALID seeks to balance safety, patient access, and innovation, but its post-implementation maintenance costs remain unclear.

Purpose of the Study:

• To estimate the potential national healthcare cost increase associated with implementing the VALID Act.
• To analyze the impact of varying regulatory stringencies on these costs.
• To inform ongoing legislative discussions regarding LDT regulation.

Main Methods:

• Utilized 2019 retrospective data from an LDT-based cancer diagnostics laboratory.
• Modeled healthcare cost increases under three different regulatory compliance stringencies.
• Conducted sensitivity analyses considering patient volume, materials, submission costs, and labor to determine per-patient costs.

Main Results:

• Estimated national healthcare cost increases ranging from $33 million to $1.11 billion USD.
• Calculated per-employed-person cost impact between $0.21 and $0.70 USD.
• Sensitivity analysis identified regulatory stringency as the primary driver of increased per-patient costs.

Conclusions:

• Clear legislative language is crucial for balancing VALID's objectives of ensuring high-quality test performance with the financial burden on laboratories and overall healthcare costs.
• While cancer testing is a key area, the findings have broader implications for all in vitro diagnostics affected by VALID.
• Developing concrete cost models is essential for informed policy-making in LDT regulation.