The U.S. Supreme Court's landmark ruling overturning the 'Chevron Doctrine' could open the door to more challenges against U.S. Food and Drug Administration (FDA) regulations, including the agency's controversial rule on laboratory-developed tests (LDTs).

In late June, the Supreme Court voted 6-3 to overturn the decades-old 'Chevron deference' doctrine. This means courts are no longer required to defer to federal agencies' interpretations of ambiguous statutes passed by Congress. The cases in question—Loper Bright Enterprises v. RaimondoandRelentless Inc. v. Department of Commerce—although involving fishery monitoring requirements, could have broad implications for all federal agencies.

"This is a far-reaching decision that will manifest itself in various ways, many of which are currently difficult to foresee," said Jeff Gibbs, a director at the Washington, D.C. law firm Hyman, Phelps & McNamara, in an interview with MedTech Dive.

Gibbs added that the ruling will affect the medical device industry, and ongoing litigation against the FDA's final rule on LDTs could serve as a 'kind of bellwether' for how the Chevron upheaval impacts the agency.

"This is a far-reaching decision that will manifest itself in various ways, many of which are currently difficult to foresee."

—Jeff Gibbs, Director, Hyman, Phelps & McNamara

An FDA spokesperson said the agency remains confident in the legal basis of its regulations, guidance, and decisions.

"We will continue to take actions guided by science, in accordance with federal law and our regulatory authority," the spokesperson wrote in an email.

Former FDA CommissionerScott Gottlieb posted on X (formerly Twitter)that the Supreme Court's ruling is 'significant for the FDA.' Gottlieb wrote that courts will still defer to the FDA on product review decisions, but certain areas could be immediately affected, including the agency'sfinal rule on LDTs。

LDTs as an 'early signal' of Chevron's impact

Early signals of how the Supreme Court's Chevron ruling will apply are expected to emerge in the LDT regulatory arena.

For decades, the FDA exercised enforcement discretion over LDTs, meaning it did not require most laboratory-developed tests to comply with medical device regulations, such as premarket review, device registration, labeling standards, and adverse event reporting.

That changed on May 6, when the FDAissued a final rulesignificantly expanding regulation of LDTs, bringing them under the same framework as other in vitro diagnostics. Despite strong opposition from the laboratory industry, the FDA moved forward with the plan because officials believed the risks associated with these increasingly complex and widely used tests had risen since the agency initially adopted its more permissive approach.

Critics of the new ruleaccused the agencyof exceeding its statutory authority in defining LDTs as medical devices. Less than a month after the final rule was issued, the American Clinical Laboratory Association (ACLA) filed a lawsuit in the U.S. District Court for the Eastern District of Texasagainst the FDAseeking to vacate the rule. ACLA argued that Congress never granted the FDA authority to regulate the provision of clinical laboratory testing services. ACLA members include Labcorp, Quest Diagnostics, and other test developers.

Legal experts say the Supreme Court's ruling overturning Chevron deference in the Loper and Relentless cases will affect how courts handle ACLA's challenge.

"I do expect Loper and Relentless to be a significant part of the current litigation," said Rebecca Wood, a partner at the Chicago law firm Sidley and former FDA chief counsel. "That doesn't mean the agency will necessarily lose, but it will certainly receive much less deference than it would have before these rulings."

Wood said that even with the Chevron precedent overturned, the FDA's positions on scientific, technical, and regulatory policy issues will still receive respect. However, the ruling could make it harder for the agency to prevail in similar court cases.

Whether testing companies and organizations will file further legal challenges to the LDT rule following the Supreme Court's action remains to be seen. "They may be more willing to let the case play out naturally in specific litigation," Wood said.

"That doesn't mean the agency will necessarily lose, but it will certainly receive much less deference than it would have before these rulings."

—Rebecca Wood, Partner, Sidley

Some believe the FDA will face more resistance in its overall decision-making, particularly regarding decisions that involve interpreting the scope of its authority under the Federal Food, Drug, and Cosmetic Act.

"Courts have made clear that agencies receive no deference on questions of statutory interpretation," said Greg Levine, a partner at the Boston law firm Ropes & Gray. Levine added that "industry players, manufacturers, and other stakeholders will be less hesitant to challenge the FDA."

For its part, the FDA will need to spend more time thinking about the basis for its decisions and articulating justifications that can withstand court challenges.

"This will inevitably slow down some of the FDA's policy-making or rule-issuing," Levine said.

Another recent Supreme Court ruling could also expose the FDA to more challenges—one that allows plaintiffs to sue within six years of being harmed by agency action, regardless of when that action occurred.

"In terms of the FDA's vulnerability to legal challenges, that's a pretty powerful combination," Levine said.

A machine moves among multiple rows of test tubes. On July 12, 2022, in Seattle, Washington, an automated system extracts DNA for Mpox virus testing at the UW Medicine Virology Laboratory. The lab is one of the few clinical reference laboratories in the U.S. offering laboratory-developed PCR testing to detect the virus.

Image credit: Karen Ducey via Getty Images

Implementation of the LDT rule

Meanwhile, test developers are transitioning to the new standards, especially those that have not previously manufactured medical devices and are therefore unaccustomed to complying with FDA's current good manufacturing practice regulations and other requirements.

"We are indeed seeing some clients who believe the rule applies to them and are preparing for it," said Wood of Sidley.

Sugganth Pillei, Medical Director of Global Oncology at San Diego-based gene sequencing company Illumina, said he sees laboratories doing their best to prepare for compliance.

"The overall sentiment is compliance, because it's a government requirement," Pillei said.

As a long-time laboratory instrument manufacturer, Illumina already meets quality management system requirements and is familiar with the relevant processes, Pillei said. He added that the company is preparing to leverage its experience as a resource for laboratory customers to help them navigate the changes brought by the FDA's new rule.

Will the VALID Act make a comeback?

For years, Congress has failed to pass a bill called the Verifying Accurate, Leading-edge IVCT Development Act (VALID Act), which aimed to clarify the regulatory framework for laboratory-developed tests by amending the Federal Food, Drug, and Cosmetic Act.

In the absence of legislation clarifying the FDA's role in regulating LDTs, the agency moved forward through the rulemaking process, citing the need to ensure the safety and effectiveness of tests ranging from newborn screening to cancer risk prediction. Mahnu Davar, a partner at the Washington, D.C. office of Arnold & Porter focusing on life sciences, said that despite Congress's lack of willingness to expand the agency's authority, after the overturning of Chevron deference, parties may recognize that a legislative solution would provide a clearer path for LDTs.

"Things like this could hopefully give parties the momentum to work together again and push Congress to act in this area," Davar said.

FDA may face more lawsuits after Chevron overturn

Although lawyers anticipate the FDA will face more challenges in light of the Supreme Court's recent rulings, the agency's authority over product approvals, clearances, and recalls is likely to remain solid.

Former U.S. Acting Attorney General Stuart Gerson expects 'more cases' to emerge between the two rulings. Gerson also anticipates more 'forum shopping' among courts, where parties choose specific jurisdictions to seek favorable rulings.

"We are entering a period of uncertainty," he said. "There will be more disputes, because... there are more avenues for litigation."

However, not all challenges to FDA policies are likely to succeed. Gerson said courts will rely on expert opinions from agencies and private parties on technical issues, and agencies are more likely to receive deference when they have maintained a consistent position over time.

Levine of Ropes & Gray said decisions involving FDA scientific expertise, such as device approvals or clearances, remain difficult to challenge in court. For similar reasons, he also does not believe the ruling will affect FDA oversight of recalls.

The FDA may face more resistance in regulating artificial intelligence and software as a medical device, as existing regulations have some ambiguity regarding how software should be classified.

Although the 21st Century Cures Act explicitly states thatsoftware functions can be medical devices, Levine said, "there are challenging questions at the margins about what software is a regulated device and what is not."

In 2022, the FDA issued afinal guidance on clinical decision support softwareclarifying when certain software functions should be regulated as medical devices. The guidance drewopposition from industry groups。

because it expanded the types of software regulated as medical devices, including tools that analyze patient information to detect potential strokes or sepsis, which were previously not subject to FDA regulation.

"This is so gray," said James Ravitz, a partner at the Chicago law firm McDermott Will & Emery. "This is exactly where someone will say, 'I'm not a medical device.'"

"Suing the U.S. government is not cheap," Ravitz said. "It requires a coalition to act together."

For medical device companies, lawyers expect the Supreme Court rulings to have minimal impact on day-to-day operations. Gibbs of Hyman Phelps said legal challenges may only arise on a 'very small percentage' of high-stakes issues, such as LDTs.