only exercised its authority over diagnostic tests where a testing company
opted to produce a test kit for sale and use in laboratories around the
66 Companies responded to the incentives created by this scheme,
and estimates suggest that the majority of genetic tests are currently offered
68 However, the FDA has become concerned about increased risk
to patients from many of the newer LDTs, and we may see increased
regulation in this area going forward.
B. Regulatory Preference
Regulatory arbitrage is only one side of the story. Rather than design their
businesses to avoid FDA scrutiny, some companies have chosen to pursue
the opposite strategy, leveraging their regulatory sophistication to move fully
into the wearable medical device category.
70 These companies welcome
FDA regulation and view it as a means of both staving off competition in the
market and obtaining a stamp of approval that other companies will lack.
Each of these rationales deserves further explication.
First, the FDA is a strong gatekeeper for traditional medical
72 No pharmaceutical or risky medical device will come to
market without FDA clearance.
73 As such, companies running the FDA
gauntlet can expect that would-be competitors will also need to expend time
manufacturer who sells a diagnostic product to other labs.
66. 21 U.S. C. § 321(h) (2012) (The Federal Food, Drug, and Cosmetic Act gives the FDA
the authority to regulate any medical device, defined as “an instrument, apparatus, implement,
machine, contrivance, implant, in vitro reagent, or other similar or related article, including
any component, part, or accessory, which is . . . intended for use in the diagnosis of disease or
other conditions, or in the cure, mitigation, treatment or prevention of disease.”); SACGHS
REPORT ON GENE PATENTS, supra note 63, at 61.
67. PRIORITIES FOR PERSONALIZED MED., PRESIDEN T’S COUNSEL OF ADVISORS ON SCI. &
TECH., 38–39 (2008), http://web.archive.org/web/20090117060516/http:// www.ostp.gov/
68. SACGHS REPORT ON GENE PATENTS, supra note 63, at 61.
69. LDT DRAFT GUIDANCE, supra note 64, at 7; see also generally U.S. FOOD & DRUG
ADMIN., THE PUB. HEALTH EVIDENCE FOR OVERSIGHT OF LABORATORY DEVELOPED TESTS:
CASE STUDIES (Nov. 16, 2015), http://www.fda.gov/downloads/AboutFDA/
70. See Julie Steenhuysen, Beyond Fitbit: The Quest to Develop Medical-Grade
Wearables, REUTERS (Dec. 18, 2015), http://www.reuters.com/article/us-usa-health-
wearables-insight-idUSKBN0U10G120151218 (last visited Mar. 2, 2017).
71. Bradley Merrill Thompson, SHOULD MHEALTH COMPANIES WANT REGULATION 6–
7 (June 2014), http://www.ebglaw.com/content/uploads/2014/06/37764_mobilehn4b.pdf.
72. See generally U.S. FOOD & DRUG ADMIN., FDA’S ROLE IN ENSURING AMERICAN
PATIENTS HAVE ACCESS TO SAFE AND EFFECTIVE MEDICAL DEVICE TECHNOLOGY (2015),