National Maintenance Cost for Precision Diagnostics Under the Verifying Accurate Leading-Edge In Vitro Clinical Test Development (VALID) Act of 2020

PURPOSE: The proposed legislation Verifying Accurate and Leading-edge In vitro clinical test Development (VALID) clarifies the US Food and Drug Administration's authority to regulate laboratory-developed tests. Many stakeholders have pointed out that the lack of direct US Food and Drug Administration oversight has led to erroneous results that have serious patient consequences—in particular for patients with cancer. Technology Certification is a key provision proposed in VALID to navigate the balance between safety, patient access, and innovation; however, the maintenance cost of the proposed framework after implementation is unclear. METHODS: On the basis of 2019 retrospective data from a laboratory-developed test–based cancer diagnostics laboratory, we expressed laboratory complexity by the number and complexity of assays and in vitro diagnostic technologies. We estimated the national health care cost increase by modeling three stringencies of complying with the Act. We performed sensitivity analysis of our regulatory stringency model taking into account number of patients tested, materials, submission cost, and labor using extra cost per patient as the output. RESULTS: We estimate the national health care cost increase to range from $33M US dollars (USD) to $1,110M USD or $0.21 USD to $0.70 USD per employed person in the United States. Sensitivity analysis demonstrates that regulatory stringency is the primary driver of extra cost per patient. Cancer testing does not reflect all areas of in vitro diagnostics affected by VALID; nonetheless, concrete cost models are paramount in informing the ongoing legislative negotiations. CONCLUSION: Our findings show the critical importance of clarity in the legislative language to ensure balance between VALID's goals of assuring high-quality test performance and the burden to laboratories and overall health care cost.