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360Dx – VALID, SALSA Still Unsettled as Legislative Deadline Approaches

360Dx – VALID, SALSA Still Unsettled as Legislative Deadline Approaches

NEW YORK – With Congress’s end-of-year legislative deadline closing in, the fates of two bills that could significantly impact the lab industry remain up in the air.

Lawmakers continue to wrangle over whether to include the Verifying Accurate Leading-edge IVCT Development (VALID) Act — which would give the US Food and Drug Administration authority over laboratory-developed tests (LDTs) under — and the Saving Access to Laboratory Service Act, or SALSA — which would reform the Protecting Access to Medicare Act (PAMA) — in the omnibus spending bill currently under negotiation.

The original deadline for passing a spending bill was Dec. 16, but Congress is expected to pass a continuing resolution Friday that will move that deadline to Dec. 23.

Lab stakeholders are generally opposed — or, at best, lukewarm — to VALID, which many see as subjecting them to a new layer of regulation and potentially undermining their ability to develop tests required for patient care, but the bill is supported by groups like The Pew Charitable Trusts and Friends of Cancer Research and advocates for the in vitro diagnostics industry. Additionally, the bill is a long-time priority for Sen. Richard Burr (R-North Carolina), who appears to be a major driver of its recent momentum, perhaps, some observers suggested, aiming to push it across the finish line before his retirement at the beginning of next year.

SALSA, meanwhile, is a major priority for labs and their advocacy groups, as it would both stop PAMA price cuts scheduled to go into effect at the start of 2023 and institute a statistical sampling-based approach to collecting lab test pricing data that proponents say would both alleviate the administrative burden on labs and ensure that price data is collected from a more representative slice of the industry. The bill has solid bipartisan support, with 26 co-sponsors in the House of Representatives and four in the Senate, but it requires roughly $6 billion in pay-fors, meaning legislators will need to make cuts in other areas for it to pass.

LDT regulation has long been an issue for labs, with many in the industry disputing FDA’s claims to have authority over such tests. VALID would resolve the issue by creating a risk-based framework for in vitro clinical tests (IVCTs) — which would include both IVDs and LDTs — with high-risk tests, such as novel assays, required to go through FDA premarket review and lower-risk tests allowed on the market after passing through technological certification. The law would grandfather in LDTs currently in clinical use.

Many expected the bill would pass as part of the larger FDA user fee package that was negotiated this year. When Congress instead passed a user fee bill that excluded VALID, along with a number of other FDA-related provisions, the end-of-year spending package became the likeliest vehicle for VALID’s passage.

There was little visible activity around VALID throughout the fall, but recent developments indicate both that its advocates are pushing for its passage and that they are scrambling to line up the needed votes.

Most notably, the bill was recently updated by Burr’s office to include a new carve-out that would exempt academic medical centers from the law. The move, which contradicts previous statements from Burr emphasizing that VALID should bring all diagnostics under a single, coherent regulatory framework, seems meant to address opposition from these centers, which one industry observer said have been among the most effective advocates against the bill.

Some representatives of academic medical centers have said the new exemption is too narrowly written to be meaningful, but this observer suggested that its inclusion may be aimed more at bringing reluctant lawmakers aboard than actually substantively addressing medical center concerns.

In any case, the observer said, inclusion of the carve-out indicates that VALID remains very much a live issue with Burr and other supportive lawmakers pushing hard for a deal.

Susan Van Meter, president of the American Clinical Laboratory Association, which has not endorsed VALID but has advocated for a legislative approach to LDT regulation, said that the organization was invited last week to comment on the updated version of the bill.

“It’s our understanding that discussions continue in a bipartisan, bicameral way,” she said.

That’s apparent outside Congress, as well, as advocacy groups have ramped up their activity around the bill. In recent weeks organizations including the Association for Molecular Pathology, the American Association for Clinical Chemistry, the National Independent Laboratory Association, and the American Society for Clinical Pathology have either issued letters to Congress opposing the bill or issued alerts calling on members to contact lawmakers and express their opposition. On the other side, organizations including Pew, AdvaMed, Friends of Cancer Research, and the American Cancer Society Cancer Action Network have sent letters urging Congress to pass the bill.

SALSA, meanwhile, is perhaps less contentious than VALID as it enjoys broad support within the lab industry and has seen relatively little opposition from other quarters, but the bill could have trouble passing due to the aforementioned pay-fors.

Additionally complicating matters is the fact that while, according to a preliminary score from the Congressional Budget Office, SALSA is projected to cost around $6 billion over ten years, simply delaying the scheduled PAMA cuts by a year — as Congress has done the previous three years — is projected to save $730 million according to the CBO analysis, which could further incentivize lawmakers to opt for the latter move.

“We are pushing very hard on SALSA,” Van Meter said. “We are really hopeful.”

Van Meter also linked SALSA to the potential passage of VALID, noting that if the latter bill passes it “will be a complicated and heavy lift for the clinical laboratory industry, and ensuring [through SALSA] that the resources are there to implement it is absolutely critical.”

Van Meter said she is “confident there will be relief for clinical laboratories” in the end-of-year package, be it through passage of SALSA or another temporary delay of the scheduled PAMA cuts.

This echoes comments by others in the industry. In November, for instance, David Nichols, president and founder of lab services consulting firm Nichols Management Group, told 360Dx that nearly all his clients expected Congress to address the looming cuts in some fashion.

“I don’t know of anyone who thinks we are going to get a 15 percent cut [as called for under PAMA] in January,” he said. “Stranger things have happened, but if I had to bet, I would say there is a 5 percent chance that we will get that haircut.”

“I don’t know if we’re going to be able to get SALSA into some legislation that passes this year,” said Matthew Schulze, director, Center for Public Policy at the ASCP.

“In which case, I would be happy to take the next best thing,” he said, noting that he and ASCP likewise expect another temporary delay if SALSA does not pass.