Public Meeting on In Vitro Diagnostic Multivariate Index Assays (IVDMIA) Transcript

UNITED STATES OF AMERICA
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FOOD AND DRUG ADMINISTRATION
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PUBLIC MEETING:
IN VITRO DIAGNOSTIC MULTIVARIATE
INDEX ASSAYS (IVDMIA)
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Thursday, February 8, 2007
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FDA PANEL PRESENT:
LARRY KESSLER, Sc.D.Moderator
ALBERTO GUTIERREZ, Ph.D.
STEVE GUTMAN, M.D.
LINDA KAHAN
DANIEL SCHULTZ, M.D.
JAMES WOODS

C O N T E N T S
PAGE
Welcome and Introduction, Dr. Steven Gutman 3
Overview and Scope of IVDMIA Guidance
Document, Dr. Courtney Harper 4
Public Presentations:
Dr. Paul Redensky 13
Dr. Thomas Grogan 21
Steven McPhail 25
Mary Steele Williams 29
Richard Samp 35
Thomas Tsakeris 44
Dr. William Clark 54
Dr. Carolyn Compton 57
Dr. Carolyn Popper 67
Alan Mertz 71
Michael Goldberg 79
Dr. Arthur Beaudet 85
Michael Ostrolenk 92
Mara Aspinall 98
Gail Javitt 105
Dr. Craig Shimasaki 114
Helen Schiff 123
David Levison 128
Sharon Terry 136
Stuart Hogarth 140
Jonathan Cohen 151
Sherry Salway Black 162
Robert Erwin 167
Elda Railey 175
Carol Berry 180
Elissa Passiment 185
Dr. Colette Saccomanno 191
Carolina Hinestrosa 199
Guido Brink 205
Dr. Judith Wilber 208
Carolyn Jones 216

Closing Remarks:

Dr. Daniel Schultz 226
Dr. Steve Gutman 230
Dr. Larry Kessler 232

P R O C E E D I N G S (8:02 a.m.)

DR. KESSLER: Good morning. It's 8:00 a.m., and we're going to start.

My name is Larry Kessler. I'm the Director of the Office of Science and Engineering Laboratories, and I'm moderating today's meeting.

I'm going to turn the podium over to Dr. Steven Gutman, Director of the Office of in Vitro Diagnostics, followed by Dr. Courtney Harper to make a presentation. then I'll provide the rules of the road for the day after those presentations.

Dr. Gutman.

DR. GUTMAN: Good morning. I would like to welcome you to the open meeting on the in vitro diagnostic multivariate index assay guidance.

FDA has a dual mission to protect public health through its regulatory programs while promoting public health by assuring timely access to cutting edge, new products. There's an inherent tension in this dual mission, which I think comes clearly into play as we consider issues related to today's topic.

Because of the complexity of the issues involved, FDA has extended the public comment period for the IVDMIA guidance for 90 days, until March 5th, and has arranged this opportunity for public discussion. FDA is clearly here to listen and to try to understand the concerns, issues, and ideas of all of our key stakeholders.

I want to thank the members of the FDA panel who will include throughout the course of the day Dan Schultz, our Center Director; Linda Kahan, our Center Deputy Director; Alberto Gutierrez, Deputy Office Director; and James Woods, Deputy Office Director, as well sa me.

I want to thank Dr. Altaie for coordinating this event, and Dr. Kessler for moderating, and of course, I want to thank you for coming to Washington and participating and being here.

Last and most important, I want to set a good example by concluding my remarks within the requisite five minutes so that you will all do the same.

Thanks.

DR. HARPER: Good morning. My name is Courtney Harper, and I am going to give a brief summary today on our guidance document entitled "In Vitro Diagnostic Multivariate Index Assays."

I'd like to give a little bit of background information to start off this day in which we're going to receive public comment on this document. We believe that there is a lot of confusion about the regulation of diagnostic tests that are developed by and used in a single laboratory. We believe that this confusion actually is derived in part from our approach to the regulation of laboratory develop tests that use analyte specific reagents and other commercially available FDA regulated components in these tests.

FDA actually stated in the preamble of the final ASR rule that clinical laboratories that develop in-house tests are acting as manufacturers of medical devices and are subject to FDA jurisdiction under the act.

When these laboratories who develop in-house tests actually use ASRs, there's often some confusion in that the ASR regulations themselves do not actually extend to the tests that are made from them. That is that laboratory developed diagnostic tests that use, for example, Class 1 exempt ASRs, another sort of Class 1 exempt FDA regulated products, such as general purpose reagents, the test themselves are not by extension necessarily Class 1 exempt tests, but as you all know, historically, FDA has generally exercised enforcement discretion in the regulation of laboratory developed tests.

However, we have noticed a growing category of tests that include elements that are not standard primary ingredients of laboratory developed tests, and we believe that these differences, such as complex, statistically driven data derived algorithms actually raise new safety and efficacy concerns.

Therefore, these types of tests, which we call IVDMIAs, we are basically stating that these do not fall within the scope of laboratory developed tests over which we have generally exercised enforcement discretion.

To communicate this policy and to actually define this class of tests, we created a new guidance document that was released in draft form in September of 2006 called "In Vitro Diagnostic Multivariate Index Assays." This document was intended to define a very narrow niche of devices, and these devices may be commercially distributed for use in laboratories across the United States or they may be developed in a single laboratory for use within that laboratory, and we believe that this narrow niche of laboratory developed and commercially distributed tests should be subject to active FDA regulation rather than enforcement discretion.

The guidance document contains three criteria that define IVDMIAs, and here I have abbreviated them. Basically an IVDMIA is a test that is developed using clinical data. Often these types of tests are developed from what's called a test set, a training set and a test set.

Basically they use a clinical data set and they use that data to derive an algorithm that basically can be used to discriminate between, for instance, two clinical parameters.

Then in unknown patient data, the test will employ the algorithm to integrate data from tests and/or demographic data to calculate a patient's specific result. This result is often called a classification, a score, a pattern, an index or something similar to that.

And this result cannot be interpreted by clinicians using their prior knowledge of medicine without information from the test developer about the performance of the assay.

Some potential examples of tests that might be IVDMIAs might be a microarray that predicts colon cancer recurrence based on an RNA expression pattern or perhaps an assay that integrates quantitative results from immunoassays to obtain a score that predicts a person's risk of developing Alzheimer's disease, or even a test that integrates demographic data, such as age, gender, et cetera, and the genotype of several genes to diagnose cardiovascular disease.

But we realize that after the publication of the guidance a lot of the questions that we have been hearing have been related to the clarification of this definition. So we'd like to point out that a device may actually use an algorithm and not be an IVDMIA. That's one common misconception.

Devices may also use software and not be IVDMIAs, and devices may be multivariate, measure multiple parameters at one time and not be an IVDMIA. For instance, some devices that are common laboratory developed tests that are not IVDMIAs would be things such as standard creatinine clearance determination or perhaps using the measurements of total cholesterol, HGL cholesterol, triglycerides, and a calculation to determine LDL concentration, or even assays that measure, for example, 25 snips in the CFTR gene to determine a patient's genotype. These things would all not be IVDMIAs.

But since there is a lot of confusion out there and the guidance comment period is still open, we would really love to see a comment from the public to help us clarify this definition. Give us concrete suggestions on how to make the definition of IVDMIAs clearer so that industry has clear guidance going forward.

The regulation of an IVDMIA will be just like the regulation of all other medical devices in that it will be regulated by the risk of its intended use. Therefore, there's actually opportunity for an IVDMIA to be any of the three classes, Class 1, Class 2 or Class 3.

And we believe that for good IVDMIAs, FDA regulation will not be a significant barrier to innovation in this area. FDA regulation will provide an independent assessment of the data and the labeling claims, but we're also grounded by a least burdensome mandate and that we ask questions about the science that are the least burdensome way to answer safety and effectiveness questions.

But all in all, we believe that good science is good science, and if tests such as IVDMIAs are being used on patients, we believe that the data probably already exists to show that they're safe and effective, and so we encourage companies to come and talk to us about that.

In fact, this week we actually cleared the first IVDMIA by de novo. This is the Agendia MammaPrint Test, and it is intended to predict the likelihood of breast cancer recurrence. This particular test is a laboratory developed test intended to be used at a single laboratory site.

This was very efficiently reviewed by FDA in that the total time of FDA's portion of the review actually took a total of less than 30 days, including classification.

This particular test was classified de novo and a Class 2, and it as such can actually now be used as a predicate device for IVDMIAs who had a similar intended use.

We intend to publish the special control guidance document for this new regulations fairly soon, and this guidance document will contain valuable information describing the type of information that should be submitted for these types of assays.

With that I'm going to close this introduction, and I'm going to remind everyone that this draft guidance document is open for comment until March 5th, and now we welcome your comments today.

Thank you.

DR. KESSLER: Thank you, Dr. Harper.

There is no truth to the rumor that Dr. Gutman personally cleared the IVDMIA this week just so he could be on TV.

I'm going to provide just a few logistics comments, and then we are going to being with the first speaker. I'll moderate today, and I'll be ably assisted by Dr. Susan Altaie, who is standing over there at the podium right now.

We have 31 speakers today, and we want to hear all of them in their entirety. We're going to insist that they take no longer than ten minutes, and to do so there's a little timer up there by the podium. It will start off green. At seven minutes it goes yellow. At nine minutes Dr. Altaie will hand the speaker a one-minute warning. At ten minutes it will go red, and at about ten and a half minutes I'll stand up, and at ten minutes and 45 seconds I'll walk over to the podium and push the button so that the speaker is turned off.

(Laughter.)

DR. KESSLER: Actually I'll do that.

(Laughter.)

DR. KESSLER: There are two reasons for that, and the biggest reason is to be fair and courteous to the other speakers. Thirty-one people have asked to speak and they have a right to be heard today, but just as important, if we stay on time, there will be a few minutes for open discussion by the rest of the audience who is here, and we would like to preserve some of that time for the open discussion. So that's very important.

If I leave the podium for a little while, Dr. Altaie will take over the moderating duties.

Okay. We're going to conclude promptly at 5:00 p.m. I'm hoping we'll have some closing remarks at the time. If we go over, we won't. We'll just walk out at five o'clock. Dr. Gutman unfortunately has to leave a little bit before then. So if we are a little bit earlier, that would be great as well.

I ask that you either turn off your cell phones or put them on vibrate so that they're not ringing while we are having -- ah, if you want, the agenda is outside at the desk where Anne Maria and Shirley Meeks are sitting.

Finally, just a comment from me, why we're here. As you heard from Dr. Gutman, we're here to listen. We're here not to have an active interchange today. That's not what the purpose of this meeting is. We're here to hear and listen to your comments.

And so I'll start off in a slightly unusual fashion with a brief passage from the Bible. It's from Isaiah 1:18. "Come now and let us reason together." And the whole phrase is, "'Come now and let us reason together,' sayeth the Lord. 'Though your sins be as scarlet, they shall be as white as snow. Though they be red like crimson, they shall be as wool.'"

There's a metaphor in there somewhere. I'm just not exactly sure where it is. Maybe you'll help me today.

We're a few minutes ahead of schedule, which is terrific, and I'm going to ask our first speaker, Paul Redensky of McDermott, Will & Emery to stand up and talk, and I will not od any fanfare with the introductions. Just a name and where they're coming from.

Thank you, Paul.

DR. REDENSKY: Good morning. My name is Paul Redensky. I'm an internist by training and a health law attorney with McDermott, Will & Emery, residing in their Miami office where it's much warmer.

and McDermott, Will & Emery represents a number of clinical laboratories who may be affected by the policies announced in the draft guidance if implemented, but this presentation is not intended to represent the policies or opinions of either our clients or the firm.

The draft guidance on in vitro diagnostic multivariate index assays raises a large number of issues. Included among them are questions about FDA's legal authority to regulate in this area, what is the most appropriate regulatory framework for laboratory developed tests, and what is the least burdensome pathway to approach that.

But those are not the topics that I'm going to discuss during the presentation today. What I'm going to focus on are what are the questions that laboratories really need to have answered if they are going to be required to comply with the policies announced in the draft guidance, and those include concerns about the definition of an IVDMIA. As Courtney outlined, there is a lot of confusion.

Second, identifying what elements are a medical device within the laboratory service.

Three, what are the pathways for premarket review and how we would understand what are likely pathways.

Four, the compliance with FDA quality system requirements and how that dovetails with CLIA. In particular, there are certain conflicts existing in the regulations between the two regulatory frameworks.

And then lastly, with respect to whenever a policy is finalized, what the time lines will be for coming into compliance.

First, with respect to the definition of an IVDMIA, laboratories considering the development of a novel assay have to have a clear and predictable set of rules to know whether or not a particular test will or will not be subject to FDA regulation. It is not a question of good science. Good science is there, as was in Courtney's slide, whether you go through a CLIA pathway or an FDA pathway.

But those who fund research on new tests will not find it acceptable to find out midway that FDA has issued a new guidance document or an expanded guidance document that will bring new tests under regulation.

So what is subject to FDA regulation and what is not subject to FDA regulation must be clear, and any changes in that have to have a fair amount of explanation as to why and timeliness in any change.

Second, and a key point is identifying what is the medical device within the laboratory service. If you're going to prepare a premarket application, if you're going to put down policies and procedures to comply with quality systems requirements, you have to be able to start by saying what is the device.

That is clear with an IVD that's a kit. You have something that's going out in interstate commerce. It is not at all clear with a laboratory developed test.

The proposed guidance mentions test system and says in a footnote that that term does not mean the same thing that those same two words mean in the CLIA regulations. That's very good to understand, but what does it mean and how does it differ from what CLIA is saying? It begs the question to simply say it's different.

Three, what are the pathways for premarket review? FDA regulation of medical devices is risk based, as everyone knows. The draft guidance indicates that IVDMIAs are likely to be classified as Class 2 or Class 3 and talks about prognostic claims most likely being Class 2 and predictive claims being Class 3.

One of the difficulties is that it's not clear what is the difference between a prognostic claim and a predictive claim. Generally, you will have a claim that is talking about the likelihood of some outcome, survival, disease free survival, cancer recurrence, a cardiac event. That's going to be on some therapy.

Is that a prognostic claim or is that a predictive claim with respect to the particular therapy? These things are key because if something is going to require a PMA versus a 510(k), those are important decisions that are there in developing the initial thoughts about the service and also for the funders to know what the time line is likely to be and what the amount of capital is likely to be required.

Four, compliance with the QSRs. CLIA has substantial quality system requirements that the laboratories already must comply with. In addition, there are state law requirements that are imposed as well, and for laboratories that accept specimens throughout the United States, New York State requires that laboratories be regulated by New York State and has proof up requirements prior to using tests in clinical practice.

How those dovetail to requirements under the quality system requirements is something that needs to be explained with particularity. It is not something where it is sufficient to say we're not going to go after folks the day that we begin enforcement.

Laboratories need to understand what they have to do, and again, this dovetails to what the definition is of what is the product, what is the device that the quality system requirements were looking at having processes in place so that you can be assured that the device is as it was intended to be and how that differs from laboratory quality control, which is really focused on accuracy, reliability of a process, not a widget.

The fifth is conflicts between FDA and CLIA requirements. FDA limits what manufacturers can say promotionally to those things that are four square within labeling. The new publication comes out that is not four square within labeling, and you can only send that out in response to an unsolicited request.

CLIA, by contrast, puts an affirmative obligation on laboratories to update information so that the treating physicians can interpret the laboratory test. So if a new publication comes out, CLIA would require that you include that information proactively to help doctors understand your test report.

These two systems are in conflict, or at least I wouldn't know how to tell someone how to comply with the two systems without further policy instruction on that.

Sixth, a transition. These are new requirements for the laboratories. Make no mistake about that. This is a substantial new regulatory burden with laboratories. They have to propose policies go forward as drafted. A laboratory is going to have to look through its portfolio and determine what is an IVDMIA, what are the elements within the IVDMIA that are a medical device, what premarket pathway they're going to have to go through, how they can set up quality system requirements to meet FDA. All of these things need to be addressed.

It will take time. There's a lot of questions inherent in the draft guidance. Those questions need to be answered so that everyone knows what the rules will be, and folks need to have time after a final policy document comes out in order to be able to come into compliance. It cannot happen the day that the final policy comes out because no one knows what FDA is thinking.

I'm not saying that in a negative way. Everyone is learning and trying to understand this space. We would recommend a period of at least two years for coming into compliance for those products that would be Class 2 and four years for those that would require a PMA.

That's not to say that there's no enforcement mechanisms that are out there. If FDA is concerned today about any laboratory test, CLIA can shut a laboratory down tomorrow or tell them that they have to cease and desist performing a particular test, and the Federal Trade Commission can challenge promotional claims that are deceptive.

So there are tools today that can be in place if there are concerns from a public health perspective until a final regulatory policy is set forth and time to come into compliance is completed.

Lastly, FDA has not really articulated what are the public health concerns it has about IVDMIAs, why putting something together in an equation is something that concerns the agency other than suggesting that it's new.

There has been some discussion about these are black boxes, but many of these are things that have been published. The algorithms have been published. They've been independently validated, and we don't see that that is sufficient.

We would urge the FDA to explain the findings that have led it to lead to regulation here, that the agency provide formal notice and comment rulemaking, not on every detail, but on the fundamental issues of why it's extending regulation, what the types of services that it plans to regulate, and at least top line on the key issues that I raised in the presentation.

Thank you very much, and we definitely appreciate the opportunity to speak here this morning.

DR. KESSLER: Thank you, Dr. Redensky. We appreciate it.

Dr. Thomas Grogan from Ventana Medical Systems. He has some slides for us as well.

DR. GROGAN: My presentation emphasizes the medical practitioner's perspective. My objectives are to demonstrate the medical utility of multivariate analyses and multiplexing and to suggest the kind of draft guidance would impede medical practice.

My career has been in patient care and in cancer biomarker development, as shown.

Next.

I will use two medical examples to make my points.

Next.

EGFR and HOA.

Next.

EGFR is a trans-membrane molecule often associated with cancer and, importantly, the object of targeted anti-EGFR therapy. There exists today a PMA approved single analyte diagnostic. The use of this assay is limited by the observation that EGFR negative tumors may respond to anti-EGFR therapy.

This leads to the NCCN to discount EGFR testing. This lack of single analyte EGFR testing effectiveness is not surprising, given our deeper knowledge of EGFR molecular biology shown here.

To decipher this complexity, we have used multiplexing with QDots directed at EGFR related molecules. These non-bleaching fluorescent QDots allow ready quantitation and give us ratiometric mathematical findings. The draft guidance suggests this type of mathematical result may not be decipherable by a medical practitioner, but I contend that if ratiometric results are put in the context of systems biology as shown here, then the medical meaning is readily interpretable. It is medically relevant to discern that an anti-EGFR therapy has decreased downstream signaling and affected proliferation and apoptosis.

The second example is HLA expression in lymphoma. Here I cite my ongoing six-year experience as an investigator on the NCI DNA array project where 13,000 ESTs were reduced to five prognostic signatures. One of these signatures shown here calls out the medical relevance or high risk of low tumor HLA expression. As shown in the left, there is a surprising mathematical relationship between HLA and the risk of death. As the HLA level drops, arithmetically the risk rises logarithmically.

This emphasizes the importance of analyte quantitation. To extend our knowledge of the HLA risk equation, we again went to QDots to multiplex the HLA associated molecules. This illustrates the complexity of HLA transcription which necessitates multiplexing.

Utilizing multiplexing, we discovered as shown that the change of the HLA family members is coordinate. Hence, the description as a signature. Again, I contend that the multiplex signature is medically more useful than the single analyte.

To further illustrate my point that signatures trump single analytes, in the next slide I'll show you text in which every word is misspelled, but you will discern the meaning by context and by signature.

Could you go back to that one? Just make sure you can read every word.

Notice the word "total mess."

Okay. Lastly, the patient's perspective. This patient report indicates the current state of anatomic pathology. Our reports now go well beyond the diagnosis found on the top line to include items found in the middle on prognosis and targets of therapy.

In 2007, the patients asked for much more than a diagnosis. On the left are the dozen questions they want the answer to.

Next.

By demand, we are going beyond diagnosis to treatment questions and beyond single analytes to multiplexing.

To conclude, from the lab director's perspective, we need as soon as possible the next generation of tests, and we need to get there probably by successive approximation.

From the patient's perspective, we need now to have their questions answered as soon as possible. So my recommendations are that we not apply single analyte logic to multiplexing. We allow new assays informed by research. We let the practitioners sort it out. We don't impede the practice of medicine. We keep the current status for IVDMIAs and ASRs until we find a flexible regulatory alternative.

Thank you.

DR. KESSLER: Thank you, Dr. Grogan.

The next speaker is Steven McPhail from Expression Analysis.

MR. McPHAIL: Thank you.

My name is Steve McPhail from Expression Analysis, a genomic service provider in Durham, North Carolina.

What I'd like to cover this morning are the current state of genetic testing, draft guidance issues as I see them, and potential unintended consequences, a possible alternative approach, and I'd like to close with what I consider to be some of the challenges to widespread genetic testing.

The application of genetic testing to date has typically been associated with rare genetic disorders, but is currently moving into certain therapeutic areas where disease etiology is not well understood, and these are all complex diseases.

So the majority of diagnostics coming out of this disease I contend will use multiple analytes. There are over 1,000 genetic tests today offered by reference laboratories. There are a few FDA cleared and approved tests, and many, many laboratory developed tests.

Issues with genetic testing today are perceived lack of oversight. Now, it depends on who you talk to. If you talk to a CLIA laboratory, they'll tell you that there's plenty of oversight. There's oversight from a federal level. There's oversight from a state level, and from voluntary organizations, such as the College of American Pathologists.

However, there is a lack of transparency associated with this testing. Does a patient and a physician really know what they're getting?

There's also a lack of consistency associated with this testing. If I were to order a cystic fibrosis test in California and order the same test in Texas, would I necessarily be getting the same results? Not necessarily, depending upon the number of variants that are actually tested.

There is also an issue with validation standards. As we're aware, CLIA laboratories are required to form analytic validation of assays that they provide, which include performance measures of sensitivity, specificity, accuracy, and reproducibility versus clinical validation that may be required in a PMA format by the Food and Drug Administration.

There's also potential problems with data interpretation and, therefore, I do believe that some level of enhanced regulation is necessary to insure high quality genetic testing.

But I would make suggestions for improvements in future guidance. These suggestions include an increase in the specificity of the guidance, and I think we've heard that already this morning. The way that I read the guidance, I believe that many, many genetic tests could fall under IVDMIA regulations.

Also, it's very important to reconcile, I believe, the laboratory quality systems versus the FDA quality system. If we force laboratories to move into the FDA quality system requirements, that is a significant cost and regulatory burden for laboratories and cannot be implemented overnight.

I think we also need to address a path for test improvements. Genomic information is coming at us very quickly. If new variants are found, for instance, for cystic fibrosis, we should be able to implement those quickly without having to go through potentially another PMA submission again.

We also need to define a mechanism to assess risk versus technology, and when I look at the IVDMIA guidance, what I see is a technology driven guidance more so than a risk driven guidance.

So some potential unintended consequences of the guidance, I believe, are reduced patient access potentially, potential interference in physician practice of medicine, a potential barrier to innovation.

When we look at many of the companies that are developing these tests, they are small companies, small laboratories. They need access to capital to be able to innovate, and this may have potential negative unintended consequences on their access to capital.

So here's a potential alternative to the guidance, and that is a laboratory developed test registry. I believe that the laboratory developed test registry could include analytical performance characteristics, clinical performance characteristics, both in terms of papers that have been published, as well as laboratory experience. It could include information on adverse events, volume, controls, et cetera.

I believe that this type of a registry would provide a path to additional regulation where necessary. It would allow for regulation based on risk versus technology, and it would provide transparency for regulatory agencies, patients and physicians.

I think I'd like to close with this. I know that the FDA is certainly very excited about personalized medicine and the use of pharmacogenomics in personalized medicine. There are a lot of challenges associated with bringing this technology to use, to widespread market use. I've listed just some of them here, and I think that it's prudent for the agency and for the legislature to focus on how do we reward innovation associated with these types of companies that are struggling to bring this testing to market.

Thank you very much.

DR. KESSLER: Thank you, Mr. McPhail.

Mary Steele Williams from the Association for Molecular Pathology is next.

MS. WILLIAMS: Good morning. My name is Mary Williams. Thank you for the opportunity to speak with you today.

AMP is an international, not for profit, educational society representing over 1,400 physicians, doctoral scientists and medical technologists who perform molecular diagnostic testing. For the last several years, AMP has provided national leadership to advance safe and effective practice and education for molecular diagnostic testing in the health care industry.

AMP is dedicated to the advancement, practice and science of clinical molecular laboratory medicine and translational research based on the applications of genomics and proteomics. Our goal is to represent all members, regardless of the setting in which they practice, because they are united in the end intent to provide high quality, relevant information for the purpose of directing individual and patient community health management.

We acknowledge, however, that different perspectives may emerge from those widely diverse settings. In those instances our primarily responsibility is to comment from the standpoint of molecular testing laboratories and the patients they serve.

Next.

AMP supports the development of tests and test systems for in vitro diagnostic use and encourages industry to pursue FDA clearance and approval where current regulations require. We would like to comment on the recently issued draft guidance, "In Vitro Diagnostic Multivariate Index Assays," or IVDMIA.

The FDA defines IVDMIAs as test systems that employ data derived in part from one or more in vitro assays and an algorithm that usually, but not necessarily, runs on software to generate a result that diagnoses a disease or condition or is used in the cure, mitigation, treatment, or prevention of disease.

In this guidance, FDA asserts that IVDMIAs are not within the ordinary expertise and ability of laboratories and, therefore, raise safety and effectiveness concerns. The FDA then advises that these test systems meet pre and post market review requirements for Class 2 and 3 devices.

AMP questions the agency's interest in regulating medical algorithms, particularly those that are disclosed by the manufacturer and are transparent to both the laboratory and the clinician.

The use of an interpretive algorithm is routine in medical practice and should not in and of itself raise specific concerns with FDA. Algorithms using patient information, such as tumor size, extent of malignancy and node involvement, have long been used to determine the recurrence risk and to classified certain cancer. Many laboratory tests cannot be properly interpreted unless patient data is collected.

One example is interpreting a glucose reading without knowing when the patient last ate. Many algorithms are published with peer review and are available for professional scrutiny.

Next.

As our members routinely design and perform many molecular tests in oncology, hematology, human genetics and infectious disease, we are particularly concerned about the broad language in the document. We feel it could severely reduce the availability of certain laboratory developed testing services and compromise the quality of molecular test development by laboratories under CLIA, many of which have become the diagnostic or prognostic standard of care.

Reduced availability of testing services would limit a health care provider's ability to manage patient care and ultimately limit patient access to new or improved molecular tests.

For example, broad interpretation could classify maternal serum screening or Bayesian analysis for cystic fibrosis carrier screening, both of which use well defined risk calculations as IVDMIAs. Laboratories offering these tests would not likely be in a position to meet FDA requirements as manufacturers.

The FDA identifies IVDMIAs not as laboratory developed tests, but as test systems that combine data derived from the laboratory assay with an algorithm or calculation to reach a patient specific result.

This definition is not found in the federal Food, Drug, and Cosmetic Act, nor in any regulation from the FDA, and was not developed through notice and comment rulemaking. With this proposed definition, the laboratory is the manufacturer of a test system and is subject to FDA regulation as a medical device. We are unaware of such a definition in any FDA regulation.

This area of laboratory operation currently is regulated by the Centers for Medicare and Medicaid services under the clinical laboratory improvement amendments of 1988.

AMP respectfully requests that FDA provide the scientific rationale for their new concerns over the safety and effectiveness of laboratory developed tests, as well as the justification for their jurisdiction over medical testing algorithms.

Next.

FDA convene a classification panel, for example, as was done in the reclassification of immunohistochemistry tests, so that criteria for determining which tests will be subject to FDA regulation will be transparent to laboratories developing such tests.

Next.

FDA clearly and specifically defined the scope of IVDMIAs that it intends to regulate.

Next.

FDA insure that any new guidance does not insert FDA into the purview of CMS regulation of laboratories under CLIA.

FDA apply restrictions requiring PMA or 510(k) clearance of an IVDMIA only when the interpretive algorithm remains undisclosed by the manufacturer.

FDA clarify the scope of its regulations that renders laboratories responsible for meeting criteria as medical device manufacturers, that is, premarket review only or all general controls, registration and listing, quality systems, labeling, medical device reporting.

Thank you for the opportunity to comment on this important document. AMP will provide a formal, written comment to the docket and remains available to work with FDA to develop clear, reasonable guidelines consistent with FDA's mission to promote and protect public health in the development of molecular pathology tests, balancing safety concerns with access and availability of exciting new medical breakthroughs.

DR. KESSLER: Thank you very much.

We will now hear from Richard Samp from the Washington Legal Foundation.

MR. SAMP: Good morning. My name is Richard Samp. I am Chief Counsel of the Washington Legal Foundation, a public interest law firm and policy center located here in Washington.

WLF devotes a substantial portion of its resources to improving health care delivery in this country. We believe that that goal can be best achieved if government regulators devote their energy to addressing proven hazards to public health while at the same time allowing medical professionals the freedom and flexibility to arrive at innovative solutions to our ever changing health care needs.

WLF has no direct financial stake in the issues being addressed at today's public meeting. We have no connection with any of the laboratories whose tests FDA is proposing to regulate. If FDA has received financial support from any laboratory, it is negligible.

I am testifying today because I am convinced that any FDA effort to impose significant regulation on laboratory developed test will be a setback for public health. My background is as a lawyer, not a medical professional. So I can speak with somewhat more confidence when I tell you my other reason for testifying today.

I am convinced that FDA's proposed regulatory effort is contrary to law.

For those reasons, WLF filed the citizen petition with FDA on September 28th, 2006. The citizen petition requests that FDA determine that it will not attempt to regulate as medical devices any assays developed by clinical laboratory strictly for their in-house use.

The petition was prepared independently of FDA's September 7th, 2006 draft guidance and raises several legal issues not addressed in the draft guidance. The citizen petition docket is open, and we encourage those with any interest in the issues addressed today to file comments in that docket.

Because I do not claim expertise as a medical professional, I've only briefly described why I view laboratory developed test, or LDTs, as so important, and why FDA's proposed regulation could significantly hinder effective development and use of LDTs.

Well, over 1,000 different tests are being used every day by clinicians to better inform diagnostic and therapeutic decisions. When new infectious agents first appear and a new diagnostic test is urgently needed for patient care, it is generally an LDT, not an FDA approved or cleared device that first meets that medical need.

For patients with cancer, LDTs have entered wide clinical use in helping to manage their care. Moreover, while inaccurate tests have the potential to cause health care problems, there is no evidence to suggest that currently available LDTs are inaccurate and clinical labs are already subject to regulation by CMS under CLIA.

If the system is not broken, it is difficult to understand why FDA feels such a compelling need to try to fix it.

Moreover, it is plain to anyone with an understanding of clinical labs that requiring them to go through FDA's premarket review process and comply with FDA's device regulatory rules would have a crippling effect on their ability to continue to provide access to LDTs. Laboratories are not operated as medical device manufacturers. Although they must comply with CLIA, they do not maintain the procedures and documents for compliance with FDA's quality system regulation, its QSR.

Nonetheless, FDA is now asserting that labs are subject both to the QSR and to the adverse event reporting regulation. Labs are being told that they will have to figure out for themselves how procedures developed for device manufacturers would apply to them. Yet I don't know anyone who knows how one would go about retrospectively developing design history files as required by the QSR.

Food and drug law attorneys are unanimous in concluding that these and other medical device regulations will preclude at least some tests from being offered at all. Labs constantly innovate and improve their tests. The need to comply with FDA regs. would prevent many of these changes from being made and severely inhibit the flexibility of laboratories and their ability to meet clinicians' needs, e.g., identifying rapidly changing pathogens, such as SARS or HIV.

Moreover, if, as is likely, FDA regulation requires many existing tests to be labeled investigational, patients' ability to obtain reimbursement for these often expensive tests will be thrown into doubt. Many insurers balk at paying for procedures deemed investigational.

I recognize that FDA may be reluctant to heed medical advice from the Washington Legal Foundation, but I ask you to heed our legal advice. The regulation of LDTs proposed by the draft guidance is contrary to law. I have three grounds for that conclusion, all spelled out in more detail in our citizen petition.

First, Congress has spoken, and it has allocated the requisite regulatory authority to CMS under CLIA, not to the FDA under the Medical Device Amendments of 1976.

Second, the Secretary of HHS confirmed in 1992-93 that the regulatory authority lies with CMS.

Third, even if FDA does possess authority to begin to regulate LDTs as medical devices, it is going about doing so in a manner that violates the Administrative Procedure Act, the APA. The only congressional legislation directed specifically at laboratories is CLIA, a 1988 statute whose enforcement responsibilities have been assigned to CMS.

CLIA establishes quality standards for virtually all clinical laboratory testing. Clinical labs that offer LDTs fit to a tee the type of facility that Congress said would be regulated under CLIA, and I quote: "a facility for the biological, microbiological, pathological or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of or the assessment of the health of human beings."

In contrast, the 1976 medical device amendments under which FDA claims regulatory authority does not have anything at all to say about laboratories or lab testing, nor is there anything in the MDA's legislative history to suggest that Congress intended to grant FDA authority to regulate labs, nor is there any evidence that in the years immediately following adoption of the MDA, FDA understood the law as granting such authority.

It was not until the 1990s that FDA first began to suggest that it might possess regulatory authorities over labs offering LDTs, and it is only in the past year that FDA has sought to exercise that alleged authority.

Under these circumstances, it is simply not credible to suggest that Congress did, indeed, intend in 1976 to grant FDA its newly discovered regulatory authority. It is theoretically possible, of course, that Congress in adopting the MDA and CLIA intended to create parallel regulatory schemes each with independent authority over lab testing.

But such an intent is highly improbable when one considers that the MDA said nothing about lab tests, while 12 years later CLIA specifically mandated regulation of lab tests without once suggesting that a preexisting statute provided for a more elaborate set of regulations.

In the absence of authority from Congress, FDA's recent attempts to regulate lab tests are improper and should cease.

Second, even if the regulatory language were deemed ambiguous, subsequent action by the Secretary of HHS removes any doubt that FDA lacks authority to act. It is the Secretary, not any of his subordinate agencies, that possesses the authority through lawful rule making to decide where the authority to regulate clinical labs should lie.

The Secretary made that decision in 1992-93 when he approved comprehensive CLIA regulations that assigned regulatory authority to CMS. In February 1992, final regulations took effect that set forth, and I quote, all requirements applicable to clinical laboratories engaged in testing and interstate commerce.

The final regulation adopted in January 1993 established, and again I quote, uniform requirements to insure the quality of lab services. CLIA regulations underwent extensive revision in 2003, and again there was no acknowledgement of any FDA rule in regulating LDTs.

The Secretary's approval of those regulations is wholly inconsistent with FDA's argument that it possesses the authority to impose a regulatory regime that would void huge parts of the existing CLIA rules.

Third, even if FDA really did possess the regulatory authority it now asserts, it is attempting to assert that authority in a manner that violates the APA. Although FDA has quietly said for about a decade that it possesses regulatory authority, it never attempted to exercise that authority until the past year. It is not the character of LDTs that has changed. It is FDA policy that has changed.

Before a federal agency may change policies in a manner that materially changes established benefits and burdens, it must comply with formal APA notice and comment procedures.

Let me skip ahead and finally say a few brief words about First Amendment concerns that I have with FDA's assertion of regulatory authority. When a lab professional provides a physician with test results, he or she is communicating medical information that FDA has no reason to believe is untruthful.

Even if FDA asserts that such communication should be deemed commercial speech, it is still entitled to a substantial degree of First Amendment protection. Before FDA gets into the business of regulating such speech, it ought to think long and hard about whether its regulatory objectives are sufficiently compelling to justify government impairment of free speech rights in this manner.

Thank you for the opportunity to share my views with you today.

DR. KESSLER: Thank you.

Next we'll hear from Thomas Tsakeris, Coalition for 21st Century Medicine.

MR. TSAKERIS: Good morning. My name is Tom Tsakeris, and I'm speaking today on behalf of the Coalition for 21st Century Medicine.

I am not being compensated by the coalition or by any of its member companies.

Many of my comments this morning are in parallel to many of the earlier speakers. However, I think given the impact that the IVDMIA guidance document has on the practice of laboratory medicine, I think whatever points have been made previously about any adverse unintended consequences are certainly worth repeating.

The coalition represents innovative diagnostic companies, clinical laboratories, researchers, physicians, venture capitalists, and patient advocacy groups who believe in a common mission to develop and offer specialized diagnostic testing to improve the quality of health care for patients. Innovation in quality patient care are the key objectives for the 21st century medicine.

The timely development and availability of high quality, innovative diagnostic tests and services meet today's needs for personalized medicine and, therefore, public health.

The Coalition is concerned that in its current form, the draft guidance document will have adverse unintended consequences. In my discussion today, I will identify some of these unintended consequences and stress the need to obtain better clarity from FDA on the scope of its intent to regulate these types of tests and also to present alternatives to the draft guidance.

The coalition has identifies several serious adverse consequences.

Number one, active FDA regulation of IVDMIAs will impede the innovation of new tests and services, while precluding improvements from being made to existing tests and service.

Two, implementation of the guidance will impose undue regulatory burden on clinical labs by adding new regulatory requirements that conflict with existing CLIA requirements.

And, three, implementing the guidance will preclude tests and services from being reimbursed by health plans, thereby creating disincentives for future research investment in new diagnostic technologies.

I will elaborate on these points.

In its current form, the draft guidance will significantly affect ability and incentives for clinical labs to develop new diagnostic tests and services that build on current medical knowledge. Innovation and diagnostic testing traditionally has been a key attribute of clinical labs.

The draft guidance extends the scope of FDA regulation to certain clinical laboratory tests referred to by FDA as IVDMIAs on the premise that IVDMIA test results -- and I'm quoting directly from the guidance -- cannot be interpreted by well trained health care practitioner using prior knowledge of medicine without information from the test developer regarding its clinical performance and effectiveness.

On the contrary, the coalition believes FDA should be clear that the primary incentive for clinical labs to develop technologically new diagnostic testing capability derives from the demand from physicians and other health care providers to obtain new innovative testing services commensurate with their advancing knowledge of the potential usefulness of such testing to laboratory medicine and not vice versa.

In short, the coalition believes that the clinical labs which offer new tests, IVDMIAs or otherwise, are typically serving informed physicians who are sufficient knowledgeable about a given test technology and its potential clinical utility to seek its availability.

The coalition believes that subjecting clinical labs to added burden of complying with FDA regulatory requirements will result in physicians and patients experiencing either unnecessary delay or doing without access to important tests in rapidly advancing fields, such as genetics, oncology, and infectious disease.

As written, the draft guidance introduces additional unnecessary regulatory burdens on an already highly regulated clinical laboratories. Clinical labs are currently regulated by CMS under CLIA. This has been mentioned before. I won't go through all of the requirements that laboratories are subject to. You're well familiar with all of them.

However, under the draft guidance, laboratory tests and services that are already subject to CLIA's quality standards would now also be subject to FDA's QSR requirements which are tailored for traditional medical device manufacturing operations.

For laboratories to develop systems that comply with FDA's QSR requirements while continuing to comply with CLIA could take years, would be prohibitively costly, and will likely drive up health care costs.

In short, what would result for both existing and prospective clinical labs is, at best an untenable business model.

If the draft guidance is implemented immediately, existing products regulated as IVDMIAs will become illegal unless they obtain FDA clearance or approval. Labs will not be able to complete the review process for a long period of time.

Offering tests that are deemed illegal raises serious risks to labor licensure and accreditation and exposes labs to unnecessary liability risks.

Of even greater concern, labs may also be prevented from being reimbursed by federal, state, and private insurance coverage. The lack of coverage, along with other increased regulatory obligations will hinder the ability of labs to maintain current operations, as well as attract adequate financial capital to support research and development of new tests and technologies.

The coalition is also concerned by the ambiguities that exist under the current draft guidance. As has been mentioned previously, the definition of the IVDMIA itself is ambiguous and introduces new terms that are not included in FDA's existing regulations. We heard from Dr. Harper. You're asking yourselves for clarification on what the definition should be. Interesting.

This ambiguity creates uncertainty as to which tests are IVDMIAs subject to regulation by FDA. As written, the definition could be interpreted to include a broad array of testing, including standard medical treatment algorithms.

The coalition has identified scores of algorithms that are not in use and many more are being published each month. FDA could be faced with regulating hundreds of IVDMIAs. This will require a tremendous amount of agency resources, diverting personnel from reviewing new marketing applications for manufacturers of assays.

The draft guidance sets forth a major change in laboratory regulation and establishes a new regulatory regime. Yet remarkably the document is only five pages long. In those five pages, there is very little detail about the proposed new regulatory path or any mention of FDA enforcement policy.

In short, labs need far more clarity than has been provided by the draft guidance.

We believe FDA should adopt alternative paths. The coalition has developed several possible alternatives to the IVDMIA guidance. For purpose of this meeting, we'll focus on four important alternatives.

First, FDA should not pursue regulation of IVDMIAs by way of the draft guidance route. Rather, the agency should propose new regulations that are detailed, clear, predictable and establish the least burdensome regulatory controls in light of the actual risks and benefits of IVDMIA testing.

FDA's exercise of authority over laboratory developed tests represents a substantial change in the regulation of labs and needs to be implemented through new regulations, not a guidance document. This will insure the maximum public participation and scrutiny.

Given the precedent that is being set, rulemaking is imperative.

Second, FDA should base any level of regulation of IVDMIAs on risk. The level of risk is higher for IVDMIAs that are predictive and that result in a binary therapy recommendation to treat or not to treat based solely on the IVDMIA outcome. Other IVDMIAs, whether predictive or prognostic, advisory or adjunctive, that do not give binary therapy recommendations are lower risk. These types of IVDMIAs should not be held to the same regulatory standards.

A risk based approach would lead to a more appropriate allocation of regulatory effort by both labs and FDA.

Third, there needs to be a transition period to assure labs with IVDMIAs to adjust from the current CLIA regulatory path to a CLIA plus FDA regulatory path. The lack of a transition period could severely disrupt the availability of tests. If FDA imposed the device requirements on labs without any transition period, it could halt the use of development of tests, as well as improvements to existing tests.

If based on risk an IVDMIA is subject to FDA regulation, a lab should have between two and four years to submit an application to FDA. During the transition period, FDA should not require labs labeled with IVDMIAs as investigational and IDE should not be required.

Note that in 1998 FDA released its draft compliance policy guidance titled "Commercialization of IBDs labeled for research use only and investigational use only," which permitted a transition period for subject IBD companies to come into compliance with the agency's premarket submission requirements. A similar transition period should also be applicable to IVDMIAs.

Fourth, FDA could institute a disclosure program. This registry could provide reliable information about the strengths and particular limitations of IVDMIAs and allow FDA to understand the scope of these tests. The information available through the registry could help FDA create a more specific definition of IVDMIA and could help show how these tests should be regulated. This would facilitate FDA's regulatory approach.

In conclusion, we believe that the draft guidance, if implemented in its current form, important medical tests may become unavailable, be frozen at their current technological state, become more expensive, or potentially lose insurance coverage. None of these outcomes benefit patients.

Labs have been a significant source of innovation for decades. Laboratory developed tests, including tests and services that would be considered IVDMIAs under the guidance, are an essential part of public health and are the future of personalized medicine.

To preserve the future, FDA should go through formal rulemaking procedures and carefully consider the alternatives we have presented.

Again, on behalf of the Coalition for 21st Century Medicine, I thank you.

DR. KESSLER: Thank you.

Before we hear from our next speaker, a brief logistics comment. I want to thank all of the speakers for not only their thoughtful and articulate comments this morning, but for staying on time. After the next two speakers, we'll have approximately a half an hour to open up the mics to the floor. So I'm giving you a chance to think about the comments and questions you have.

We will concentrate on your comments on the previous speakers or other comments we want to make. We're not going to be handling questions from the front of the room here, but the mics will be open for quite a little while. If we get a chance, we may even advance a couple of the speakers from after the break into the morning session so that we can advance the whole day.

Next we're going to hear from Dr. William Clark from the American Association of Clinical Chemistry.

Dr. Clark.

DR. CLARK: Good morning. My name is Bill Clark, and I'm a clinical laboratory director at Johns Hopkins Hospital in Baltimore.

Today I'm speaking on behalf of the American Association for Clinical Chemistry.

AACC is the principal association of professional laboratory scientists whose membership includes M.D.s, Ph.D.s, and medical technologists. Our members develop and use chemical concepts, procedures, techniques, and instrumentation in health related investigations and work in hospitals, independent laboratories, and the diagnostics industry worldwide.

AACC would like to thank the agency for holding this public forum. We believe this meeting gives the agency an opportunity to clear up much of the confusion surrounding the IVDMIA draft guidance while also giving the public and other stakeholders an opportunity to express their views on this important document.

Although AACC is still finalizing its comments on the draft guidance, we generally supported the agency's goal, which is to insure that IVDMIAs provide accurate, verifiable test results.

Further, we agree with the FDA's decision to leave primary oversight of traditional laboratory methods, develop tests with CMS utilizing the CLIA ADA standards.

AACC is concerned, however, that the agency may be moving forward too quickly in this area without fully examining the unintended consequences that could arise from this policy. AACC suggests that the FDA consider and address the following questions before fully implementing its IVDMIA policies, such as:

What impact will this policy have on incremental advances to existing technologies as well as the development of first of a kind assays?

Also, will tests no longer be offered as a result of this policy? If so, which of these tests?

And will the loss of these tests hinder the delivery of patient care?

Will the agency allow laboratories to continue utilizing existing unapproved algorithms until it or similarly approved algorithms are approved by the FDA?

How will the FDA inspect laboratories under the promised QSR guidance?

Also, we are requesting that the agency clarify whether IVDMIAs can serve as a predicate device, particularly if the IVDMIA is not available for clinical comparison or precision comparison studies. Typically devices approved or cleared under the PMA or 510(k) processes serve as predicate for future submissions to the FDA.

In this instance, however, a manufacturer laboratory would not have access to the reagents since they are not in commercial distribution, although I think this was partially addressed through the comments in the introduction.

Finally, AACC recommends that the agency include examples of tests which employ algorithms but would not be subject to this guidance. For example, we expect that a test employing simple calculations to result, such as creatinine clearance addressed in the introduction, would not be considered an IVDMIA, nor would an assay utilizing publicly available algorithms or clinical guidelines, such as prenatal screening for open neural tube defects.

AACC believes these and other examples would more clearly demarcate the limits of the document. AACC welcomes the opportunity to comment here today and will provide more detailed comments to the agency by the March 5th deadline.

Thank you.

DR. KESSLER: Thank you, Dr. Clark.

We're next to hear from Dr. Carolyn Compton of the National Cancer Institute.

DR. COMPTON: Thank you.

I appreciate the chance to speak to you today because I'm bringing a new focus to the table, one that is not directed toward the test itself but toward the thing being tested.

I'm here from the National Cancer Institute, which as you know represents a vast scientific enterprise that's dedicated to the development, validation, and application of new methods of diagnosing, treating, and preventing cancer for the American public and cancer patients, and it has been the perspective of this agency that the new methods, the new technological platforms that are being developed to focus on analysis of human specimens that raise the bar for specificity, sensitivity, and complexity, especially multiplexing tests, raise the bar for the quality of the thing being tested, the human specimen.

And, in fact, the institute has focused on this problem in such a critical way that a year and a half ago it created the office which I now direct, the Office of Biorepositories and Biospecimen Research, which is focused on optimizing and standardizing the quality of human specimens for the research that will drive personalized cancer medicine, and certainly IVDMIAs fall into the category of personalized medicine very centrally and to remove the current and future barriers to cancer research represented by the limitation in quality of human specimens; that human specimens are not regulated in any way right now, and in fact, very little guidance exists as to how to standardize or optimize the quality of human specimens as they are used in analytic testing across the medical enterprise.

Our office, the OBBR, has in the last year and a half taken direct steps toward providing guidance for our research enterprise, and hopefully this will translate into clinical medicine very shortly, by providing the first of its kind, first generation guidelines for NCI supported biorepositories that represent the state of the science, best practices for the handling of human specimens for molecular analysis.

And we have many other initiatives in place that are focused toward developing second generation guidelines that will be largely, if not entirely data driven because the state of the art at it exists today is mostly empirical and based on expertise and experience, but not objective scientific data as to the effects of handling, processing and storing variables of human specimens on molecular profiles, and therefore, guidance on how to optimize the handling of these specimens for consistency in testing results does not exist.

Next slide.

Our view of biospecimens is a dynamic one. We view the biospecimen as a viable entity that, in fact, has two phases as it enters clinical analysis. One is the preacquisition phase, before it becomes a specimen and comes out of or off of the patient. It is subjected to iatrogenic variables that can dramatically change its biomolecular profiles, and after it is removed and sent to the pathologist or into the testing process, additional variables can also change these specimens biomolecular profiles because it is, in fact, still viable until it is suspended in biologic animation by fixation or freezing.

Next slide.

These are only a few of the pre and post acquisition variables that we know can dramatically change singular molecular profiles and certainly complexes or fingerprints of molecular profiles in specimens of a different type, and each one of these variables can have differing effects on different types of specimens and even from the same specimen type, such as a cancer specimen, from different sites in the body.

So we expect this to be a very complex issue and one in which we have undertaken a serious scientific effort to sort out.

Next slide.

One of the most critical issues has just come forward recently when it was pointed out that a diagnostic test, which in fact I am a pathologist so I can speak for this very strong. This is the first diagnostic test in pathology that determines whether or not a patient will be treated with a specific therapy irrespective of any clinical input.

HER2 new testing, as you know, is performed on breast cancer tissue, and it is performed by an immunohistochemical test that if it is shown to be positive and the cut points for that were determined, of course, by validation tests, that the patient will receive herceptin therapy, and positive results trigger a therapeutic burden for the medical system of $60,000 per patient per year, and false positive results can carry a risk of cardiotoxicity.

So this is a very critical test which it was learned several years after this therapy had been on the market and had been actively being used in the clinic for patients, was discovered that there was, in fact, no strictly standardized testing method for the biospecimen.

ASPA went to the College of American Pathologists, and just recently a standardized guidance was published. However, even in the process of writing this guidance it became clear to the College of American Pathologists that there were unanswered questions about handling of the specimen, and this brings up a general issue about the way the FDA approaches its diagnostic testing guidances and its regulations.

There's very specific guidance typically about how to do the test. Yet even if your test is validated, standardized, and perfect in its execution, you can build in the variation up front in the biospecimen if the handling processing of the specimen itself is not standardized.

So standardization of the analyte is at least as important as the standardization of the analysis, again, as pointed out by HER2 testing, and it was documented by Asbill and Capp that as much as 20 percent of the diagnostic tests performed on breast biopsies were, in fact, inaccurate based on handling variables, such as type of fixation, length of fixation, temperatures in imbedding machines, and other types of variables.

Next slide.

So with the emergence on the horizon of other diagnostic multiplex tests, this problem becomes even more significant, and on the horizon we certainly have, as was mentioned by previous speakers, EGFR testing, Oncotype Dx testing, which is now in clinical trials, Lymphochip tests, and in fact, some of these multiplex tests, such as Oncotype Dx, are performed on specimens that are handled for clinical purposes and borrowed from the clinical enterprise with no specific guidance up front as to how to handle the specimen specifically to acquire reproducible results from the tests.

So, in fact, on matter how clever, how standardized, how perfected your test, or even how highly diagnostic or prognostic, under the correct conditions these tests are still subject to the rules of all good science, which is garbage in, garbage out.

Next slide.

So I don't come here to suggest that biospecimens are something that the FDA can or should regulate. I'm only bringing this issue to your attention as a problem that affects multiple stakeholders, may, in fact, affect multiple government agencies, but for which there is no answer at the moment as to where and how to develop standards for specimen handling, how to draw the development and implementation of biospecimen quality standards, or how to provide the reimbursement that will be necessary to make certain that the pathologists who are the people that handle these specimens for the most part or if the handling of the specimen for a given test happens up stream are reimbursed for the extra time and expert input that they will have to provide in order to standardize this critical variable for testing.

Thank you.

DR. KESSLER: Thank you, Dr. Compton. We're glad to have our NCI colleagues here and have your program presented. We appreciate it.

We're doing great on time. I want to thank all of the speakers of the morning so far, and leave the microphones open. We'll try to recognize you in some order if you stand up, and please feel free to comment, particularly about the morning's presentations.

And, please, for the record, state your name and your affiliation. And you can use the mics in the center if you prefer.

MS. CHARACHE: My name is Patricia Charache, and I'm representing the American Society for Microbiology.

And I'd like to first agree with my colleagues, including my co-member of Johns Hopkins University from AACC, that there's a need, and all other speakers, there's a need to clarify the definitions so that we know more clearly exactly what's meant by the different categories.

We are concerned about the needs to address patient safety with these tests, and I would point out that although CLIA is responsible for laboratory processes, thus far CLIA and its deemed agents that review laboratories through CMS have emphasized analytical validation of tests rather than clinical validation as they review development of new tests.

The FDA, and I'm familiar from advisory panels particularly in microbiology, does address the clinical validation area.

The point that Dr. Tsakeris pointed out that there is a major increase by clinicians for the use of these molecular tests is certainly supported and our own experience at Johns Hopkins, and this pressure comes primarily from two sources. One is the literature, but the other is a new tendency that we've seen very heavily in our home institution, which is direct to clinician marketing by laboratories that offer this type of complex test.

This direct to clinician marketing in our institution has covered diverse diseases, such as the ability to diagnose inflammatory bowel disease, some endocrinopathies, to cancer management and to the diagnosis of genetic disorders.

And all of this has bypassed the expertise of anyone who can objectively look at the quality of the information being provided. We've had to interrupt when we've learned about these processes direct sending of specimens to at least four such laboratories that had not done clinical validation.

So that we do feel that there's a need to look closely at this type of test, which has very major impact upon patient management, particularly if the quality of the test or, as the NCI just pointed out, the way in which the test was validated, have not been addressed.

So we think that the underpinnings of the desire to improve quality of these complex tests and our knowledge that the clinicians despite their skill and their excellent knowledge of clinical diseases are not equipped to know whether the test is one in which they should be managing their patients presents a need to look further into how to achieve those goals.

Thank you.

DR. KESSLER: Thank you very much.

Are there other comments from the floor, questions, clarifications, funny jokes?

(Laughter.)

DR. KESSLER: Well, we're not yet ready for a break. So I'm hoping that a couple of the speakers for the next session of the morning are prepared and we'll begin with a few of those presentations. We'll break a little bit early and that will advance the schedule today.

So I'd like to call up Carolyn Popper if she's here from Exagen Diagnostics.

Well, it's not true that if you snooze you lose. We'll come back to Carolyn. Perhaps Alan Mertz is here from the American Clinical Laboratory Association -- oh, wait, wait. Carolyn, is that you? No, no, no. Come on. Thank you.

So we are going to begin with Dr. Carolyn Popper from Exagen Diagnostics, correct?

DR. POPPER: Correct.

DR. KESSLER: Okay.

DR. POPPER: And I'm not going to tell a joke.

DR. KESSLER: You just did.

DR. POPPER: Good morning. I'm Carolyn Popper, and I'm a physician and a senior regulatory advisor to Exagen Diagnostics.

I very much appreciate the opportunity on behalf of Exagen to comment on the draft guidance. In sum, we at Exagen appreciate the FDA's efforts to protect public health by a reasonable regulatory oversight, and we particularly are glad to have this opportunity to offer our thoughts and perspective on many of the issues raised both in the document and in the comments here today.

Exagen was founded in 2002 in Albuquerque, New Mexico, and it discovers, designs, validates, manufactures, and commercializes small sets of genomic markers to provide prognostic and diagnostic kits for commercial laboratory testing and for use in clinical trials by drug developers.

Exagen is currently developing a number of products that fall under the food drug and cosmetic act and FDA regulations. During the past year, we have been working closely with the Office of in Vitro Diagnostics as we are pursuing regulatory review for the first of several products in the coming months. We understand that new technologies giving rise to new, more complex marker sets challenges conventional diagnostic regulatory paradigms and believe that reasonable oversight to protect public health is entirely appropriate.

Like the FDA, we feel that an IVDMIA that utilizes data from an IVD assay which is then manipulated by an algorithm to produce a final result in tended to help diagnose, mitigate, treat, or prevent disease is, indeed, a medical device and should, therefore, be regulated by the FDA.

We hope though that as the FDA seeks a regulatory framework for IVDMIAs that the agency takes what it describes as the least burdensome approach, thereby facilitating regulatory oversight while not impeding commercialization of new technologies.

In that regard we congratulate Agendia at having achieved FDA clearance.

It is also important to note, in our opinion, as have others here this morning, that not all IVDMIAs are equal. The agency should take into consideration the intended use of new IVDMIA products and recognize that they vary quite considerably. As such, a whole variety of new regulatory approaches may be warranted based upon the risk to the patient and the benefit of the test.

We agree with the statement in the draft guidance that most IVDMIAs will be either Class 2 or Class 3. As for example, any device intended as an indicator of the patient's risk of cancer recurrence would be a Class 2. The IVDMIA which provides another data point to the physician without specifically dictating treatment is not relied upon by the physician as the sole decision point in the diagnosis or selection of therapeutic options.

Exagen does request clarification of an item on page 3 of the guidance. On page 3 in the guidance document under the section about definition and regulation of status of IVDMIAs, there's a sentence which reads, "Even if a laboratory or other IVDMIA manufacturer. . . . " This sentence we find to be ambiguous, and we recommend that the FDA clarifies its position.

I believe other speakers before me have raised this position, too. It is clear that the IVDMIA applies to laboratories. However, Exagen does not believe that manufacturers seeking premarket review under the act for interstate commerce fall under this guidance.

Clearly, this is a very exciting time for science and medicine and for patients, with a promise of many new discoveries and IVDMIA products on the horizon from many companies and innovators. Given that laboratories and IVDMIA manufacturers are in the early stages of discovery and development and validation of these IVDMIA products, it is important that the FDA guidance and regulations support the degree of innovation that we have seen in the industry in recent years.

We look forward to continued discussion here this morning and in the weeks ahead, and look forward further to the opportunity to offer our thoughts as the FDA refines its position in the coming months.

Thank you.

DR. KESSLER: Thank you very much.

We'll turn now to Alan Mertz from the American Clinical Laboratory Association.

MR. MERTZ: Good morning. I'm Alan Mertz, president of the American Clinical Laboratory Association, and we're an association that represents local, regional, national, hospital and independent clinical laboratories, and we thank the FDA for this public meeting this morning.

This is important because many of ACLA members perform laboratory developed tests that could be very much affected by the FDA's draft guidance on IVDMIAs.

Next slide.

ACLA strongly supports the goal of the draft guidance, namely, to dispel the existing confusion and lack of clarity regarding FDA's regulatory approach towards certain laboratory developed tests.

Although the concerns identified by FDA in its draft guidance are clear, the guidance falls short of achieving the goal. We would like to work with FDA toward resolving these concerns in a manner that promotes the promise of personalized medicine and encourages the continued investment in these rapidly advancing areas of laboratory medicine.

Next slide, please.

We focus on three key recommendations this morning. First, ACLA recommends that FDA issue a proposed rule to address this important subject matter through the formal notice and comment rulemaking process rather than through subregulatory guidance.

Second, we recommend that FDA consider proposals to narrow and clarify its definition of IVDMIAs to avoid confusion and unintended consequences.

Third, we recommend that FDA work with CMS through HHS to address its concerns through enforcement and better enforcement of the regulations promulgated under the Clinical Laboratory Improvement Amendments, CLIA.

Next slide.

The procedural recommendation in favor of notice and comment rulemaking is important. Since the draft guidance announces the laboratory developed tests deemed IVDMIA are Class 2 or Class 3 devices requiring FDA premarket clearance or approval, it represents a significant change from the agency's historical practice regarding laboratory developed tests and has a present binding effect.

Rather than merely stating the agency's current thinking on the topic without creating or conferring any rights or binding FDA or the public, the draft guidance operates as a substantive rule. As such, its subject matter should be vetted through the formal, on-the-record notice and comment rulemaking procedures of the APA.

Similarly, while FDA declined to classify laboratory developed tests as Class 2 or Class 3 medical devices in the ASR rule, on the policy grounds, laboratory developed tests have contributed to enhanced standards of medical care in many circumstances, and the significant regulatory changes in this area could have negative effects on the public health.

The draft guidance seeks to regulate certain laboratory developed tests on the ground that the public health requires it. Since the FDA's advisory opinion in the ASR rule was published in the Federal Register as part of a formal notice and comment rulemaking, the modification of that policy which the draft guidance represents must be treated in the same manner procedurally.

The best substantive result for all stakeholders is most likely to be achieved only when all stakeholders are afforded the full procedural protections of notice and comment rulemaking.

Next slide, please.

While FDA has noted that IVDMIAs are intended to describe a narrow niche of devices, the draft guidance defines IVDMIAs so broadly and so vaguely that the scope of the draft guidance's application could easily be interpreted to extend far beyond its intended reach.

Specifically, the draft guidance defines IVDMIAs as, quote, test systems that employ data derived in part from one or more in vitro assays and an algorithm that usually, but not necessarily, runs on software to generate a result that diagnoses a disease or condition or is used in the cure, mitigation, treatment, or provision of disease, end quote.

It further describes three interlocking criteria of IVDMIAs, use of clinical data, an algorithm, and a result that cannot be interpreted by a health care provider without the help of the test developer.

As written, the draft guidance could be interpreted to apply to many well established tests that are already the part of the standard of care. Upon citing examples of such tests to FDA, ACLA was informed by FDA that it was not their intent to include such well established tests within the scope of the draft guidance, and FDA requested our assistance in clarifying and narrowing the definition to conform to its intended application.

Next slide, please.

While the following recommendations for clarifying and narrowing the definition of IVDMIA should not be construed as an endorsement by ACLA of FDA regulation of any lab developed test nor an acknowledgement that FDA has the authority to regulate these tests, and while ACLA and its members reserve the right to offer modifications at a future date, we offer the following recommendations in a good faith effort to make progress toward achieving our shared goals.

FDA should consider the following link factors in formulating a definition.

One, a new single source test system.

Two, use as patient and/or clinical data derived from one or more in vitro diagnostic assays together with a proprietary non-published algorithm.

Three, generate a patient specific binary result that is intended definitively to diagnose a condition or to direct behavior for the cure, mitigation, treatment or prevention of disease.

And, four, present significant safety and effectiveness risk not present in test systems which have become part of the standard of care.

Next slide.

Moreover, certain factors, if present, would indicate the FDA regulation is not warranted. Specifically, test systems which meet one or more of the following criteria should not be deemed IVDMIAs: low risk consequences of invalid or inaccurate test results; independent verification by one or more laboratories; support of clinical relevance in peer reviewed literature, transparent algorithms, interpretation support for clinicians, support in clinical guidelines, established use, CPT code assignment, and payer recognition.

We'll provide further elaboration of these points in our formal written comments on the draft guidance.

next slide.

Nevertheless, ACLA firmly believes that FDA should also consider working with CMS and through HHS to enhance this CLIA regulations and provide means for the systematic and rigorous enforcement. This approach has the potential to address the concerns that prompted FDA ot issue the draft uigdance in the contest of the regulatory framework specifically designed for clinical laboratories and the services they provide, CLIA, and could avoid the difficulties associated with regulating services under a regulatory framework designed for commercially manufactured and distributed products.

Next slide.

CLIA regulations explicitly require the laboratory director to insure that selected test methodologies are capable of providing the quality of results required for effective patient care, which implicitly requires the selection of medically relevant tests that have an effective clinical purpose.

Likewise, CLIA regulations require the laboratory to have a clinical consultant who is responsible for providing information about the appropriateness of a test in a clinical context. Systematic and rigorous enforcement of these requirements by CMS could approximate the independent validation of clinical relevance that FDA seeks to achieve for IVDMIAs through the IVDMIA draft guidance.

CLIA regulations also require the laboratory to validate the performance characteristics of laboratory developed tests, including any algorithm or formula that the laboratory relies upon to issue a result, and further require the laboratory director to insure that an ordering clinician can properly interpret results by including pertinent interpretive information in the reports and making consultation available.

Thus, the foundations for algorithm transparency and interpretive guidance for clinicians already exist within the CLIA regulations. Amendments to the CLIA interpretive guidelines or to the CLIA regulations themselves, if deemed necessary, coupled with systematic and rigorous enforcement by CMS, would be consistent with the FDA's emphasis on smart regulation and following the least burdensome approach to address the issues which prompted FDA to issue the draft guidance.

Thus, we encourage FDA to consider working with CMS in this matter.

Last slide.

In conclusion, we look forward to working with the FDA in an ongoing dialogue to achieve our shared goals of providing continued access to safe, effective, and innovative clinical laboratory services for patient care.

Thank you.

DR. KESSLER: Thank you.

We'll continue with Michael Goldberg from the Mohr Davidow Ventures Group.

MR. GOLDBERG: Good morning. Thank you very much.

I'm here first as a patient, second as a parent, and third as a child. My parents are fortunately still alive.

I spend a lot of time professionally as a venture capitalist. I'll get to that in a moment, but principally I'm a patient advocate, and I've been on the board of the National Childhood Cancer Foundation as a trustee for the last 12 years. I was also a founder of that organization. I was instrumental in the passage of Prop 71, the Stem Cell Act in California two years ago where seven million Californians stood up and voted on behalf of patient advocacy to liberate funds for embryonic stem cell research, which our federal government at the moment is severely limiting.

I have since been appointed to the oversight committee of the California Institute of Regenerative medicine, where I spend many days sitting as you do listening to the public, and I have extraordinary respect and regard for the time you give to your service.

Professionally, I've been involved in the biotechnology industry for the last 25 years. I've watched recombinant DNA go from being a gleam in scientists' and clinicians' eyes to treating hundreds of millions of patients daily around the globe. It has taken billions of dollars of capital to get there. I think we're all better served as a result of it.

The FDA has been a magnificent partner with industry in causing that to occur.

My concern today has to do with not your intent, but simply the tactical implementation of what you're proposing to do, and with that if you'll permit me to make two comments before I begin my remarks.

Do any of you know how to get a one armed venture capitalist out of a tree? You know that joke. You wave at him.

Secondly, for the first time in California, which is where I arrived from last evening, I saw a personalized license plate. Actually it said IVDMIA. You should be pleased to know it was on a Prius.

(Laughter.)

MR. GOLDBERG: Next slide, please.

My background isn't relevant.

DR. KESSLER: You can have more than ten minutes.

(Laughter.)

MR. GOLDBERG: So at the risk of stating the obvious, the diagnostic and laboratory industries really are in the cusp of dramatically innovating in the field of medicine and in health care. We're excited in the venture capital community and in the entrepreneurial community, where I spent most of my career before I became a venture capitalist, because new, innovative diagnostics, we believe, can expand the scope of personalized medicine, improve outcomes, reduce costs in many cases, and hopefully reduce adverse events.

Next slide, please.

Many of the companies and laboratories, as you know, developing these innovative diagnostics are small and entrepreneurial. They aren't the large corporations that frequently pay homage to Rockville.

And in order ot make the benefits of their products a reality, these small companies and laboratories really need access to capital.

Funding for diagnostics for research has historically been much lower than funding for drug research or other devices. Furthermore, funding for diagnostics continues to lag behind that of drug and other devices.

My concern personally is if implemented in its current form, the draft guidance may leave even less funding for diagnostics. You have to understand in the context of a broad technology based Silicon Valley venture capital firm, my projects compete for capital with projects to invest in Clean Tech, projects to invest in the next generation of high technology infrastructure, and regulatory uncertainty creates a disincentive around our partnership table as we make these decisions.

The ambiguity and regulatory uncertainty can be, I think, captured from our standpoint, and not having clarity as what type of lab services will be subject to regulation by you, if laboratory service is subject to regulation, it's not clear what the level of regulation will be.

I know that's your goal to clarify all of this for us and we appreciate that.

Next slide, please.

It's not clear how labs will deal with the competing requirements of both the FDA and CLIA requirements, how products or services determined as IVDMIAs will actually be labeled, if labeled, and what, of course, the costs of compliance are as young companies are trying to forecast what their capital requirements are to actually bring products to market.

So to attract investors, young companies and laboratories need to know whether their product or service is going to be regulated by the FDA, what the nature of that regulation is, and what the cost of complying with those regulations are.

Under the draft guidance, we simply don't know this.

From an investor perspective, we need to understand and evaluate the risk and benefits of competing investments in different fields and an ambiguous regulatory scheme and regulatory uncertainty makes this evaluation very, very difficult.

The ambiguities and uncertainty under the draft guidance we believe have the risk of deterring investment in innovative diagnostics. If the draft guidance is implemented, investors looking for opportunity in technology or health care will look to alternative opportunities, I fear personally, and without these investments in innovative diagnostics, we won't be able to experience the benefits of personalized medicine, better health outcomes, lower health care costs, and reduced adverse events as we're all seeking to achieve.

Thank you very much, and I'm a big fan of the critical path, and I hope wherever you end up on this issue it enhances that regulatory scheme.

Thank you.

DR. KESSLER: Thank you. We do as well.

I want to thank the morning speakers, and before we take a break, here's what we're going to do. I'm going to take a 20 minute break now. The line down the hall at Starbucks will get quite long. I'm aware of that. So we may take a couple extra minutes, but we'll try to convene promptly at ten after ten, and because we are fairly far ahead, some of the speakers who would normally be speaking right after lunch we'll take in the morning.

So I'd like the panel, who should be here for the afternoon, to check in with Susan to make sure you're here and so that we can get moving. So I'd like to make sure that David Levison, Stuart Hogarth, Jonathan Cohen, Sherry Black, Robert Erwin-Marty, Elda Railey, Carol Berry, and Elissa Passiment, please check in with Susan.

Let's take a 20-some odd minute break. We'll see you at ten after ten.

(Whereupon, the foregoing matter went off the record at 9:49 a.m. and went back on the record at 10:12 a.m.)

DR. KESSLER: Thank you all.

We're going to begin. Dr. Arthur Beaudet from Baylor College of Medicine.

DR. BEAUDET: Thank you.

I appreciate the opportunity to be here today. I'm going to focus more specifically on one particular test.

I think you can go to the next slide.

One of the more comment tests done in genetics is chromosome analysis, and this is sort of the traditional appearance of the result that's been available for decades now, and most of the chromosomes there are two copies, and many of the diagnoses you want to make involve the gain or loss of a copy so that a region that should have two copies now has only one or has three.

Next.

The chromosome analysis has gotten extended by a method called fluorescence in situ hybridization, or FISH, so that you can detect particular spots in the DNA here, a normal chromosome with a green and a red spot, and here a deleted chromosome with a green spot but not red spot present.

And the next slide shows another example of this kind of FISH at a different stage in the cell cycle where there's a normal chromosome with a red and a green dot, and a chromosome that has one green dot and two red dots, the extra red dot indicating additional copies.

So we can have a gain of copy or loss of copy.

The method that is replacing this is called array comparative genomic hybridization, or array CGH or sometimes called chromosomal microarray analysis or CMA, and they're equivalent in the meaning.

Next.

In this test, DNA from a test sample like a patient is labeled with a fluorescent dye and DNA from a control is labeled with a second fluorescent dye, and this red and green combination will, if the mixes are equal representations of the genome, give a balanced yellow color.

Go to the next slide.

If you then hybridize these onto bits of DNA on a glass, and these could be large pieces of DNA, kilo bases size like BACs or it could be small bits of DNA like allogonucleotides of 50 or 60 base pairs.

If there's a region in the test genome that has a duplication here, it would give a greener color or a deletion would give a redder color.

Next.

This is a demonstration of what a result looks like in our laboratory. The red data are from one hybridization and then the dyes have been reversed to give a second hybridization shown in blue, and Chromosomes 1 through 22 are here, and you see that the data fall on a single line, but here we've hybridized a normal male to a normal female, and you see the difference in the X and the Y chromosome down here, and you can very easily see gains and losses in the genome.

Next slide.

This is one of the most common genetic diagnoses, Trisomy 21, where the old test shows three copies of Chromosome 21, and here on the new test you see that all of the clones on Chromosome 21 are showing a gain being shifted to the right.

This is just an example of now many diagnoses which the old tests have not made, but the new tests can make. So this is a child with various abnormalities in the neonatal period with cleft lip and palate, congenital heart disease, and a normal chromosome analysis.

And the next slide shows the test detects that many of the clones on the short one of Chromosome 21 are shifted to the left, meaning a deletion.

This is usually missed. This is what the chromosomes can look like in their most stretched out form, and maybe in retrospect you can suspect a difference here, but in general these kinds of chromosomes are usually interpreted as normal.

And this test can be confirmed with the FISH method. Again, so we always have the old and the new tests side by side to work with.

Now, there's a lot of potential here for platform equivalency where many different platforms can detect gains or losses in the genome, and we currently use a back chromosome array in the clinic, but we're in the process of switching to an oligonucleotide array and dead arrays are also possible.

So the results can be specified for particular parts of the DNA, the genomic segments with precise locations in the genome now that the genome is sequenced and available in various browsers.

Next slide.

This is an attempt to show the same patient I showed you a minute ago with the back array, but now with a oligonucleotide array from adjulent (phonetic). You see here each black dot is an oligonucleotide, and you can see that there are lots of black dots here at the tip that are normal. Then you have a whole bunch that are involved in a deletion, and if you do a dye reversal and smooth the curve, you get this very precise detection of this deletion, and this is a lesion which by chromosome analysis is not detectable in any kind of consistent way.

So array CGH detects many abnormalities missed by chromosome analysis. They're missed for two reasons actually. Some are just absolutely not detectable by the karyotype method, and another problem is that there's great variability in the quality of chromosome analysis that's performed out there. We see many abnormalities that should have been detected by karyotype, but they were not. They were missed by the group that did the karyotype.

So this test allows you to do hundreds or even thousands of FISH test equivalence on a single slide at a low cost. It's also particularly good for detecting extra copies, which most of the FISH methods are more difficult to use to detect extra copies.

So our approach is to suggest that what we are proposing is a test that detects copy number changes in the genome, and we think there's a lot of analogy to say that an MRI of the brain or a mammogram, many different machines can detect and give an image that's useful, even, say, a CAT scan versus an MRI.

There's multiple components to this process. There's a raw image of the data. Then there's an algorithm to process the data. In fact, in this case there's not that really that much of an algorithm. It's more a statistical analysis to determine is there a gain or a loss at a particular site.

Then there's some need for interpretation that's typically provided by some Board certified laboratorian that says gains or losses in this region usually are associated with a particular syndrome or NOD or benign or whatever, and I think this, I think, is parallel to what the radiologist does.

The radiologist says there's something on this brain MRI that means one or another possible clinical implication, but then the clinician has to integrate this result further. The neurosurgeon or neurologist needs to take the radiologist's interpretation and integrate that back into the family, and that's what's going on in our situation.

Many times you'll have a parent and a child with the same gain or loss in the genome, but maybe the child has a severe phenotype and the parent may have a much milder phenotype. So there's not a perfect correlation of the genotype with the clinical findings in the patient.

So we believe that array CGH is the biggest advance in genetic diagnosis in decades. We believe that it is rapidly replacing the standard chromosome analysis or karyotype.

Delay in this transition is actually depriving many families of valuable diagnostic and counseling information. People are having the old test and coming up with no abnormal result and not knowing the cause of their child's problem, would know the cause of their child's problem if they had the newer test.

This ultimately is a test that will be less costly than a karyotype. You don't need to do tissue culture. You don't need technologists doing lots of work, and you don't need a qualified cytogeneticist to scrutinize the chromosomes and try to interpret them.

And so ultimately we are going to have the good fortune of having a test that is cheaper than the old test and better than the old test.

Array CGH is applicable to prenatal diagnosis, but 99 percent of the work is now being done on pediatric patients with blood samples.

thank you.

DR. KESSLER: Thank you very much.

Our next speaker is Michael Ostrolenk from the Association of American Physicians and Surgeons.

MR. OSTROLENK: Good morning, and thank you.

The Association of American Physicians and Surgeons is a national organization of physicians in all specialties. Founded in 1943 to preserve and promote the practice of private medicine, the sanctity of the patient-physician relationship and ethical medical practices according to the oath of Hippocrates, physicians are obliged to prescribe for the good of their patients according to the best of their ability and judgment.

We are very concerned about the destructive impact of the proposed guidance for several reasons.

One, professional discretion is essential if the medical profession is to serve individual client needs. The guidance constitutes (unintelligible) of regulations of the practice of medicine.

Physicians undergo a lengthy period of rigorous education, including scientific reasoning and standards, to prepare them to function as independent professionals. Independent professionals' judgment is essential, as has long been recognized in law, if physicians are to serve the needs of the patients competently.

There is tremendous individual variations in clinical problems as they present and in the individual responses of patients to various diseases and other insults. Increasingly, we are recognizing a wide range of biochemical individuality, which results in great variations in response of patients due to therapeutic regimens, particularly drugs based on the genetic endowment.

This guidance would not only deprive physicians of their clinical tools that they need to meet their patients' needs, but new regulations encroach upon the practice of medicine itself. The FDA is supposed to be regulating products to assure their safety, not services.

But with this guidance, it appears they're trying to expand its scope even as far as to declare which methods of mathematical analysis may or may not be used by professionals.

Number two, innovation is needed to meet new threats. Human health is endangered by an increasing array of new threats, as microorganisms adapt to antibiotics and as mutant organisms, including influenza viruses and vector borne diseases, such as the West Nile virus, gain the ability to proliferate rapidly throughout the world, as a consequence of modern transportation.

Genetic engineering also raises the sinister threat of bioengineered organisms being used as a terrorist weapon.

Then there is the continuing AIDS epidemic, which is changing manifestations demanding constant advances in therapeutic strategy. As diseases change, physicians must have the ability to respond rapidly. The physicians' ability to serve their patients would be crippled by blocking innovation and laboratory testing and data analysis.

This innovation can only be achieved if laboratories are able to use their personnel, facilities, and other resources in creative, efficient ways determined by the needs of the clinical situation rather than by rigid, ambiguous, bureaucratic dictate.

Number three, the FDA lacks the authority to expand its power as contemplated in the guidance. We are strenuously to the FDA efforts to overreach its statutory limits in its attempts to regulate laboratory developed tests that have previously been explicitly exempt. It lacks both constitutional and statutory authority to do this.

Number four, the proposed guidance will stifle innovation. Neither scientists nor investors will have any interest in using their talents and resources in ways that could be instantly stifled at bureaucratic whim. It's not rational to take the risk that efforts will simply be thrown away because of an arbitrary or capricious change of government policy.

It appears that the FDA proposed regulations can only make it more difficult and expensive for laboratories to comply, but may make it altogether impossible to comply with conflicting demands from the FDA, the Center for Medicare and Medicaid Services under the clinical laboratory Improvement Act.

The effect of contradictory demands goes beyond freezing medical progress, but will likely also cause regression as techniques are withdrawn because of regulatory fiat or ambiguity.

Our member physicians and the millions of patients that they serve need access to innovation, including laboratory developed tests, and also the freedom to practice their profession without constant fear of violating bureaucratic guidelines concerning allowable methods for diagnosing or analyzing a problem.

Number five, the proposed guidelines will increase the cost of innovation already extremely burdensome, possibly to reportable levels. We know that life style drugs have been delayed by years or decades because of FDA requirements and that the cost of bringing a new drug to market has rapidly escalated.

Everyone is concerned about the high and rising costs of medical care, regulations making a tremendous and unusually acknowledged contribution to these costs. A large portion of the regulatory burden is counterproductive. We believe that the FDA should not be allowed to impose new regulations without employing the equivalent of evidence based medicine to show that the regulations do not do more harm than good, with the waste of resources being included in the calculation of harm.

No such methodology has been applied to the proposed guidance.

Number six, the net effect of the guidance is likely to imperil patient safety rather than improving it. The FDA attempts to justify delays in regulatory barriers as necessary to protect patient safety. Its record of protecting safety is not impressive, as recent drug recalls have shown, but it has never ever attempted to calculate the lives that are lost because better products are prevented from entering the marketplace, some of them permanently because the cost barriers cannot be overcome

The cost of regulatory delay needs to be measured in lost lives as well as dollars. We agree with the concerns expressed by the Coalition for the 21st Century Medicine that the new FDA guidance documents are impermissibly vague and are also in violation of statutes such as the Administrative Procedures Act. Their effect will be to increase costs enormously while crippling physicians' ability to serve clinical needs.

Proposed changes would impose an unlawful straightjacket upon clinical practice. They would force laboratories, if they continue to function at all, to develop wholly new, expensive and nonproductive infrastructure in an attempt to do what is impossible, to begin with, namely, comply with conflicting obligations.

The FDA has not stated a problem that this guidance is supposed to solve. In fact, it apparently cannot even define such terms as service product or device in a clear and rational manner. This guidance should simply be rejected in its entirety. If the FDA is able to define the problem, then new guidance to address the need should be the least costly and intrusive manner in compliance with existing law.

It is not acceptable for the FDA to transgress the boundaries that forbid it to engage in or interfere with the practice of medicine.

Thank you.

DR. KESSLER: Thank you.

And our next speaker is Mara Aspinall from Genzyme Genetics.

MS. ASPINALL: Thank you.

Good morning. I am Mara Aspinall, president of Genzyme Genetics, and I very much appreciate the opportunity to be here today and to focus on one aspect of the draft IVDMIA guidance.

But first I'd like to say that Genzyme greatly appreciates that the FDA in response to concern with the guidance took two important steps:

First, to extend the deadline for the comment period; and

Secondly, to convene this session today.

These two steps are necessary, we believe, to insure that we begin the dialogue to look at what is essential in having new regulations and the potential of those, to make sure that they're necessary and appropriate and, most importantly, that any changes to the regulatory environment improve physician access to and confidence in diagnostics that help health care today.

Thank you for taking these steps.

However, because of the legal, administrative, and time and other constraints, neither a public docket or a public meeting such as this can truly provide the optimal opportunity for an active exchange. That active exchange of information or scientific information between FDA experts and those outside, we believe that we would like the agency to convene an additional meeting before proceeding further with an independent third party, if appropriate, a session that's a workshop or a similar format where true interactive dialogue can occur.

Such a format would give us the opportunity to listen and hear, to engage in an open dialogue with the agency, with you about the details that are so important in producing this guidance.

This kind of truly interactive format will allow us to hear your response issue by issue, question by question. So we look forward and would like you to consider a potential future opportunity to do that.

Today, however, I want to focus my comments on a concern amongst the many that have been discussed today, and this issue is the impact of the draft guidance on innovation, directly and indirectly through the reimbursement system and, therefore, on the timely physician and patient access to the most up to date and newest science and technology.

Health care today is moving from traditional medicine to personalized medicine, and personalized medicine involves getting more specific information on the detailed health status of a patient and will require more and more targeted tests to smaller and smaller patient populations.

To fulfill this promise of personalized medicine, we will need to insure that innovation is possible and is fostered in the laboratory developed part of the industry. If we fail to do that, we will be unable to carry out the promise or personalized medicine and our unwaiving commitment to excellent patient care and to patient safety.

To highlight that point, I want to take a moment to talk about what laboratory developed tests are, how they come into use, and the benefit that they bring to physicians who order them and the patients who need them.

These tests often have their beginning in academic centers in research that results in scientific publications about the usefulness of particular biomarkers or assays. Academic centers then typically look to independent laboratories to make these tests available to the relevant patients. In some cases the laboratories themselves develop the test based on scientific and medical information in the literature as presented at scientific meetings and conferences, indicating both the utility and the importance of these tests.

Laboratories then validate the test, insure the scientific underpinnings are robust, and develop processes that guarantee the test will be produced accurately and reproducible, and that they are offered and appropriate to the physicians.

Tests are developed and validated under the direction of Board certified pathologists and clinical scientists. In every case it is the treating physician that makes the choice about which validated test is appropriate for a particular patient and to insure that each test is medically necessary.

Treating physicians make the decision regarding specific tests based on patient need, their own clinical knowledge, and information from the medical and scientific literature.

So today what typically happens is unless and until a new diagnostic test reaches a critical and relatively large volume, no commercial test kit can be developed.

Lacking that critical volume, there is no market incentive to develop a kit and to spend the resources required to take this kit through a full FDA process.

The bottom line is that as a result, for conditions that affect a relatively small number of patients or, importantly in oncology and infectious disease, subpopulations of patients. The only access to valuable and necessary testing is through laboratory developed tests.

And just as balancing expenditures with potential returns on investment may dissuade a company from developing a test kit for a small market, financial realities will apply to laboratories as they develop cutting edge and innovative tests.

Extensive and costly regulatory requirements would serve as an extremely strong disincentive to the development of tests such as those for genetic disorders or from diseases, and very importantly and increasingly so, cancers that affect targeted subpopulations.

Why is this the case? It simply is that while diagnostics comprise less than five percent of hospital costs and 1.6 percent of Medicare costs, their findings influence as much as 70 percent of health care decision making.

That said, the current reimbursement system does not compensate laboratories adequately even now. The added cost associated with an FDA clearance or approval would be impossible to recoup. The end result would be that laboratories could not afford to develop new tests. Diagnostic testing, a key piece of personalized medicine today, in the future would suffer enormously. Treating physicians would be seriously limited to access to the important cutting edge tests that would help them determine the best course of treatment for their patients and, above all, patients would lose.

As we look to the future, we envision many new complex tasks that Genzyme Genetics would like to develop that would focus on specific and relatively small populations of patients. Many of these tests are expected to be in the area of oncology patient management and will provide critical diagnostic information essential to selecting the most appropriate therapies for each and every patient

We believe that most of those potential future tests will meet the definition as currently defined in the draft guidance of an IVDMIA that would potentially require additional regulation and/or costly premarket approval.

Because these tests are truly in the realm of personalized medicine, the market for them would be small, and even currently the reimbursement system is a challenge for laboratories making decision, such as us and others to invest in these new tests.

An additional level of regulation would make such an investment virtually impossible. Because we believe every patient and every treating physician deserves access to important information provided by these tests, we believe that the regulatory system should not be one that only focuses and only promotes the development of high volume testing.

Our message is this. If you determine that additional regulation in this area is absolutely essential, please insure that all the information and facts are thoroughly vetted and fully considered before proceeding

And please, as you determine your way forward, look at the costs. Look at the reimbursement system. And finally and most importantly, the implications that derive from this guidance for information for patients and for physicians.

Thank you for the opportunity to speak.

DR. KESSLER: Thank you.

And our next speaker is Gail Javitt from Genetics and Public Policy Center.

MS. JAVITT: Good morning. My name is Gail Javitt, and I appreciate the opportunity to speak today on behalf of the Genetics and Public Policy Center of Johns Hopkins University.

We'd like to commend FDA for holding this public meeting today.

The Genetics and Public Policy Center was founded in 2002 with a mission to help policy leaders, decision makers, and the public better understand and respond to the challenges and opportunities that arise from advances in human genetics. In 2005, with funding from the Pew Charitable Trusts, we launched a genetic testing quality initiative with the goal of improving overall effectiveness, safety and availability of genetic testing.

Today there are more than 1,000 genetic tests clinically available, and several hundred more that are available in a research setting. These tests are used to diagnose disease, to predict the risk of future disease and, most recently, to guide decisions about whether to undergo a procedure or take a drug or a particular dose of a drug.

Yet the regulatory framework to insure the safety and effectiveness of these tests is both incoherent and inadequate. Most genetic tests are not reviewed by any entity within the federal government before they're offered clinically. To date FDA has cleared or approved only a handful of genetic tests. Most genetic tests are sold as in-house developed tests or home brew assays, as others have said, and each laboratory director makes an independent decision regarding whether and when to make a test available.

So in the absence of FDA review, there is no independent review of either a test's analytic validity, meaning whether the right answer can be obtained with the test, or its clinical validity, meaning how the particular genetic variation relates to an individual's current disease or risk of future disease.

While CLIA, as has been mentioned several times, clearly requires laboratories to independently establish analytic validity of tests, there's insufficient oversight to insure that laboratories do so. And as the Genetics and Public Policy Center has said on other occasions, there is no genetic testing specialty today under CLIA, and although we, along with Genetic Alliance and Public Citizen, have filed the citizen petition with CMS asking for a genetic testing specialty to be created, we have not received a response, nearly six months later.

Moreover, CLIA has not been interpreted to require that laboratories demonstrate clinical validity, but clinical validity is profoundly important when considering whether and under what circumstances a genetic test should be made commercially available. Offering tests without adequate evidence of clinical validity endangers the public pocketbook and, moreover, the public's health.

Based on the survey of 190 laboratory directors that we conducted at the center in 2006, a significant number of directors lack a clear understanding of what clinical validity means. Thirty-six percent of those we surveyed did not select the correct answer to the question.

Additionally, director face considerable challenges in establishing clinical validity. While 84 percent of those that we surveyed agreed that standards should be developed regarding the amount of data needed to establish clinical validity of tests, 76 percent cited lack of clinical data as a significant challenge in establishing clinical validity.

In addition, because FDA has regulated test kits and not home brews, there is an uneven playing field, which creates a disincentive to perform research to establish clinical validity and deters innovation of new tests that are able to demonstrate their clinical validity.

A company that invests the time and effort necessary to develop the test kit for cystic fibrosis, for example, will encounter competition in the marketplace from laboratories that offer home-per (phonetic) tests for the same purpose which have not undergone FDA review.

So this current two pass system has resulted in very few FDA approved test kits being available. According to our survey, almost 40 percent of laboratories do not use FDA approved test kits at all, and another 26 percent use them for less than a quarter of the tests that they offer, and the main reason cited for not using FDA approved test kits was that no test kits were available for the disorders for which they were offering testing.

So the status quo leave the public health insufficiently protected and fails to reward genetic test manufacturers who do perform the research necessary to demonstrate their test analytic and clinical validity. FDA has a critical role to play in insuring the safety, effectiveness, and availability of genetic tests. Effective stewardship by FDA is needed to develop and implement a coherent and equitable system of oversight.

So the draft guidance that we are here today to discuss is an important first step in articulating what FDA's role will be, and we appreciate that FDA has begun this public conversation today.

However, based on our review of the draft guidance and our consultation with stakeholders, we have identified the following key concerns

First, FDA needs to consider genetic tests holistically rather than engaging in a piecemeal regulatory strategy.

Second, FDA needs to engage all stakeholders, including device manufacturers, clinical laboratories, patients and providers, in discussion before making binding regulatory changes and to clarify at the outset what the overarching goals if a regulatory change will be.

Third, FDA needs to provide sufficient clarity so that the regulated industry knows what it needs to do to comply at the outset and not through a warning or untitled letter from the agency.

So, first, turning to the need for a holistic approach, we note that FDA has yet to convincingly lay out its rationale for starting with and singling out IVDMIAs. The approach seems to be purely technology based. FDA seems to be operating under the assumption that IVDMIAs as a class are inherently more risky than other laboratory tests.

This is certainly true in some cases, but we are concerned that FDA's piecemeal approach overlooks other high risk tests that do not fall within the IVDMIA framework, while at the same time putting all IVDMIAs in the same high risk class when compared to other diagnostic tests.

Additionally, FDA's rationale for focusing on IVDMIAs appears to be based on the physician's competence or lack of competence to independently interpret the results, but numerous studies have documented that health care providers lack education generally to interpret the results of genetic tests. So clinician competence would appear to be an insufficient basis for distinguishing between IVDMIAs and other laboratory tests.

Turning to the concern about clarity, there is scant detail provided in this draft guidance making compliance difficult. Uncertainty in the regulatory arena is a significant potential deterrent to innovation, and FDA should provide clear, transparent direction regarding its expectations.

The definition of IVDMIAs lacks clarity and leaves some to wonder whether their tests are or are not IVDMIAs. Clear articulation of what tests do and do not fall within the category will alleviate this confusion.

FDA has also not yet provided concrete direction regarding the interaction between its QSR requirements and the requirements of CLIA, and more clarity here is needed as well to avoid potentially duplicative or conflicting requirements.

Finally, turning to process, while this IVDMIA document is cast as a draft guidance, it does represent a major shift in FDA's thinking about laboratory developed diagnostics, and for the first time defines a new subset of laboratory tests that are subject to regulation.

While FDA has publicly declared that the guidance document is not yet being enforced, the letters that have been sent to certain in the industry suggest otherwise and at the very least, FDA is sending confusing signals at a time when it needs to be more clear.

These signals create uncertainty in the marketplace and are counterproductive to the goal of insuring the availability of safe and effective tests. We hope that today's meeting and FDA's subsequent interactions will be characterized by greater notice and explanation regarding FDA's regulatory intentions.

In conclusion, we believe that an adequate regulatory system for genetic tests should insure that all genetic tests provide accurate information for diagnosis, treatment or prevention of disease; should insure that laboratories performing genetic tests are using validated technologies to perform testing; should insure that both providers and patients have adequate information about a test's benefits and limitations so that they can make an informed decision; should establish a level playing field for all companies seeking to market genetic tests by establishing rational requirements that apply to all players; should employ a risk based approach that tailors requirements to the degree of risk posed by a test; should require post market reporting of problems with testing that led or could potentially lead to an adverse clinical event and should promote the development of new genetic tests, particularly those for rare conditions and those that can improve treatment decision making for life threatening disease.

We look forward to working with FDA as it continues to refine its regulatory approach.

Thank you.

DR. KESSLER: Thank you.

We're looking for Sharon Terry, and if she's here in the house, please approach Susan, and while we're doing that, we're going to welcome Craig Shimasaki. Dr. Shimasaki is from InterGenetics, Incorporated, and he's going to need a minute or two to change computers.

DR. SHIMASAKI: Thank you.

I don't have a joke, but I can tell you what Henry VIII told his fourth wife. "I won't keep you very long."

(Laughter.)

DR. SHIMASAKI: Do I get extra time?

(Laughter.)

DR. KESSLER: Actually, you're done.

(Laughter.)

DR. KESSLER: No soup for you.

DR. SHIMASAKI: Thank you.

I do appreciate the time to share with you. I've had the good pleasure of working with Dr. Gutman and his staff over the past 15 years on five other applications. What I want to do is share with you though what's with InterGenetics the story about a real life example about how this guidance does affect the industry today.

And we are a small biotech company, a predictive medicine company. I need to tell you a little bit about the background of the company so that you get an appreciation for that.

We started in 1993 doing this research in breast cancer susceptibility and founded a company out of the medical research foundation in '99. So about 13 years of research and about eight years of product development genotyped over 8,000 women around the country under an IRB and informed consent in five different geographic regions. It's one of the largest case controlled studies of breast cancer risk genotyped.

We then developed OncoVue, which is the first genetic based breast cancer risk test, which does take into account personal history measures, or the Gail model.

In 2002 when we were working to refinance the company and set up the CLIA lab, I approached the FDA to be sure that a multigenic test that had an algorithm with a software program imbedded into it operated out of a CLIA lab was, indeed, covered under CMS.

My response at that time was, of course, to the affirmative, and based on that and also our other guidance with knowing the history of what was going on in the industry, we raised about $15 million for continuing development of this program.

That's a picture to tell you we're in Oklahoma City, and you don't see any cowboys or Indians there. It is actually a research park with almost a million square feet of Class A wetland.

So what you see here is the way medical practice is currently being done: diagnosis, detection, new treatments, monitor therapy, and if it doesn't work you change the treatment. Outcomes are what we get today.

What the IVDMIA will most likely cover are tests that involve genetic predisposition, where you intervene and try to prevent or avoid the disease entirely or prognostic testing, where you're looking to actually find a better way to treat the patient such that the medications that are given will, indeed, be truly helpful.

This is how we went about developing the test. We had almost 10,000 patients through this in cases and controls, and we looked at 125 polymorphisms, combined them with the current Gail model. These are questions that have been used in medical practice for 20 years now, found epistatic interactions between the personal history measures and the genes that are used.

So we created and found combinations of these algorithms that produced age specific risk wars. Now, I'm not talking about having frank, undetected cancer. I'm talking about susceptibility to a disease, the old theory of find a gene, find a disease has been very unfruitful, but what we're finding is that combinations of genes that taken together can be subverted when other genes are available to stop the body from going towards disease.

But if you look at combinations of genes and combination with personal history measures, you can accurately predict the susceptibility to certain complex diseases. So, therefore, we've developed this test in 2006 that a woman will take a mouthwash. The side effects are minty flavored breath. We then analyze the DNA. We put them through this algorithm that was created in our laboratory information management system and produce a risk score.

The effect is that about 90 percent of women who get breast cancer don't have a strong family history of the disease. A previous speaker talked about calculate the loss of lives. Right now the Gail model is being used out there, and this performs at least twice as good as the Gail model. Yet it's still being used without anything else available. You get a report for three stages of your life, your genetic risk compared to the average risk.

What do you do with it? You can either look at ways which are being done now to prevent the disease, reduce the risk, identified early through more comprehensive screening, change life styles or low risk patients' peace of mind.

What I really want to talk about though is some of the economics and then some of the effects on InterGenetics, which I'll bring it back to.

Michael Goldberg talked about economics. Well, if you look at traditional diagnostics costing between 25 to $50 million, medical diagnostics in the molecular diagnostic industry range from 40 to $100 million. If you look at as he talked about, novel medical testing originates in small biotechnology companies. It doesn't mean that all do, but most of them have been, and they get into clinical use once you've completed your validation and your clinical testing.

It's funded by venture capital. Most venture capital groups will tell you if you hit a ceiling of $60 million, they will not invest in the company at the beginning because the returns, the multiples just don't work.

So if you add another regulatory process at the end when the company is fully staffed up like we are today and we talk about most likely a PMA and a real time effect of about 18 months, you're looking at about 60 to 120 million development costs and most likely that just will not occur because there will not be capital to be infused into the company. It's not the intent, but it's the effect.

The purpose of the regulation is safety of the public, efficacy of tests to be validated, proficiency, and then prevent the bogus test from getting in here. We do believe that these can be accomplished by modifying existing CLIA regulations and the FTC regulations currently in place. We are saying that we do not want to penalize the companies that are trying to do this correctly, taking the time and validating it, but then shore up the existing laws that can help prevent what you're looking for.

The new guidance is creating confusion. We received a letter in January or a call from the compliance officer in January of 2006 that the FDA did not believe we were in compliance.

In February we received a letter that said we would need to come and visit. We came for a visit. We were then told that our test would not be allowed to enter commercial market without an application, and therefore, we had to figure out a way, which the FDA did allow us to file an investigational device exemption that allowed us to collect the additional data on psychological analysis and medical impact. We're not talking about more genotyping, but to collect that in order to help suffice a filing.

So that took about seven to eight months of real time, including our time to respond. We though are aware that other companies during that period of time with prognostic tests did go into the market, and so therefore, the inequitable treatments among companies is also a confusion. We did not have time to respond, and we did not have time to go into compliance, and because there's inadequate guidance on how to regulate laboratory services, we're still trying to figure out and we believe that the FDA is working very closely to try to work with us, how we can get there.

But in some cases, potentially companies will go out of business. We were expecting funds. At the launch most of our investors backed out. Now, it does create a real problem for an organization because a test like this does require additional funds to get there. We know that clarification is necessary. The FDA has said that our device is a significant risk device. Our IRB says it is not a significant risk device. We have conflicts because one of it means it will be a Class 3 versus a Class 2 or a Class 1 and require IRB versus no IRB approvals.

How do you get a 510(k) if there's no substantial equivalence?

The other really is who trumps whom. In essence, do we have to meet both CLIA and we meet FDA regulations? And then who will mediate the conflicts when these conflicts do and will come up?

And then how do you modify it? Because laboratory based tests try to get to a result. The way in which you get there can be improved very frequently. Do you need to file another 510(k) to do that?

So our recommendation is that we make modifications to CLIA if there's inadequate protections for public safety. Our desire is for public safety, which is why we did not offer this over the Internet. We did not go out in 2003 when we had about 150 patients that seemed to indicate this. We went and got 8,000 women, and then we only allowed this to be used in properly trained clinics where we only hand selected them that had genetic counseling capabilities, and we required that they have proficiencies in doing this.

If oversight is still deemed necessary, we need guidance on how do you deal with device design GMP, device master records, et cetera, allow time for feedback. The compliance has to have time in order to be able to get there, and I would say consider making it voluntary.

If you think about it, you did just approve a test that is going to necessitate another company having to do the same thing in order to gain market share. If you allow the market forces to dictate that, it can be another way of making sure the companies that have money can do this and those that have niche places to fill don't go out of business, and then enforce the FTC laws.

So in summary, it's an area of medicine that will grow. This is an area that will change. We do believe it will reduce health care costs, prevent disease. America is getting older. If we don't stop people from getting sick, health care costs will always go up.

If the hurdle is so high, no funding will be directed there. If you look at the NIH, American has one of the best countries for medicine health care in the world. It's also the highest cost.

And in conclusion, we're going to find solutions to accomplish the goal of safety and efficacy rather than just implementing a particular objective, which is regulation.

Thank you for your attention.

DR. KESSLER: Thank you.

For scheduling reasons, a couple of folks from the afternoon need to move their presentations now. So we're going to do that. We'll then have some time for a few of the afternoon presentations to be brought forward, and then at approximately 11:30 or 11:40 we'll take questions and comments from the floor.

I will ask at that time that the questions and comments be kept to approximately two minutes so that we have adequate time for everyone who may want to speak from the audience.

I'm going to turn now to Helen Schiff from the Breast Cancer Advocate group in New York City.

MS. SCHIFF: My name is Helen Schiff. I'm a breast cancer survivor and advocate from New York City. I work as a consultant for the City for Medical Consumers, and I am a member of SHARE, a breast and ovarian cancer organization in New York City.

I'm also a patient consultant for the FDA.

The potential for complex biomarkers known as IVDMIAs to change the face of breast cancer treatment is tremendous. For too long we have been plagued with a one size fits all approach to treatment. Even though many women are cured with surgery, they have to suffer through radiation, chemotherapy, and five years of a hormonal treatment because there is no way to know with certainty what treatment a woman really needs, if any.

While this treatment strategy has had a small impact on breast cancer mortality, it has meant that many women have been needlessly exposed to the lethal and life altering effects of all these modalities.

Just to name some of the worst ones, leukemia, cardiomyopathy, endometrial cancer, stroke, pulmonary embolism, infertility, lymphedema, hemobrain, and loss of libido.

So we welcome a new technology that has the potential to customize our treatments, to give us only what we need, to even tell us which chemotherapy, hormonal treatment, monoclonal antibody, or small molecule, will be optimal for our specific tumors.

And we know that in the future, IVDMIAs will also have the potential to find breast cancer earlier than is now possible and to do a better job than the Gail model at determining who is really at high risk for breast cancer.

Nevertheless, it is very important to be aware of the pitfalls that have plagued biomarker research over the years. In almost half a century of breast cancer biomarker research, only two biomarkers have proved to have clinical value: ER and HER2. The significance of what PR means is still disputed. We know for a fact that problems with assays have led to erroneous assessments, less than optimal treatment and, more importantly, premature loss of many lives.

Unfortunately recent studies indicate that there are still problems, for example, with accurate ER and HER2 assays. For example, the cut point for ER positivity varies from lab to lab, from one percent to 25 percent of cells with estrogen receptor.

You heard what Carolyn Compton said about the problems with the HER2 assay.

Other countries, by the way, for the estrogen receptor use a 50 percent cut point. As many have said, a treatment is only as good as its biomarker, and hence, they need to be rigorously regulated. One of the most important recommendations of the National Breast Cancer Coalition's strategic consensus report on breast cancer biomarkers is, quote, to incorporate the best components of drug development to guide the development and validation of biomarker assays.

This new FDA guidance for IVDMIAs is an important first step in that direction. It will assure that IVDMIAs are, one, examined before they are marketed; two, that their results are reproducible by an independent body; three, that they are tested for accuracy; and four, and most important, that they have clinical relevance.

The writing of the IVDMIA label, as with new drugs, must be overseen by the FDA to insure that there are no false claims and that the results of an IVDMIA assay are understandable to both doctors and patients.

It is clear to me that neither CLIA nor the Federal Trade Commission or any other HHS agency has the depth of experience, the capabilities or the resources to undertake such a job, nor do they have the regulatory power.

One only need look to the Over Check experience to see why this kind of regulatory power is so important. Over Check was developed as a blood test for the early detection of ovarian cancer in high risk women by Coralogic, a private company in partnership with scientists from the FDA and the NCI.

The FDA said, however, that it would not allow Over Check to be marketed to be marketed until it published clinical evidence that it worked in patients.

Keith Baterly, a bioinformatics specialist at M.D. Anderson, when trying to replicate the study, found among other problems that test results were influenced by the order in which the assay was run. According to an article by David Ransohoff in the Journal of the National Cancer Institute, Over Check had not been properly validated, its findings in an independent data set, and there were possible problems with over fitting and bias.

Three years later, it has still not been approved to be marketed, confirming its problems were serious. If it was up to CLIA or the FDA, Over Check would have been on the market because they do not have the power to stop it. And we all know how hard it is to get something off the market once it is on, not to mention the irreparable damage that would have done to women.

To me the argument that FDA regulation of IVDMIAs will hinder development and commercialization or that this new regulation is unfair are nonsequitors. Don't we want to find out which IVDMIAs work and which don't regardless of when they were developed or for whom?

If anything will hold up development in this field, it will be the premature marketing of more Over Checks. As we see, this is not just a matter of colorful characters or fly-by-night companies, as suggested in a recent GLA report. Reputable scientists can make honest mistakes.

As an advocate I think we need to introduce rigor and oversight into the biomarker field, and I think the FDA guidance on IVDMIAs is an important first step in this regard. I certainly don't follow the logic that because IVDMIAs are home brews they should not e regulated by the FDA. My logic leads in the other direction. Al biomarkers, including home brews when used in the clinic should be regulated by the FDA. Otherwise we leave the successful commercialization of IVDMIAs to companies who write the best press releases, do the most advertising, or try and court advocacy groups.

Thank you.

DR. KESSLER: Thank you.

We'll turn to David Levison from Cardio DX.

MR. LEVISON: Thank you for the opportunity to speak here today.

I'm David Levison, the president and CEO of Cardio DX.

Craig Shimasaki did a very nice job of providing a case study in the oncology area. I'm going to do a similar thing in the cardiovascular area to really demonstrate how companies are developing products in this area and why regulation needs to go hand in hand with innovation.

First slide, please.

Cardio DX is a molecular diagnostic company based in California. We're developing a series of diagnostic tools to allow physicians to make more appropriate treatment decisions for their patients.

The scientific tools we have at our disposal today provide the opportunity to improve patient care in new and unique ways. We believe there are many very safe and very effective treatments available to patients in this country.

Unfortunately, in many disease areas we have not had the diagnostic tests necessary to guide physicians in finding the right treatment for the right patient at the right time.

Said another way, Cardio DX is trying to help physicians take some of the practice out of the practice of medicine.

Next slide. Keep going. Another one.

Our focus is on cardiovascular disease, specifically three of the largest areas within cardiovascular medicine. If you think of the common things that can go wrong with your heart starting with the top left-hand part of this slide, you can either have a plumbing problem, coronary disease; you can have a pump problem, heart failure; or you can have an electrical problem, arrhythmias.

Cardiovascular disease is widespread and affects millions of patients and families in this country. These diseases are prime candidates for new types of diagnostic tools being developed by companies like Cardio DX.

Specifically, Cardio DX is working in disease states where patient stratification can improve clinical outcomes and lower total health care cost.

let me use one example. If you look at the third bullet point on this slide, we can use sudden cardiac death to illustrate a large unmet medical need to better risk stratify patients. Today, Thursday, February 8th, there will be about 500 ICD devices implanted in patients in hospitals around the country. If you track these patients that receive the defibrillators today for two years, less than 30 percent of them will receive therapeutic benefit during that period of time.

That leaves the door wide open to improve our techniques for stratifying patients that should receive this remarkable ICD therapy.

The ICD case is just one example of how we might be able to use our understanding of the human genome to improve the delivery of care. You've heard other examples today during others' testimony.

Next slide.

While we can all agree on the need for better risk stratification, I think it's important to highlight the rigor and redundancy that must go into the research and development of these diagnostics. Cardio DX has taken an intensive clinically focused approach in the development of our products. We will spend several years and millions of dollars to bring each product to market.

We begin to carefully choosing the clinical decision where there is a significant need for patient stratification. We then design clinical protocols, collaborate with academic and community based cardiologists to collect thousands of samples.

In addition to samples, we collect all of the relevant clinical data necessary for our analysis, and in many cases the clinical data is more challenging to collect than the sample itself.

With the samples in hand, we use provided nonproprietary technology to generate millions and in some cases billions of data points from these samples. It's that data that drives the development of our diagnostic products. This process takes a dedicated group of scientists, clinicians, statisticians, and business people to bring a product through the many hurdles of the development process.

In this slide I've provided just a general outline of the development phase that we go through to bring a product to market. We believe that it's a proven and reproducible process that will lead not only to clinically useful products, but also to acceptance within the scientific community through the publication and peer reviewed journal articles.

Next.

One of the things we'd like to emphasize is that Cardio DX products are designed to provide new information to physicians that are not available today. I believe that our work and that of others will provide new tools and new insights into the delivery of patient care.

I believe that molecular diagnostics provide a new flashlight, if you will, to illuminate disease in a new and exciting way.

I've got to the level of detail on Cardio DX because I believe it's important for the agency to know the rigor and thoroughness which many are approaching the development and use of IVDMIAs. Let me now turn my attention to draft guidance in its current form.

Ironically, if the guidance had been issued two years ago, I doubt I'd be standing here today. It's unlikely that Cardio DX would have received its initial funding if the draft guidance had been in place at that time.

Going forward, the guidance will force our company to be much more selective in our development projects and to significantly scale back our research and development efforts. This reduction stems from the economics of the market. Diagnostic products do not enjoy the same high revenue and high margins as pharmaceuticals and medical devices.

Therefore, diagnostic firms cannot afford the development of regulatory cycles that take five to ten years to get a product to market. If the guidance were to be implemented as is, Cardio DX would be forced into a difficult decision. Should we focus our resource on a single product rather than continue to drive the development of three programs? That's a choice that is one of the many unintended consequences of this draft guidance.

We're very supportive of the appropriate level of regulation to insure the public safety, but the draft guidance is too significant a jump from the current regulations to avoid significant disruptions in the flow of new and innovative diagnostic products.

Cardio DX is just one example, but you've heard others talk about the consequences of their programs as well. My biggest fear is that the draft guidance will have the opposite impact of what is intended. It could have the impact of keeping thousands of physicians from having the information necessary to deliver the most appropriate care to millions of patients.

I believe that companies like Cardio DX will be the source of innovation in the area of molecular diagnostics. Both the academic research centers and large laboratory companies are missing critical components necessary for the development of the new types of tests. Academic centers and established labs will be valuable partners for companies like Cardio DX, but they are unlikely to drive innovation.

We encourage the FDA to continue to foster innovation through forms like today's session where we can find creative solutions to the challenging issues. Specifically, we would like the FDA to continue working with companies and coalitions like the ones represented here today to find common ground. We firmly believe that the existing CLIA regulations are appropriate and adequate to bring tests to market.

If there is to be regulatory authority over IVDMIAs, let's drive innovation by focusing on risks and not complexity, by creating low volume exemptions similar to orphan drugs, and by giving credit to those tests that have withstood the scrutiny of published research by the scientific community.

Regulation can go hand in hand with innovation.

Thank you for the opportunity of discussing these issues with you today.

DR. KESSLER: Thank you very much.

We're going to turn to Sharon Terry from Genetic Alliance, please.

MS. TERRY: Thank you for the opportunity to address you this morning.

Next slide.

The Genetic Alliance was founded in 1986. It's an international coalition of over 600 advocacy organizations covering about 1,000 diseases which affect about 25 million people. We basically work to transform the leadership of that community and to build a capacity in those organizations.

I'm concerned with some of the rhetoric around the IVDMIA guidance from all the stakeholders, and as a parent of children with a genetic disease and as an advocate I'm deeply concerned that we have not struck the correct balance and are currently engaged in inadequate dialogue to serve the end users of IVDMIA.

The first concern I'd like to address is process. I think that we should stick to regulation by rulemaking and not by guidance. The unrealistic public comment period was very difficult and is difficult for us to get especially advocates up to speed enabling them to respond during this time. Draft guidances are not binding or enforceable and so we're concerned about their ability to advance the FDA's aims.

The FDA process could lead to litigation and artificial procedural delays that would impact the kinds of qualities that we want to see at the end and disjointed regulatory strategy from the FDA and CMS and others could also impede this area. We're a part of the citizens petition with Genetics and Public Policy Center to look at enhancing CLIA.

We'd also like to address whether we're talking about services or devices, whether this is about process or product or whether we need to even look at some reclassification in general, and how does this work in practical terms and pragmatically I think that maybe in this age of innovation there needs to be some consideration of that.

Is this an over extension of the Medical Device Safety Act and its amendments into an area that was not originally contemplated in the original intent of the regulations. In other words, has science advanced to a place where we really need to reconstitute some things? And it appears that there are unintended consequences or potentially harmful effect from the enforcement of these draft guidances.

We also wonder whether this is technology based rather than risk based, and we've heard several other people address this. In general, consumers are far more concerned about risk that the method of delivery or the technology, and they look forward to coming innovation in this field, as we've heard. We'd like to know if there are findings or wrongdoings that would be good examples of what motivated this approach because that would be certainly important in understanding why a technology approach might supersede a risk approach, and we believe that what is at stake and what truly matters to us as community, which is availability, access, affordability, innovation and transparency are not served in this approach, and we would agree that the more transparency we could have, for example, with registries, et cetera, that are open would be very important.

So I think in summary we have issues around whether or not the guidance shows us that FDA is getting up to speed and keeping pace with discovery and commercialization, including focus resources, your staffing and training, your experience in clinical laboratory operations, the general knowledge base and genetics, genomics and proteomics, and the technological aptitude.

So patient access to tests, basically the individuals that we work with, and we are working with a consumer task force on genetic testing asks questions about will this impede access. What are the associated costs? What are the associated delays for commercial adaption? How to facilitate timely access; is FDA balancing access to powerful innovation with regulation that would improve clinical outcome? Is the FDA creating new processes that will facilitate the integration of these new technologies into traditional markets as these markets change?

Innovation and information and technological renaissance in health care, we've heard a number of speakers address this, that the existing industrialized manufacturing regulatory model for the 19th Century will not overlay well in a new era of information based or personalized medicine. We want federal authorities to be looking forward to this new age. We stand at the tipping point for dramatic and powerful advances in our understanding and potential management of these disease pathways and the regulatory paradigm can either promote or stymie innovation, access, affordability, and transparency.

So we feel that this guidance fails to adequately deal with this dynamic reality, and in our community a great deal is at stake, and we feel we really need to get this right now.

We would recommend that the guidance be withdrawn, that a formal rulemaking process be initiated, and that we request a formal public engagement initiated to be established by HS across the federal agencies involved in this in establishing a process that will deliver a regulatory pathway to enable 21st Century health care.

So our challenge to every entity involved, and it's across the board, all the agencies and the companies and the advocates, is to consider the system not only from your own perspective but from the whole system's needs, essentially forgetting turf; create methods for supporting innovation, access, transparency, and accountability that will support novel solutions for the men, women and children who depend on you to get it right so that they may life in health and strength and comfort and plan and execute actions from what matters for patients and not from the limited perspective of advocacy of research regulation, laboratory or industry.

Thank you.

DR. KESSLER: Thank you very much.

We're going to turn to Stuart Hogarth from the University of Cambridge from the U.K.

You came all the way here for this?

MR. HOGARTH: And another meeting in San Francisco. So --

(Laughter.)

MR. HOGARTH: Yeah, and I should declare a conflict of interest. I'm getting a lift to the airport this afternoon from Steve Gutman.

(Laughter.)

DR. GUTMAN: I really want to hear your comments.

MR. HOGARTH: So I'm a research associate in the Department of Public Health and Primary Care at the University of Cambridge, and I'm part of a research team who has spent the last three years exploring the policy issues around the evaluation and regulation of genetic tests.

Next slide.

Our forthcoming report will explore two key questions. What are the incentives test developers need to generate good evaluative data on new tests? And what are the appropriate regulatory mechanisms for evaluation of such data?

We've looked at the regulatory regimes in Europe, the U.S., Canada, Australia, and we've spoken to 80 individuals from key stakeholder groups, policy makers, regulators, diagnostics companies, clinicians, and patients groups.

We've had the good fortune to enjoy active FDA involvement in our research, and we've held two policy workshops here in D.C.

Many of the people we've spoken to expressed the view that the public confidence in genetic testing can only be maintained if there's a clear and coherent framework of regulation. There was general agreement that the status quo was not adequate, that new tests should be subject to some form of systematic, independent, premarket evaluation.

Many U.S. participants expressed some frustration that despite the detailed policy work of successive task forces and advisory committees, there was still no progress in these issues. Much of this concerns centers and the lack of a level playing field between test kits and in-house developed tests. The clear certification process relapse is an important and necessary part of insuring the safety and effectiveness of pathology tests, but it is not enough. Premarket review of novel tests to assess the analytic and clinical validity if also required.

Next slide.

If we look at this internationally, we can see a clear trend in the regulation of IVDs towards explicitly bringing in-house developed tests into device regulations, exemplified by Australia and Europe.

However, the situation in the United States is not quite as clear-cut as this little table suggests. A significant proportion of in-house tests are subject to premarket review in the U.S. not by the FDA, but by New York State Department of Health under their clinical laboratory evaluation program.

I am told that the New York State system of premarket review is not dissimilar to requirements for a 510(k) review by FDA. What can we learn from the New York State model?

Clearly there is a concern that FDA regulation of in-house tests may become a block in innovation. Yet companies like Quest, LabCorp and Genomic Health are at the leading edge of diagnostic innovation. the fact that they are NY licensed, which suggests that premarket review of in-house tests need not be a major block in innovation.

In passing I would also comment that we have very little data on the relationship between innovation and regulation. A negative correlation is often asserted, but usually in the absence of evidence.

Innovation is important. I believe in order to discuss the IVDMIA guidance we need to place it in the context of changing models of innovation in the IVD industry. The industry has traditionally held IP and test platforms not in biomarkers. This means it's very competitive industry with low profit margins compared with PhRMA, with little protection and investment, relatively low margins and little experience or infrastructure for clinical evaluation, the traditional sector is ill equipped to undertake large scale clinical studies.

This model of weak IP in biomarkers has meant that no one party is responsible for developing the data on the clinical validity of a new test. Academic studies and professional advocates have filled the gap often promoting tests in the back of ad hoc clinical experience.

Next slide.

There's some evidence that the emerging field of molecular diagnostics has disrupted the traditional model in a number of ways. A number of companies developing genetic tests based on patent protection of the gene and its association with disease have emerged with products near or on the market, Decode, InterGenetics, Solera, devoting some or all of their R&D activity to heritable risk predictors and, of course, bringing tests to market, often with IP in the biomarkers and/or the interpretive algorithm which creates a clinical result from the analysis of multiple analytes.

The emerging market for gene expression and proteomic tests is based on similar strong IP rights. Strong IP allows company to charge higher prices for the test because it gives them longer in the market before they arrive off competing products.

IP gives small companies the leverage to access the money needed for clinical studies. they can raise money from catalysts or find a bigger partner, such as a major reference lab.

So IP is an incentive to fund large scale clinical studies. It is a good thing, and it is not just the technology which is changing. It's just the business model and the innovation process.

Next slide, please.

Do IP protected tests such as IVDMIAs present special regulatory problems? IP biomarkers can lead to monopolistic provision of test and the home brew loophole has made it more attractive for companies to develop their tests as in-house tests which are carried out in a monopolistic basis by either the test developer or two or three exclusive licensees.

Many clinicians and lab directors have opposed this arguing that monopolistic provisions circumvents the traditional informal methods of test evaluation whereby a test is subject to peer review in the field. They are concerned that it creates a situation where the only people who can perform the test are those with a vested interest in its promotion, and this creates anxiety that in order to recoup their R&D investment companies may make strong clinical claims for their test at a stage when the evidence base is still developing.

Controversy over emerging IP protected tests has been seen repeatedly in recent years and we've just had discussion of the correlogic (phonetic) Over Check example.

The novelty and complexity of many of the tests involved only heightens concerns. The point is not that all companies producing IVDMIAs are bad players making dangerous tests. No. The point is that with that independent evaluation by FDA there is no way for doctors and patients to distinguish good from bad.

Next slide.

Over the last few years, the FDA has written letters to several companies about irregulatory status of their in-house tests. Many industry people we spoke to felt that there was a clear pattern emerging about when FDA might intervene, if there's an algorithm involved in the test, if there's strong utility claims or if it's for a high risk use.

Last year we wrote a report in Pharmacogenomics for the Canadian government. We noted this trend and suggested that it was likely to increase in pace and would eventually have to be resolved by a formal guidance document or even a rule akin to the AASR rule.

Next slide.

Our research has indicated the importance which companies place on regulatory guidance documents, providing clarity on both the review processes and standards of evidence required, vital information for those taking strategic business decisions about product development.

This was clearly an area where clarification was needed. There may be doubts about whether guidance is sufficient and concerns about ambiguities in the document, but the draft guidance has provided a rationale for FDA's recent activities in this field. It represents a major step forward, yet it raises as many questions as it answers.

The new guidance does not cover all monopolistic providers. Manufacturers still compete with in-house tests which do not need to go through FDA review. Having asserted its authority over in-house tests, FDA must accept it may be called upon to exercise that authority.

What will the agency do if it receives complaints about a test which falls outside the IVDMIA guidance? It cannot state that the matter is outside its jurisdiction, and there's no other authority to whom the matter can be referred.

Yet for the FDA to respond by investigating other tests on an ad hoc basis would simply add to the confusion around this issue. This is not a hypothetical situation. Witness the current controversy surrounding direct consumer genetic tests, some but not all of which may fall under the new guidance.

The only solution as Gail Javitt indicated earlier is for a comprehensive approach to in-house tests, one which leaves test developers in no doubt about the regulatory pathway they must follow and which gives doctors and patients the assurance that the tests on which they rely are both safe and effective.

Next slide.

This is not the forum for a detailed discussion of how FDA could develop its approach to the regulation of in-house tests. However, it is worth noting that the agency has at its disposal a range of regulatory tools which might be applied to insure FDA review is not unduly burdensome.

In Australia the TGA have adopted third party review, authorizing the professional pathology bodies as reviewers, but with TGA retaining ultimate authority in a standard setting role. Orphan status can be given to rare disease tests to address the unique challenges faced in this area.

The SACGT identified an approach to premarket review which focuses on insuring truth in labeling as one which may be of assistance. This may be consistent with the use of the 510(k) review process and FDA has asserted that they took this approach in their reviews of both the raw (unintelligible) and third wave UGD-181 test.

Another approach is conditional licensing, although at present it would appear that this can only be done for PMAs, and there may be some scope here for enhancing the role of post marketing surveillance for Class 2 devices.

A move towards PMS could be consistent with a shift in favor of responsive regulation. That is, companies which clearly play by the rules are given relative freedom, but those who transgress come under greater regulatory scrutiny.

Finally, the U.S. has in the N.Y. State model an alternative free market review process which is already applied successfully to in-house tests, and it may be that the FDA can learn from this model.

Finally, in conclusion, I believe there's good reasons for the FDA to bring IVDMIAs under regulatory scrutiny. The guidance has brought greater clarity and consistency to the agency's previous piecemeal approach to this class of tests. FDA's decision to assert its authority over lab developed tests begins to bring it in line with the regulatory approach of both Europe and Australia, creating greater consistency across the international market for IVDs.

However, as has been made clear this morning, much remains to be done. The guidance is not the end of the process. It can only be the beginning.

Do I still get a lift to the airport, Steve?

(Laughter.)

DR. KESSLER: Thank you very much.

DR. GUTMAN: We're going to the same meeting.

DR. KESSLER: The last speaker for this morning will be Jonathan Cohen. Then we'll have some time for an open discussion on the floor. Jonathan Cohen is from 20/20 Gene Systems.

MR. COHEN: Thank you.

It appears that I'm the last. I'm between you and lunch. So I'm going to try to be very brief.

I'm Jonathan Cohen, President of 20/20 Gene Systems. I serve as in-house patent counsel and General Counsel for two publicly traded diagnostics companies, one of which got the first FDA approval for the HER2 test, which has become the poster child of personalized medicine.

Before starting 20/20 in 2000, we're an emerging diagnostics company that among other things is developing a blood test for the early detection of lung cancer which looks at a panel of autoantibodies in serum, and based on the published data to date, it appears that the tests can identify lung cancer in high risk smokers with up to 80 percent sensitivity and specificity several years earlier than it is detected on the CT scanning.

Some of what I'm going to cover, I'll be brief because it has been touched on by others, but I want to kind of give you my perspective of where diagnostics is today from the standpoint of a small company entrepreneur, anticipated consequences of these guidelines, and perhaps most importantly what the FDA should do because I do believe that the FDA plays a critical role in advancing products like the one that we're trying to develop, although it's not the role I believe that you are currently playing. I'd like to see the FDA be more of a referee than a gatekeeper, and I will return to that.

And finally, talking about incentives, a number of people have called for incentives. I'd like to give some specific ideas on that, with a little bit more detail.

As has been articulated, you know, this has historically been a commodity based industry. Most of the innovation has been on instrumentation and automation, and as a result, you have low margins.

But a lot of the products are essentially generic. In generic products, as you see with the drug side, typically are reimbursed at a substantially lower amount than innovative products.

So we're caught in a bit of a Catch-22. There are a few incentives for substantial investments both by companies, large or small, or venture capitalists. There was a statistic in BioWorld that I read that in 2004 only three percent of the venture capital, life science venture capital went to diagnostics, and I have no reason to believe that that has increased.

In fact, we heard from one VC this morning that if these regulations were to be implemented as written, he predicts that there will be even less venture capital. So its hard to believe it could be any harder, but perhaps with these guidelines it could actually be that.

And I really think it's very important because a number of entrepreneurs have touched on this, that for those that are advocates of higher guidelines, whether they be in government or in patient advocacy or in academia, really take to heart this point because ultimately what brings products to markets are companies, and companies need to be funded to do things the right way, and that funding comes from investors.

And if you're hearing from investors and you're hearing from entrepreneurs the same thing, that needs to really be absorbed. So I think that's extremely important.

Next slide.

This sort of says it a different way, and this is why I believe that pharmaceuticals and medical devices, as traditionally defined, such as stents and the like, do attract more investment relative to diagnostics. In short, the risk and rewards for both drugs and medical devices are, by and large, balanced. The burdens are very high, but the rewards are high. There are blockbuster drugs. There are blockbuster stents. There really are no blockbuster diagnostics.

And as a result, when you have medium level risks but low returns, there's little investment. My concern is that with if you with these guidelines only increase the risks or increase the burdens, but we're not addressing the return side, and that will mean fewer products and perhaps more inferior products. Again, less investment, fewer products.

Static tests, again, this was touched upon. Again, the perception of those of us in industry, especially in the area of multiplex biomarkers because things are evolving, and I can't say that the five or six markers we have today will necessarily be the optimum ones. It's a very early stage process, and the fear a lot of us have is that we will need to lock down our panel, and there will be little incentive to improve. It could create what I would call a race to the bottom. In other words, the pathologist this morning talked about the EGFR marker, very important for a class of new targeted cancer drugs, and currently there's an FDA product that's a single analyte, and it's by and large viewed not to be very effective.

What incentive would that company or others have to then create a panel test that could be effective. And actually the FDA is singling out the multiplex testing for higher scrutiny. You're, in essence, punishing the innovator, and that could create a race to the bottom where companies retreat to safer ground, which in the end could be worse and will be worse for patients. We'll have fewer products, and the products will ultimately be less effective.

So what should the FDA do? I believe that, again, referee, not gatekeeper. There is a critical role, and I definitely hear that the views from the cancer advocates and the academics and so forth, that there does need to be something done to be able to help these doctors and the patients determine what really is the right product.

And can you believe these claims that entrepreneurs and the companies are making? The database concept, some call it a registry, I think is really where we want to go at least for now for the next few years. I think the FDA is the right agency to manage that process and allow, essentially empower the marketplace to pick the winners. And as I'll talk about furthermore, to provide incentives and, if necessary, go to Congress and ask for legislation to provide incentives to help accelerate diagnostic development.

The database concept, again, well, you know what? Let's go to the next slide, yeah.

This is just sort of an example, quick and dirty, but this concept of where you would have Internet accessible not unlike the food labeling concept that you have for food, where physicians and even patients could make apples to apples comparisons between a lab test done that would clearly spell out the sensitivities, the specificities, validation of the studies that were done, all with links to the published data, and even allow the FDA to comment because I think the FDA can play an active role.

The FDA could in some cases even criticize companies if they think that they are making inflated claims or that the cohort of patients tested was too small to be statistically significant. So there would be the opportunity for the FDA to play an active role, but again, acting as a referee and not a gatekeeper.

This would not have -- there would be no premarket approval required here. This would allow the marketplace to be able to compare tests, and if you say you have a test with 85 percent sensitivity, you need to reference the studies that support that.

Next slide, please.

Again, to the extent that FDA does require a formal PMA type approval, it would really be for the high volume, high risk test, and this illustrates it graphically. Here when you have a test that addresses a small population, it simply doesn't make sense to develop a kit. It can be done in one lab with one set of technicians, with one set of equipment, and it doesn't need to be done under GMP with all of the burdens that traditional FDA approval has It just doesn't make sense.

On the other hand, there will be certain tests that do because of the market size warrant that the test be done in multiple places, and then there should be a higher level of regulatory scrutiny. As a practical matter because it's high volume, the manufacturer or the developer would have the economic resources for this type of regulation.

So this makes sense, I think, both scientifically and economically, this kind of model where the high volume, high risk test would be regulated, and the others would be regulated under the CLIA model as well as this proposed database concept.

I want to touch on accelerators because really -- and a number of people have touched on this, but I think we need to really start thinking of real ideas.

The orphan drug model is by and large a success for the FDA where, in essence, combinations of exclusivity tax credits and grants, in essence, created a robust market where one did not exist. In part, I think that is applicable to diagnostics today. I think there needs to be expanded reimbursement, but not for all tests, but truly the innovators. Let's reward the risk taker. Let's reward the person that substantially improves the state of the art. There needs to be a new DARPA-like or BARTA, the new BARTA for biodefense-like entity at HHS to fund Valley of Death development in diagnostics.

The number of peer review publications is exploding. Apparently there was 100,000 publications on biomarkers last year and zero FDA approved products. So we have a lot of publications, but very few products. We need funding for that Valley of Death. We need to collectively ask Congress for it.

Finally, income tax credits for both investors and developers is a proven and effective mechanism that works at the state level. I think it has worked at the orphan drug. This is really where we need to advance diagnostics so that we can have the kind of accuracy that that we need to deliver the patients without putting companies out of business.

Thank you.

DR. KESSLER: Thank you, Mr. Cohen.

I think in your last comments talking about the gulf between the large number of biomarker discoveries and the lack of new products may make an advertisement for some of our critical path initiatives.

So thank you.

The floor is open. If you do want to make comments, please come to one of the microphones in the center, the microphone at the podium, and please make your comments brief and to the point and try and keep it under two minutes.

We're not paid by the minute up here.

(Laughter.)

DR. KESSLER: Sir. Please don't forget to mention your name clearly.

DR. LEADER: Mention my name?

DR. KESSLER: Mention your name.

DR. LEADER: Hi. My name is Ben Leader. I'm an emergency physician and I did have a -- I apologize. I've got a cold -- but I did a Ph.D. where I started to develop a genetic diagnostic, and I've been encountering some of the challenges to try to bring this to patient care.

So I wanted to just ask maybe a naive question. Would it be possible to maybe take a non-traditional approach of an interaction between the FDA and industry where you actually say to industry, "We're going to help you get FDA approval or we'll go through the process for free, but we'll just take a percent of the profits."

(Laughter.)

DR. LEADER: And, I mean, that way there's no argument to say that there's any cost up front, and those that have a good idea, you know, it's a business proposition, and I'm not sure. Then there's the alignment of goals. So I put that out there for business experts.

DR. KESSLER: If you'd like a ride to the airport, I'm sure Steve will give you one.

(Laughter.)

DR. KESSLER: Other comments from the floor?

(No response.)

DR. KESSLER: It's approximately quarter of 12. Let's all retire for lunch. An hour and 15 minutes. We'll convene back here at one o'clock promptly, and we should be finished this afternoon in case any one of you are planning approximately we're looking at 3:30 to four o'clock, maybe even a little earlier.

Thank you.

(Whereupon, at 11:45 a.m., the meeting was recessed for lunch, to reconvene at 1:00 p.m., the same day.)

AFTERNOON SESSION (1:01 p.m.)

DR. KESSLER: Good afternoon. If we're fortunate and this afternoon's speakers are as careful with their time as this morning, we're going to take all ten presentations straight in a row. That should take us to a little before three o'clock, a little time for open mic, and then Dr. Schultz will be back in a minute, our Center Director, and I will have some closing comments.

I'm going to start with Sherry Salway Black from the Ovarian Cancer National Alliance.

Thank you.

MS. BLACK: Thank you.

Good afternoon. I'd also first like to thank the FDA for holding this public hearing and providing the opportunity to testify on this very, very important issue.

The Ovarian Cancer National Alliance has no financial interest. Our interest is in the millions of women who are at risk for this disease, and the close to 200,000 women who are survivors, who are alive today in this country.

My name is Sherry Salway Black, and I am Executive Director of the Ovarian Cancer National Alliance.

I was diagnosed five years ago with both ovarian and endometrial cancers. Both cancers were detected in Stage 1 where I had the best chance of survival. Actually this month is my fifth anniversary, something only 25 percent of women with ovarian cancer can claim, being diagnosed in early stages.

I was lucky to be diagnosed early. However, it was not the result of having access to an early screening test. My good fortune was only the lucky result of my perseverance with my doctor and subsequent treatment by the appropriate specialist, the gynecologic oncologist.

Two years ago I joined the Ovarian Cancer National Alliance as Executive Director to insure that other women can have the opportunity to be as fortunate as I have been. We cannot rely on luck for our survival. We must have the research to develop early screening tests, diagnostic tests, and new and better treatment and the spread awareness to women about the risk factors and symptoms of ovarian cancer.

The alliance is an umbrella organization with 50 state and local groups representing more than a million grassroots advocates, activists, and health care professionals. I'm testifying on behalf of those survivors, women at risk, advocates, and professionals to express my concern regarding draft guidance on IVDMIA.

According to the American Cancer Society, in 2007 22,430 women will be diagnosed with ovarian cancer and 15,000 will lose their lives to this terrible disease. Ovarian cancer is the deadliest gynecologic cancer, and the fifth leading cause of cancer death among women in America. Currently more than half of the women diagnosed with ovarian cancer will die within five years.

When detected early, the five-year survival rate increases to 90 percent, and when detected in the late stages, it drops to 28 percent.

A valid and reliable screening test, which is an important tool for improving early diagnosis and survival rates unfortunately does not yet exist for ovarian cancer. Since the alliance was founded ten years ago, close to 250,000 women have been diagnosed with ovarian cancer, more than 85,000 of those diagnosed in Stages 3 and 4 because there is no early screening test and no diagnostic test.

Only a small portion of those women are alive today. We recognize that it may be years before there is a highly sensitive and specific early screening test for the general population, but we do know there is significant research going on sponsored by both government and industry to develop effective diagnostic tests using multiple markers. These tests are the future for early screening, but they may be today and in the very near future the best hope for an early diagnosis for women who are at a higher risk than those with an existing pelvic mass.

These women's lives cannot be held hostage by a process that creates barriers getting a safe and effective test for early diagnosis and screening. Some of the issues and concerns for advocates are:

Does FDA's intervention and process improve safety and efficacy of these tests? Is the FDA the right body to regulate these tests?

Advocates have called for a specialty under CLIA that would create certain standards for this test. Is issuing guidelines the right process for the FDA to take in establishing the regulation of these tests?

The impact of this guidance is a totally new approach to how these tests are regulated and how the FDA interacts with labs.

What is the big picture plan for regulation of these types of tests to insure their quality and thus the health of the public? It is clear that standard need to be established -- we've heard that this morning -- for these kinds of tests which address their clinical validity. The FDA does have this expertise.

But this approach is a slide of a much bigger issue. There are dangers in taking a piecemeal approach to such a significant issue, and we really don't feel there's an overall strategy that is clear.

It's not clear what the procedures will be for the regulation of these tests. The FDA indicated it will take a risk based approach in determining what kind of review will be required. In fact, it seems to be taking a technology based approach with this more complicated algorithm and more variables require longer review.

The guidance appears overly general. There are a number of outstanding questions regarding what the FDA policies will be, and I won't go into more specifics because I think it was covered quite adequately this morning.

We feel the draft guidance is vague and opening to varying interpretations. We urge the FDA to resolve this by creating a clear, predictable process with remedies. The process must allow rapid access to diagnostic or screening tests, as well as increased safety and efficacy. I know it's a delicate balance, but this is what we're asking.

Such a process will encourage entry in research and the tools that will increase survivorship while protecting safety. Already ovarian cancer is a rare disease, not always at the forefront of medical research. Further discouragement into the ovarian cancer area will have great consequences for the lives of women.

The process required by the FDA must be clear, must be predictable, fast, and protect the lives of women because our lives depend on it.

Thank you.

DR. KESSLER: Thank you very much.

We'll next hear from Robert Erwin-Marty of the Nelson Cancer Foundation.

MR. ERWIN: Thank you. It's Robert Erwin of the Marti Nelson Cancer Foundation, but that's okay.

DR. KESSLER: I just realized where the hyphen was.

MR. ERWIN: Yes, thanks.

Well, I appreciate the opportunity to speak and also your setting up this meeting. I've worked as a patient advocate for about 12 or 13 years now. I also have been involved in commercial biotech for even longer than that, and by this time in the day there's probably not a whole lot new that you'll hear from me, but I thought I might see if I could frame my view of the problem and then offer a few suggestions.

I think the problem in the broader context is really the attempt to balance two realities, one, the reality that there are a lot of scumbags in the world who will take advantage of people who are in desperate situations, and that the attempt to keep them out of the market will create significant obstacles to the honest, legitimate, creative people who want to enter the market.

I don't like reading slides, but sitting in the back earlier I realized they can't all be read. But basically that conflict between the willingness of people to cut corners and the desire of people to have the government prevent that is the essence of a very serious challenge, I believe.

Looking at how we got to where we are, clea regulations came about because consumers were harmed by sloppiness, poor quality control, and corner cutting. FDA regulations arose from basically the same reasons, death and injury caused by products that were dangerous or faulty or that were completely misrepresented.

And it goes far beyond health care. I think that there is a very real problem that the FDA in general does a very good job of addressing, and that is what happens if capitalism is totally unfettered, and the examples I have up here are not health care specifically, but auto makers selling minivans as passenger cars without meeting passenger car standards was a rather cynical attempt to drive through the loopholes which they did successfully for a long time.

I don't think I need to comment to this audience on the problems with nutritional supplements and the fraud in that industry.

More recently, breakfast cereals being essentially advertised as containing fruit when they don't, and how many of us have seen the young, healthy models flitting through the fields of flowers? If anything, that should at least increase the sales of anti-nausea medication.

(Laughter.)

MR. ERWIN: So I believe that the regulation of claims made for products is very important. I agree with the comments that have been made earlier about regulating the analytical reliability, the clinical validity and all of that, but from simply a consumer standpoint, understanding that what is claimed for a product can be believed is an extremely important government service which, left to the free market, frequently unfortunately is not done.

And my concern is that as CLIA currently operates, that's not being done and that validation of claims for products sold directly to consumers, especially as the technology becomes more and more complex, is especially critical.

So I believe that FDA should regulate claims made for these products, and I do not think that the Federal Trade Commission and CLIA, despite the good work they do, are the answer. As personalized medicine, I hope, become more and more the norm, the importance of overcoming the natural tendency that would ensue if only direct to consumer advertising guided the choice of medicine and the choice of diagnostic tests, even direct to physician advertising would be a real problem.

I think that the pace of technological innovation certainly is high, but despite the protestations of a lot of people, it's not so fast that a rational regulatory process cannot provide good quality controls and good assurance to consumers.

However, there are some problems, and it basically has to do with the potential for government regulation to stifle innovation and to delay consumer access to the things that they need. I believe that the FDA currently does not have the resources to keep the review time line short enough if it takes on the full breadth of materials, products that are covered by this draft guidance. Depending on how it's implemented, a good product could be withdrawn from the market, and certainly the ambiguities between CLIA and FDA will make a lot of money for the lawyers, and I don't think that's necessarily a good thing.

Delays in marketing approval as has been pointed out before will definitely inhibit investment in innovative technologies, and that will result in innovation being slower to reach routine medical practice.

In addition, something that I'm very concerned about is that an added regulatory burden can significantly increase the prices of these products and the costs to consumers.

So one solution is to provide more resources to the FDA. I think that 15 years ago if you had asked me, I would have said the FDA were the bad guys. After a lot of interactions with a lot of people in the FDA on a lot of different projects with many companies, some quite controversial, I've revised that opinion substantially. I have a lot of respect for the quality of the staff, and I particularly like the researcher-reviewer model where there are very good scientists staying on the cutting edge of work who participate in the reviews. I don't think there are enough of them. I think there needs to be a reallocation of resources.

The federal government has plenty of resources. It's a question of allocation. I think the FDA staff should be expanded so that it can do this job well. More resources would reduce the risk of costly delays, and it would also reduce the need for selective enforcement, and I know that that's been a concern addressed in various ways today.

I agree that selective enforcement is a bad thing because it creates uncertainty among investors, even among physicians and researchers.

So a few slightly more specific suggestions, although these are somewhat "lay" in orientation. I think they get at a lot of what we've heard today.

Products that are already in clinical use that have already been validated through third party efforts or peer reviewed processes I think should in some way be grandfathered or exempted from any sort of deadly change, withdrawal from market or what have you.

I've listed two examples here, which are products that I believe, based on the peer reviewed medical literature, are good examples of things where the risk-benefit of a grandfathering or a temporary but adequate exemption from immediate compliance would make sense, and the examples I chose are Oncotype DX for breast cancer and AlloMap used in heart transplantation.

I also agree with an earlier comment that existing tests should not suddenly be labeled experimental because, going back to my skepticism about capitalism, we know exactly what the insurance companies will do if that happens.

And I do think that the standards need to be clarified a little bit across the rather diverse range of technologies that are covered here so that it's a little easier to understand.

To get at what is probably a red herring, but could be an actual health issue, there should be a special provision for IVDMIAs that specifically address rapidly emerging or mutating infectious disease. This is a very different kind of biology from a genetic test, a cancer test, or something else where the progression and the treatment occurs over a much longer time period than the potential need to react quickly to an emerging infectious disease.

Some type of a provision to put this in a special category will also reduce the income to the lawyers who will feed off of this otherwise, and I think that at least as a person who is not an expert but who has read a lot of this stuff, I had a hard time figuring out what would fall into Class 2 versus Class 3, and there are huge financial implications for that difference for the companies that have to fund it.

And my suggestion is to reconcile conflicts between CLIA and FDA and to use plain English. The Securities and Exchange Commission has figured out how to do that reasonably well, and it's probably a good model for other government agencies to follow.

So just to wrap things up, I think that the draft guidance is a good start. I would encourage a few modifications stated very clearly and with as many words as it takes, but clearly so that ordinary people can understand it.

And I do think that if it's properly done, this will represent a benefit for consumers, and it will also have the effect of assuring that profits flow to people who actually earn them.

Thank you very much.

DR. KESSLER: Thank you, Mr. Erwin.

At the beginning of the talk Dr. Schultz leaned over and wanted to offer you another minute. When you got to the resources, we wanted to offer you another half hour.

(Laughter.)

DR. KESSLER: However, we got three notes from the lawyers in the audience. They wanted us to cut you off.

(Laughter.)

DR. KESSLER: And finally, with regard to the SEC and plain language, we'll be calling Martha Stewart to see what she thinks of plain language with the SEC.

Elda Railey, you're welcome. You're from the Research Advocacy Network, and we'd like to hear your thoughts. Thank you.

MS. RAILEY: Thank you.

I'm Elda Railey from Research Advocacy Network who is the sole supporter of my presentation today.

We hope that makes a strong statement of how we feel about this issue because we do feel like for an organization with limited resources to fund my travel here today and to be able to speak to you, and we thank you for that opportunity.

It's also providential that this is happening on my son's 24th birthday. To me it's important for us to remember that it's for our next generation. It's not only for ourselves, but it's for our next generation that we will be enacting some of these regulations.

At the Research Advocacy Network, we're focused on demystifying the science behind cancer research and providing advocates with the tools they need to participate effectively in the research process. This is in an effort to insure the inclusion of the patient perspective in clinical trials as they are designed and conducted and as new diagnostics and therapeutics are developed.

As advocate we believe that IVDMIAs play a critical role for patients and the health care providers that use them to better understand a prognosis or to provide insight into treatment decision making.

In addition, these tests and this field of genetics and genomic research also represent the overall direction that research is rapidly moving, holding the promise of earlier diagnoses more effective treatments and better patient outcomes.

However, we also acknowledge that because the information provided by these assays leads to critical decision making on the part of the patient and the physician, it's imperative to insure that genetic and genomic tests are both scientifically accurate and can be reliably performed by the testing laboratory.

We recognize that there is a very fine balance to be achieved protecting safety while still enabling patient access and promoting scientific innovation.

It's from this perspective then that we ask the agency to address the following issues and questions as it considers how to effectively provide oversight of IVDMIAs. Because all of these are not created equal, it doesn't make sense to us for all of these tests to be regarded in the same way simply because they fall into the same category.

There could be significant difference in the quality of the science being conducted by the individual companies who develop and manufacture these tests, how well FDA distinguished between the companies to develop their assays with rigorous research practices and those whose clinical data is subpar.

What standard FDA used to determine the sufficiency of a company's scientific evidence? And when has a company fulfilled its research obligations with regard to demonstrating the clinical accuracy and the validity of its tests?

We feel that some of the developers have already provided a breadth of clinical data attesting to the scientific utility of their assays. Will these companies be forced to go back and do their clinical studies under this new regulation?

Since some of the assays were already scientifically validated and readily available, does the FDA plan to allow patients continue to have access to those tests throughout these changes to the process?

We believe that it's important for these tests to be grandfathered in as Bob Erwin mentioned to any regulatory process, providing that adequate clinical data exists to demonstrate scientific validity.

Otherwise patients and health care providers who have come to rely on these tests will lose out on the important information that they provide.

These are just a few of the complex issues our organization would like addressed through the draft guidance issued by the FDA. As the science of genetics and genomics advances rapidly, we anticipate that the agency may be challenged to develop regulatory policies and procedures that keep pace with the research, and as new policies and procedures are developed, we urge the FDA to create a clear, fair, balanced, and scientifically informed process so that new regulations are rational and truly support the best interest of patients.

Additionally, it's important that the FDA and the community come together to work out the details of new regulation in this arena. We all want the new science to move forward as long as it is safe and effective and results in better patient outcomes.

Thank you for the opportunity.

DR. KESSLER: Thank you. Thank you for spending your time with us today.

I'd like to introduce Carol Berry from Aviara Diagnostics.

MS. BERRY: Thank you.

And we appreciate the opportunity to talk. I am the Vice President of Sales at Aviar Diagnostics. We are a molecular diagnostic company focused in on oncology based genetic tests.

today what I wanted to do, many of the points that I had in my presentation have been covered in the morning session. So I'll highlight just few of those, but I'd like to talk about one of our tests that has been licensed to Labcor and Quest and exists on the market today.

This is a 92-gene RTCPR test that classifies 39 different tumor types. The sample that is used is generally taken out of a metastatic cancer patient is a fine needle biopsy, and it's used formalin fixed paraffin embedded tissues. So these are samples that are very small because these patients generally go through these fine needle biopsies. So the test was developed to accommodate those small sample sizes.

The medical situation today that exists is that one out of every four metastatic cancer patients, the primary classification cannot be identified. So this is about 15 percent of around 300,000 cases. So this is a very serious situation, and the physicians really depend upon the knowledge of what that primary cancer type is to be able to make a sufficient treatment decision.

And the traditional work-up is extremely costly, but more important, the time that it takes to diagnose these patients is critical because these patients don't have time. Every day is important to them.

So through successful cancer identification the patient can receive the best treatment to either help cure their cancer or extend their lives.

So this is the clinical decision tree, and one of the points I want to make is that this test today and how it's applied does not stand alone in clinical decision making as many diagnostic tests do not. The physician, the pathologist usually starts with immunohistochemical staining. If they can't -- sometimes they do get an answer and they go straight to a treatment decision, but in many of these cases these patients are not identified. So you have diagnoses like adenocarcinoma. It's just this general classification of cancer.

But what we suggest is that when we work with the pathologist is that they come back and confirm with their IHC or they confirm with an imaging test. So it's not like the est acts alone.

So just to give you an example, in one of our recent studies, we were looking at 50 cases of what's called cancer of the unknown primary or CUP patients, and they blinded the 50 patients for us. So the pathology group knew the results and when they unblinded it, seven of the cases were actually CUP patients. They could not determine the case, and when they applied the CUP test to those seven patients, five of the seven were identified properly.

So this is a test that is really encouraging because now these people can receive treatments that are very specific to their primary cancer type.

But another piece of this, too, is it's also about an economic look at the disease, is that some of the treatments that are available are very expensive and managed care companies are not going to pay for those expensive treatments unless you can get a proper diagnosis. So if you do get that diagnosis and you do get that treatment, then it will be covered, whereas in general what these patients receive today is just general chemotherapy, which is usually not successful.

So some of the questions which have been very well covered in the morning session we stand in the same situation and that is what do we do. This is a laboratory developed test at the present time. We've actually been to you all and talked with you. You like our science. You like all of the peer reviewed articles that we've -- all the science that we've generated.

But we stand in a situation that is very difficult because we want to follow the guidelines. We want to comply, but we're unsure because of the ambiguities in the current draft guidance.

So as I sat here this morning and I listened to many of my colleagues and many of the patient advocates, what I came away with, and this is not on the slide, is there are a lot of smart people in this room, and you guys were M.D.s, were Ph.D.s, were MBAs. Good heavens, I would hope that as a group we could figure this out and not have the FDA standing on one side, CLIA standing on the other, and our industry sitting out here listening.

I mean, good heavens, we need to come together as a group and figure this out. I really think that we can. I think we can make it reasonable.

The CLIA guidelines as they exist today, it's kind of interesting from a perspective of a business person in this industry for 20 years, is that we sometimes generate more clinical data and validation studies on the CLIA side because when you go to a physician to get them to use your test, they ask for lots of information, and that's the sign of a good physician.

And then on the other side, we can take that data and somehow apply it to FDA and not have to recreate studies, which creates a lot of cost. So we would really hope for a transition period to be able to look at new regulations that address laboratory developed tests, not devices.

There should be guidelines for devices. There should be guidelines for laboratory developed tests, and let's make them appropriate so that we can then take our tests and have patients benefit from those tests.

So go ahead.

So this is really one of the issues that's been covered quite well, is about risk and benefit to the patient, and really what are we trying to do? Are we trying to look at the way now we use multiple markers versus single markers? And really looking at it, is it because we're bringing new platforms and technologies to market?

These are all good things, but we need to have some balance, and that is risk and patient benefit.

So thank you for the opportunity to speak, and hopefully as a group we can work this out together.

DR. KESSLER: Thank you very much.

Elissa Passiment from the American Society for Clinical Laboratory Science.

Did I get the pronunciation correct?

MS. PASSIMENT: No, that's okay. No one does.

My name is Elissa Passiment. I'm a clinical laboratory scientist, and I'm here today to talk to you about the concerns of the members of the American Society for Clinical Laboratory Science.

Our organization is made up of the individuals who not only manage laboratories, but perform the laboratory testing, and we have over the years spent our time watching technology evolve and have grappled with the problems that occur in the real world both in implementing laboratory testing and also helping physicians and patients understand the results of their testing.

Next slide.

Our members have two major concerns, and both of these have been expressed. So they are simple statements, but they are still the huge hurdles that have to be overcome by whatever documentation and by whatever process FDA and the industry and the community decide to use.

The advances in science that are coming hold incredible promise for all of our patients and for patients and consumers in every point of the health care continuum, not just during acute phases, but also in prevention wellness and in chronic disease, and these advances cannot be stifled by more regulation that is truly nothing more than a burden.

On the other hand, there are a lot of claims that have been made that we have seen over the years that have not been able to be validated when put into practice in a routine laboratory, and it is very, very important that the science that we use in our laboratories be as validated as possible.

We believe that laboratories and laboratorians in general have a fairly good relationship with clinicians and with patients, that most of our laboratory tests have proven over time to be accurate, and that most physicians especially place a great deal of weight on what we produce in the way of information.

However, it will take very little to compromise that relationship. It doesn't take much for a physician or for an entire community of consumers to suddenly decide that there's something terribly wrong because we are putting out information that we cannot clearly state or validate and then have to retract.

You see this in the drug industry all the time, and this is not the way we want to see the practice of laboratory services evolve.

The guidance document that has been issued is an interesting one. We applaud FDA for attempting to frame the issue surrounding these assay, and we appreciate this attempt to give some clue as to your thinking. We agree with the agency that these assays are devices that should be regulated and that they do not fall under the ASR rule.

We support the characteristics that you've enumerated to define IVDMIAs, but we need some clarification. We assumed when we read this, and it's interesting to me listening all day today how we could all have read the same document and come away with different ideas about what it said.

But we assume from the language that all three of those characteristics had to be in place before it was considered an IVDMIA. If that is not the case, if that is not the correct assumption, we have a problem because there are some very common algorithms and calculations that were developed in house over time by laboratories that would be in jeopardy.

So there needs to be clarification on this point, exactly what encompasses the definition, how much of those three characteristics need to be in place before it becomes an IVDMIA, and if there is any ambiguity, that needs to be clarified.

We recommend that the FDA include descriptions of the 510(k) and PMA processes in whatever guidance they issue and that the URLs for additional information be supplied. Now, this sounds like possibly a silly thing to ask, but for most laboratorians who are going to be involved in trying to meet this guidance, they have no background in either 510(k) submissions or PMA, and they don't understand at all what it is that the FDA is even asking for.

So as much information as possible that can be placed in one place where people can go and that information concisely stated and then referred on with URLs rather than trying to find things on the FDA site would be appreciated.

The other thing that we request is that FDA develop more examples and, frankly, over time a process that better defines what's Class 2 and Class 3. This has been said multiple times in many different ways. It is a very important part of this process. It will make the difference between how people will approach their in-house lab test development.

The current document does not provide enough guidance for laboratorians, and after listening to the industry reps and their comments today, I've come to realize it give us enough information at all.

We are very supportive of FDA's intent to work with laboratorians, to be in compliance with the QSR and with CLIA. There are differences between the two. Those differences have to be worked out. They have to be enumerated.

We're asking that you not wait for laboratorians to identify the instances where they believe there is a particular requirement that may demonstrate compliance for QSR that's already being done under the CLIA's quality systems, but rather, give those examples to us within the framework of the document now because people will need, laboratorians are going to need some idea of what it is you're talking about. Again, this is a process that's very foreign to most laboratorians.

And then we would like to see a compendium developed over time. We commend the FDA;s plan to provide laboratory professionals with further guidance about MDR provisions since many of our members and many laboratorians out in the field really, frankly, do not spend a great deal of time with the MDR. They rely on the manufacturers for that.

We believe that this guidance document provides an approach that will insure that our services are medically and scientifically sound. Now, we recognize that this is a very complex issue. This is not something that's going to get done tomorrow. We are looking forward to working with the FDA over time to review multiple iterations of this document before we have anything that we can call final.

There is certainly a need to continue to develop and expand the document, and we must at all times keep in mind that the complexity of testing that will be covered by this is testing that is so cutting edge that for many physician, clinicians and patients, it becomes and will continue to be confusing.

So the more guidance and more structure and more standardization that occurs will make it easier for all of us.

Thank you very much for your time.

DR. KESSLER: Thank you.

The next speaker is Colette Saccamanno, Dr. Saccamanno from Gene Express.

DR. SACCAMANNO: Good afternoon, and thank you for this opportunity. I'm actually here by proxy for my colleague Dr. Jim Willey, who is the inventor and co-founder of Gene Express, inventor of the technology that I'd like to discuss with you today, which is called StaRT-PCR.

The position of Gene Express as a company has been always to be aligned in philosophy with the goals of what the FDA is trying to do here today, and with the issuance of the pharmacogenomic data submissions guideline back in 2004 or 2005, rather, the company really started to try to define its technology around the guidelines that were spelled out back then as looking for an analytical system within which a biomarker would be considered valid under the conditions specified here.

Gene Express was actually founded back in 1992 and spent the first decade of its existence coming up with validated assays for various genes and developing a technology platform that would be not only high throughput, but would remove much of the human intervention needed in the kind of precision that is needed in the pipetting steps and such in reverse transcription PCR processes, quantitative PCR processes.

So in keeping with the approach to try to find the least burdensome approach -- next slide, please -- the technology that we have developed is known as StaRT-PCR. Standardized reverse transcription polymerase chain reaction is simply a variation, a very what I call an elegant twist on the competitive template PCR by which each gene is measured relative to its respective internal standard within a mixture of internal standards.

And the elegance of this becomes clear shortly, but the features of the technology that actually allows me to say that we believe we have what could be characterized as a least burdensome approach is that the method itself inherently controls for the sources of variation that contribute to some of the difficulties that have been well acknowledged over the years with looking at various gene expression measurement technologies.

The internal standards and normalization to a reference gene of choice produces numerical data that is standardized and is quality controlled inherently. It allows the development of what we call interactive transcript abundance indices that have a beauty in and of themselves as providing a very simple and relatively easy and quick approach to defining a set of biomarkers, a small subset of biomarkers that can possibly diagnose a condition or monitor response to therapy, and so forth.

And we are very confident that the clinical chemistry aspects of what this StaRT-PCR brings to the table do meet the FDA requirements for genomic data submissions, as well as the requirements set out by CLIA for analytical performance characteristics.

This is a little busy. I'll just focus your attention right here. The standardized mixtures of internal standards that I referred to is literally a mixture of the standards that are pulled from the genes of interest, normalized against a reference gene, in this case beta Actin.

and you can see by the relationships here that Sample A and Sample B in the presence of the SMIS mixture can be related based virtually infinitely across the matrix not only to each other, but to any of the subsequent samples that are taken, and this is all documented in published literature, including the recently published results of the FDA's own microarray quality control Phase 1 project.

Down the right-hand side of the slide we can see some, again, of the characteristics that allow this to be characterized as a least burdensome approach. The intrinsic quality control in each of these measurements virtually eliminates any possibility of a false negative or false positive reading because you must see that internal control. Otherwise there's no result.

The lower limit of detection is established a priori in the development of the assay itself. The numerical data that is generated will allow the scientists interpreting this the knowledge that would basically rule out or at least understand the stoichastic sampling errors, especially on the low expression level end.

It also definitely simplifies the development of these diagnostic interactive transcriptive indices that I mentioned earlier.

The standardized data. Here's a power that is being brought to the industry that is unprecedented, and that is by virtue of, again, the SMIS reagents. Every laboratory that does an experiment with a particular gene will be able to measure that result against every other.

We just got word that Clinical Chemistry has accepted for publication some work that we did jointly with Pfizer that shows that we have used StaRT-PCR to generate normal human reference ranges for gene expression.

Next slide, please.

I mentioned the MAQC project. We did participate as one of the quantitative PCR platforms. Again, I guess one of the questions I had even in coming here today, seeing the news that came out yesterday, I like so many of people here am a little bit confused about the need, the recognition for standardization, for clear regulation, and yet I would like for the record to ask the question what criteria were invoked that enabled the clearance of the Mammiford (phonetic) test yesterday.

So I think everybody in the room deserves possibly in the closing remarks to hear a little bit directed toward that, especially in light of the fact that MAQC Phase 1 basically gave rise to the need for MAQC Phase 2, which is currently in the planning stages.

So the FDA recommended analytical performance characteristics that were defined by that work and even earlier by the guidance that came out did define for us what the performance characteristics are.

Next slide, please.

Those that are intrinsic to StaRT-PCR, and virtually all other quantitative PCR platforms are listed here, sensitivity, specificity, a linear dynamic range that covers the known range of human expression, and appropriate signal to analyte response, but those inherent to StaRT-PCR that are missing in other measuring platforms are the following: quality control, namely, internal standards in each measurement to control for false negatives and positives, and for interfering substance, and the ability to produce numerical quantification that gives rise to these indices that I've mentioned.

Here is a unique example of averting a false negative reading. If we do not see the internal control peak, then we cannot call that a result at all. It's not measurable.

By noticing that what should have been a highly expressed gene not being expressed at all gave the laboratorian the ability to go back and say what was going on here, dilute the cDNA, the sample, and the SMIS tenfold, dilute out the inhibitor, and get a reading of 160,000 molecules of ERB-2 per million molecules of beta Actin.

That same sample first time through was able to pick up a very lowly expressed gene at 2,300 molecules per million beta Actin because there was no gene specific inhibition in that particular sample. This is not possible with any of the other current technologies.

We recently licensed our technology to Gene Logic right here down the street and have started compiling some data that is beginning to show the ruggedness of the technology being able to compare lab to lab, gene to gene all of the transcription abundance measurements that were done. These are just representative, high, medium and low expressing genes, the average CVs that are coming out.

Admittedly a small sample size right now, but over time this will grow.

The power to produce molecular diagnostic products. These all have been well characterized in the published literature. We do have a diagnostic of lung cancer that would improve the diagnostic accuracy from 80 percent to something in the order of 93 to 95 percent. Again, money is the object. We don't have it to move forward with the clinical development of these tests right now.

We are working, looking at FFPE samples with Eli Lily to protect pemetrexed resistance. That's soon to be advanced and published. We do have a test that can look for resistance to cisplatin, again, bladder cancer progression, all using our technology.

Next slide.

So in conclusion, the performance characteristics does affect the quality of the data obtained, properly controlled transcript abundance measurement methods such as StaRT-PCR is standardized, is sensitive and poor performance in any area of these things will be reflected in our results.

So I echo the comments of the previous speakers as well. There's enough brains in this room to get this right.

Thank you.

DR. KESSLER: Thank you.

The next comments, we'll hear from Carolina Hinestrosa from the National Breast Cancer Coalition.

And, Carolina, you can mention.

MS. HINESTROSA: Okay. Thank you very much for the opportunity to speak today, and I'm going to focus really on the issue of the importance to consumers of the evidence based use of biomarker assays.

The National Breast Cancer Coalition was founded in 1991, and we have the nation's largest grassroots advocacy organization dedicated to ending breast cancer.

NBCC recognizes the tremendous potential that biomarker research has to impact risk assessment for the prevention and early detection of breast cancer and for the clinical care of those diagnosed. However, despite enormous investment and decades of research, there have been few successes and many disappointments so far.

With this in mind, the National Breast Cancer Coalition convened its first strategic consensus conference shaping the future of biomarker research in breast cancer to insure clinical relevance. This is the report I was referring to. There are some copies outside, and a few others.

This meeting took place in November 2005 with 50 world experts representing five key stakeholder groups, consumers, practicing clinicians, academic researchers, industry, and federal regulatory and research agencies in the U.S.

The group developed consensus on five general principles that serve as the framework for six priority areas and 18 recommendations. The five principles focus on the need for research on and the clinical use of biomarkers to be patient centered and aimed at substantially improving patient outcomes.

In other words, for biomarkers to be clinically useful, their use must reliably result in marked improvements in patient outcomes, chiefly survival, balance with quality of life, minimal toxicity and no over treatment.

Ultimately, a clinically useful biomarker will arguably identify those individuals likely to benefit from specific intervention and those who will probably not benefit from those interventions.

The other principles in the report call for biomarkers to be conducted in a socially responsible environment that poses innovation, where resources are shared as part of the social network, and where stakeholders have mutually agreed standards of guidelines, and hope. This is no utopia. We hope this is going to happen.

I'm going to tell you a little bit more about or enumerate our priority areas. The priority, number one is to develop and adopt standards and guidelines for the different stages of the bench to bedside continuum to insure that only biomarkers with clinical utility make their way into routine clinical practice.

And I will read the four recommendations in that area. The first one is to incorporate the best components of drug development, guide the development and evaluation of biomarker assays.

The second is to expand and encourage the adoption of guidelines for the publication of biomarker study results, and we hear a lot about the multiplicity and the studies that are published, but there are no clear standards as to how and what should be included in those publications. They are guidelines now and they should be expanded in and adopted.

We should maintain and update current guidelines for the clinical use of biomarkers and insure their implementation.

And the fourth recommendation in that area is to develop standards to encompass the clinical methodologies for biomarker measurement and reporting.

The second priority talks about improving access to biological specimens including associated clinical data and research study information, therefore, recommendations that you can read in the report.

The third recommendation is very specific and relevant to today's meeting, strengthening in some sense, expanding the role of regulatory agencies, particularly FDA and insuring the responsible and evidence based clinical use of biomarkers.

Two of the recommendations I'm going to highlight. Review of relevant (unintelligible) pertaining to biomarker assay oversight and recommend changes where needed, and this came because in the discussion or in the meeting it wasn't clear really whether FDA had the regulatory power to do this, and so we felt that it was -- or whether an act of Congress was required to give FDA that power.

So we recommended that this be done, and also to establish rules and our recommendation to establish rules for post marketing surveillance, also prove biomarker assays.

The four general priorities were to promote the synergistic collaboration across research disciplines and among industry, academia and consumer advocates. One of the recommendations here is to insure that the relevant biomarker assays be in tandem with new therapies.

The fifth priority, educate all stakeholders including clinicians and consumers in all aspects of biomarker research and use.

And the sixth recommendation, to enact legislation to protect patients against discrimination on the basis of biomarker information.

Some of the comments and really the rationale for the priority number three, which is strengthening the role of regulatory agencies to insure the responsible use of biomarkers, in the report it stated that the current regulatory framework for cancer biomarker oversight is insufficient to serve the best interest of consumers. It permits the clinical use of assays that are not reviewed by the FDA and the widespread use of FDA reviewed assays for nonapproved indications.

Further, there was concern that even in the case of FDA approved biomarker assays there's no assurance that the biomarker has demonstrated clinical utility as defined in the report.

The report states that the scope of FDA review should be expanded to include clinical utility as defined, the clinical potential process as well as extended to tests currently under the authority of CLIA.

Again, panelists expressed considerable concern regarding the premature or inappropriate noted basis of biomarker assays. Such use wastes welfare dollars and can lead to negative physical and psychological consequences and affect consumers.

The National Breast Cancer Coalition believes that the draft guidance is a step in the right direction as it intends to exercise more significant regulation oversight of biomarker assays to insure clinical relevance that should lead to evidence use of these biomarker assays.

I would agree with other comments that we really need a more comprehensive approach that creates a clear path moving forward and in which criteria and definitions clearly reflect the real and key issue, the impact of this test on patient outcomes, regardless of the technology that is being used.

While business considerations are important, they really should be secondary to the best interest of our patients and consumers. We urge you and invite you to take a look at this report. As I said, we have copies here, and if we run out of them, we will be happy to provide you a copy.

Thank you.

DR. KESSLER: Thank you, Carolina.

We're next to hear from Guido Brink from Agendia.

MR. BRINK: Good afternoon. My name is Guido Brink. It's a pleasure to be here, and I appreciate the opportunity to bring forward our vision on IVDMIAs.

I'm the Director of Regulatory Affairs of Agendia. You might have heard of our company. We're a small, commercial, central laboratory located in Amsterdam in the Netherlands.

Next slide.

The vision of Agendia is that complex diagnostics are an integral part of health care innovations that will expedite personalized medicine.

Next slide.

Agendia's first product required FDA clearance as an IVDMIA is MammaPrint. MammaPrint is used in assessment of breast cancer recurrence risk through microarray analysis of gene expression.

So why does Agendia think FDA oversight is desirable? New technologies used in IVDMIAs are considered experimental by most physicians. It's hard for physicians to understand and, therefore, trust new complex gene tests and incorrect results can have grave implications on morbidity and mortality and the clinical acceptance and utility of IVDMIAs will be greatly accelerated by FDA oversight.

Next slide.

Why is it needed? The complexity of IVDMIA test systems, indeed, warrants oversight because experimental design of validation studies is not straightforward and requires expert FDA agency review. Algorithms employed require independent review and validation by the FDA. Otherwise they are just a black box, whereas clinical lab regulations, such as CLIA are not focused on the complex text systems, and within those systems no specific regulatory standards exist that address IVDMIAs.

Proficiency testing schemes often do not exist and must be developed. Expertise for evaluating validation studies do not exist.

To our opinion, the key differences between home brew and IVDMIAs are that home brew tests can be independently validated. Technologies and software exist that are readily available and allow for independent confirmation of results.

For example, sequencing OLA, dHPLC, SSCP, all get you to the same result and no complex, high interpretive algorithm is needed to generate the result.

However, IVDMIAs often cannot be independently validated due to proprietary algorithms. Therefore, FDA validation will add to the validity of IVDMIAs.

Agendia is of the opinion that all IVDMIAs must be held to the same standard. We strongly believe that once the first IVDMIA has been cleared or approved, all IVDMIAs must be regulated to create a level playing field and to insure patient safety and the device effectiveness.

I'd like to close acknowledging the people that were instrumental in acquiring the appropriate regulatory clearance for our MammaPrint product. From Agendia, I would like to mention Dr. Laura van't Veer, Chief Operating Officer, and Professor Rene Bernards, Chief Scientific Officer of Agendia.

From FDA, I would like to thank Dr. Steve Gutman, Dr. Robert Becker, Dr. Maria Chung, Dr. Estelle Russell Cohen, and a special thanks to Dr. Rena Phillip.

Thank you.

DR. KESSLER: You're welcome. Thank you.

I still don't think despite that very nice praise that Dr. Gutman can do better than 30 days on the next approval.

(Laughter.)

DR. KESSLER: Although if anyone can, it's Dr. Gutman.

The next speaker is Judith Wilber. Dr. Wilber is from Expression Diagnostic.

DR. WILBER: Thank you.

What I thought I would do today is to use AlloMap testing as a specific example of CLIA oversight of the laboratory developed test. I am the lab director of the XDx Laboratory, meaning that it is my feet that are to the fire on this, and I want to give you some examples of how we take the CLIA rules seriously, and exactly how we interpret the CLIA rules in getting a complex test like this through.

The test itself is a service that's provided to transplant cardiologists. It detects the absence of acute cellular rejection in heart transplant patients. Currently heart transplant patients are monitored by using heart biopsy, and these are actually done quite frequently. In the first year they're done about 14 times. So this is a blood test that can substitute for that, and the hope is to reduce the number of endomyocardial biopsies, which, of course, can be traumatic to the patient.

This is performed entirely in the CLIA certified XDx Laboratory, and the laboratory besides being CLIA certified has also been licensed by the States of California and New York and the other states that require individual licensing.

There was some talk earlier about the New York regulations. It is true that all of the data, validation data, including clinical validation data, must be submitted to New York. However, they do inspect as a laboratory. So they get clinical validation data. They review it, and then they come out and inspect the laboratory, but they inspect the laboratory essentially the same way that CLIA does as the laboratory service.

This test measures specific immune system genes, and I'll get to a few of the details later, and it was developed as a part of an XDx initiated and sponsored four-year study where we collected samples.

The next slide, please.

This study was called CARGO for cardiac allograft rejection gene expression observational study. The sample collection was done at eight transplant centers. It required 737 patients and close to 6,000 samples in order to get enough rejection samples in order to do the algorithm development.

So I might point out here that there's more than one reason why there might be only one company doing this test, and that's because it would be very difficult for somebody else to do a study such as this at this point.

In addition to collecting blood samples and clinical data, we also collected the biopsy slides which were then reread by three centralized pathologists. So we had four pathology readings on all of the biopsy slides to go with.

And then we developed the technology first looking at micro arrays, but once the genes were selected all of the testing, current testing, and the validation testing was done using quantitative real time PCR on the exposed RNA.

The final set of markers were, of course tested and validated on a separate set of samples.

I just thought I'd pull out a little bit of the CLIA language, and interestingly, I think we've all seen the QSR regs also. It fits in a tiny, little book, but there's an awful lot that needs to be done as a result of that tiny, little book, and a lot of things that need to be done for CLIA can fit on this slide as well, but there's a lot of work that goes into validating according to these rules.

But just to be really brief, you do need to have accuracy measures, precision, analytic sensitivity, analytical specificity, reportable range, reference intervals, et cetera.

All of these things I would like ot also point out can be done not only on the individual genes, but on the score itself so that while there may be an algorithm that takes all of the information from the individual genes into in single number, that number can also be tested for reproducibility, et cetera, and interference from other things.

May I have the next slide, please?

While CLIA doesn't specifically talk about clinical verification, in order to get a test instituted and used, you do need to determine what is the clinical use of this and also some of the things that are required by CLIA could be construed to be talking about clinical validation.

Accuracy, besides talking about analytical sensitivity and specificity, you need to know clinical sensitivity and specificity, and that can be done in comparison with outcome measures, with other tests, such as biopsy or other tests that might come to similar conclusions, and then other clinical diagnoses that have happened within the patient population.

Normal values also need to be established actually even for FDA approved tests. Each laboratory needs to establish normal values for their populations, and then measures of positive predictive value and negative predictive value are also needed.

Reference ranges also so that you know what the range is of the scores that you might see.

Reproducibility studies, as I mentioned earlier, can be done both on the individual genes and on the score itself. The test that I'm talking about has raw scores that can be tested, and then there's 11 different genes that are measured that go into the algorithm, and there are nine other genes that are run in order to control the assay.

Obviously, the rules of CLIA say you have to establish the stability of every reagent that's being used, all of your in process test materials. How long can the RNA sit out? All of those things have to be validated.

You have to look at potential interfering substances, and you also need to do guard band studies, such as, you know, if you say it's supposed to be incubated at 37 degrees, what happens if it's at 39 degrees, or is it 37 plus or minus what?

As an example, I thought I'd pull this one out because it's looking at different genes in relation to the preanalytical steps of the assay. If we're looking at expression of RNA in white cells, you need to have the test that we're doing to be on the same sample at the same state as when it was taken from the patient.

And so once we looked at the genes that we had of interest, we went back and did a stability study to determine the time to processing and whether or not you kept the same signal from the time the blood was drawn until it was put in the lysis buffer and frozen.

If you can see, on the left there are some that were quite stable from the time that the blood was drawn. There were some others which were of great interest to our scientists, but we had to drop from the assay because they change from the time the blood was drawn until it was placed in the freeze.

And the next slide shows how we then can look at that with the score itself. So this is looking at all of the genes that are in the final assay, and you can see they're quite stable over a period of eight hours, and we actually require that the samples be placed in the freezer within two hours.

Next slide.

This is our final gene set. This is published, and what the genes represent is also published.

Can I have the next slide, please?

We look at the sensitivity, specificity, NPV, PPV, et cetera, in comparison with the biopsy. Now, the biopsy is not a gold, gold standard, and that's actually a challenge with any test manufacturer, is figuring out what exactly is a gold standard and what is truth. But that's the reason for having so many readings of the same slide, so that we could come to a consensus of whether this was a rejection or not.

Next slide.

The final test procedure is 60 real time PCRs, quantitative real time PCRs. There's 20 genes that are tested, and they're all done in duplicate, and they're all separate PCR reactions.

The next slide, please.

The next couple of slides I was just pointing out that this is a lab process. We have not put it in -- it's fairly complicated. It's not in a kit, and we probably are not going to put it in a kit, but this is the way we look at it as a lab process, and this is very standard, according to CLIA rules, looking at preanalytic, analytic, and post analytic phases of the testing.

So the next slide, I know you can't read this, but these are the flow charts that we go through and figure out what QC needs to be done at each step, whether something goes wrong, where we can loop back and retest, things like that. This is preanalytic process detail.

The next slide is the analytic and post analytic process detail.

The next slide is some of the QC we go through, and if you can see, the next slide is not only the QC but the whole QA procedure, quality assurance, which is what the CLIA also requires.

This is our test report. It gives some information to the physician on how to interpret the results, and the final is the references, which include the first reference up there, which is the clinical experience using this test from several different prominent heart transplant centers.

Thank you for your time.

DR. KESSLER: Thank you very much.

In a minute I'll introduce our last speaker. Following that, we'll have the microphones open again as we have the last two times, and then at the end of that I'll ask Dr. Schultz, our Center Director, and Dr. Gutman to make a couple of comments, and we'll close the day out. So if you have anything to say after Carolyn Jones from AdvaMed speaks, the mics will be open.

Carolyn.

MS. JONES: Good afternoon. I'm Carolyn Jones. I'm with the Technology and Regulatory Affairs Department at AdvaMed.

And AdvaMed is a trade association representing medical device manufacturers, diagnostic products, and medical information systems.

We want to join the other participants here today in thanking FDA leadership for holding this public meeting to allow stakeholders' input on this important subject.

We at AdvaMed support the goal identified in FDA's draft guidance document and applaud your efforts to dispel confusion that has resulted in the way FDA turn -- derives in part from FDA's approach to the regulation of laboratory developed tests that use FDA regulated components and, I guess, most specifically ASRs.

From an IVD perspective, AdvaMed represents a diverse group of interest, from manufacturers of IVDs that are clearly approved by FDA, companies that make ASRs that are used in laboratory developed tests, companies that provide laboratory services, and some combinations thereof.

The breadth of AdvaMed's membership makes us a good sounding board for diagnostic policies. The vast majority of AdvaMed's membership, IVD membership, has concluded that laboratory developed tests, including IVDMIAs, used for clinical diagnostic purposes meets the definition of a medical device and should be subject to a reasonable risk-based regulatory approach.

They believe that the laboratory developed tests should be subject to the same regulatory standard as other IVDs.

A few members have concluded that an IVDMIA is not a medical device, but a test system regulated by CMS under the CLIA regulations.

The views of our members almost certainly reflect the discussions taking place among other stakeholders, which is why this public meeting and additional explanation from FDA are very important.

All parties agree that patients need timely access to safe and effective diagnostics. Although the FDA IVD clearance process provides for safe and effective tests, it is still too burdensome and too slow moving for some new, novel technologies. It needs further streamlining to meet patient care and public health needs in a timely way.

That being said, the IVDMIA guidance document introduces new FDA policy to actively regulate some laboratory developed tests as medical devices, and the clinical laboratories that offer these testing services as manufacturers. This is a significant change in FDA policy and practice.

AdvaMed is here today because the IVDMIA guidance document raises important policy questions that require further clarification and to raise some concerns regarding the process FDA employed to announce this new policy.

Because the new IVDMIA policy guidance announces the significant change in policy, we believe the public would be better served by going through a guidance process that allows earlier empiric so that all stakeholders can participate and present their opinions on how such changes in policy will impact public health and the operations of the health care sector most affected, in this instance the clinical laboratories.

The involvement of stakeholders earlier in the process provides all potentially affected parties, including industry, a better understanding of the purpose of this change and FDA a better understanding of the potential impact of the new policy. We are glad for the hearing today, but because this guidance raises new questions for the laboratory community, we believe the process would have been better served if FDA had issued a concept paper and held this public meeting before issuing the guidance.

We believe the guidance as issued also needs some clarification. Because of the new requirements, AdvaMed believes it is important that its scope be clear and unambiguous. For example, based on discussions with stakeholders, it is clear to us that the clinical laboratory community does not understand the types of medical algorithms that FDA intends to regulate. They believe a guidance may include medical algorithms that have been longstanding truths of medical practice, and I think Elissa alluded to that in her presentation as well.

Therefore, we believe that FDA should provide more detailed information regarding which products will be subject to regulation.

In addition, we believe that if FDA goes forward with the initiative as drafted, fairness requires a substantial transition time from the point FDA publishes any final policy to the date the new policy is in force.

Laboratories will not fully understand which tests are or are not considered IVDMIA by FDA or how to come into compliance with the new regulations unless FDA takes the time to educate these entities and answer their questions.

Finally, we hope and expect that the new FDA thinking and transparency called for in today's meeting will extend to all of our members' enterprises, including those companies currently regulated by FDA that are investing heavily in delivering new know-how into the worldwide advances in medicine.

To meet the continuing needs of hospitals, physicians, and their patients and public health, and to address the disease challenges of all constituencies, including our companies, we should be invited to work with FDA to continue to develop more streamlined, cost effective approaches to insure these essential assays are safe and effective for worldwide use.

Again, we commend FDA's efforts, and we intend to continue to work with FDA and the laboratory organizations to achieve our shared goal of insuring timely patient access to safe and effective diagnostic tests wherever they are made.

Thank you for the opportunity to present here today, and we will be offering more extensive recommendations in our submission on this matter before the comment part closes on March 5th.

Thank you.

DR. KESSLER: Thank you, Carolyn.

I'd like to spend a moment and thank all of the speakers today for not only being on time, but for their thoughtful and careful consideration of the issues that we face and for the generally constructive tone and nature of the comments.

Microphones are open. We're here to listen. That's okay. You had one shot. You can take another. Go ahead. State your name again, please.

MS. CARACHE: I'm Patricia Carache. I represent the AMA, but I'm going to comment on a couple of other issues that have become forward this afternoon very briefly.

As I had commented earlier on the need for some type of clear-cut oversight, particularly in a setting in which the clinicians are not in a position to assess the quality of the tests that they are currently very excited about because it meets their clinical needs, as well as the consumer associated marketing. But there are three things I'd like to comment on of increasing importance, in my view.

The first is the concept of the orphan test, the need to regulate or not regulate rare diseases, and I point out there and my experience there is from discussions on this in which I was in working groups associated with the original SACGT, the Secretary's Committee on Genetic Testing.

We found that when we used the criteria for rare diseases that's currently used for antibiotics and other drugs, 90 percent of genetic diseases would be ignored because they would all fall below that threshold, and this actually would apply particularly to many of the particular analytes and microarrays and what have you that are being developed for cancer diseases and even some cancer diseases would fall below the threshold.

So even though a given disease may be in small numbers, the total population of those affected by genetic diseases and by many forms of cancer is grave, and it was decided that one should have criteria that could apply to all in a given category as a function of risk.

The second comment has to do with the current CLIA regulations, that if a test is not cleared by the FDA, it's the responsibility of the laboratory director that offers the test -- and we've heard just now perhaps the normal ranges in terms of gene expression -- to validate the test before he offers it.

I think the fallacy in this is extremely clear when you realize immediately that no individual laboratory directors, even if they had the money and the time required to do this, has the patient population available to him or her for the kinds of diseases we've heard discussed today. They can't validate it.

This also, I might add, applies to ASRs where there are analyte specific tests out for anthrax and for meningitis due to diseases that no laboratory -- even our own had to spend three years to develop a patient base at Johns Hopkins to diagnose some of the viral diseases that are out and in use. The laboratory directors rarely can do this. It has an Alice in Wonderland kind of component to it. So it almost has to be done through a premarket type of review that makes sense.

And finally, my comment pertains to a recurrent theme that has come up in many different formats today of the need to have CLIA participate in clinical validation, as well as in what they're doing now, which is a very limited form of analyte validation, and it was just pointed out that although we heard that we have a wonderful model here in New York State, in fact, it combines the activities of CLIA and the FDA

So New York State has had available something that we don't have nationally, where the policies of moving together, the FDA and CLIA, has seemed to me almost like trying to make the North Rim and the South Rim join at the Grand Canyon.

And I think that we do have enough smarts in this room and enough support from agencies that concede the value of smoothing out the entire system to see what can be done to coordinate as New York State has coordinated the regulatory activities pertaining to laboratory testing.

Thank you.

DR. KESSLER: Thank you very much.

Other comments from the floor? Don't be shy.

Well, I have to thank the speakers. They must have said everything there is to say.

(Laughter.)

DR. SHIMASAKI: Craig Shimasaki. I spoke earlier for InterGenetics.

I think it is clear from everyone that spoke that there was no disagreement that it is important that we find better ways to insure safety and efficacy for patients in welfare. I think it's clear that we want to make sure that innovation is not hampered as a result.

So, therefore, the question is how do you go about it. I've taken five products from a previous company through Dr. Gutman's office, and we've been very pleased with the candid interaction and the capabilities of the staff.

And so it was quite surprising and a little uncharacteristic to be in sort of a confusing situation that actually resulted in something that is detrimental to the organization. So none of us would want to be in your position because we know that that's a difficult thing to have to regulate an entire industry and try to target a moving target here as it moves.

But we do realize that that's important. So one of my questions would be: what is the process going forward after hearing the comments? And then what's the time frame that you may anticipate that things may be done or maybe actions might be taken such that we might have a better idea of what to expect as companies that are developing or companies that are already in the market for products that people do use now.

DR. KESSLER: We'll try to address some of that in our final comments.

We've been fortunate today to have Dr. Daniel Schultz, who is the Director of the Center for Device and Radiological Health, spend the day with us, and I'm going to turn to Dan to make a few comments about some of the things he's heard, and next we'll turn to Steve Gutman.

DR. SCHULTZ: Thank you very much, Larry, and thanks for running what I think is a great meeting.

I think it's certainly clear to me based on the size of this group that there's a lot of interest in this area, and very frankly, there should be. I think a number of speakers today have made comments about how we really are on the cusp of a fundamental change in the way medicine is practiced in this country and around the world, and a lot of that will be based on the types of diagnostic tests that have been discussed here today.

So I think the interest is warranted, and I think that the need for these types of discussions is extremely important. Certainly there are a lot of issues that were brought up today that I listened to very, very carefully. I think there were a lot of divergent opinions regarding the scope of the guidance and our activities in this area. Clearly that scope will have to be defined, and to me one of the main things that we need to do is pay careful attention for the need for us to be able to define things as clearly as possible.

We may not in the end be able to satisfy everyone with exactly whatever policy we finally come up with, but at the very least we should be able to make that policy as clear as possible, and I think that that's certainly a message that I took out of today's discussion.

Another couple of issues that I think were very clear to me is that we need to do a better job associating technology and risk. I think that there were some comments today about how we were regulating things based on technology as opposed to using a risk based approach. If that was the message in the guidance, from the guidance or some message that people think they heard, frankly, in terms of our own internal discussions and knowing the people that actually have formulated this policy, I think that that, in fact, couldn't be further from the truth.

I think at the end of the day what we are very, very interested in is providing a regulatory oversight framework that does, in fact, reflect the risk of the product. And I would say that to some extent and perhaps, again, we need to do a little bit better job explaining and defining this, but to some extent there is a link between the changes in technology and the level of risk, and I think that we need to be able to explain that because if people don't understand it, then we haven't succeeded the way we need to.

There were also a number of comments about how we move forward, and I think the last speaker certainly asked what is the plan for moving forward. And I guess what I would say to that is there is a plan for moving forward, and I think that the idea that we can simply go back to where we were several months ago, I guess that to me is the one notion that would be unacceptable.

The field is moving very quickly. The technology is moving very quickly. Expectations both in this room and, I think, throughout the country are moving very quickly in terms of us being able to get a handle on this type of technology and to be able to, as many people said, do it right, and I think we need to continue moving forward based on today's discussion.

In terms of the time frame, I think we will move with deliberate speed. I think we're going to take the time required once the comments come in to digest the comments that were made here today and the written comments that we get to the docket, and then we'll move forward as quickly as we possibly can.

I don't think that this guidance will be the last piece of this discussion, just as today's meeting will not be the last meeting, but I do think that we need to take deliberate but concrete steps in order to be able to move this area forward and we fully intend to do that.

So anyway, I would just like to close, again, with an acknowledgement of the fact that your interest and participation in this meeting and in future meetings and discussions is very, very much appreciated. We certainly believe that we can do a better job when we listen, and we're trying to do more listening.

But again, I think at the end of the day we all need to understand that this process needs to proceed and will proceed.

So thank you very much.

DR. KESSLER: Thank you, Dan.

Dr. Gutman.

DR. GUTMAN: Yes, I also want to thank everyone. It really was a very rich day. I'm very close to our work group and very close to this document. So being able to actually hear people with their particular passions provide their perspectives was just very valuable to me. So thank you.

We always expected that the document was not perfect, and I guess you have suggested the same. So I thank you for that.

We, actually as we were interacting with people early in the life of the document, actually thought that people either over reading or misreading the document, sort of blaming you and not us. But I'll take part of the blame perhaps for not having crafted language with the clarity that SEC does, and we'll try and go to the SEC Website and be more attuned or I'll look at mutual fund reports and try and be more attuned to clarity in language.

We didn't think this was going to be easy. I think you've reinforce that, and I can assure you that from where I sit, and I'm not perfect and my work group isn't perfect, but from where I sit unfortunately I'm getting older. People in my family are getting older. I actually do understand the opportunity cost of the delayed lab test. So I don't want anyone to walk away from this room and not understand that I appreciate the value and importance of this new technology. It would be in no one's best interest to put up artificial hurdles that didn't contribute in some positive way to that new technology.

I loved Carolyn's idea about dialogue. Other people suggested it as well, and we would like to seek dialogue. It certainly isn't in our best interest to surprise or confuse people. It just makes for extra work for us and for people. That's not the way we want to operate. That's not the way we've historically operated, and I am certainly committed to try and do my imperfect best to do that in the future.

And the one thing that you can do to help make sure we move forward fast is please respect the March 5th deadline. Get us good comments, concrete comments. Some of you actually -- many of you provided power points, but some actually have already provided written comments, but please be attentive to that document so you can help us start the hard work of figuring out where we're going to go.

Thank you.

DR. KESSLER: So I'm going to make a few closing comments.

The first thing I'd like to do is send a special thank you to my left to Dr. Susan Altaie. She helped arrange a lot of this meeting and the fact that we were able to conduct the meeting and hear from everybody in such a timely fashion is credit to her.

I'd like to thank Steve and his Office of In Vitro Diagnostics for not only doing the work, but providing the support for this, and our conference people there in Murray Williams and Shirley Meeks are always wonderfully helpful. So I appreciate that.

Susan says that we will in the very near future hope to post a transcript that we're doing, as well as the slides that you saw today. They're part of the public record. So if you wish to get slides, we will put them on the Website at the FDA site so that you can draw them down.

A few substantive comments from today. I'm going to echo some of the things that Dan and Steve just said just to make sure that we're all on the same page, and I want to echo one of the comments from one of our speakers from this afternoon. We do this for ourselves because it's important for medicine today.

More importantly, we do this for medicine for future generations. It's important to all of us to make sure that we're setting the ground work for the way medicine, public health, and the regulated products that we deal with will work in the future.

We do find ourselves in an exciting time. For lab science it's very obvious for medicine and public health, and here are a couple of things that we heard.

You want us to be clear about making our public health case for why this is important. I think the interest in the room shows why it's important, but I think we certainly can make the case why we've chosen the regulatory path that we have.

Dan said it again. I'm going to repeat it in a different way. It's like the old adage in real estate. What's important? Location, location, location.

For us in this guidance, clearly clarify, clarify, and again clarify, and we will endeavor to do that as we move forward, and in doing so we hope to provide both scientific and regulatory certainty in terms of how we move forward because we recognize that that's going to be important for the laboratories who are involved with these tests, as well sa for the companies and the scientists that are trying to manufacture and create and innovate in this important product area.

One of the things we also heard is that you want us to work closely with our federal partners. That would include the Center for Medicare and Medicaid Services, CDC, FTC, and NCI was here in force as was other parts of NIH, and we certainly do plan to work with them. We have closely, and we continue to do that.

We have heard contrasting things today. Dan said it's going to be hard to fix this and make everybody happy. We heard some people say we should be very narrow in what we try to do and others say we should be both broad and comprehensive. It's hard to do both, but we're going to try and look at the full gamut of the possibilities and try and think about thoughtful regulation in that.

Finally, it is clear we find ourselves at the bring of a revolution in personalized medicine, but just as previous dramatic advances in science have delivered health benefits, they also sometimes unexpectedly bring new risks. As a science based public health agency, we seek to find the optimal balance between risk and benefit and between rapid access to market and careful deliberative product review. That's a very difficult balance. Steve does it every day. The people in the Office of Device Evaluation do it every day. We do it in the post market side every day.

We've listened to your concerns. We will take your ideas into serious consideration and help us chart the path to the future.

Thank you. We're adjourned.

(Whereupon, at 2:39 p.m., the public meeting in the above-entitled matter was concluded.)