The FDA has proposed the reclassification of numerous oncology companion diagnostics (CDx) from Class III to Class II, which would allow these tests to utilize the 510(k) pathway under the new device type specified at 21 CFR 866.6075.
This is one of the most significant regulatory shifts for CDx in a decade and it arrives at an interesting moment, after the court has ruled against FDA’s LDT final rule, placing real limits on the agency’s authority over LDT.
Below is my take on what this means for CDx co-development, follow-on CDx, and IVD companies of different sizes, including a key dilemma that still won’t be solved unless FDA addresses access issues around predicate testing.
- Drug + CDx Co-Development
Benefits
- Lower regulatory burden: Moving from PMA → 510(k) eases documentation, analytical evidence requirements, and timelines.
- More accessible to emerging IVD players: Start-ups and mid-sized companies can more realistically pursue pharma partnerships.
- Faster updates: Biomarker additions, variant expansions, and pipeline updates may move through special-controls-driven 510(k) routes.
- Reduced drug–diagnostic misalignment: Less risk that the CDx becomes the bottleneck for a therapeutic approval or label expansion.
Risks / Trade-offs
- Special controls will still be rigorous, particularly for NGS (such as pipeline versioning, QC metrics, analytical standards, etc).
- Competition will intensify as the regulatory moat narrows.
- Pharma may reset expectations around cost and timelines.
- Follow-On CDx (Competing with an existing approved CDx)
This is where the real-world barrier still exists and it has nothing to do with the LDT rule or the new down-classification.
The central problem: “closed-predicate” CDx models
Consider the case where the original CDx for a drug is a PMA-approved NGS LDT, where the lab/IVD manufacturer:
- Controls the wet lab.
- Controls the bioinformatics pipeline.
- Controls access to sample testing.
- Has no obligation to collaborate with subsequent developers.
Yet follow-on CDx developers must compare their assay to the predicate to demonstrate substantial equivalence.
If the predicate owner refuses to test samples, share materials, or enable comparison, then follow-on CDx development becomes practically impossible, even if the regulatory classification is reduced.
Down-classification does not solve this structural access problem.
Potential benefits if predicate access were enabled
- True CDx competition could finally emerge.
- Multiple validated platforms for the same therapeutic indication.
- Improved access and lower cost through market competition.
- Innovation around workflow, turnaround time, and platform choice.
Persistent risks
- No access = no follow-on CDx, regardless of Class II status or special controls.
- Drug labeling complexity: How should equivalence/substitution be defined across platforms?
- Market power remains concentrated if the originator CDx sponsor controls all sample access.
- Impact by Company Size
- Large IVD Companies
Upside:
- Faster and less costly CDx development cycles.
- Ability to expand and refresh CDx portfolios more easily.
- Stronger position in global regulatory discussions.
Risks:
- New competitors emerging from the SME/start-up space.
- Pricing pressure as barriers fall.
- Need to differentiate through quality, informatics, and service.
- Small & Mid-Size IVD Companies
Upside:
- CDx development finally becomes attainable, not just theoretically possible.
- More pharma partnership opportunities.
- Shorter path to revenue, more attractive to investors.
- Ability to innovate around niche biomarkers with lower capital risk.
Risks:
- Predicate access bottleneck remains the biggest blocker for follow-on CDx.
- Special controls still require strong quality and bioinformatics maturity.
- Competition intensifies as more entrants emerge.
Bottom Line
FDA’s proposed down-classification is a major accelerator for precision oncology and CDx innovation, and it especially empowers smaller IVD companies to enter markets previously gated by PMA complexity and cost.
But we must be clear: Even in Class II, the follow-on CDx pathway remains blocked for some CDx unless FDA addresses predicate-access barriers for method comparison.
Curious to hear from others:
Are we moving toward a more competitive CDx ecosystem, or will predicate-access constraints keep the field largely consolidated?