A federal court ruled against the FDA’s final rule to regulate laboratory‑developed tests (LDTs), overturning an agency effort to bring many LDTs under stricter federal oversight. Legal challenges argued the rule exceeded FDA authority; the court decision removes the new regulatory pathway and leaves LDT governance fragmented between states and CLIA oversight. The ruling, widely reported as the top regulatory story of 2025, alters compliance plans for diagnostics firms and labs that had begun preparing for FDA submission pathways. Policymakers, test developers and investors must reassess timelines and regulatory risk for diagnostics programs, especially those leveraging next‑generation sequencing and AI‑driven algorithms.