Theranos’ Future in Doubt | Elizabeth Holmes barred for 2 years from Lab Industry
Theranos, blood-testing startup, which was in its peak few months ago, is now heading towards a doubtful future. The founder of Theranos, Elizabeth Holmes, who was once the darling of Silicon Valley, has been barred for two years from running a laboratory.
Learning about this development, questions were raised about what is left for Theranos. It was already reeling from lost contracts amid doubts about the science behind its tests — which promised to use only a drop of blood to detect diseases.
Holmes still remains the CEO of Theranos and they havent yet cancelled the plans to present the scientific data behind the blood tests, which was for the first time in history for them. They plan to present the data next month.
But the Centers for Medicare and Medicaid Services also imposed other sanctions on the company, including:
- Revoking the California lab’s CLIA license after 60 days
- Prohibiting the lab from participating in the Medicare program
- Canceling the lab’s approval to receive Medicare payments
- Limiting Theranos’ hematology CLIA certification
- A financial penalty
- The CMS will direct a portion of Theranos’ correction plan
Theranos’ problems came into
focus when it was reported that the company’s tests were not producing accurate results and that the company was trying to cover it up.Since report popped-up, the company, which once fetched a $9 billion valuation, has lost out on a key deal, had one of its two labs shut down, and wound up under investigation by several government agencies and Congress. Its president and chief operating officer Sunny Balwani has left the company, and it voided or corrected tens of thousands of blood tests in an attempt to make things right with the CMS.
Walgreens, which was Theranos’ biggest partner, abandoned the blood-testing company in June, citing Theranos’ decision to void two years’ worth of test results and a government agency’s rejection of the company’s plan of correction.
The termination shuttered an additional 40 Theranos Wellness Centers, where people would have gone to have their blood drawn, in Walgreens stores. A separate Theranos blood-testing center in Pennsylvania has been closed since January.
Theranos had been running blood tests since 2013, at one point serving as many as 46 locations.
Here’s what Theranos has left (for now):
- Theranos still operates five locations where people can get their blood tested (four in Arizona and one in California).
- It still has plans to present its scientific data in an education session at a medical conference in August, when the company will have to show whether its technology is as revolutionary as it seems.
- Theranos created a medical advisory board in April, with eight scientists from major universities and hospitals, which is meant to find ways to present the data to the scientific community.
- Its Arizona lab remains open, and Theranos plans to shut down an “subsequently rebuild” the facility in California,” Holmes said.
Most of Theranos’ commercial operations that put its tests to use hinged on its agreement with Walgreens, and most of Theranos’ backing came from Holmes’ own relationships.
Theranos is trying to keep up even with the losses and is putting up its best spin on this, saying that even though they are disappointed by CMS’ decision, they take these matters very seriously and are committed to fully resolve all outstanding issues with CMS and to demonstrate their dedication to the highest standards of quality and compliance.
