The business of blood tests is big business and the Rise and Fall of Theranos is a Big Story
Federal health regulators have proposed banning Theranos Inc. founder Elizabeth Holmes from the blood-testing business for at least two years after concluding that the company failed to fix what regulators have called major problems at its laboratory in California.
In a letter dated March 18, the Centers for Medicare and Medicaid Services said it plans to revoke the California lab’s federal license and prohibit its owners, including Ms. Holmes and Theranos’s president, Sunny Balwani, from owning or running any other lab for at least two years. That would include the company’s only other lab, located in Arizona.
The two labs generate most of Theranos’s revenue and are at the core of its strategy to revolutionize the blood-testing industry with new technology, user-friendliness and quick results.
The letter hasn’t been released to the public, but a copy was reviewed by The Wall Street Journal.
Under federal law, Theranos had 10 days to give CMS evidence of why the sanctions shouldn’t be imposed. The company has responded, and CMS is reviewing the response, according to a person familiar with the matter. (More at WSJ)
The last few months have witnessed the unraveling of the remarkable life sciences company Theranos, culminating in the latest news that federal regulators may ban founder Elizabeth Holmes from the blood-testing industry for at least two years. The company is also facing a federal criminal investigation into whether it misled investors about its technology and company operations.
How has this widely acclaimed biomedical innovator fallen so far, so fast?
Theranos’ revolutionary claim that won over investors was that it could accurately run tests using a small amount of blood taken from a poke in the patient’s finger, instead of a syringe full from a needle stuck in a vein. The idea was that dozens of tests, such as cholesterol and thyroid hormone levels, could be run on a single, tiny blood sample….
Theranos always asserted that it had to operate in “stealth mode” to protect its lead in breakthrough technology, which means that there was literally no peer-reviewed information out there about its technology.
A few weeks before regulators proposed banning Holmes and Theranos President Sunny Balwani from the blood-testing industry, the company tried to remedy this by bulking up its medical advisor board with well-qualified experts in chemistry, pathology and clinical chemistry.
It’s hard to imagine these experts would have signed on amid all the bad publicity and allegations without demanding proof that the technology works, but who knows?
It still remains possible that Theranos has discovered a breakthrough technology that can do hundreds of lab tests on a drop of fluid from a patient’s finger. But even if this increasingly unlikely prospect is a reality, Holmes’ erstwhile acolytes need to remember the lessons learned from the pantheon of past pied pipers and summed up by statistician W. Edwards Deming:
In God we trust; all others must bring data.