Theranos blood-testing lab poses 'immediate' risk – US government

‘Immediate corrective action’ is needed at the blood-testing firm’s California lab, a health agency has told the Silicon Valley unicorn

Theranos has been hit with yet another major setback after a US government health agency described its blood-testing technology as posing “immediate jeopardy” to the public.

The Silicon Valley firm has been valued at $10bn, raising $400m from investors through what it claimed was “breakthrough” technology that allowed it to do blood tests based on a pinprick, rather than a full blood draw.

But in October, the company was rocked by a Wall Street Journal investigation into exactly how much – or how little – it actually used its own technology during tests.

Once considered a “unicorn” for its multibillion-dollar valuation, Theranos is now dealing with a detailed letter from the Centers for Medicare and Medicaid Services (CMS) that claims the Theranos lab in Newark, California, poses a risk to patients.

CMS’s letter said that Theranos met the conditions of “a situation in which immediate corrective action is necessary because the laboratory’s non-compliance with one or more … requirements has already caused, is causing, or is likely to cause, at any time, serious injury or harm, or death, to individuals served by the laboratory or to the health and safety of the general public”.

It also identified five specific areas in which the lab operated by Theranos did not meet its standards but said that “in addition, other standards were also found to be not met”.

Theranos was founded in 2003 by 31-year-old Elizabeth Holmes, the year she dropped out of a course in chemical engineering at Stanford University. It quickly gained a lot of attention and investment – $400m at a valuation of $10bn, according to Bloomberg News, as well as a deal with insurer BlueCross.

But the Wall Street Journal investigation found that Theranos wasn’t using its pinprick technology for almost any of the 240 tests it offered, concluding that the company “is operating more like a traditional lab that draws blood with needles from patients’ arms”.

In a statement, a Theranos representative said that the CMS survey “began months ago and does not reflect the current state of the lab,” adding that the finding “does not apply to the whole lab, and none of these findings relate to our Arizona lab, where we currently process over 90 percent of our tests.”

The statement also said that Theranos had made policy and personnel changes at the Newark lab following an internal review that happened concurrently with the CMS survey. It added that the company “value[s] engagement with our regulators, which helps us build best-in-class systems, and are committed to ensuring that all our labs operate at the highest standards.”


Nicky Woolf in San Francisco

The GuardianTramp

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