Dive Brief:
- The Wall Street Journal on Sunday reported that the Centers for Medicare & Medicaid Services (CMS) will soon publicly release a report allegedly finding "serious deficiencies" at a Theranos laboratory in Newark, California.
- While the Journal doesn't reveal the nature of these particular deficiencies, the paper cites sources alleging that these particular violations are far more problematic than the ones cited by CMS for the same lab in 2013. UPDATE: It should be noted that a CMS spokesperson responded to the Journal by saying that he or she "can’t confirm any survey conclusions or results at this time."
- Theranos has already been forced to limit use of its "nanotainer," finger-prick blood testing technology to its sole approved herpes test indication by the FDA. In December, two former Theranos employees filed complaints alleging that the firm forced workers to continue administering the nanotainer tests even in the face of signs of inaccuracy. Theranos has vehemently pushed back on those claims.
Dive Insight:
The Journal article contains plenty of material to chew over, including the implications that this ostensibly imminent report could have for Theranos' dealings with pharmacy giant Walgreens.
In October, Walgreens reportedly put an expansion of Theranos testing services at "Wellness Centers" in 41 California and Arizona stores on hold following the burgeoning regulatory controversy building around the firm. Now, the Journal is reporting that Walgreens executives have been mulling shutting down the existing wellness centers, and that the upcoming report could hasten that decision. UPDATE: A Walgreens spokesperson stated to the Journal that the company is "currently in discussions about the next phase of our relationship" with Theranos but did not elaborate on what that next phase may entail.
Moreover, Theranos has potentially been incurring big losses on some of its testing by outsourcing blood work to more expensive reference laboratories such as one at the University of California, San Francisco.
Theranos has been largely critical of the Journal's reporting and pushed back on many of its assertions surrounding the firm's practices and regulatory dealings. A company spokesperson also stressed to BioPharma Dive that the firm has not received any notification to date regarding the deficiencies alleged by the Journal's sources.
But the firm, which was once a darling of the startup community, has a tough road ahead with convincing regulators, investors, and partners that its technology is sound and accurate and the firm's business and compliance procedures are all above board.