- Theranos reportedly told federal regulators it has corrected the results of tens of thousands of tests conducted by the blood-testing company between 2014 and 2015, reports The Wall Street Journal, citing people familiar with the matter.
- In some cases test results were revised, while others were voided, The Journal said. After rising to a lofty $9 billion valuation on the promise of finger-prick diagnostic capabilities, Theranos' Edison technology has faced increasingly sharp scrutiny into its accuracy and reliability.
- The Centers for Medicare and Medicaid Services is currently considering whether to levy sweeping sanctions against Theranos. The company failed to address significant deficiencies at a Newark, CA lab flagged in an inspection last fall. Founder Elizabeth Holmes could face a two-year ban from the business, among other penalties.
When news first broke of the potential CMS sanctions, Theranos made an effort to clarify that the sanctions stemmed only from violations found at its Newark laboratory. Over 90% of testing carried out by the company is done at its Arizona lab, originally suggesting the CMS penalties, while damaging, would not be crippling for Theranos’ continued functioning as a blood-testing company.
The Wall Street Journal's report points to possibly more comprehensive flaws in how Theranos conducted blood testing across its operations though.
Since the CMS first indicated sanctions could be forthcoming, Theranos has submitted an updated corrective plan to the regulator. No penalties have been applied, and the two-year ban for Holmes is only the most severe of a wide range of potential sanctions.
Theranos has also redoubled its efforts to improve the scientific chops of its executive team. Three new directors with diagnostics and medical experience, including a former Amgen exec, have joined the company's board of directors, and the scientific and medical board has been filled out.
Sunny Balwani, the former president and chief operating officer of Theranos, has departed and the company is currently looking to add several new executives.
Recalling two-years' worth of tests is a dramatic step, however. Inaccurate tests could lead to improper patient care and cause patients to believe themselves at risk when their readings are, in fact, normal.
The move also puts further strain on the partnerships Theranos has made to bring its testing services to patients, such as through Walgreens. And Theranos has yet to file any evidence of its diagnostic testing in a peer-reviewed scientific article.
CMS will likely decide on penalties soon and Theranos also faces investigations from the Securities and Exchange Commission, as well as the Department of Justice.