Health regulators have proposed revoking the federal license for Theranos Inc.’s California laboratory and banning the firm’s top two executives from the blood-testing business for at least two years.
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CMS’s concerns became public in January, after the agency conducted a routine survey of the lab and found five areas in which it fell short of compliance standards.
Under federal law, Theranos has 10 days to submit evidence to CMS that the sanctions should not be imposed, which the company has done.
The proposed ban would include Theranos’s only other lab, located in Arizona, which along with the California lab generates most of the company’s revenue, the Journal said.
Just previous year, Elizabeth Holmes, the founder of blood testing company Theranos, ranked as the world’s youngest self-made female billionaire, a Silicon Valley darling who was revolutionizing her industry.
Theranos made conclusions in their statements to regulators but did not provide information as to how they arrived at these conclusions, the report said. The problems with the company’s response included a range of problems, including “a lack of understanding” of the regulatory requirements.
“We’ve taken comprehensive corrective measures over the past several months”, she said. That would mean that the lab could not perform any testing, according to the letter.
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Following a series of controversies over faulty and erratic blood test results, Holmes or Sunny Balwani, Theranos’s chief operating officer, will be prohibited from owning or running a laboratory for two years, a letter dated March 18 from the Centers for Medicare and Medicaid Services (CMS) said. If the evidence fails to convince the regulator, sanctions would be imposed as quickly as eight days, although the license revocation would take 60 days. This is one of the most severe sanctions that the U.S. government can impose on a laboratory. It was disclosed Wednesday by the Wall Street Journal. “But if they do, we will work with CMS to address all of their concerns”.
