CMS Inspection Finds Problems at Theranos: WSJ

In its latest salvo against the blood-testing company, the Wall Street Journal reports that Theranos could lose CMS backing unless it corrects deficiencies found in its facilities. It also states that the company heavily relies on outsourcing partners for some complex blood tests.

Qmed Staff

U.S. health inspectors associated with the Centers for Medicare & Medicaid Services (CMS) discovered serious deficiencies at Theranos Inc.'s facilities in Silicon Valley, according to the Wall Street Journal, which reports that the inspection results will be soon released publicly.

The inspectors reportedly discovered significant problems, although the Journal does not go into detail about the nature of those problems. It does, however, claim that the problems were "far more severe" than those listed in a 2013 inspection of the Theranos lab.

A CMS spokesperson explained that the agency "can't confirm any survey conclusions or results at this time."

By now, the Journal's coverage of Theranos is turning into a saga and the newspaper continues to heavily rely on anonymous sources in its reporting--a practice that has been criticized by the company's founder and CEO Elizabeth Holmes.

Holmes has admitted that the company has stopped using its proprietary technology for all but a herpes test, which had been cleared by FDA in the summer of 2015. For the rest of its 200 plus tests, the company is using traditional lab testing machines while also relying on external partners such as University of California, San Francisco and ARUP Laboratories, to perform some of the tests, the Journal reports.

Furthermore, Theranos is purportedly losing money for some of these tests. For instance, the Journal states that it pays $300 to have an outside lab perform a comprehensive metabolic panel while the company only charges its patients $7.19 for that same test.

The company s said to be outsourcing some of the most common blood tests to UCSF, including blood counts and screening for prostate-specific antigen.

Walgreens is rumored to be mulling closing the Theranos blood testing centers that it operates primarily in Arizona, the newspaper further reported. It further reports that Walgreens has lent the company at least $50 million in the form of debt convertible into equity.

While the press against Theranos has been scathing, many of the problems outlined in the publicly released 483s are common, says David Amor, managing partner and principal consultant at MEDgineering Inc., who will be speaking on the subject at MD&M West next month in Anaheim, CA.

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