Theranos Gave Few Credible Responses to CMS

Nancy Crotti

April 27, 2016

3 Min Read
Theranos Gave Few Credible Responses to CMS

In fact, the words "not credible" are repeated many times in the notice of sanctions from the U.S. Centers for Medicare & Medicaid Services.

Nancy Crotti

Troubled Theranos asked CMS to redact information about its proprietary blood testing technology from the agency's investigative documents before making them public.

Even by redacting a dozen or so references in the 148-page report, the 45-page notice of sanctions shows that CMS has thus far found Theranos not credible.

Indeed, the notice repeats the sentence, "The laboratory's allegation of compliance is not credible and evidence of correction is not acceptable." It appears more than 40 times, in boldface, about a variety of issues inspectors found in the company's California lab and Theranos' responses.

Each lapse in itself might be found in any lab, Tim Hamill, director of UC San Francisco's clinical labs at China Basin and Parnassus, told Wired. "The fact that there are so many of them gives me the impression that these guys don't know what they're doing," Hamill added.

The Silicon Valley startup became well-known for its blood-testing technology, which promised to perform multiple diagnostic tests with a single drop of blood. Its 30-year-old founder, Elizabeth Holmes, became a media darling.

If anyone had been paying close enough attention at the beginning, they would have seen trouble coming, opined New York Times columnist Randall Stross. Stross, who has written books about Silicon Valley and Thomas Edison, points out that Theranos made plenty of fundraising pitches in the valley, but landed no money from the big-name VC firms there.

Google Ventures (now GV) turned Theranos down twice because of what Stross quoted one partner as referring to as "so much hand-waving." Others were dissatisfied with a lack of technical details that the company was willing to provide. Theranos didn't publish its findings in peer-reviewed journals, either, Stross adds.

Plus, the illuminati on its original board of directors included not medical professionals, but the likes of Henry Kissinger, former secretary of state George Shultz, and William H. Foege, the former director of the Centers for Disease Control and Prevention. Theranos has since beefed up its scientific and medical advisory boardwith eight medical and lab testing experts.

An earlier CMS report found that the company's Edison technology--designed to test small amounts of blood from a fingerprick--failed 87% of quality-control tests when measuring a hormone that affects testosterone levels.

CMS had already said in January that  it might fine the firm, or suspend or revoke the company's certification for testing human samples. The agency is now threatening fines and revocation in addition to shutting Holmes and Theranos president, Sunny Balwani, out of the business.

Holmes appeared on NBC's "Today" show several days ago to take responsibility for her company's actions. Reports of federal investigations surfaced in Bloomberg and the Wall Street Journal, whose in-depth stories last year first signaled trouble at Theranos. Stay tuned.

Nancy Crotti is a contributor to Qmed and MPMN.

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About the Author(s)

Nancy Crotti

Nancy Crotti is a frequent contributor to MD+DI. Reach her at [email protected].

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