February 13, 2017
By Alex Keown, BioSpace.com Breaking News Staff
PALO ALTO, Calif. – Theranos continues to face scrutiny over its legacy of botched testing and the failure to notify patients. This time the embattled company reportedly failed to notify patients in Arizona about potentially deficient diabetes tests.
The Wall Street Journal, which has led the way in investigating the questionable scientific practices of Theranos, said the company did not ensure some patients who received inaccurate results regarding a diabetes test were notified. The company has been flagged multiple times for its shoddy clinical practices, which resulted in the shuttering of clinical labs in California as well as Arizona. In the latest report, Theranos performed “blood-coagulation tests” on a machine that company staff improperly configured, the Journal reported, as reported by the Phoenix Business Times.
In a September report from the Centers for Medicare and Medicaid Services (CMS), which was obtained by the Wall Street Journal, government inspectors said Theranos failed to follow proper procedures when attempting to calibrate the machines they used. Also, the government found that Theranos did not maintain proper records regarding the calibration testing on the machines. Throughout the 40 page report, the CMS found that Theranos failed to follow proper procedures on multiple tests.
The report shows that Theranos’ laboratory manager defended many of the tests, saying the results found by the CMS were within the “acceptable limits.” The CMS report said the clinical lab manager did not define the criteria of “acceptable limits” as something set by the manufacturer of the testing device, but by a third-party source.
The September inspection led to Theranos shuttering its lab facilities across the country. Earlier in 2016, the federal organization investigated the company’s Newark, Calif. blood testing laboratory where investigators found egregious practices. Issues at the lab lead the company to void two years’ worth of data sent to customers. The voiding of data caused Walgreens to sever ties with Theranos and shutter the Theranos testing sites in the 40 Walgreens locations across Arizona.
Theranos’ problems in Arizona has led the attorney general of that state to look into suing the California-based company over a “long-running scheme of deceptive acts and misrepresentations” that are related to its blood testing technology. In addition to the Arizona lawsuit, Theranos is facing several others, including a $140 million lawsuit filed by former partner Walgreens and a lawsuit filed by a Bay Area hedge fund that alleged the biotech company duped investors about the efficacy of its products in order to attract investments of nearly $100 million.
Since the company has faced such scrutiny over its blood testing technology, tech that was supposed to revolutionize the industry, Theranos has drastically pivoted its business focus to development of miniaturized portable laboratory.
Theranos was once valued at approximately $9 billion, but now the company is worth considerably less, with some estimates placing it at about $400 million. Theranos started 2017 with an announcement it was slashing about 41 percent of its workforce, leaving “a core team of 220 professionals to execute on its business plans.” In October, the company terminated 340 people as it shut down its clinical labs and wellness centers following a two-year ban from operating a clinical laboratory. The company is appealing the ban.