Posted by Sten Westgard, MS
Following a devastating series of stories from the Wall Street Journal, additional events have only increased the skepticism of outside observers of this company.
The next body blow to theranos came in the form of an FDA finding that the Edison machine and nanotainer were uncleared medical devices, which means that only 1 true theranos test has been cleared - and all other tests must be run on the "old-fashioned" diagnostic instruments such as those supplied by Siemens.
But it didn't stop there, January 25th, CMS released the results of an inspection of the Theranos laboratory in Newark, California. They declared that this laboratory posed "an immediate jeopardy to patient health and safety." That's a pretty bad sign. But the specific deficiencies are even worse:
- D5024: 42 C.F.R. § 493.1215 Condition: Hematology;
- D5400: 42 C.F.R. § 493.1250 Condition: Analytic systems;
- D6076: 42 C.F.R. § 493.1441 Condition: Laboratories performing high complexity testing; laboratory director;
- D6108: 42 C.F.R. § 493.1447 Condition: Laboratories performing high complexity testing; technical supervisor; and,
- D6168: 42 C.F.R. § 493.1487 Condition: Laboratories performing high complexity testing; testing personnel.
What these deficiencies suggest is that the Newark Theranos laboratory has system-wide faults. Crucially, the laboratory does not have qualified staff at the bench level, supervisor level, or the director level. None of the staff running this lab meet the criteria necessary to be performing high complexity testing. How can this be? While Theranos has a right to believe it can break all the rules about laboratory testing, they can't believe that their tests are so good that they don't have to be in compliance with the most basic personnel qualifications. The first two deficiencies also suggest that there are major problems in their analytical practices and their hematology testing. These are big, systemic problems, not little errors or minor oversights. And we only know the deficiencies that were listed in the public letter. The letter alludes to a list of even more deficiencies that is not public.
In the face of these violations, Theranos had 10 calendar days to respond and correct their problems. They didn't. They had to request another extension (which in itself shows that CMS is being rather accommodating to them). Even with the extension, they didn't get their response to CMS until the last possible moment. Not a good sign.
As a result of these regulatory failures, Walgreens, a one-time cheerful partner of Theranos, demanded that Theranos stop sending any specimens to the Newark laboratory from their Arizona testing centers. Walgreens issued a statement to the public, stressing that
"Walgreens informed Theranos that tests collected at 40 Theranos Wellness Centers located at stores in Arizona must be sent only to Theranos’s certified lab in the Phoenix area or to an accredited third-party lab for analysis....No patient samples will be sent to the Newark lab until all issues raised by CMS have been fully resolved.”
Other partners of Theranos are getting similarly cold feet: Capital BlueCross, asked Theranos to stop drawing blood from its patients at a retail store in Harrisburg, Pennsylvania. BlueCross had announced a partnership with Theranos back in July of 2015. Those samples from Harrisburg were being sent all the way to California to be tested at that Newark laboratory.
Similarly, the Cleveland Clinic, once so eager to announce their "strategic alliance" with Theranos in March of 2015, now seems to be distancing itself from the struggling start-up. On October 27, 2015, just as the first Wall Street Journal articles were exposing problems at Theranos, CEO Elizabeth Holmes claimed she would let outside experts from the Cleveland Clinic review the proprietary Theranos technology and "publish their results in a peer-reviewed journal." Yet three months later, a Theranos spokesperson admitted that no such studies have been started, nor is there any timetable to begin them.
To shield the performance data in secrecy is problematic enough. But to go further and falsely promise transparency and instead willfully avoid sharing any useful data, that makes even the most generous observer begin to wonder what Theranos is hiding. What are they afraid of?
Indeed, it seems that since Holmes' promise of transparency, their spokesperson has been backpedaling, now claiming that no data will be shared until the FDA approves each Theranos test. "We never said we were going to do it before," said the spokesperson.
"[The spokesperson] said the company is, instead, permitting interested journalists to view the confidential data, and to be "walked through it" by Theranos personnel, though it will not provide physical or digital printouts of the data itself." Of course, journalists are unlikely to be able to sift through the data and evaluate whether or not the results show that the Theranos devices are actually performing any better than today's typical analyzers.
All in all, there are many more reasons to suspect Theranos is going to bleed out.