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Theranos’ Elizabeth Holmes banned from operating blood testing labs


Elizabeth Holmes, the founder of blood analysis startup Theranos has been banned from operating a blood testing lab for the next two years. Where this leaves the founder of the testing company and how it can continue to operate with her banned from operating a blood testing facility remains to be seen.

Holmes censure, first noted in the Wall Street Journal, is based on a regulatory review of Theranos Newark California lab and includes a monetary penalty of an unspecified amount.

A company statement over the matter reads:

We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions. Those actions include shutting down and subsequently rebuilding the Newark lab from the ground up, rebuilding quality systems, adding highly experienced leadership, personnel and experts, and implementing enhanced quality and training procedures.

While we are disappointed by CMS’ decision, we take these matters very seriously and are committed to fully resolving all outstanding issues with CMS and to demonstrating our dedication to the highest standards of quality and compliance.

The company has also had regulatory approval removed for its California lab.

Theranos, a once Silicon Valley darling purportedly worth $9 billion took a dramatic nose dive after coming under intense scrutiny over the last eight months from the Centers for Medicare & Medicaid Services and the Food and Drug Administration. Several Journal articles began to raise questions about the accuracy of the startups technology used on patients and CMS declared the company was putting patients in “immediate danger.”

Theranos voided thousands of its test results taken over the last two years it said were not up to its own standards and was forced to shut down operations at its Newark facility while it tried to get in compliance. Walgreens, the company’s biggest partner, recently severed ties with Theranos as well.

CMS suggested months earlier Holmes might be banned from the industry for a time and now it seems that time has come.

The ban won’t take effect for 60 days but no lab tests will be conducted out of its California facility in the meantime. Instead, the company will continue to serve customers from its Arizona lab.

Article updated to note that Holmes has been banned, specifically, from operating a blood-testing laboratory, rather than Theranos as a company.

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