Sean Fenske, Editor07.08.16
The other shoe has finally dropped on the whole Theranos scandal. (Is it appropriate to brand it that at this point?) The company has shared the details of a notice it received from the Centers for Medicare & Medicaid Services (CMS) regarding the sanctions handed down to the company. The penalties are the end result of a 2015 survey of its laboratory in Newark, Calif.
Most notable among the sanctions is that Elizabeth Holmes, the company’s founder and CEO, is essentially banned from owning, operating, or directing a laboratory for at least two years. That restriction extends to any other owners and operators of the Theranos lab.
The additional sanctions handed down according to the announcement made by Theranos are:
This action caps a long timeline of struggles and challenges the diagnostic company has faced since first emerging as a highly regarded start-up. The company first made headlines by claiming to have the ability to diagnose an array of diseases from a miniscule amount of blood. At one point, it was valued at $9 billion, but that quickly faded as questions of accuracy and feasibility emerged. The company’s attempts to make appropriate changes were apparently not enough and eventually lead to the termination of its relationship with Walgreens, which may have been the final nail in the company’s financial coffin. With the CMS sanctions, it will be a question if the company or its founder are ever able to recover enough to be able to return to the medical technology or diagnostic sectors.
Most notable among the sanctions is that Elizabeth Holmes, the company’s founder and CEO, is essentially banned from owning, operating, or directing a laboratory for at least two years. That restriction extends to any other owners and operators of the Theranos lab.
The additional sanctions handed down according to the announcement made by Theranos are:
- Limitation of the laboratory’s CLIA certificate for the specialty of hematology
- A civil money penalty
- A directed portion of a plan of correction
- Suspension of the laboratory’s approval to receive Medicare and Medicaid payments for any services performed for the specialty of hematology
- Cancellation of the laboratory’s approval to receive Medicare and Medicaid payments for all laboratory services
This action caps a long timeline of struggles and challenges the diagnostic company has faced since first emerging as a highly regarded start-up. The company first made headlines by claiming to have the ability to diagnose an array of diseases from a miniscule amount of blood. At one point, it was valued at $9 billion, but that quickly faded as questions of accuracy and feasibility emerged. The company’s attempts to make appropriate changes were apparently not enough and eventually lead to the termination of its relationship with Walgreens, which may have been the final nail in the company’s financial coffin. With the CMS sanctions, it will be a question if the company or its founder are ever able to recover enough to be able to return to the medical technology or diagnostic sectors.