Theranos was Supposed to Revolutionize Blood Tests: Now its CEO is banned from running labs

Theranos was supposed to revolutionize blood tests. Now its CEO is banned from running labs

Elizabeth Holmes once promised to disrupt the multibillion-dollar blood vessels testing industry with her revolutionary finger-prick tests.

Nowadays the 31-year-old founder of biotech startup Theranos has been banned from buying or operating a medical laboratory for at least two years.

Within a Thursday statement, Theranos reported that the Centers for Medicare and Medicaid Companies revoked the recognition at the company's Newark, Cal, testing facility (which included the minimum two-year bar for Holmes), prohibited the lab from collecting Medicare insurance and Medicaid payments for blood services, and recharged Theranos with a municipal financial penalty of an unspecified amount.

"We recognize full responsibility for the issues at our research laboratory in Newark, California, and still have already worked to embark on comprehensive remedial actions, inches Holmes said in the statement.

This news comes after a March 18 letter obtained by the Wall Street Journal -- the latest revelation in the newspaper's impressive exploration into Holmes's crumbling contr?le -- which broke this news that US health government bodies were closing in on Theranos, after finding that the corporation failed to treat deficiencies that pose a threat to patient health and safety.

Theranos believed to offer faster, less costly, painless blood tests

Theranos's current set of problems came to light with an October Wall Road Journal published investigation. In it, reporter John Carreyrou showed that you can actually promises of a health attention revolution were overblown. Opposite to Holmes's public transactions, Theranos had allegedly recently been collecting liquid blood free templates using traditional methods and then diluting them so they could be run on machines manufactured by other companies -- not their much-hyped Edison technology (more on that below).

In addition, the Journal's investigation, and a follow-up story, suggested there are major concerns about the accuracy of Theranos's test results.

Theranos had stated it had the technology to consider blood from a simple painless prick and run multiple tests on that tiny, raindrop-size test rather than the multiple vials usually required. The sample would be brought to a lab in a "nanotainer" and tested on Theranos's proprietary technology, known as "Edison machines. inch

Theranos also promised to offer results in a few hours, to eliminate anxiety-inducing waits. Holmes said the tests would cost about 50 % of current Medicare and Medicaid repayment rates for tests.

That seemed promising. In 2013, Theranos opened 42 "wellness centers" in Walgreens medical stores in Arizona, two in California, and one in Pennsylvania. Holmes had also started lobbying state government authorities to allow patients to order Theranos tests and not having to go through the difficult annoyance of having a physician's note -- a step that, in theory, would further cut down on time and cost to patients.

By 2015, Sherlock holmes had persuaded Arizona's legislature to pass a legislation allowing patients to miss right to her labs and order up whatever menu of testing they wanted, without doctors' authorization.

So not only was Holmes trying to upend the way blood tests is done, she was also trying to change how people interact with the health care system. Considering that every person gets blood tests at some point, the change she promised was a huge deal.

Many of Theranos's claims were never confirmed, raising suspicions

More lately, nevertheless , critics had commenced requesting proof that Theranos's technology actually works, and that its answers are correct. After all, the proof about this wasn't public: The Food and Drug Supervision hadn't cleared Theranos's testing. And Holmes had never published her claims in peer-reviewed journals.

Holmes and Theranos's PR team deflected these critics by citing intellectual property concerns and suggesting that any problems were being planted by rival testing companies, such as Quest and Lab Corporation. Here's how George clooney Auletta of the newest Yorker described Holmes's stonewalling:

What exactly happens in the machines is treated as a state secret, and Holmes's description of the process was comically imprecise: "A chemistry is performed so that an effect occurs and generates a sign from the chemical substance interaction with the design, which is translated into an effect, which is then reviewed by certified clinical personnel. " [Holmes] added that, bless you to "miniaturization and software, we are able to handle these tiny examples. "

Then in March 2015 came the significant Wall Street Journal exploration. Carreyrou eventually learned and reported that it shows up Theranos rarely even used its much-hyped Edison technology in its tests. Rather, the startup allegedly is dependent mostly on older technology by companies like Siemens for the bulk of its testing. (This was in contrast to the company's claims which it used older machines simply for "certain esoteric and less commonly ordered tests. ")

In addition, there are real concerns that the company's unsecured personal Edison machines -- the ones which may have garnered all the hype -- not necessarily practically as accurate as claimed. Within this point, Carreyrou cited former employees, inside emails, and doctors. One particular Theranos employee even lamented to regulators that Theranos had been gaming the system, "failing to statement test results that brought up questions about the finely-detailed of the Edison system. "

Since the Journal's story, other critics have come forward and stated that their blood test results from Theranos failed to quite match those from standard labs. In a follow-up, the Wall Streets Journal confirmed that the FDA had pressured Theranos to stop using it is Edison technology on almost all of its blood vessels tests save for starters (a test for Type one particular herpes simplex) because of concerns about the machine's accuracy.

So how performed Theranos get so much hype with such poor claims?

There isn't a shortage of Silicon Area companies that claim to be changing the globe, but Theranos stood to a couple of reasons: It had an incredible beginning story, it was led pre lit by a young girl in a mostly natural male tech industry, and it promised to solve a problem that was relevant to most people.

Sherlock holmes, the company's founder, decreased out of Stanford as a sophomore in 2005. She said she'd started out the company both to address her phobia of needles -- the one which the lady realized many people distributed -- and out of the desire to help people diagnose potential diseases faster with more accessible prices. Her message that billion-dollar lab companies were ripping people off with costly, outdated, and without cause painful technology deeply resonated.

Over the next 10 years, Holmes managed not only to get her own Stanford professor and instructor on board, but also to attract $400 mil from venture capitalists, and assemble a star-studded panel that included former US Secretaries of State Holly Kissinger and George S. Shultz.

In this situation, it's not surprising that favorable press followed: Sherlock holmes could be seen, always in Steve Jobs-esque dark-colored, on the cover of Forbes and Fortune, and was even the subject matter associated with an in-depth New Yorker profile. She was known as "the world's youngest prosperous female billionaire" by Forbes and "America's coolest billionaire" by Inc. magazine, and even made Time magazine's set of the "100 most influential people. "