The other shoe has dropped for Theranos. Late Thursday night, the embattled diagnostics company disclosed that it is officially being sanctioned by the Centers for Medicare and Medicaid Services.
In a press release issued at 11:35 p.m. Eastern time, the wounded unicorn said CMS has moved to revoke the CLIA certificate for Theranos’ laboratory in Newark, California. Company executives — mainly founder and CEO Elizabeth Holmes — will be barred from owning, operating or directing a clinical lab for two years once the sanctions take effect 60 days from now.
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Theranos said it also will pay an undisclosed civil fine and permanently lose the right to receive Medicare and Medicaid reimbursements for lab services. There’s a chance the company could still regain privileges for hematology.
Holmes remained characteristically upbeat, perhaps defiant, in her statement:
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.
Theranos promised to continue testing at its Arizona lab. But how long can it survive? The company lost its largest customer, Walgreens, a month ago and reportedly is under criminal investigation.
A Deep-dive Into Specialty Pharma
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Photo: Flickr user Dennis Skley
