February 15, 2016
By Alex Keown, BioSpace.com Breaking News Staff
PALO ALTO, Calif. – Theranos submitted a plan of correction to the U.S. Centers for Medicare & Medicaid Services to address deficiencies regulators found at the embattled blood-testing company’s Newark, Calif. lab, Bloomberg reported this morning.
The company has maintained that approximately 95 percent of its laboratory work is performed at its Arizona facilities. But, the revelation of deficiencies, which regulators said “posed immediate jeopardy to the health and safety” of patients, was another knock to the reputation of the company that has been under scrutiny for some of its business practices.
This morning Bloomberg reported the Centers for Medicare & Medicaid Services was in possession of Theranos’ plan of action for the Newark lab site, which was filed late Feb. 12, and was currently reviewing the proposal. What the company’s plans may be though were not revealed by either the regulatory agency or Theranos, Bloomberg said.
In January, the Centers for Medicare & Medicaid Services publicized findings of a November visit to Theranos’ Newark lab where regulators discovered “deficient practices” that “pose immediate jeopardy to patient health and safety.” Regulators said Theranos’ laboratory practices at the Newark site were not in compliance with conditions set forth by the federal Clinical Laboratory Improvement Amendment (CLIA). The letter said the company’s hematology practices at that site “posed immediate jeopardy to the health and safety” of patients. The letter defined immediate jeopardy a situation in which corrective action is necessary due to the laboratory’s non-compliance, which “has already caused, is causing, or is likely to cause, at any time, serious injury or harm, or death, to individuals served by the laboratory or the health and safety of the general public.”
Following the release of the letter, Walgreens, Theranos’ biggest customer, which has partnered with Theranos to provide blood testing in 40 of its Arizona stores, demanded the company not send any tests to the California site. Within hours of the CMMS making its findings public, Walgreens told Theranos that tests collected at 40 Theranos Wellness Centers located at stores in Arizona must be sent only to Theranos’ 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 [CMMS] have been fully resolved,” Walgreens said.
Following Walgreens’ announcement, Theranos told BioSpace that it was addressing the deficiencies at the Newark lab and had hired a new CLIA lab director to oversee operations at the facility, as well as having made some personnel changes.
The Newark lab deficiencies are the latest problems for Theranos, which has an estimated valuation of $9 billion. Following an inspection of its labs earlier this summer by the U.S. Food and Drug Administration, federal regulators called the company’s proprietary Nanotainer tubes an uncleared medical device. Regulators were critical of some of the practices its inspectors observed, including improper classification for its proprietary nanotainer tubes used for blood specimens. The FDA said Theranos’ Nanotainer blood specimen tubes are not properly filed as a Class II medical device, but are instead being identified as a Class I medical exempt device. Other observations made by FDA inspectors include a criticism that a method for addressing complaints regarding a possible failure of the device to meet its specifications were not “reviewed, evaluated and investigated where necessary.”
Theranos’ nanotainer tube is only being used in one of about 200 tests the company conducts, Bloomberg noted.
