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US health inspectors from the Centers of Medicare and Medicaid Services (CMS) has found that the laboratory facility managed by Theranos in Newark, California failed to meet clinical testing standards and poses patient health and safety risks in a detailed letter sent by federal regulators to the blood testing company dated January 25^th.

In the letter, CMS notified the company of the said violations and urged the blood testing firm to address the lab deficiencies within 10 days from the time the letter was officially received. Failure to do so would result in heavy fines and possible cancellation of its lab certification to become part of the Medicare program.

How serious is the regulatory breach?

"It means the Centers for Medicare and Medicaid Services fear you are operating in a manner that could cause immediate jeopardy to patients," remarked Ed Thornborrow of UC San Francisco's clinical laboratories as quoted saying by Wired.

Despite the negative assessment by federal regulators, Theranos maintained that 90% of its operations are carried out by its Arizona-based lab, which was not included in the CMS inspection according to a New York Times article.

The company also promised to respond to the issues raised in the letter as soon as possible.

"This survey of our Newark, CA lab began months ago and does not reflect the current state of the lab. As the survey took place we were simultaneously conducting a comprehensive review...to ensure that we have best-in-class quality systems...We value engagement with our regulators...A full plan of correction will be submitted to CMS within days," the company's official statement reads as mentioned in a report by CNBC.