Theranos, the blood testing start up that was regarded as the next big thing among health start ups has had a horrid run over the past few months following the emergence of serious doubts about its testing procedures and on Thurday, the company received another jolt when its much lauded founder Elizabeth Holmes was banned from operating a laboratory for the next two years by Federal authorities.
Theranos has released a statement and stated the sanctions that have been brought upon the company. According to a report in the New York Times, "In a statement late Thursday, Theranos said the regulators revoked the certification of its flagship laboratory in Newark, Calif., and prohibited the laboratory from taking Medicare and Medicaid payments for its services. Regulators also levied a monetary penalty that Theranos did not specify. The sanctions take effect in 60 days, Theranos said. Theranos represents the promise and the pitfalls of the start-up era, as money floods into young companies with new technologies in an effort to find a "unicorn" - a billion-dollar business that transforms its industry and makes its backers rich in the process."
Elizabeth Holmes herself shared her thoughts about the ruling in the statement. Miss Holmes said, "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." The New York Times report futher went on to add, "The sanctions could put pressure on Ms. Holmes to step aside, though it was not clear if that could happen without her consent, given her control of the company. Even if she stepped aside as chief executive, she would still be a big owner of Theranos, so the ban on operating laboratories might still apply. It is also unclear who could or would take on the job."
