Theranos Inspection Report Details Quality-Control Failures

  • Regulators found incomplete documentation, unqualified staff
  • Blood-testing startup says new procedures are now in place

An inspection report of Theranos Inc. released late Thursday by U.S. regulators paints a picture of an understaffed and inexperienced startup struggling to meet basic requirements, let alone deliver on its promise to revolutionize the blood-testing industry.

The 121-page redacted report details shortcomings found by inspectors for the Centers for Medicare and Medicaid Services at the company’s Newark, California, laboratory last fall. CMS said in late January that faults at the lab were so severe that they jeopardized patients’ health. The document makes public the details of these issues for the first time.

Several themes arise over and over again: failures to meet quality-control standards, such as not keeping freezers at the temperatures required by manufacturers; lack of proper documentation and missing signatures on paperwork; and unqualified personnel.

“The laboratory director failed to ensure that the appropriate personnel were responsible for the quality control and quality assessment program; failed to ensure that the freezer temperatures were appropriate for storage of specimens and reference materials; failed to ensure the methodologies selected provided quality results; failed to ensure the verification procedures were adequate,” CMS inspectors wrote in the report.

New Procedures

The document also includes Theranos’s plans for corrections, saying the new lab director, Kingshuk Das, has implemented extensive new procedures to improve the facility’s operations. “The lab directors during the period covered by the survey no longer hold any position with the lab,” Theranos wrote in the document.

Some errors in patient tests results weren’t reported immediately. 

“The laboratory failed to notify the authorized person for approximately seven weeks after the surveyer identified a quality control problem,” the document says.

Theranos writes repeatedly in the document that it has “completed assessments to identify any patients affected.” 

“We have no reason to believe that the issues raised by CMS have affected patients health,” company spokeswoman Brooke Buchanan said Thursday in an e-mail. “We’ve made mistakes in the past in the Newark, CA lab, but when the company was made aware of the deficiencies we have dedicated every resource to remedy those failures.”

Quality Control

The Wall Street Journal reported that 29 percent of quality-control checks performed on Theranos machines in October 2014 failed to produce results in an acceptable range, based on an unredacted version obtained by the Journal. In the document released by CMS, it’s not clear whether the results reported are based solely on Theranos machines, due to redactions.

Theranos’s founder, Elizabeth Holmes, is working to regain credibility for her closely held firm after a series of news reports and regulatory documents raised questions about the company’s technology. Theranos, which has been valued at $9 billion in private fundraising, has said it can perform lab tests more cheaply than rivals, in many cases using just a few drops of blood from a patient’s finger. The Palo Alto, California-based startup says it’s now using its proprietary “nanotainer” collection-tube technology in only one of about 200 tests offered as it waits for the rest to be cleared by the U.S. Food and Drug Administration.

An independent study by the Icahn School of Medicine at Mount Sinai in New York, published Monday, found that Theranos’s blood tests gave irregular results more often than testing services offered by large laboratories. Theranos disputes those results, saying it has concerns with how the study was run.

Pennsylvania insurer Capital BlueCross said in January that they were suspending their use of the company’s tests while Theranos worked to fix the shortcomings identified by CMS. Walgreens Boots Alliance Inc. closed Theranos’s retail outlet in Palo Alto, while leaving its Arizona outlets open. In January, Theranos said that the government findings didn’t apply to its Arizona lab, where it’s doing most of its testing.

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