CEO SUMMARY: With each passing month, Theranos is looking more like a traditional clinical laboratory company, based on how it is expanding its patient service center network and courier/logistics system into different regions while pursuing managed care contracts with health insurers. Meanwhile, respected laboratory scientists and physicians are using peer-reviewed medical journals to point out that Theranos has yet to publish details about the performance of its diagnostic technology to enable independent validation.
IT’S BEEN A BUSY MONTH for Theranos, Inc., the ambitious clinical lab testing company based in Palo Alto, California. Last week, Theranos and Capital Blue Cross, of Harrisburg, Pennsylvania, announced an agreement that would give the clinical lab testing company access to the 725,000 members of Capital Blue Cross in Harrisburg and in Central Pennsylvania.
The week before, on July 2, Theranos issued a press release that it had “received the U.S. Food and Drug Administration’s (FDA) clearance of its test system and test for herpes simplex 1 virus IgG. The FDA’s decision provides independent validation of Theranos’ patented finger stick and venous blood testing technology and the ground breaking Theranos System upon which the HSV-1 IgG test is run, as well as the approach that the company has supported for FDA review of Laboratory Developed Tests (LDTs).”
Also of interest is the announcement Theranos made on June 23 that it had entered into an agreement with the Carlos Slim Foundation of Mexico City, Mexico, “to provide Theranos’ innovative laboratory testing services in Mexico.”
The press release issued by the two organizations further stated that:
The Carlos Slim Foundation has developed and implemented a new model for healthcare service centers, CASALUD, which emphasizes prevention of diseases such as obesity, diabetes, and hypertension, and an associated program called MIDO, which evaluates risk factors for those conditions. By incorporating the Theranos system for testing, CASALUD will be able to provide lower cost, more accessible testing than is currently available. The resulting impact in earlier diagnosis for people in Mexico who may unknowingly suffer from diabetes or hypertension will allow these individuals to reduce the risks of these diseases.
This may represent significant market access in Mexico for Theranos. That’s because Carlos Slim is the wealthiest individual in Mexico and, between 2010 to 2013, was ranked as the richest person in the world. His companies represent 40% of the listings on Mexico’s stock exchange.
News that Theranos had a lab testing agreement with Capital Blue Cross in central Pennsylvania caught the attention of many pathologists and lab administrators across the country. It represents the first expansion of the company outside California and Arizona, where it operates Theranos Wellness Centers in certain Walgreens pharmacy stores.
Service Centers in PA
According to the press release, Theranos lab testing will be offered in the two Capital Blue Wellness Centers. These are located in retail malls. One is in Enola, a town in the Harrisburg metro. The other is in Center Valley, a community in the Allentown-Bethlehem metropolitan area.
The press release also noted that there would be “a network of Theranos Wellness Centers across the region” to serve the Capital Blue Cross beneficiaries. That may mean that, under its existing national agreement with Walgreens, Theranos would locate its specimen collection centers in Walgreens pharmacies in central Pennsylvania.
The assumption is that Theranos intends to service patients in Pennsylvania from its CLIA laboratory in Newark, California (or eventually from its laboratory in Scottsdale, Arizona, that has applied for CLIA registration). That will add the cost of cross-country transportation to laboratory specimens collected in Pennsylvania, not to mention extend the turnaround time before results can be reported.
Direct-access Testing Law
Also, with this foothold in Pennsylvania, it can be expected that Theranos will lobby the state legislature to amend existing laws that require lab tests to only be ordered by a “member of the healing arts licensed to practice” in the Commonwealth. If Theranos follows the pattern it used in Arizona, it will send CEO Elizabeth Holmes to Harrisburg to identify a state legislator willing to sponsor a bill to permit consumers to order their own medical laboratory tests without the need for a physician to sign the lab test order. Theranos will then initiate a lobbying and public relations campaign to support passage of this legislation.
In response to the announcement Theranos had obtained FDA clearance of its LDT for herpes simplex 1, press coverage ranged from laudatory to dismissive. On one extreme, USAToday reporter Marco della Cava wrote, “In a ringing endorsement of its technology and a counter to its critics, Silicon Valley biotech company Theranos announced Thursday that its proprietary blood-testing system has received clearance.” On the other extreme, reporter Jonah Comstock of Mobihealthnews titled his story, “Theranos gets unnecessary FDA clearance for its cheap, fingerstick blood tests.”
FDA Review of LDTs
Pathologists and clinical laboratory directors will recognize that Theranos did not need to get FDA clearance for its test. As Lauren Friedman reported for Business Insider, “Theranos’ technology isn’t necessarily such a departure from what’s already been proven, though they have likely made significant improvements. In the FDA’s letter to Theranos, which was provided to Business Insider, the agency noted that “the device is substantially equivalent” to existing technology. “You may, therefore, market the device,” it said.
Given that applying for FDA clearance of an LDT is voluntary, that means, “Theranos went above and beyond to validate their tests-or at least one of them something that might help to beat back the steady stream of critics,” Friedman wrote in Business Insider. “The technology still has not been subjected to formal peer review, and the details of how it works remain secret. But the FDA approval is an important step toward validating the company’s technology.”
Respected Pathologists and Experts Ask: Why Don’t We Know More about Theranos’ Technology?
IN AN ARTICLE ABOUT THERANOS PUBLISHED last month in Clinical Chemistry and Laboratory Medicine, Eleftherios P. Diamandis, M.D., Ph.D., wrote an Opinion Paper. He stated “I analyzed the Theranos technology and their promises, and contrast this information with the currently used technologies, to show that most of the company’s claims are exaggerated.” (Clin Chem Lab Med 2015; 53(7): 989–993.)
Diamandis is the Section Head of Clinical Biochemistry in the Department of Pathology and Laboratory Medicine at Mount Sinai Hospital in Toronto, Ontario. He is also a Professor and Head, Division of Clinical Biochemistry, Department of Laboratory Medicine and Pathobiology, University of Toronto and Biochemist-in-Chief, Laboratory Medicine Program, University Health Network, Toronto, Ontario.
After evaluating what is known about Theranos’ technology, Diamandis wrote:
The following comments apply: The quality of the results are not known since the Theranos system has not been independently evaluated, nor do any published results exist to compare with conventional technologies. New diagnostic tests must be evaluated for their accuracy, precision, specificity and long-term robustness. Trueness and precision (accuracy) need to be maintained over months or years, and monitored by external quality assurance programs, so that patient’s data can be directly compared over long periods of time. Without independent validation, Theranos technology’s quality and robustness will remain in question.
In an editorial in the same issue, CCLM Editor-in-Chief Dr. Mario Plebani describes Diamandis’ work as the first scientific article to explore the diagnostic technology of Theranos. He wrote:
Diamandis raises serious concerns regarding the Theranos technology, maintaining that the system has not been independently evaluated, and as none of its results have appeared in the literature, it cannot be compared with conventional technologies. Nor has it provided evidence on the trueness, reproducibility, specificity, and long-term robustness of the innovative technology used; the finger prick process presents challenges because its commutability and correlation with traditional venipuncture has not been verified.
Plebani is a full Professor of Clinical Biochemistry and Clinical Molecular Biology at the School of Medicine, University of Padua, in Italy. He is also Chief of the Department of Laboratory Medicine at the University Hospital of Padua and Chief of the Center of Biomedical Research.
JAMA Story about Theranos
Earlier in the year, John P.A. Ioannidis, M.D., the C.F. Rehnborg Chair in Disease Prevention at Stanford University, raised questions about Theranos in an article he wrote for perhaps the most prestigious peer-reviewed journal in the nation, the Journal of the American Medical Association. In his article, he explained that, because so little has been written about Theranos in peerreviewed journals, scientists have not had the opportunity to evaluate its technology.
Ioannidis described the lack of peer-reviewed publications based on Theranos’ technology as “stealth research,” which “creates total ambiguity about what evidence can be trusted in a mix of possibly brilliant ideas, aggressive corporate announcements, and mass media hype.” He also wrote that, “…unless stealth research adopts more scientific transparency, investors, physicians, patients, and healthy people will not be able to judge whether some proposed innovation is worth $9 billion, $900 billion, or just $9, let alone if the innovation will improve the health and well-being of individuals.”