BREAKING NEWS: As this issue of THE DARK REPORT went to press, it was learned that Walgreens had announced the termination of its lab testing agreement with Theranos, effective immediately. Theranos loses access to about 40 Walgreens pharmacies in Phoenix and is left with about five patient collection centers. The following story summarizes developments involving Theranos through Friday, June, 10. It was prepared before Walgreens disclosed its decision to end its agreement with Theranos.
EVENTS OF THE PAST THREE WEEKS have brought more bad news to Theranos, Inc., the lab testing company based in Palo Alto, California.
Of greatest interest to the laboratory medicine profession was the disclosure by Theranos that it had voided two years of lab test results. On May 18, reporter John Carreyrou of The Wall Street Journal wrote, “Theranos Inc. has told federal health regulators that the company voided two years of results from its Edison bloodtesting devices, according to a person familiar with the matter.”
Two weeks later, on June 1, Forbes published a story declaring that it had revised its estimate of the net worth of Elizabeth Holmes, the Founder and CEO of Theranos. It said, “Last year, Elizabeth Holmes topped the Forbes list of America’s Richest Self-Made Women with a net worth of $4.5 billion. Today, Forbes is lowering our estimate of her net worth to nothing. Theranos had no comment.”
Even as these events were hitting the national news, several media outlets reported that Theranos is now the defendant in at least three class action lawsuits. One of these suits also names Walgreens as a defendant because the pharmacy company had allowed Theranos to use its retail pharmacies in California and Arizona to collect lab specimens from patients and consumers.
These new developments come on top of the media stories reported in April and May about how the federal Centers for Medicare & Medicaid Services had sent a letter to Theranos announcing its intent to impose the most severe sanctions for violations of CLIA, that the Department of Justice was investigating Theranos, and that the Securities and Exchange Commission had launched its own probe of the lab testing company.
The disclosure that Theranos was voiding two years of lab test results, some of which were performed on its proprietary Edison analyzer, was a major blow to the company’s representations to the public in recent years that its lab testing services were of the highest quality.
In its reporting on this story, Bloomberg spoke with Theranos Vice President of Communications, Brooke Buchanan. Bloomberg said, “Less than 1% of the blood test results Theranos Inc. has provided have either been voided or corrected, according to the company, which last month said it was canceling or altering tens of thousands of results, including two years of results on some of the company’s proprietary machines.”
Bloomberg also wrote, “The revisions were made out of what spokeswoman Brooke Buchanan said was an abundance of caution. In response to questions from Bloomberg, the Silicon Valley startup said it has informed all patients who were affected. …The decision to void some results was made because previous tests weren’t up to the standards of Theranos’s current lab managers, Buchanan said. …Theranos doesn’t plan to send more corrections, and stands behind the other 99% of results, said Buchanan.”
Three Class Action Lawsuits
About the class action lawsuits against Theranos, Bloomberg quoted Theranos, “‘The lawsuits filed against Theranos are without merit and the company will vig-orously defend itself against these claims,’ Buchanan said in a statement.”
As has been true since last October, it was The Wall Street Journal which first broke the story about Theranos notifying patients and physicians about problems with their lab test results.
How big is the notification effort? The Journal said, “The company has told the Centers for Medicare and Medicaid Services that it has issued tens of thousands of corrected blood-test reports to doctors and patients, voiding some results and revising others, according to the person familiar with the matter.”
Notably, the inaccurate tests may not be limited to tests run on the Edison analyzer, but may include assays run on conventional lab test equipment. The Journal wrote, “The corrected reports include the voided Edison results and many tests run on traditional laboratory machines, the person said.”
The Journal also reported that the CMS inspection report of Theranos had noted that the Theranos lab in Newark performed 890,000 tests per year. Another news account reported that Theranos has performed about 6 million lab tests in total.
How Many Tests Voided?
A ballpark guess for the number of patients receiving a notice of an inaccurate lab test report can be developed along these lines. Assume an average of two tests per patient and the two-year period of 2014 and 2015. That would indicate 1.78 million tests, divided by two, or 890,000 patients. If 1% of that number were sent notices, that would be 8,900 patients.
Taking the larger number of six million tests, 1% of half that number would be 30,000 patients getting notices. In either case, this is a significant number of patients affected by inaccurate lab test reports issued by Theranos.
Of significance for lab professionals, media stories indicate that Theranos produced inaccurate lab test results even on conventional lab analyzers. In its reporting of this issue, Bloomberg wrote that “the corrected reports include the voided Edison results and many tests run on traditional laboratory machines, the person said.”
At this time, it is believed that only the Theranos lab facility in Scottsdale, Arizona, is doing patient testing. News reports say that the Scottsdale lab uses conventional lab analyzers for its testing.
Probably the next major development in the Theranos story will happen on August 1. That’s when Theranos CEO Holmes is scheduled to present scientific data and answer questions from the audience at a session during the American Association of Clinical Chemistry’s annual meeting in Philadelphia.
Director Adam McKay to Make Movie about Theranos With Jennifer Lawrence to Play Elizabeth Holmes
IT WAS A BIG STORY LAST WEEK WHEN NEWS BROKE THAT A MOVIE ABOUT THERANOS WAS IN THE WORKS. People Magazine and Time were among the media outlets that reported the story. The director will be Adam McKay, recognized for such movies as “The Big Short” and “Anchorman.”
And who will play Elizabeth Holmes, the Founder and CEO of Theranos? It is expected to be Jennifer Lawrence. She is known to the American public for her roles in the “Hunger Games” series, as well as “American Hustle” and “X-Men.” No information was provided as to a date when production of the movie would commence.
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