October 26, 2015 Intelligence: Late Breaking Lab News

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Describing “nutritional chemistry and food safety as an exciting growth opportunity,” CEO David King of Laboratory Corporation of America announced his company’s recent acquisition of International Food Network and The National Food Laboratory. Terms of the deal were not announced. Some analysts considered this to be a small diversification play by LabCorp as a response to tougher times in the clinical lab testing marketplace.

CALLOWAY LABS CEASES OPERATIONS

One of the first lab casualties in the coming decline of the toxicology and pain management sector is Calloway Labs of Woburn, Massachusetts. On October 16, it ceased testing and went out of business. In early 2012, the toxicology lab had entered into a $20 million agreement to settle state charges that it defrauded Medicaid with a kickback scheme that included sham companies, fake doctor signatures, and excessive urine tests for drug addicts. Later in 2012, Calloway Labs was acquired by Ampersand Capital Partners. Ampersand then hired Gail Marcus, formerly CEO of Caris Diagnostics, to be the new CEO of Calloway Labs and turn the business around. Executives at Calloway would only tell reporters that the lab company closed due to “unforeseen circumstances beyond the company’s control.”

MORE ON: Calloway

Calloway was caught in a sweep of toxicology lab companies in Massachusetts that was initiated by then-Attorney General Martha Ann Coakley. Between 2007 and 2012, she prosecuted at least seven toxicology lab companies for Medicaid fraud, including Calloway Labs. It was in October 2012 that CEO Arthur Levitan and COO Patrick Cavanaugh of Calloway Labs pled guilty to criminal charges of Medicaid fraud and were sentenced to four years of probation.

TRANSITIONS

Empire Genomics of Buffalo, New York, named John J. Rushton, PhD, as its new Chief Operating Officer. He has held management positions at PAML, Signature Genetics, and University of New Mexico Health Sciences Center.

Effective January 1, 2016, Eyas Hattab, MD, will become the new Chairman of the Department of Pathology and Laboratory Medicine at the Louisville School of Medicine in Louisville, Kentucky. Hattab formerly held the position of Vice Chairman of Pathology at Indiana University School of Medicine.

Dark Daily Update

dark_daily_logoHave you caught the latest e-briefings from DARK Daily? If so, then you’d know that…

Consumer Reports ranks smaller and non-teaching hospitals highest in infection prevention.

You can get the free DARK Daily e-briefings by signing up at www.darkdaily.com.

That’s all the insider intelligence for this report. Look for the next briefing on Monday, November 16, 2015.

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